The following is the Executive Summary from the "Newspapers' Online Operations: Performance Report 2006," released today by the Newspaper Association of America.

The full report is available for download as a pdf, and a pdf of a PowerPoint presentation with more data is also available (under 'related materials' on the download page). For more information on this report, contact Beth Lawton (beth.lawton@naa.org or (571) 366-1037).

The online world has changed significantly since 2004, the last time the Newspaper Association of America dispatched a digital media survey to member newspapers.

• Broadband penetration in U.S. households has increased significantly in the past few years. In 2004, the Pew Internet & American Life Project reported 39 percent of adult Internet users had a broadband connection at home. (“Broadband Penetration on the Upswing,” Pew, 2004). In 2007, Pew reported, that had increased to 70 percent of all home Internet users ( "Memo: Home Broadband Adoption," Pew, 2007).
  
• Mobile Web usage has also increased significantly. In the United States, 71 percent of mobile device owners can surf the Web, and 41 percent do so, according to a study the Online Publishers Association released in early 2007. Weather, sports and local news are most popular ( "Going Mobile," Online Publishers Association, 2007).
  
• Apple sold almost 1.5 million iPods in 2003. The company sold more than 20 million in just the first half of 2007, based on Apple’s quarterly earnings reports.

This growth in consumer technology has meant big changes in newspapers’ digital media technology. Not only are newspapers’ Web sites reporting increased page views and more unique visitors, but online revenue from advertising is up, as well. In addition, the content on newspaper Web sites has changed to include significantly more video, audio and other bandwidth-heavy features. 

The following are just a few of the key findings from this year’s report, compared with information from earlier studies, particularly the Newspaper Association of America’s “Newspapers’ Online Operations: Performance Report 2004”:

Audience

• Fifty-two percent of large-market sites reported commonly serving up more than 35 million page views per month, an increase from 35 percent in 2003 and 19 percent in 2002.
  
• The median number of unique visitors per month for newspaper Web sites across circulation groups was more than 291,000.
  
• Each circulation category surveyed reported significant gains in the number of monthly unique visitors. In the highest circulation category (papers with a print circulation of more than 250,000), 62 percent reported more than 1 million monthly unique visitors in 2003. In 2006, this percentage increased to 95 percent.
  
• Twenty percent of visitors to newspaper Web sites in 2006 came from Google, highlighting the importance of search engine marketing and optimization for newspapers.
  
• Forty-seven percent of surveyed newspapers reported that in 2006 more than half their online audience came from within the primary market area. This is a decrease from 2003, when 64 percent of surveyed newspapers cold say most of their audience was within the newspaper’s Primary Market Area (PMA).

Revenue

• More than half the sites with 500,000 to 1 million unique visitors per month reported revenue of $5 million to $10 million in 2006.
  
• Almost three-fourths of the newspaper Web sites that reported more than 1 million unique visitors per month had revenues greater than $15 million.
  
• Online-only classified revenue has increased substantially across circulation groups, especially in the automotive category.
  
• Local retailers are driving online display revenue at most circulation levels. Overall, local advertising accounts for 90 percent or more of newspapers’ Web site revenue. In the past few years, large market newspapers are reaching out more to national advertisers, and the percentage of local advertising revenue at the 250,000 and higher circulation level has dropped.
  
• Only five percent of the total advertising revenue at surveyed newspapers comes from online.
  
• More than two-thirds of this five percent comes from classified advertisements.
  

Content

• More than half the newspapers surveyed required visitors to register for access in 2006. This has doubled since 2003.
  
• Only 27 percent of all newspaper sites charge for some or all content online. Most newspapers that charge do so only for niche or premium content.
  
• At least 80 percent of newspapers surveyed offer searchable archives, much or the entire daily/Sunday print product, news updated throughout the day, community information, blogs and video. In most content areas, newspapers with a circulation of 50,000 or less lagged behind higher-circulation newspapers.

In addition to details about these findings, this report includes information about the online audience, newspaper Web site traffic, marketing and promotions, media partnerships and online advertising sales and revenue. This report also includes a few strategic recommendations for newspapers moving forward.

We hope this report is helpful both in understanding the current state of the newspaper digital media environment and in planning for your newspaper’s digital future.