Arlington, Va. – Newspaper-owned Web sites maintained a three-to-one lead over other local competitors in advertising market share last year, capturing 26.9 percent of the market, according to data from Borrell Associates’ fifth annual local online revenue survey. The study examined more than 3,000 local web operations.
“This survey provides further proof that local advertisers recognize newspaper Web sites as an indispensable way to reach their best customers,” said NAA President and CEO John F. Sturm. “The trusted name brand, quality content and desirable audience delivered by the medium’s digital properties are critical to advertisers in today’s crowded media landscape.”
Commanding Market Share
According to the survey, newspaper-owned Web sites earned more than $2 billion in local online advertising revenue in 2007, a figure that surpasses all local online media companies combined and represents a 27 percent share of the total local online ad market. Local Yellow Pages and television Web sites were next with 9.5 percent of the market each, while radio stations captured 2.1 percent.
The survey indicates that video, the fastest growing segment of local online advertising, generated $363 million in 2007, with local online advertisers expected to spend $1.2 billion in 2008 (nearly a four-fold increase). Newspaper-owned Web sites have seized a foothold in this area as well, with a 26 percent share of all local online video advertising – more than any other local competitor.
National advertising also impacted newspapers online – according to Borrell, newspaper Web sites earned $1.1 billion in national online advertising revenue throughout 2007, bringing the combined total to $3.1 billion. NAA had similar estimates for newspapers’ 2007 online ad expenditures, with newspaper Web sites generating $3.2 billion in ad revenue.
Sales Strategies Paying Off
According to the survey, the largest newspaper Web sites achieved a majority of revenue from non-print advertisers for the first time, developing a broader base of customers to generate new revenue streams. The online-only advertisers accounted for 59 percent of the total ad revenue generated by newspaper sites.
These changes come as newspapers have doubled their online sales staff since 2005, adding an estimated 3,800 sales employees nationwide who are dedicated to developing, managing and selling new online products at their properties.
“The importance of maintaining a knowledgeable, well-trained online sales force in today’s environment simply cannot be overstated,” said John Kimball, NAA’s senior vice president and chief marketing officer. “Such specialization gives the sales consultants the best chance to have a significant impact on revenue – the survey found that newspaper Web sites who employ at least one salesperson dedicated to selling online advertising averaged 87 percent more revenue than sites that relied solely on print representatives to sell online ads. Mobilizing to meet the needs of our newest customers can pay big dividends.”
Principles in Practice
In a sample of 61 markets covering the full range of market sizes, Borrell Associates compared the number of online-only salespeople at each market’s largest newspaper site with the number at its largest TV site. The numbers demonstrate the medium’s commitment to generating revenues by meeting the needs of online advertisers:
- Across all markets, the largest newspaper Web site had an average of 2.4 times as many online-only salespeople as the largest TV site.
- Among the 20 largest markets, the largest newspaper site averaged 5.1 times as many online-only salespeople as the largest TV site.
- Among the 50 largest markets, newspapers averaged 3.1 times as many online-only salespeople as the largest TV site.
- In several markets, the main newspaper’s online-only staff of 12, 18, or 22 is competing against TV station online-only staffs of two, one or 0.3 people.
Capital Conference ’08: Digital Media Executives Provide Perspective
The survey results come as newspaper publishers and editors prepare to convene at NAA’s Capital Conference ’08, scheduled for April 12-16 at the Washington Convention Center. The event will feature a panel discussion during which digital media executives will share their thoughts on new opportunities for driving revenue and audience development, including strategic imperatives that will allow newspaper companies to successfully compete on current and emerging digital platforms.
The session, entitled “Navigating the Digital Future: What’s Next for Media Companies,” is scheduled for April 15 from 9-10:15 a.m. and will include the following speakers: Eleanor Cippel, director of innovation, The E.W. Scripps Company; Oliver Knowlton, president, MediaNews Group Interactive; Leon Levitt, vice president of digital media, Cox Newspapers, Inc.; Chris Saridakis, senior vice president and chief digital officer, Gannett Company, Inc.; and Vivian Schiller, senior vice president and general manager of NYTimes.com, The New York Times.
Please visit www.naa.org/capitalconference to view the full conference program.
NAA is a nonprofit organization representing the $59 billion newspaper industry and more than 2,000 newspapers in the U.S. and Canada. NAA members include daily newspapers, as well as non-dailies and other publications published throughout the world. Headquartered just outside Washington, D.C., in Arlington, Va., the Association focuses on six key strategic priorities that affect the newspaper industry collectively: marketing, public policy, diversity, industry development, newspaper operations and readership. Information about NAA and the industry also may be found at www.naa.org.
Borrell Associates is a research and consulting firm headquartered in Williamsburg, Va., that provides detailed research and analysis on market-by-market local advertising expenditures in the U.S. and Canada. The company publishes regular analysis on the growth of local online advertising, and works with hundreds of local media companies to develop and implement successful strategies to maximize their advertising share in cable, radio, TV, print and online. More information about the company can be found at www.borrellassociates.com.