Newspaper Sites Earn More in Local Online Ads than All Local Media Companies

April 14, 2008

This article is included in these additional categories:

Local & Directories / Small Biz | Newspapers | Television

Newspaper-owned websites earned $2 billion in local online advertising revenue in 2007, surpassing all local online media companies combined and accounting for 26.9% of the local online ad market, the Newspaper Association of America said, citing data from Borrell Associates.

According to Borrell’s local online revenue survey of 3,000 local web operations:

  • Local Yellow Pages and TV websites each captured 9.5% of the market, and radio stations took 2.1%.
  • Newspaper-owned websites also grabbed a hefty share (26%) of revenues from video ads – the fastest growing segment of local online advertising. Video ads generated $363 million in 2007 – a number expected to reach $1.2 billion in 2008.
  • On the national level, newspaper websites alone earned $1.1 billion in online advertising revenue, bringing the combined total of online local and national ad revenues to $3.1 billion. (The NAA’s estimates for newspaper online ad revenue was $3.2 billion.)

“[L]ocal advertisers recognize newspaper websites as an indispensable way to reach their best customers,” said NAA President and CEO John F. Sturm. “The trusted name brand, quality content, and desirable audience delivered by the medium’s digital properties are critical to advertisers in today’s crowded media landscape.”

Online Ad Sales Strategies Pay Off

Also according to the survey:

  • The largest newspaper websites achieved a majority of online ad revenue from non-print advertisers for the first time, developing a broader base of customers to generate new revenue streams.
  • Online-only advertisers accounted for 59% of the total ad revenue generated by newspaper sites.
  • websites that employ at least one salesperson dedicated to selling online advertising averaged 87% more revenue than sites that relied solely on print representatives to sell online ads.

Newspapers have doubled their online sales staff since 2005, adding an estimated 3,800 sales employees nationwide who are dedicated to developing, managing and selling new online products at their properties.

“The importance of maintaining a knowledgeable, well-trained online sales force in today’s environment simply cannot be overstated,” said John Kimball, NAA SVP and CMO. “Such specialization gives the sales consultants the best chance to have a significant impact on revenue.”

TV Sites vs. Newspaper Sites

In a sample of 61 markets covering the full range of market sizes, Borrell Associates compared the number of online-only salespeople at each market’s largest newspaper site with the number at its largest TV site:

  • Across all markets, the largest newspaper website had an average of 2.4 times as many online-only salespeople as the largest TV site.
  • Among the 20 largest markets, the largest newspaper site averaged 5.1 times as many online-only salespeople as the largest TV site.
  • Among the 50 largest markets, newspapers averaged 3.1 times as many online-only salespeople as the largest TV site.

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