Mike Markson lists some reasons why the local newspapers do not do well online….
1. Local brands don’t translate online. New mediums need new brands. Localnewspaper.com doesn’t work.
2. Local markets don’t exist online for users. The web itself is an aggregator – makes everyone a neighbor. Most of the audience to newspaper.com’s come from "out of market."
3. Local markets do exist online for advertisers. Local advertisers only want to reach local customers. The newspapers can’t deliver that (see point #2). As a result, online, the newspaper has lost its unique value proposition.
4. Display advertising online is a bad deal. It’s poorly priced and less effective than its chief competitor, search advertising. Search ads make all the money because they’re the better deal. They deliver no wasted impressions (only clicks are charged), they’re 100% trackable – so success is measured daily – and are perfectly priced as a result of an auction.
5. Display advertising may also be a bad deal offline, but its untrackable. That 1/4 page ad you want to sell offline, go ahead, charge $20 CPM – no one will know if it was a bargain or not. Online, they’ll track it down to the click.
6. Your loss leaders are too heavy. National news, international news, entertainment news, etc . – they don’t pay their way. You can’t contextualize around them, the audiences aren’t segmented and as a result, they don’t perform. All of which would be fine except these are the pages that most of your audience is reading.
7. Your money makers are too few. Sure you can sell a $20 CPM on your business or health pages, but that’s a small fraction of your traffic. (see point #6). You may say your site earns $20 CPM because that is your rate card, but add up your revenue and add up your pages views and do the math. My guess is your not much above $1.00 CPM.
8. The only unique value you could have now is your stories, but everyone has them. The syndication structure worked offline, but online it’s a disaster. The wire service stories that make up most of your site are a commodity. You can’t build an audience selling a commodity.
9. Your classifieds revenue has gone away. The brands didn’t translate, the products you launched were wrong. Craigslist, etc. are eating your lunch online.
10. You still have print revenue. This is why you are losing online?? Actually, yes. You make a lot of money from your offline operations. It must be protected, to the degree it can. Shareholders, employees, etc. depend on it. It would be easier if you didn’t have any revenue to protect and didn’t worry about cannibalization. In that case you could make big bets that you can’t make now.
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