Groupon has just expanded to San Angelo. That means the site is now found in 13 cities in Texas and obviously, it’s beginning to move toward smaller markets. Other Texas cities that have Groupon sites are Beaumont, Fort Worth, the Rio Grande Valley, San Antonio, Dallas, Lubbock, Austin, Corpus Christi, Houston, Amarillo, El Paso, Midland/Odessa and Abilene. Groupon is just one example of the move of advertising dollars to digital direct marketing. Forbes magazine called Groupon “the fastest growing company ever.”
The good news for newspaper advertising is that it just experienced its smallest drop in any one quarter since 2007. Spending for print ads was down 7.6 percent. It shows you how bad things have been overall that we consider that figure hopeful. But online spending was actually up by 13.9 percent. – giving us a total drop of 5.5 percent. Here’s the official glass-is-half-full interpretation from John F. Sturm, president and CEO of NAA: “The steady transformation of the newspaper industry is clearly evident in these latest revenue figures. Despite a highly competitive environment, online advertising growth rebounded back into double digits, while declines in traditional revenue categories continue to moderate as the general advertising recovery progresses. The fact that online now represents nearly 12 percent of overall newspaper advertising revenues bodes well for our medium’s future in an increasingly digital environment. Even as the economy is slow to rebound, there is heightened optimism within the industry – a confidence reflected in second quarter earnings reports from public newspaper companies. New business models are taking hold, with publishers continuing to invest in platforms that deepen audience engagement in print and online. In a world where trusted, high-quality content is in demand, newspaper companies are uniquely positioned to benefit from the advertising recovery.” Or, if you’re a half-empty type, try this observation, from Alan Mutter: “Following a historic pattern that shows newspapers take in roughly 47 percent of their ad revenue in the first half of the year, it is possible to project that full-year sales for the industry will drop some $2 billion this year to finish at approximately $26.5 billion. Assuming no major positive or negative changes in the economy between now and the end of the year, this will put newspaper ad sales back to the lowest level they have seen since 1985.”
In this time of radical change for newspapers, you’ll find lots of folk trying to make sense of it all – especially in the blogosphere. These writers are trying to interpret the signs of the media times and to recommend what we should do next. You can’t read them all, but when I see Steve Buttry’s byline attached to something, I always take time to check it out. I hope you will read the entire blog post at the URL above. Talking about the free vs. paid content issue, Steve notes that many people see the Original Sin of newspapers as not beginning to charge for online content from the get-go. But in a typical (for Steve) flash of insight, he notes that the Original Sin was on the ad side. Here’s a brief sample: “The disastrous error that newspapers made early in our digital lives was treating online advertising as a throw-in or upsell for their print advertisers. Helping businesses connect with customers was always our business. We were facing new technology and new opportunities and we did next to nothing to explore how we might use this new technology to help businesses connect with customers. We just offered businesses the same old solutions that we offered in print, but pop-up ads and web banners somehow didn’t work as well as display ads. Which was just as well, because we told our business customers the ads weren’t worth much by the way we treated them.” If you agree with what Buttry is saying, you will definitely want to make plans to attend our Internet ad sales workshop on Oct. 29 with Chuck Nau. Mark your calendars now and watch for more details on the website and in your inbox soon.
Shortly after the Ann Arbor News closed, AnnArbor.com went live. The site has an interesting format — it’s rather blog-like — and it screams hyperlocal. It’s definitely worth looking at if you’re a community journalist. And on top of the interesting format for news, they’ve also rethought advertising in a unique way. Check out the articles for more information. The first link, from the Nieman Journalism Lab at Harvard, covers the reasoning behind the sites layout and delves into the ad issue as well. See the other two links for some commentary on the site from Steve Buttry and Jeff Jarvis.
Here’s a site you need to check out, and print out for your ad staff. According to recent research, consumers trust advertising on local newspaper, magazine and television Websites, and are very likely to take action after viewing ads on these sites. It’s a piece any Texas ad rep needs in his/her pitch book when selling Internet ads.
This is definitely an advertising concept that I can see working for community newspapers. The Nieman Lab has a story op about MinnPost’s experiment with “real-time advertising.” They’re sort of a technologically-updated version of classified ads that are powered by micro-updates from businesses.
An article in Advertising Age reminds newspaper publishers that they might want to be careful about how high they build their pay walls, because online advertising revenue is still climbing. “Digital ad revenue won’t replace the print revenue newspapers used to wring out of near monopolies, but digital ad spending at newspaper sites won’t keep falling beyond next year,” according to the article.
Newspapers who are curious about why their classified revenues are down need look no further than this study: According to Pew research, online classified use is growing significantly. The number of online adults to use classified ads websites, such as Craigslist, has more than doubled since 2005. Online classified use has more than doubled in the past four years. Almost half (49 percent) of Internet users say they have ever used online classified sites, compared with 22 percent of online adults who had done so in 2005. On any given day about a tenth of internet users (9 percent) visit online classified sites, up from 4 percent in 2005.