Online Rally May Sidestep Newspapers

It was a good day for newspaper Web sites when Mercedes-Benz USA introduced its updated E-Class cars this summer. Mercedes bought out the ad space on the home pages of The Washington Post, The Wall Street Journal and The New York Times, and had those sites create special 3-D ads for them, at an estimated cost of $100,000 a site.

The days after were not as good. While Mercedes was happy with the newspaper sites’ performance, it shifted money to cheaper, more tightly aimed ads bought through networks, which bundle ad space from many Web sites.

When Mercedes advertises its more basic models next year, it will largely avoid newspaper Web sites and rely on networks. That lets Mercedes “be very targeted and efficient with our dollars,” said Beth Lange, digital media specialist for Mercedes-Benz USA.

But that also explains why newspaper sites are not holding on to ad dollars, even while overall Internet advertising is creeping back. Newspaper sites are the patent-leather stilettos of the online world: they get used for special occasions, but other shoes get much more daily wear. The beneficiaries of this behavior are networks and exchanges like Advertising.com from AOL and DoubleClick Ad Exchange from Google, which dominate the buying and selling of extra space.

At nonnewspaper sites like Yahoo and Google, revenue from display advertising — the image-based ads on Web pages — seems to be returning. Yahoo’s display revenue on its Web sites increased 2 percent in the third quarter, though it was down from a year earlier. Display revenue increased at Google from a year earlier.

Over all, the Internet is the only advertising medium expected to grow this year in the United States, rising 9.2 percent, to $54.1 billion, according to figures released this month by ZenithOptimedia, a media service firm.

Newspaper sites cannot seem to catch that wave. The New York Times Company reported a decline in ad revenue at its newspaper Web sites of 18.5 percent this quarter compared with the third quarter last year. Advertising revenue at Gannett’s newspaper sites also declined. The McClatchy Company was an exception, with online advertising revenue rising 3.1 percent from a year ago, though the rate of growth slowed. (Other major newspaper companies have not yet reported their revenues for the most recent quarter.)

That is a sobering trend for newspaper executives, who once hoped that online revenue would make up for plummeting print revenue.

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Tags: ad space, advertising medium, aol, display advertising, doubleclick, Google, internet advertising, media specialist, mercedes benz, new york times, new york times company, wall street journal, washington post

This entry was posted on Monday, October 26th, 2009 at 4:01 am and is filed under Communications, Innovation Needed, NY Times, media. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.