Newspapers plow old ground | Blogads

Newspapers plow old ground

by henrycopeland
Tuesday, October 8th, 2002

Gordon Borrell and Clark G. Gilbert have applied great empirical rigor in examining the way newspapers respond to the Internet. Highlights from their access-restricted report:

“In every instance of disruptive technology studied, the disruption causes a net expansion of the marketplace. So, it seems, will the Internet create net growth of local advertising expenditures.” While cable-TV advertising took 11 years to achieve a 2.5% share of total ad spending, the Internet achieved the same share in 4 years.

But, focused on winning yesterday’s battles online, newspapers turn their backs on the real growers. “Our estimate for 2002 is that the newspaper industry is missing out on $289 million in ad revenue by not offering targeted advertising and other high-growth revenue categories that are achievable on the Internet today. By 2005, those missing categories could represent as much as $880 million…”

Newspapers are wired to defend current franchises rather than greenfield, and millennial-era Internet-pioneering losses reinforced this reflex. Currently, 72% of the typical newspaper’s online revenues come from classifieds, with half this only an upsell from print.

Even in plowing old fields, newspapers often undershoot; in Pressflex‘s experience serving newspaper websites, an astonishing number of papers fail even to promote print subscriptions online, something that can work remarkably well.

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