By: Ken Liebeskind
Category’s Revenue Dropped $21.4 Million In August
Dot-com advertising may have been “easy come,” but newspapers hope it won’t be “easy go.” As dot-com ad spending drops in all media, newspapers are suffering, too, although they are working hard to reignite the category for the holidays.
The most recent numbers are scary. Newspaper dot-com ad revenue dropped to $21.4 million for August, the lowest monthly total for the year by far (March was the highest at $63.8 million), according to Competitive Media Reporting (CMR). July’s total was almost as low as August’s.
Some executives, however, believe newspapers won’t be hit as hard as other media by the dot-com shakeout. “Of various media forms, newspapers will be affected least, because they are only used by companies that have matured enough to be out there with the conventional retail battle,” says Bruce Silverman, executive vice president of Initiative Media, a media-buying agency in Los Angeles.
The dot-com shakeout, which started last spring, forced some companies out of business and prompted others to reassess their advertising. A major casualty was Value America Inc., a huge online retailer and newspaper advertiser that declared bankruptcy in August after spending more than $27 million in newspapers in 1999 and 2000, according to CMR. Priceline.com, another big advertiser, closed part of its business and reduced its advertising. The grocery delivery sites Webvan.com, Streamline.com, and Peapod.com also have cut back or stopped their newspaper advertising.
And CarsDirect.com, a leading automotive site, stopped using newspapers in the third quarter after trying them in a number of markets early this year. “We tested different online and offline media, and we’ve been reallocating dollars to what works best,” says Vice President of Marketing Chuck Hoover, a former newspaper executive. San Francisco is the only market where CarsDirect.com is still using newspapers, he says.
Although many dot-coms are dropping out of newspapers, some remain, including Mercata and Buy.com. Two big e-commerce sites, Travelscape.com and Lowestfare.com, increased their newspaper spending last year. Lowestfare.com bought ads in 41 newspapers in October, while Travelscape advertises on newspaper Web sites as well as in papers.
Newspapers are hoping to offset their recent losses in dot-com ads with a big holiday season. “I’m positive for the holidays, because we’ve put things in place to help the dot-commers,” says John Rowe, national sales manager for the Chicago Sun-Times.
The paper plans three e-commerce gift guides that encourage online shopping with dot-com ads. The eight- to 24-page guides, to run as inserts, will begin the week before Thanksgiving and continue into December. “It’s our job to help them come up with something creative and fresh to develop a new relationship,” Rowe says.
The Washington Post will run two similar e-commerce gift guides, one as an insert Nov. 14 and another in the Sunday magazine Dec. 3. The Atlanta Journal and Constitution also plans two e-shopping sections.
The Boston Globe plans one e-commerce gift guide in late November, says Vice President of Advertising Peter Newton. The Globe ran a similar guide last year, but “we did it very quickly; it ran eight pages,” he says. “There’s more lead time this year, and we’re putting more into it editorially.” The Globe is also running two special sections in November for the business-to-business market (a customer-relationship management section and an application-service-provider section) that demonstrate the trend of dot-com advertising moving away from business-to-consumer to business-to-business.
Steve Howe, vice president of advertising at The Wall Street Journal, says, “B-to-b dot-com verticals have been coming on strong. We’ve been carrying a substantial amount.”
The question is whether papers besides the business-oriented Journal can get b-to-b advertising. Top business markets, including those with lots of banks, may benefit. “It’s more difficult for us,” the Globe’s Newton says, “but because we’re such a hot tech market we can do it.”
Ken Liebeskind is a free-lancer for E&P.
Copyright 2000, Editor & Publisher.