The Death Of Newspapers, Again: Advertisers Will Follow Audiences

Guardian editor Alan Rusbridger and Independent editor Simon Kelner were on BBC Radio 4’s Today program Friday morning responding to another of those “newspapers are dead” pieces – this time the cover of The Economist.
Rusbridger said that not all newspapers will survive; he listed the combined pressures of declining circulation and ad revenue — both of which are shifting to the web; disaggregation of advertising from editorial; fragmentation of audiences; and competition from free sheets — all at a time when newspapers will have to invest large sums of money in new technologies.
But he said The Guardian employs 450 journalists around the world and no website could replicate that. “If we hold our nerve… there is an audience for what we do and what we do matters. History shows that advertisers follow the audience.” He also said that The Guardian is “already making a lot of money” online with revenues increasing by 50 percent each year.
Kelner said he’s not one of the naysayers of newspapers. He might want to have a word with his boss Ivan Fallon who said in March (reg. req.)that he didn’t believe in the integration of print and online operations, as gleefully reported in MediaGuardian. (Fallon might want to read this recent post identifying integration as a key factor in the success of online newspaper businesses.) Listen to the segment here.
From the article:
— For Norwegian newspaper publisher Schibsted, online contributed 35 percent of 2005’s operating profits. EVP of Schibsted’s international business Sverre Munck said that the company has to turn away leagues of foreign newspaper execs who want to know the secret – but it’s significant that alongside its online news brands Schibsted operates a successful search engine and a classified ad site. Also, I’d imagine, Norwegian businesses have the clear advantage of less competition from English-language rivals.
— Munck goes on to explain, why in one way, search engines undermine the revenue of news sites: “If visitors come from Google to stories deep in the paper and then leave, Google gets the dollars and we get only cents,. But if we can bring them in through the front page we can charge $25,000 for a 24-hour banner ad.”
— I’ve heard WSJ Online ME Bill Grueskin say when advertising is doing really well, everyone thinks WSJ is stupid to charge for content — but then they think the reverse when advertising slumps. Interestingly, Dow Jones CE Richard Zannino says here that he expects the relative price of web ads to rise: the average price of a WSJ print ad is only three times that of a WSJ web ad, compared with six to seven times for most of the US industry.
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This article originally appeared in MediaGuardian.