Convention Report: Online Growth

First Published: May 2008

Ideas Fuel Digital Flame

By LaShell Stratton | Photo By Ringo H.W. Chu

As circulation and print advertising dollars decline, newspapers face greater pressure to balance those losses by increasing audience and revenue online. At the Navigating the Digital Future: What’s Next for Media session, newspaper executives discussed how to develop Web sites that appeal to readers and advertisers—something the industry has been struggling with for more than a decade.

“You can’t just take a newspaper and put it online,” said Chris Saridakis, senior vice president and chief digital officer of Gannett Co. in McLean, Va. Newspaper sites must offer local news, databases, news packaged according to specific audiences and provide interactive experiences.

Eleanor Cippel, director of innovation for The E.W. Scripps Co. in Cincinnati, said the company’s Entrepreneur Fund, a $1.5 million internal fund that Scripps started in 2006 to support employees’ business proposals, has generated good ideas for online content.

The fund helped to produce www.redblueamerica.com, a news site geared toward online readers who primarily identify themselves as political moderates, Cippel said. The site seems to be gaining in popularity, she added, noting that Scripps wants to foster ideas even if they result in products that compete with established services.

“When someone suggests something and the immediate reaction is, ‘Well, we can’t do that because it will hurt this,’ then we definitely should do it,” she said. “We should get away from this predatory mentality and be willing to take chances.”

NYTimes.com has evolved from just an online newspaper to an interactive platform, said Vivian Schiller, senior vice president and general manager. After experimenting with a partial paid-subscription model, NYTimes.com offers all content free and is developing blogs, videos and interactive graphics, along with exporting content to social networking sites such as Facebook.

Editors also are trying to tailor content to appeal to executive decision makers, who help attract advertisers. The executives “come to us largely for our general interest news,” Schiller said, but NYTimes.com is adding more business and technology coverage to appeal to these readers.

Session moderator Leon Levitt, vice president of digital media for Cox Newspapers Inc. in Atlanta, said with so much focus on online operations, newspaper execs seem to be “putting all our eggs into one basket.” Online revenue is not growing at the same pace as the online news audience, he pointed out. He asked other panelists for ideas on how to generate revenue from digital products.

Schiller said newspaper sales staffs must educate advertisers who may be hesitant to market their products and services online. Some of The New York Times’ luxury advertisers, who are more comfortable promoting their brands in print, are unsure that their messages will translate on the Web, she said.

Panelist Oliver Knowlton, president of MediaNews Group Interactive in Denver, said newspapers should integrate online and print sales forces, as magazines have done, but “just not to the extent that magazines have done it,” he said. “They may have integrated too much.”

To view video from this session, go to www.naa.org/CapConfvideo.

Print Ads Drive Consumers Online, Google Study Finds

By John Heys | Photo By Ringo H.W. Chu

Consumers frequently use print newspapers and the Internet when making purchasing decisions, according to new research from Google Inc. analyzed by NAA. Released at the Capital Conference, the findings show how newspaper ads often drive online traffic, influence buying decisions and generate consumer trust.

Among people who researched products and services after seeing them advertised in newspapers, 67 percent went online, the study found. Nearly 70 percent of these consumers made a purchase after this research. Additionally, 56 percent of all respondents researched or bought at least one product they saw in a newspaper in the past month.

“As part of Google’s initiative to provide their online customers with a platform to buy printed newspapers, they have been aggressively promoting the newspaper value proposition,” said Randy Bennett, NAA vice president of audience and new business development. The latest research reinforces that newspapers continue to be a vital source of product information and have a measurable impact on driving customers online to evaluate and buy products, Bennett said.

Other findings from the research include:

Nearly 30 percent of newspaper readers who use the Internet went online to research at least one product they saw in a newspaper. On average, these consumers researched nine products.
Among respondents who said they researched at least one product they saw in a newspaper, 67 percent reported conducting further research online, compared with 48 percent who visited a store, 23 percent who called a store and 23 percent who asked a friend.
Use of the newspaper and Internet together reinforces consumer confidence. About half of survey respondents (48 percent) reported that seeing a product in the newspaper after seeing it online would make them trust the product. More than half (52 percent) of this group said they would be more likely to buy the product.

Conducted by market research company Clark, Martire & Bartolomeo Inc. (www.cmbinc.com), the Google (www.google.com) study was based on a 2007 telephone survey of 1,003 U.S. adults who regularly read print newspapers and also use the Internet and search engines at least once a month. The research comes as more than 750 newspapers, representing 48 of the nation’s top 50 media markets, participate in Google’s Print Ads program.

“The results of the study confirm a core marketing principle: Consumers’ exposure to advertising messages across mediums influences their subsequent research and purchasing behavior,” said Spencer Spinnell, head of Google’s Print Ads program. “Newspaper ads drive readers to the Web, where they search, find and obtain products.”

Online, newspapers maintain a strong lead over local media competition in capturing ad spending, according to additional research released in April. Newspaper-owned Web sites earned more than $2 billion in local ad revenue in 2007, more than all other local media companies combined, according to survey data collected from more than 3,000 local Web operations by Borrell Associates Inc. (www.borrellassociates.com).

The figure represents a 26.9 percent share of the total online ad market, followed by local Yellow Pages and television Web sites at 9.5 percent each and radio stations at 2.1 percent.

The survey also found significant growth in newspapers’ online sales staffs, which have more than doubled since 2005, adding an estimated 3,800 employees. The findings highlight the importance of a knowledgeable, well-trained online sales force, said John Kimball, NAA senior vice president and chief marketing officer. Web sites with at least one salesperson dedicated to selling online advertising averaged 87 percent more revenue than sites relying solely on print sales reps to sell online, the survey found.

Newspapers’ online reach, meanwhile, continues to grow. Newspaper Web sites attracted more than 66.4 million unique visitors, on average, in the first quarter of 2008, representing a 12.3 percent increase compared with the same period a year ago.

The figures come from a custom analysis conducted by Nielsen Online (www.nielsen-netratings.com) for NAA. Additional research by the company revealed that those who read newspaper Web sites are more likely to be politically engaged, affluent and multimedia-oriented than other Internet users.

To hear a podcast related to this story, go to www.naa.org/podcasts.

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