The next three years are critical for newspaper web sites

The next three years could be critical for the online news game. The timeline may be five years, but more likely, I think, we’ll have a pretty good idea as to our fate (speaking of newspapers and their online properties) within three years.
By mid-2010, we won’t necessarily be saying, “whew, we made it through that one,” but we will be able to say whether our long-term prospects are good or poor.

I know there are those who would say the prospects are bleak now. I disagree. I remain hopeful. But I would say the trends now are neutral. Our fate hangs in the balance.

Within three years, we’ll know:

  • Whether CPM rates can be pushed much, much higher;
  • Whether newspaper sites can band together to create a useful national advertising network;
  • Whether there is any there there in behavioral advertising (this point independent of the first two items, but also related);
  • Whether returns on contextual, CPC advertising can become a significant revenue stream for local news publishers;
  • We will know if we can figure out a sustainable, significant video advertising model;
  • We will know if we’ve figured out a way to not only protect, but expand our classified and vertical advertising revenue;
  • We will know if we can really turn internet yellow pages into a strong, new revenue source;
  • We will know if we’ve figured out how to grow audience significantly enough to better under gird all of these advertising models.

If we’ve succeed in all or most of these areas, I think we will have reason to celebrate our success. If we’re still just treading water, or worse, falling behind, we will be justified in feeling quite panicked.

My prediction: Within three years, we will see a number of online news sites associated with newspapers that take in more than 30 percent of the revenue of the total media company operations — all of the trends above will be robustly positive for those companies. And we’ll see some newspapers failing miserably and on their way out of business.

9 thoughts on “The next three years are critical for newspaper web sites

  1. Yes, the main bread and butter of the moment, banner advertising, can sustain significant increases in CPM rates at most Web sites, which significantly undercharge. I’m predicting CPMs will double during the next two years. And, yes, I’m pulling that number out of . . . the air.

    It’s important, though, to offer low-cost advertising options such as contextual ads within search results to maintain a hold on mom-and-pop local advertising. The thing to remember about mom-and-pops is that all the major companies used to be one.

    Don’t you want to be on the good side of future big timers?

  2. Bob Cauthorn said much the same thing at an online forum I attended in LA about six years ago … take care of the small advertisers online — they’re your future big advertisers.

  3. What would you consider the determining factor for the successes and failures? Is it:

    1. Being the dominant news source in the community makes it easier to succeed as the online news source in the community.

    2. Suburban newspapers with strong local coverage will succeed online while large lumbering metro newspapers will be too big to be local and too small to be national.

    3. It all comes down to how much online savvy you have. You can be starting from behind in the print world, but you can succeed if you “get it” online.

  4. It all comes down to making money. It doesn’t matter how much you “get it” online, there’s got to be revenue there to sustain the “getting it.”

    To me, it’s not hard to figure out the content play. And I can also see the light at the end of the tunnel on revenue, but until we get there, until we establish sufficient revenue to offset print loses, we’re not out of the wood.

  5. That’s a reasonable answer. It suggests that the dominant news source in the community will be most likely to pull together that revenue.

  6. One reason I push so hard for newspaper sites to dominate the local markets is the spoils will go to the local winner online. A fragmented local online market is going to be much harder to succeed in.

    The model for that seems to be how just a handful of major online players dominate online revenue nationally.

  7. nice summary. I would add – own the customer relationship. Either the newspaper will transfer their customer ownership online – or they will hand it over to someone else and just become a service provider.

  8. I agree this is a crucial time for newspapers and that the cultivation of a loyal and active audience is the most important aspect of winning in the local space. In my mind, that is bullet number one.

    Although display and other business models will continue to grow, the addition of advertising mechanisms that connect buyer and seller directly will be critical to expanding ineractive revenue for newspapers. However, turning “Internet Yellow Pages” into a revenue source isn’t the answer. What newspapers can do is create a new user experience which marries location-based directory information and rich content to provide something more compelling for both uses and advertisers than the old Yellow Pages and shift the model to one that is near impossible to be replicated by anyone with just a business directory database and an ad platform.

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