Newspaper print ads being wiped out by Internet ads
U.S. newspapers lost $10 in ad revenue for every $1 they gained online
Reading the morning newspaper, feet up on the couch or ottoman is a uniquely American pastime - whose time may soon be over. Print advertising, the lifeblood of all newspapers, large and small, has fallen out of favor with the public. As a matter of fact, U.S. newspapers lost $10 in print advertising revenue last year for every $1 they gained online, a far deeper loss than in 2010.
Reading the morning newspaper, feet up on the couch or ottoman is a uniquely American pastime - whose time may soon be over. Print advertising, the lifeblood of all newspapers, large and small, has fallen out of favor with the public.
"They're continuing to lose ground to tech intermediaries," such as Google Inc. and Facebook Inc. as well as to Apple Inc. and Internet retailer Amazon.com Inc., Tom Rosenstiel, director of Pew's Project for Excellence in Journalism said in a telephone interview. "The news industry has been fundamentally disadvantaged in this area," he said.
Suffering declines in print advertising, the newspaper industry hasn't been able to make up for those losses with digital revenue. According to Pew's study, total newspaper ad revenue dropped 7.3 percent to $23.9 billion in 2011 from the previous year.
While online advertising among news groups increased by about $207 million, print advertising revenue declined by around $2.1 billion, Pew said.
A major part of the problem is that newspaper have failed to capitalize on the volume of personalized data available online in the face of increased competition from companies including Google and Facebook. Online advertising is targeted to consumers based on their interests and demographics, typically at higher ad rates, Rosenstiel said.
Newspapers have slowly shifted their businesses online, led in part by the recent success of New York Times Co. plan to charge readers for access to its newspapers' Web sites. Pew's study estimates as many as 100 newspapers are expected to offer a digital subscription model shortly.
Times Co. has about 406,000 paying subscribers to its Web sites, including those for its namesake paper as well as the Boston Globe and International Herald Tribune.
Additionally, the Los Angeles Times, owned by Tribune Co., began charging for access to its website last month. Gannett Co. said it would move 81 of its daily newspapers to an online paid model before the end of the year.
"A growing number of executives predict that in five years many newspapers will offer a print home-delivered newspaper only on Sunday," Pew's report said.
Those wishing to jump on the online bandwagon should business models similar to those of Thomson Reuters Corp. and Bloomberg LP, Rosenstiel said. They may also consider becoming partners with data-driven companies such as Google and Facebook.
© 2012, Catholic Online. Distributed by NEWS CONSORTIUM.
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Keywords: Newspapers, advertising, online ad sales, business models
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