Friday, September 11, 2009

Online ads

There has been much discussion lately about how newspapers can survive in an online world. Here Felix Salmon criticizes a micropayments proposal. I agree micropayments are unlikely to work. Salmon goes on to say:

My view is that the internet has been magnificent at vastly increasing the number of readers that newspapers have, and at strengthening the relationship that print subscribers have with the newspaper brand. By rights, those relationships, in aggregate, should now be more valuable, not less valuable. But because of problems with the ad market — including the tyranny of the CPM and the fact that advertisers in general are not big fans of buying online inventory — newspapers profits have gone down even as their readership has skyrocketed.

However I don't think this is accurate. The internet means I read articles from a greater number of newspapers but the total amount of time I spend reading newspapers has decreased. And online ads don't sell for much because they aren't worth much. They are too easy to ignore. This is true of newspaper ads also but sometimes you don't want to ignore newspaper ads. You might be in the market for a house or a car or just want to see what some local stores have on sale. But online you would not go to a newspaper site for these needs, you would go directly to an online market or store website. And reading a newspaper or magazine an ad can catch your eye in a way that does not seem (at least for me) to happen online.

While I don't think micropayments will work an annual subscription model might. I might pay the New York Times a small annual fee, say $50/year, for unlimited access to their website and archives. But I wouldn't pay such fees to a lot of different newspapers. So perhaps the end result will be massive consolidation of the newspaper industry with only a few survivors.

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