Newspapers' online growth slowed in '07 along with web ad industry

Online newspaper ad disbursement rose about 19 percent to $3.2 one million million last year, according to estimated numbers just published by the paper Association of United States. However, growing of paper Web site disbursement dropped more than 10 percentage from 2006, when online ad gross grew 31.5 percentage.

In Q4 2007, online newspaper disbursement hit $847 1000000, up more than 13 percentage over Q4 2006. Overall, print and online ad gross reached $12.6 one million million in the last one-fourth of 2007, a diminution from total ad disbursement of $14 one million million in Q4 '06.

The part of ad gross from Web media continued its slope last year, accounting for 7.5 percentage of all paper ad dollars, up from 5.7 percentage in '06, according to the NAA. Although online ad dollars are going up, the rate at which they're rising has slowed for paper publishers. In 2005 and 2006, online ad gross grew at a 31 percentage clip each year over the previous year. Yet in 2007, the growing rate decreased to below 19 percentage from 2006, down over 12 percentage.

The NAA property the growing decline to overall online ad disbursement decreases in 2007. So, the stallion industry experienced a rate of growing in 2007 of about 10 percentage less than in 2006. Estimates from the Interactive Advertising agency and PricewaterhouseCoopers pegged 2006 online ad disbursement at $16.8 one million million, an addition of 34 percentage over $12.5 one million million in 2005. Yet, by 2007 online ad growing tapered. The IAB estimated last month that full year '07 gross would reach about $21 one million million, a 24 percentage increase over '06.

NAA VP Audience and New concern Development Randy Floyd Bennett indicated the paper industry's partnership with Yahoo, as well as the recently-launched quadrantOne paper network, will boost online ad gross generation for the industry. "Newspapers have been sharply diversifying the online advertising gross, particularly through the Yahoo partnership and the quadrantOne newspaper partnership, to gaining control a larger share of subject advertising dollars," he told ClickZ News. "We expect to see an impact from those partnerships this year."

Although the Yahoo deals have involved HotJobs recruitment listings revenue thus far, a handful of sites from the 26 publishers in the newspaper consortium have begun testing a display advertising relationship with Yahoo. The project promises to rake in national ad dollars for the paper sites, something they've been sorely missing.

The drop in combined print and online ad revenues also has continued to accelerate. According to NAA numbers, total ad spending fell at a rate of less than 1 percent between '05 and '06, but declined nearly 8 percent in 2007 compared to 2006.

In their long transition to the Web, newspapers have bundled sales of print and online classifieds ads. Now that's coming back to bite them, said Ken Doctor, newspaper industry pundit and lead news analyst at media market research firm Outsell. "They have a lot fewer ads going into print, and if they're not going into print, they're not getting the [online] upsell," said Doctor. Still, he points to the industry's increased investments in staff and training dedicated to selling Web advertising. "Online-only sales have ramped up," he continued.

Doctor also suggested online newspapers, still mainly reliant on CPM-based advertising, would benefit from introducing more performance-based ad opportunities. As the recession tightens ad budgets, advertisers are seeking advertising that can be tracked, with results tied directly to expenditures. Those recession winds are shifting more towards performance-based online advertising sold on a cost-per-click or cost-per-action basis, and away from impression-based advertising.

"Newspapers need a [cost-per-action] strategy as advertisers discover the world of pay-for-performance just like the auto advertisers have with lead generation," said Doctor.