Scott Karp does the math on the lone bright spot of the newspaper economy – the growth in online business – and calculates that newspaper websites will need nearly 2 trillion ad impressions at a $30 CPM to equal their print revenue. that’s 24 times as much traffic as newspaper sites currently receive, he notes. And that’s assuming that CPMs would hold steady at $30 at those traffic levels.
The Newspaper Association of America said online advertising revenue at newspapers was up 22 percent in the first quarter. However, traffic was up only about five percent. Even if visitor growth continued at that pace indefinitely, it would be many decades before online revenue could equal print sales.
The best path for newspapers, of course, is to get away from anonymous metrics like page views and impressions and move toward an alternative model that monetizes reader engagement and contextual relevance. The trouble is that newspapers are the ultimate mass-market media vehicle. There is no historical or cultural precedent for addressing small markets, which are the most valuable ones to advertisers. The lone bright spot in the picture looks like a flashlight.
This entry was posted on Tuesday, July 31st, 2007 at 3:52 am and is filed under Advertising, BusinessModel, Demographics, NewMedia, Newspapers, OnlineMedia. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.