medialifemagazine.com
Where the bucks are: Local web sites
By Heidi Dawley
Sep 26, 2008 - 1:11:26 AM
The news is out, and none of it's good for traditional local media. Newspapers, TV, radio and magazines all took hits in ad revenue in the first half of 2008.
But one local medium is doing extraordinarily well: the internet. Ad spending continues to surge, and now a new report is out saying that local web sites are hot properties, some worth hundreds of millions of dollars, even though many are still turning small profits.
“To some extent this has taken a lot of people by surprise because these internet operations started small and as marketing extensions of a core product rather than independent business ventures,” says Gordon Borrell of Borrell Associates, an online advertising research firm, which did the report with BIA Financial Network, a financial data company.
“Now 14 years later people are saying ‘Wow, these companies are not only generating millions of dollars, but profits too,’” he says.
Certainly part of their value is the strong growth still ahead. Borrell is forecasting 50 percent growth in ad revenue this year, and that's as overall online growth has slowed considerably. TNS Media Intelligence reports that total internet spending for first-half 2008 rose just 8 percent.
Borrell and BIAfn set values on 3,200 local sites after analyzing their revenues, expenses and growth trends, and included in the study were sites of the big local newspapers, local TV and radio stations, and so-called pure-plays, sites started from scratch without any affiliations to existing media properties, such as Atlanta.com.
The sites of local papers have the highest revenue and valuations, and the largest were given values between $300 million and $450 million, with the median value at $3.5 million.
But interestingly TV stations were given valuations nearly as high, with a median value of $3.1 million, even though they generate far less revenue. Median revenue for TV sites was $450,000 versus $715,000 for newspaper sites.
The reason? TV station sites attract more lucrative forms of advertising, which had lead to higher growth rates. The study reports that newspaper site revenues grew some 33.5 percent from 2002 to 2008, while TV sites saw growth of 67.2 percent.
Newspaper sites tend to sell banners and listings, while TV sites focus on streaming video and paid search advertising, both of which are growing quickly.
Pure play and radio sites also rely on faster-growing types of advertising.
The pure plays have a median revenue of $300,000 and are valued at a median value of $2.4 million. Radio station sites had a median revenue of $165,000, and were found to have a median value of $1.2 million.
“You would think the more valuable ones would be the ones making the most money. But it is not true. The ones that have the highest multiples are the ones sitting on what are like undeveloped beach front properties," says Borrell. "The multiples for the city.com sites, which are seen as untapped mines, are high.”
But the internet being the internet, all this could change. Now newspapers are getting into video advertising, in competition with TV, as well as interactive yellow pages directories. Both areas could lead to faster growth.
“So I think that there is a good future for them,” says Borrell.
***
Meanwhile, in online ratings for the week ended Sept. 14, according to Nielsen Online, Google was the top parent company, followed by Microsoft, Yahoo, Time Warner and News Corp. Online. The top five brands were Google, Yahoo, MSN/Windows Live, Microsoft and AOL Media Network.
Experian Group Limited held the top advertiser spot with 2.9 million impressions, while Netflix was No. 2 at 1.9 million. Yahoo was once again the top advertising site with 14.1 million ads served, with MSN No. 2 at 2.6 million.
Sessions per person per week rose, from 16 to 17, as did domains visited per person, from 40 to 41. PC time per person was up 6 percent from the previous week to 18 hours and 47 minutes.
|
Top 25 parent companies
Through Sept. 14
|
|
#
|
Parent
|
Unique Audience (000)
|
Reach %
|
Time Spent per Person (hh:mm:ss)
|
|
1
|
Google
|
95,896
|
67.9
|
0:37:30
|
|
2
|
Microsoft
|
87,411
|
61.9
|
0:50:22
|
|
3
|
Yahoo!
|
79,945
|
56.6
|
1:12:30
|
|
4
|
Time Warner (Division)*
|
57,088
|
40.4
|
1:24:27
|
|
5
|
News Corp. Online
|
45,760
|
32.4
|
0:42:48
|
|
6
|
eBay
|
33,931
|
24.0
|
0:48:15
|
|
7
|
InterActiveCorp
|
32,581
|
23.1
|
0:11:33
|
|
8
|
Walt Disney Internet Group
|
26,779
|
19.0
|
0:26:34
|
|
9
|
Landmark Communications
|
26,591
|
18.8
|
0:12:09
|
|
10
|
Amazon
|
25,539
|
18.1
|
0:14:54
|
|
11
|
Wikimedia Foundation
|
25,190
|
17.8
|
0:09:59
|
|
12
|
Apple Computer
|
24,472
|
17.3
|
0:25:20
|
|
13
|
Turner Network (Division)
|
23,895
|
16.9
|
0:21:21
|
|
14
|
CBS Corporation
|
22,224
|
15.7
|
0:18:01
|
|
15
|
New York Times Company
|
21,878
|
15.5
|
0:11:05
|
|
16
|
Facebook
|
20,707
|
14.7
|
0:43:29
|
|
17
|
AT&T Inc.
