I'm CEO of Newspeg.com, a social news-sharing platform. I've spent 20 years at the intersection of traditional and digital journalism. I've helped to invent ways to read and interact with the news and advertising on computer screens and iPads, and before that, I wrote news stories on typewriters and six-ply paper. I co-founded WashingtonPost.com and hyperlocal pioneers Backfence.com and GrowthSpur; served as editor of Philly.com; taught media entrepreneurship at the University of Maryland; and have done product-development and strategy consulting for all sorts of media and Internet companies. You can read more about me here.
It's an axiom of newspaper Web site strategy and design that one of the worst things you can do is "paste a newspaper on a screen," or too slavishly replicate the print experience online.
It may even be worse to paste print advertising onto a screen. But that's what too many newspaper Web sites do. And that's a big reason why newspapers are having trouble finding growth in Web advertising revenue, especially in this lousy economy.
Look at any newspaper Web site. What advertisers do you see? Pretty much the same ones that dominate the print editions. You'll see plenty of banks, car dealers, big retailers and the like. There's a good reason for this: They're traditional customers of newspapers, they're relatively easy to sell and they pay big (though diminishing) bucks to be on the Web site. And the ads they usually buy? Banners, skyscrapers and the like, the Web equivalent of old-fashioned print display ads.
This is a problem. Why? Because these sorts of advertisers have been among those hardest hit by the current economic downturn. And because by sticking to this traditional ad base, newspaper Web sites are failing to go after other forms of advertising that might truly expand their revenue.
You hear all the time the complaint that newspaper Web sites can't bring in enough revenue to cover the costs of a fullscale newsgathering operation plus related expenses like marketing and online production. This has crippled the goal of moving toward freestanding Web business for newspapers.
But I'd argue that that's because newspapers just haven't tried hard enough to build online products that are attractive to a different type of local advertiser, and haven't tried hard enough to sell to those advertisers–who tend to be smaller and have very different needs than the old standbys.
Most newspaper sites know nothing of things like contextual advertising, search advertising, self-service advertising tools, behavioral and geographical targeting, business directories, RSS and mobile ads, video ads and other newfangled ad models that are springing up all over the Internet. Guess what: their online competitors are all over these. And that's why newspapers are losing the local online ad war, and badly, to the likes of Google, Yahoo, Local.com, Yelp and others that have scooped up a majority of local online ad spending.
Hello? Local ad spending? Didn't that used to be the newspapers' domain? Not anymore. Not online. Papers are losing it to smarter competitors the same way they let the classifieds business slip away to the likes of craigslist, Monster and eBay--by failing to innovate and move quickly to come up with online advertising offerings that local advertisers–many of whom have never advertised in print–are now looking for.
There's some hope. E.W. Scripps, A.H. Belo and McClatchy reportedly are finally focusing on truly ramping up their local advertising efforts and going after smaller businesses that they've never even called on before. And perhaps the much-vaunted Yahoo newspaper consortium will finally bear some fruit in this area. But newspapers are playing from behind, and the economy is exacerbating the situation.
There's no doubt that the current economic mess is going to slow down online spending–Borrell Associates recently scaled back its 2009 predictions for overall local online ad spending growth to 7.8 percent, after a 47 percent increase this year. And small local businesses are cutting all types of advertising right now. But newspaper Web sites haven't benefited much from this year's increase in local Web advertising anyway–many have reported paltry online revenue increases, at best, while competitors were charging ahead–and Borrell argues that newspaper sites will be even more affected by next year's slowdown because they're so dependent on online display ads and classifieds.
Yes, online advertising isn't–for now–as lucrative as print advertising. Yes, measurements like CPM are lower online. Yes, the chasm between the legacy print advertising business and the online future is widening and deepening for newspaper companies. But a lot of that is because newspapers are approaching Web advertising with one hand–or more–tied behind their back. Until they get much more sophisticated about pursuing Web advertising opportunities and really broaden their client targets and offerings, and get really serious about winning the Web advertising game, they're going to keep falling further behind at precisely the moment they need to be increasing Web revenue.
Disclosure: I'm doing some consulting for a local online advertising tools startup called PaperG, which has some newspaper clients and is seeking more. But the problem is far bigger than one small company can solve.