Sarah Palin, Lindsay, and Recession; Why they increase Readership & Ad Revenue

By Guillaume Bouchard

NEW YORK,(RushPRnews-Hollywood Today)10/15/08-As quickfire news, from the economy and the elections to Britney and the Jonas Brothers, ad dollars and editorial decisions are changing in the Internet Age. Faster-than-print choices are being made by smart editors on an instant basis.

Fiction editor Ra Page once quipped, ”I want every story I read to go snap, so fast it takes the skin off my fingers.”

Whether it’s traditional print media or online journalism, it would be great if every article, or advertisement instigated a sale or a thousand new readers. But alas, the economics of the internet remains journalism’s trillion dollar mystery. Can journalism figure out a way to monetize their online properties?

And it’s not as if online news sites aren’t trying. In 2007, advertising expenditures for newspaper Web sites increased by 18.8% year-over-year to $3.2 billion. For the same time frame, $42 billion was spent on print ads in the United States alone; down 9.4% from 2006.

With a projected annual growth rate of 21% per year, online advertising is expected to reach $62 billion in 2011, making it bigger than newspaper advertising, which is expected to total $60 billion in 2011.

While the online ad industry is still relatively young, there is plenty of room to grow. According to TNS Media Intelligence, the top 50 advertisers are spending just 3.8% of their budgets on online ads; smaller advertisers spend 6.8%.

The lack of a clear definition of markets, competition, products and the relationship between print and online newspapers has created a largely fragmented industry where revenue strategies (and their profitability and/or failure) vary from site to site.

In the not too distant past, print newspapers relied on advertising and subscription rates to boost their bottom line. The same subscription model has been extremely difficult to duplicate online. The learning curve has proven to be steep. In addition to losing subscribers, newspapers also lost a great amount of classified ads revenues to online free classified sites, such as the immensely popular Craig’s List, eBay and Kijiji.

A few early online newspapers, including USA Today, the San Jose Mercury news and the LA Times initially charged for access but subsequently dropped their fee based service, focusing instead on advertising.

Wall Street Journal, introduced a subscription fee for nearly all content in 1996. The success of the Wall Street Journal Online has been attributed, in part, to a successful brand name in a (lucrative) niche market.

This significant factor delineates the WSJ from most general interest newspapers. In fact, in 2005, only 44 U.S. online newspapers charged a subscription fee; out of a total of 1,500.

Given the growing competitiveness of online advertising, and difficulty in charging subscription fees, no single revenue source has emerged as a clear front runner for sustained long-term growth

Instead, multiple revenue streams may be necessary for online newspapers to not just survive, but thrive. In addition, larger online news-sites may need to make more of an effort to localize their news offering and advertising. In other words, thinking globally and acting locally.

On one hand, the internet has created a globalized culture; on the other hand, we are not cookie cutters. According to the publication Foreign Policy, global firms that sell only homogenous content are less likely to have an audience. Therefore, to actually broaden their scope, online news sources need to both localize content, and attract niche readers

Readers are interested in news items from around the world; they are also interested in information that affects them directly.

Bullish or conservative, locally targeted ads in search, display (including video), and classifieds are growing at rates faster than overall online ad growth. A report by Borrell Associates said that local online advertising would reach $12.6 billion in 2008, with local search contributing roughly $5 billion to that total.

After all, no paper traditional or online can be everything to everybody. With this in mind, the web has created a huge opportunity for niche journalism, and by extension, uber-specific niche advertising. If anything, the internet has taught us it’s more important to be everything to somebody.

One overarching metric that is generating higher traffic growth are magazine websites. The advertising is also geared toward a very specific, information hungry audience.

To increase the number of targeted readers and thereby increase ad revenue, news organizations may have to divide into consortium. This could either mean joining forces with other news organizations or dividing sites up into smaller niche categories; thereby forming a linked association with other like minded sites. Entering one portal to negotiate a variety of specific sites is far easier than one site trying to win over individual readers.

Yes, the vast majority of online news sites are profitable to some degree. And yes, the window of opportunity to generate significant ad revenue remains wide open. Unfortunately, only a fraction of what’s available is being used online.

Jeffrey Jolson-Colburn, Publisher and Editor in Chief of Hollywood Today (www.hollywoodtoday.net), and former online editor of the Hollywood Reporter believes that to stay healthy in a competitive online news market, newspapers can’t rely on traditional web advertising.

“All online papers have to find new revenue sources,” he said in a telephone interview. “Fortunately, with their content and brand-driven head-start, newspapers have a great deal of opportunity to enter any market within a broad scope of relevance.”

While our fragmented industry seeks to put their proprietary stamp on new online revenue generating models, it might be simpler to make the content available to the search engine first.

Many have found, you can only succeed online if surfers can actually find your site. In turn, clients can only spring their advertising dollar into actual sales if people are interacting with the online ads.

The news industry has spent copious amounts of time and money figuring out the online behavior of surfers but has done little to change the structure of their sites. To generate hits and ad revenue people need to rework the way they tag their stories; being conscious of both the URL name and headline.

Maximize the chances that people will check out your site and you’ll maximize your advertiser’s dollar too. And this doesn’t mean putting your site through an extensive SEO overhaul.

Chances are, your article will find a larger readership if the URL contains popular search words. “/Paris_Hilton_Wins_Presidency” will get a lot more hits than “/20081104/aakaj8857i”. The same goes for the actual title. Simple headlines get hits; witty iambic pentameter does not.

If you want to see what successful maximized online headlines look like, check out eBay. Everyday members have mastered the art of the headline and sale.

The road to riches is not necessary straightforward and the planning has to be carefully thought out. For some, it will mean forming a niche consortium to increase traffic and revenues. For others, it could be as simple as changing the way you present your information to the search engines. For most, it will be both.

According to Jolson, “It may sound obvious, but if it was, everyone would be doing it.”