By: Carl Sullivan
Newspapers have built it, but the advertisers don’t necessarily come. “It” is the newspaper Web site, the top online information source in many markets, handily trouncing competitors. Yet online newspaper executives sing this common refrain: “National advertisers ignore us. We can’t get in the door with national buyers.”
Joining the chorus is Dana Hayes, vice president of sales for Tribune Media Net, the cross-selling arm of Chicago’s Tribune Co. “Online sites in general are not getting their fair share of national advertisers,” he said. “Most companies are spending less than 2% of their ad budgets online. The top 100 advertisers are sitting on the sidelines.”
Those that do spend bucks in cyberspace tend to flock to big players such as America Online Inc. and Yahoo! Inc. — or maybe to the few truly national newspapers, such as USA Today and The New York Times. In the lingo of a New York ad exec, fuggedabout the sites owned by major metros: advertisers such as the Coca-Cola Co. and General Motors Corp. are noticeably absent.
The problem? “Until now, the metrics and tools that everyone’s been playing with haven’t been very understandable by the people that have the money,” said Dave Morgan, president of New York’s Tacoda Systems, which helps companies such as Tribune integrate their audience databases for more effective targeting.
When you ask national ad buyers why they don’t purchase space on newspaper Web sites, you’ll get a variety of answers. One you won’t hear is “I’m too lazy to do the research on local online audiences” — even though that answer may be as applicable as any of the others.
Less harshly, ad agencies don’t have the resources to research dozens of regional Web sites, especially when the alternative is a single buy on MSN. At a Newspaper Association of America (NAA) conference this summer, advertising consultant Joseph Jaffe admitted media planners want publishers to make their jobs easier. “Tell us that you can effectively and efficiently get us the numbers we’re looking for,” he said.
But what “numbers” do advertisers want? In a recent unscientific poll conducted by E&P Online, we asked news Web sites what metrics they used when talking to advertisers. The results: unique users, 28%; page views, 26%; time spent per visitor, 4%; their own customized metrics, 2%; and a combination of metrics, 40%.
And remember that a metric such as “unique user” may be counted very differently from one site to the next, particularly when multiple vendors are doing the counting. A new report for NAA and The Associated Press by Borrell Associates Inc. of Portsmouth, Va., said “the state of local Web measurement is one of disarray.”
Interviewing Web publishing executives at 87 newspaper-affiliated sites and 142 broadcast television sites, Borrell found double-counting of Web visitors due to network partnerships, among other problems. And only 21% have their server logs audited by a third party.
An obstacle for independent and smaller publishers is cost. “One of the challenges for a single online newspaper site that’s not part of a larger group is getting that data at a reasonable cost,” said Chris Jennewein, director of Internet operations for The San Diego Union-Tribune. “The national reports are expensive.”
On the bright side, many feel the industry is moving to a standard set of metrics that will be used by all sites and universally understood by advertisers, thanks in part to work by groups such as the Online Publishers Association and the Interactive Advertising Bureau. Morgan predicted standardized Web measurements by next year: “I see it evolving into metrics consistent with traditional media — reach, frequency, demographics, and content affinity.”
The Borrell report rightly admonishes newspapers to be players in the decision-making process on audience measurement. “Publishers who remain apathetic about the direction of online measurement may awake to find themselves marginalized by standards that tilt the playing field toward their competitors,” the report said.
What all advertisers, including national and local, want more than anything, of course, is results. “Publishers can’t just sell eyeballs, they have to sell effectiveness,” said Nick Nyhan, president of New York’s Dynamic Logic, which helps measures the impact of online campaigns. His company is tracking the brand impact of advertisers on Forbes.com, which recently offered a money-back guarantee if advertisers’ brand metrics aren’t increased. Dynamic Logic surveys consumers to measure advertising’s impact — an expensive proposition that can only be used for large advertisers on big Web sites. “This type of research won’t be cost effective for smaller campaigns,” Nyhan said.
Nyhan’s point may suggest that most newspapers not lose sleep over the big national advertisers. “Web advertising is still a locally driven business,” said Hilary Schneider, Knight Ridder Digital’s CEO and president. “National advertising is the overlay” that sits on top of the strong local ad base. She was happy to report increased national sales through the company’s Real Cities network, but couldn’t emphasize the importance of local enough.
“Most newspapers do understand the local market and don’t understand national advertising,” noted Washingtonpost.Newsweek Interactive CEO and Publisher Christopher Schroeder, who manages one of the sites lucky enough to draw national ad dollars. His advice for most publishers? “The idea of stick to what you know [local customers] and go after that first has a lot of veracity to it,” he said, encouraging his colleagues to go aggressively after local TV and radio advertisers. “Some newspaper sites have at-work audiences that rival daytime broadcast audiences,” Schroeder pointed out.
At The Modesto (Calif.) Bee, Director of Online Services Eric Johnston actually turned away some national ad dollars recently. “An ad agency for a luxury car approached us with an offer for $6 CPM [cost per thousand], but we’ve had success with local advertisers who are spending $18 to $20 CPM and our inventory was pretty full,” he said. So for now, Johnston is focusing on local.
In San Diego, about 90% of the advertising on the U-T‘s site is local, Jennewein said. “Very few newspapers have sold all the business they can in their local market,” he said. “The Web site should bring in new customers and new business from existing print customers. There’s lots of room for local growth.”
But here’s where newspapers have some work to do. In the Borrell study, all of the TV sites surveyed offer e-mail-based advertising products, but only 43% of the newspaper sites do. And only five of the 62 newspaper sites surveyed require registration, another tool that helps publishers better target advertising.