The online-news industry in 2003 and beyond

A few thoughts on Steve Outing’s end of the year column

He predicts for 2003:

Even though pop-ups are intrusive enough that they work better than the old standard Web ad banners, I think they’ll slowly die out due to consumer backlash.

Consumers hate television commercials, too, but we still have them.

My speculation is that advertisers will still find pop-ups appealing and will continue to buy them so long as click-through rates and branding studies show them to be effective. In fact, I would think that as more and more consumers install and use pop-up blocking software, pop-ups will become even more attractive to advertisers — because there will reach a point where the vast majority of consumers who actually see the ads will be those who have the least resistance to them. These are the consumers most likely to respond.

The real challenge for online publishers will be in devising a way to price these ads. Many pop-up blockers register an ad impression because the ad opens briefly, so the publisher cannot give a true accounting of impressions. So, if there ever was an ad format best designed for price-per-click fees, poppers are it.

Personally, I hate poppers, but just because we consumers hate them doesn’t mean that advertisers won’t continue to love them — they just need to deliver enough ROI, and I don’t think that is too big of a hurdle.

On the classified front, Outing is most pessimistic:

Most newspapers won’t move quickly enough and will see further loss of recruitment market share to, et al within their local markets.

Recruitment advertising has traditionally been a newspaper’s strongest suit and most important revenue source. This is changing, and no matter what newspapers do, newspapers will never again dominate this market as they once did. This is the biggest change the “new economy” has wrought. I don’t believe the situation is hopeless, however. While newspapers will need to scramble to better meet the needs of their clients (and they need to start looking on HR departments as clients, and not customers), newspapers remain the business best positioned to help local employers.

My prediction: Look for newspapers to start providing personalized job matching services — not, per se, a searchable résumé bank; rather, recruitment teams will start pre-screening résumés for employers and giving them the best possible matches, at a premium price. The newspaper will become the head hunter, even on lower-end jobs.

Outing is also bullish on Wi-Fi, or the wireless Internet. I remain bearish. First, where is the revenue? I can’t see recommending that my employer spend a lot of time and effort in PDAs, cell phones, and tablets until I can see a revenue model that works. While it was important for newspapers to jump into the online world in 1994/95, when revenue models were hard to imagine, I don’t think newspapers need to remain cutting edge about every new technology that comes down the pike. Getting online was a no brainer because it opened up a world of possibilities and it was clear pretty early that the Net would become important. Also, falling behind then was dangerous, but falling behind on PDAs doesn’t seem nearly as fatal. Wireless, as popular as it seems today, remains a boutique service, and the consumers of such services are even less likely to pay for wireless content than Internet consumers. And with the smaller screens, where do you put ads?

Yes, there is a market for breaking news (national and international), sports scores and stock reports on wireless, but there are also plenty of news channels providing those services already. I’m not sure there is a screaming need to get local news (which is what the vast majority of online news professionals are concerned about) on PDAs.

My big prediction for 2003 and beyond is to look for online newspapers to bank less on banner ads — including poppers and rich media ads — and more on leveraging print/online synergies, such as the Top Jobs application, print ads online, coupons and the like. Newspapers are also going to continue to move in a direction that leverages their standing in their local communities to better meet the needs of advertisers and consumers. Applications like online auctions that provide local advertisers with unique and inexpensive means to market directly to consumers will continue to grow and morph into new ideas.

I would say more, but I don’t want to give away the shop.

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