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June 2001



 













 

 

Internet Strategy
Are newspapers losing revenue to online sites? Not yet
by Peter Zollman


Newspapers say they’re not losing classified advertising to interactive media — at least not yet.

That’s the conclusion of two new research studies, one from Classified Intelligence and one from the World Association of Newspapers.

They provide a startling counterpoint to the claims by Internet prognosticators like Forrester Research and Jupiter Media Metrix, which have projected significant losses by newspapers to online services.

The first study comes from Classified Intelligence, which is affiliated with the Advanced Interactive Media Group, my consulting group. This report includes the results of a survey of print classified advertising executives at more than 60 daily newspapers in the United States.

The key finding: newspapers say development of online employment advertising services has actually increased print advertising revenue or has had no impact, rather than decreasing it. Twenty-two percent of the newspapers surveyed said their print advertising went up as a result of their online employment sales efforts, and another two-thirds of the respondents said it had no noticeable impact. Only 6 percent said they noticed a negative impact as a result of their online employment advertising sales.

The interviews also gathered information about rates for newspaper online employment services, the specific services offered by various newspapers, vendors used and other topics. The report also includes sections on broadcasters’ print and on-air recruitment offerings; a case-study of an employment site developed by a group of Pennysaver publications that is generating millions of dollars in revenue annually; a look at current trends and statistics in print and online employment advertising; information on vendors providing online employment services to media companies; a statistical review of the world’s leading online employment site, and other sections.

Despite the newspapers’ comments, the report paints a disturbing long-term picture for print employment-advertising revenue — the most profitable category at major papers, and a significant revenue-producer in most smaller markets as well.

“Newspapers are deluding themselves,” the report says. “Print employment advertising profits at daily newspapers will probably never again be as strong as they were in 2000. Rate pressure, new technologies, lower barriers to entry and changing demographics are all making it easier for other media companies and dot-coms to steadily increase their market share in this segment, which just a few years ago was owned outright by the newspaper industry.”

The other study, for the World Association of Newspapers, will be released at the World Newspaper Congress and World Editors Forum in Hong Kong this month. The research was done by Innovation International Media Consulting Group; a preview was issued recently by WAN.

“For the foreseeable future, print classified will remain a mainstay of the newspapers’ business and should not be neglected as management shifts attention to the Internet,” WAN said in its preview.

The research covered newspapers in 10 countries, all of them selling classifieds on the Internet.

“None of them reports that the print business has suffered as a result,” said Timothy Balding, director-general of WAN.

“These experiences contradict some predictions that newspapers would have to ‘kiss their classifieds goodbye,’” Balding said. “Newspapers are optimistic about the future of Web and print classifieds. They believe the combination clearly produces added value for customers.”

The WAN classifieds study will be included in the group’s annual Innovations in Newspapers report. This year’s report will include information on media convergence, newspaper management of Web sites, news agencies in the digital world and other topics.s

The AIM Group has just released a free report about newspaper online archive sales, including several steps newspapers can take to tap the untapped value of their text and photo archives.

It reviews the prices U.S. newspapers are charging for archive access, and presents a short case study of one mid-sized newspaper that is generating more than $100,000 annually in archive sales.

The report is available for download from www.aimgroup.com/reports.

 

Peter M. Zollman is founding principal of Advanced Interactive Media Group L.L.C., a consulting group that works with newspapers and other media companies to develop profitable interactive services. He can be reached at 407.788.2780 or via e-mail at pzollman@group-aim.com.