|
17,913
|
12.7
|
0:23:12
|
|
18
|
RealNetworks, Inc.
|
15,513
|
11.0
|
0:15:52
|
|
19
|
CraigsList
|
15,240
|
10.8
|
0:33:57
|
|
20
|
Verizon Communications
|
14,856
|
10.5
|
0:22:10
|
|
21
|
Viacom Digital
|
13,859
|
9.8
|
0:23:01
|
|
22
|
E.W. Scripps Company
|
12,909
|
9.1
|
0:07:51
|
|
23
|
Glam Media
|
12,903
|
9.1
|
0:11:38
|
|
24
|
Comcast Corp.
|
12,815
|
9.1
|
0:31:50
|
|
25
|
Gannett
|
12,282
|
8.7
|
0:12:00
|
|
Source: Nielsen Online
|
|
Top 25 brands
Through Sept. 14
|
|
|
Parent
|
Unique Audience (000)
|
Reach %
|
Time spent per person (hh:mm:ss)
|
|
1
|
Google
|
86,746
|
61.4
|
0:27:34
|
|
2
|
Yahoo!
|
78,683
|
55.7
|
1:13:08
|
|
3
|
MSN/Windows Live
|
67,474
|
47.8
|
0:52:20
|
|
4
|
Microsoft
|
54,902
|
38.9
|
0:15:48
|
|
5
|
AOL Media Network
|
51,187
|
36.2
|
1:31:29
|
|
6
|
YouTube
|
40,914
|
29.0
|
0:24:17
|
|
7
|
Fox Interactive Media
|
39,965
|
28.3
|
0:43:11
|
|
8
|
eBay
|
27,948
|
19.8
|
0:49:58
|
|
9
|
Wikipedia
|
24,803
|
17.6
|
0:10:05
|
|
10
|
Apple
|
24,472
|
17.3
|
0:25:20
|
|
11
|
Weather Channel
|
24,052
|
17.0
|
0:12:40
|
|
12
|
Facebook
|
20,707
|
14.7
|
0:43:29
|
|
13
|
Amazon
|
20,566
|
14.6
|
0:14:45
|
|
14
|
Blogger
|
19,790
|
14.0
|
0:06:30
|
|
15
|
CNN Digital Network
|
19,445
|
13.8
|
0:21:26
|
|
16
|
Ask Search Network
|
19,036
|
13.5
|
0:10:32
|
|
17
|
Real Network
|
15,508
|
11.0
|
0:15:52
|
|
18
|
Craigslist
|
15,185
|
10.8
|
0:34:00
|
|
19
|
AT&T
|
13,800
|
9.8
|
0:27:02
|
|
20
|
About.com
|
13,750
|
9.7
|
0:03:27
|
|
21
|
Glam Media
|
12,903
|
9.1
|
0:11:38
|
|
22
|
ESPN
|
11,845
|
8.4
|
0:30:55
|
|
23
|
Bank of
America
|
11,657
|
8.3
|
0:22:51
|
|
24
|
Comcast
|
10,227
|
7.2
|
0:38:05
|
|
25
|
Verizon
|
9,250
|
6.6
|
0:19:24
|
|
Source: Nielsen Online
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|
Top 25 advertisers
(excludes house ads)
Through Sept. 14
|
|
#
|
Company
|
Impressions (000)
|
|
1
|
Experian Group Limited
|
2,865,512
|
|
2
|
Netflix, Inc.
|
1,875,888
|
|
3
|
Scottrade, Inc.
|
1,339,781
|
|
4
|
Verizon Communications, Inc.
|
1,210,810
|
|
5
|
AT&T Corp.
|
989,556
|
|
6
|
InterActiveCorp
|
694,780
|
|
7
|
United Online, Inc.
