Thursday

Papers rule local
web advertising

TV and radio stations are but blips on the $ radar

By Toni Fitzgerald

   Back in the dark ages of the internet, local TV stations were pumping their web sites and hawking all the exciting content.
   But an economic slowdown forced many to cut back, and thus become left behind.
   These days, when it comes to local online advertising sales, newspapers are way ahead of the competition. TV stations are a mere blip on the screen, with newspapers having long since passed them in the race for local dollars.
   Newspaper sites, which understand the arena perhaps a little better because it corresponds to the offline paper format so well, lead the $1.65 billion market, according to a new report by Borrell Associates.
    Newspapers account for 40 percent of local internet advertising, earning $655 million in revenue last year.
    Yellow Pages listings account for 24 percent of local online advertising. Locally targeted verticals like Monster.com and Homestore.com are third with 21 percent and portals such as AOL, Yahoo and MSN are fourth with 12 percent.
   TV and radio stations account for a paltry 3 percent.
   “TV stations are just hardly on the radar scope,” says Gordon Borrell, president and CEO of Borrell Associates. “The misfortune there is that TV, had it been motivated and focused four or five years ago, could have whupped up on newspapers.
   “They could have whupped up on them a lot by getting into using their web sites to get into classified operations, and they didn’t do it. They’re trying to do it now, but it’s an afterthought.”
   Local internet advertising accounts for roughly 2.3 percent of all local advertising dollars. It’s not yet a huge piece of the pie, but Borrell says that it is growing.
   He says that usage within categories varies. Some 50,000-circulation newspapers of the 200 that were surveyed have figured out how to make $400,000 or more off their sites while others with circulation of 75,000 make virtually nothing from the sites.
   It all depends on how aggressive and focused the papers have been in selling their sites. Compared to TV stations, that focus is very high.
   Far too often a local television station’s web site consists of a few anchor bios and the weekend weather forecast, providing little more than the online equivalent of dead air.
   Not so for local newspapers, which generally leverage their sites to include content far more engaging and more interesting to readers.
   Is it any wonder, then, that TV stations are lagging so far behind newspapers when it comes to local internet advertising? Their product is not as strong, and it’s not being sold as well.
    Borrell says that lackadaisical approach will hurt the TV stations in a few years, when they’re scrambling to catch up on the internet.
   Though internet advertising is still decades from being a dominant medium, Borrell thinks it will eventually happen. And newspapers will be in a much better position to capitalize on it, because many have been playing around with areas besides just the traditional classified and banner ads.
   “This medium could be the most significant advertising medium that we’ve seen – bigger than television, bigger than newspapers, bigger than direct mail,” Borrell says of the internet. “It has the very strong potential to be that.”
Borrell predicts that real estate and recruitment could be two big areas for TV stations to explore online in the future.
   The report finds that newspapers average $14.49 annually in online revenues per print subscriber.

-Toni Fitzgerald is a staff writer for Media Life.

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