|
665,960
|
|
8
|
Sprint Corporation
|
621,102
|
|
9
|
Deutsche Telekom AG
|
586,686
|
|
10
|
ALLTEL Corporation
|
575,785
|
|
11
|
General Motors Corporation
|
535,756
|
|
12
|
Monster Worldwide, Inc.
|
459,549
|
|
13
|
Fandango, Inc.
|
453,959
|
|
14
|
Vonage Holdings Corp
|
447,453
|
|
15
|
Mighty Net, Inc
|
431,622
|
|
16
|
Dell Computer Corporation
|
412,701
|
|
17
|
NexTag, Inc.
|
406,950
|
|
18
|
Microsoft Corporation
|
367,859
|
|
19
|
Bank of America Corporation
|
356,231
|
|
20
|
E*TRADE FINANCIAL Corp.
|
355,641
|
|
21
|
Apollo Group, Inc.
|
340,439
|
|
22
|
Washington Mutual, Inc.
|
332,683
|
|
23
|
Time Warner Inc.
|
309,139
|
|
24
|
Weight Watchers International, Inc.
|
302,605
|
|
25
|
Best Western International, Inc.
|
297,718
|
|
Source: Nielsen Online, AdRelevance
Note: Nielsen Online, AdRelevance service estimated online advertising expenditures account for CPM-based image-based advertising. All reported estimated expenditures and impressions do not account for the following placement types: text only, paid fee services, performance-based campaigns, sponsorships, barters, in-stream ("pre-rolls") players, messenger applications, partnership advertising, promotions and email campaigns. AdRelevance currently does not report estimated spending for paid search advertising. Also, Nielsen Online, AdRelevance reporting data reflects advertising activity served on pages accessible via the World Wide Web and not within AOL's proprietary service.
|
|
Top 25 advertising sites
(excludes house ads)
Through Sept. 14
|
|
|
Company
|
Impressions (000)
|
|
1
|
Yahoo!
|
14,111,858
|
|
2
|
MSN
|
2,565,961
|
|
3
|
MySpace
|
1,850,983
|
|
4
|
MSNBC
|
1,812,250
|
|
5
|
Comcast.net
|
1,730,853
|
|
6
|
AOL.com
|
1,017,986
|
|
7
|
FOXNEWS.COM
|
756,934
|
|
8
|
eBay
|
607,617
|
|
9
|
Facebook
|
495,815
|
|
10
|
The Weather Underground
|
494,647
|
|
11
|
The Weather Channel
|
463,736
|
|
12
|
ESPN.com
|
451,991
|
|
13
|
Juno
|
429,707
|
|
14
|
IMDb
|
355,602
|
|
15
|
CNN
|
336,279
|
|
16
|
Amazon
|
313,464
|
|
17
|
Photobucket
|
306,324
|
|
18
|
YouTube
|
278,620
|
|
19
|
Project Playlist
|
274,299
|
|
20
|
TheStreet.com
|
267,362
|
|
21
|
NetZero
|
248,149
|
|
22
|
AT&T Worldnet
|
225,469
|
|
23
|
Pogo
|
212,046
|
|
24
|
CBS SportsLine
|
210,771
|
|
25
|
Drudge Report
|
207,638
|
|
Source: Nielsen Online, AdRelevance
Note: Nielsen Online, AdRelevance service estimated online advertising expenditures account for CPM-based image-based advertising. All reported estimated expenditures and impressions do not account for the following placement types: text only, paid fee services, performance-based campaigns, sponsorships, barters, in-stream ("pre-rolls") players, messenger applications, partnership advertising, promotions and email campaigns. AdRelevance currently does not report estimated spending for paid search advertising. Above data does not include any house advertising activity. Also, Nielsen Online, AdRelevance reporting data reflects advertising activity served on pages accessible via the World Wide Web and not within AOL's proprietary service.
|
|
Average use
Through Sept. 14
|
|
|
Current Week
|
Last Week
|
% Change
|
|
Sessions/Visits per Person
|
17
|
16
|
6.25
|
|
Domains Visited per Person
|
41
|
40
|
2.5
|
|
PC Time per Person
|
18:47:17
|
17:39:20
|
6.41
|
|
Active Digital Media Universe
|
141,248,109
|
141,477,708
|
-0.16
|
|
Current Digital Media Universe Estimate
|
224,108,426
|
224,204,647
|
-0.04
|
|
Source: Nielsen Online
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© 2009 Media Life
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