We at TownNews.com have one very simple mission: To help our newspaper customers “own the Internet.”
Long-time customers (and friends) have heard me repeat this mantra over and over: The Internet is another communications medium. It can be owned, and it can be worth something. Newspapers have the first right of refusal to own this franchise.
Ask yourself: Who owns the newspaper in your town? (The answer ought to be obvious. Who owns the radio station(s) in town? Who owns TV? The cable franchise? And so on.
Now ask yourself: Who owns the Internet in your trade area?
When the Internet was truly “new media” nobody owned it, but lots of folks saw the opportunity to get in on ownership at the ground floor.
Local companies tried such as Internet Service Providers (ISPs), and computer stores made efforts to be the dominant Internet company in local markets. Radio and TV stations have made efforts to “own the Internet.”
Nationally, America Online, Yahoo!, Microsoft, Lycos, etc., are still trying to gain control of the Internet.
The dot-com mania was fueled by greedy and often brain-dead efforts to own the Internet. Despite the dot-com era becoming the dot-bomb era, the Internet is still worth owning.
There are 220 million people in the world who regularly use the Internet, and fully half of those folks live in the United States or Canada. Once a person has Internet access, his or her media consumption patterns change.
GartnerG2 completed a survey of 4,398 American Internet users in October. Twenty percent said they read newspapers less often because of the Internet, including 10 percent who said they read newspapers “much less often.” Television and magazine consumption also were affected dramatically.
The Internet is no longer “new media.” Arbitron and Edison Media reported in September that “nearly half of all Americans between the ages o 12 and 34 consider the Internet the most essential medium to their lives.” Across all ages, the study said nearly 20 percent of Americans consider the Internet as their most essential medium.”
The U.S. Postal Service and the phone companies have taken hits because of the Internet. A Gartner G2 survey found thatmore than half of consumers use postal mail less than they had pre-Web., and about a third of those polled place fewer long-distance telephone calls.
So where to newspapers stand in the battle to “own the Internet.”
Mixed results.
On the good news front:
- The National Newspaper Association released research that showed online newspapers as the most-visited local sites.”
- The NAA research said 62 percent of Internet users who go online for local news said they visit newspaper web sites; Yahoo! got 55 percent of the audience and local TV stations 39 percent.
- Media Audit announced in June that daily newspaper Web sites attracted more local adult visitor than other news and information sites in 51 of 81 metro markets in 2001; local city guides led in the other 30 markets.
- Online classifieds work, and work best locally in online newspapers. Belden Associates reported in September that 47 percent of newspaper sites visitors are “very interested” in classified ads. Belden said breaking news was sought by 67 percent of the online readers, local news by 64 percent, weather forecasts by 56 percent, statewide news by 49 percent, followed by classifieds at 47 percent.
The classified news is especially encouraging to newspaper executives. In many cases, online classifieds account for a vast majority of online revenues. Even Knight Ridder – the nation’s largest chain and a heavy investor in Internet technology – reports that 72 percent of its online income comes from classifieds.
To sum up the good news it’s safe to say online newspapers usually are the most visited local site and that the historical model of “upselling” print classifieds into the Web product works well for advertisers, readers and newspapers.
But it’s not all good news. Let’s look at problem areas:
- Employment advertising remains a major concern. As a newspaper classified category, employment was off 38.4 percent nationally in 2001, compared with 2000. Optimists say this category will rebound when the recession ends. Pessimists say this category is now “owned” by non-newspaper online competitors, led by Monster.com.
NAA funded research conducted by Kannon Consulting says there will be 22 million new jobs created this decade along with 45 million jobs that will churn. Kannon predicts that the high-tech, high-paying jobs will tend to be advertised via the Internet while lower-pay, lower-tech jobs will stick with newspaper classifieds.
- Real estate advertising – which, nationally, accounts for 5 percent (or $6.5 billion) of newspaper advertising – is at a real crossroads. The National Board of Realtors released a study this summer that said the Internet has equally – if not surpassed – newspapers as the most important advertising medium. It appears that the NBR is encouraging the nation’s 600,000 registered Realtors and 80,000 brokers to begin moving away from newspaper advertising, while encouraging buyers and sellers to more fully appreciate the Internet’s advertising strengths.
A major opportunity for newspapers is that Realtor.com, the national real estate listings portal, has been de-listed by NASDAQ and several of its parent company’s former officials have been indicted.
The NBR has responded by encouraging brokers through a program known as Internet Data Exchange (IDX) to aggregate real estate listings locally – possibly to the disadvantage of newspapers. IDX is so poorly understood in many markets that aggressive newspapers might be able to use IDX to become the de facto multiple listing service in their trade areas.
- Auto advertising is still a muddle. Claims that 20 to 50 percent of all automobiles would be sold online have proved to be hogwash, at least in this decade. Efforts to aggregate auto dealers listings online have gained mixed success; newspapers which have been successful have usually built online products around successful auto books.
In summary, because of their local news content and promotional power, newspapers usually are the most dominant Internet companies in their trade area. They usually “own the Internet” in their trade areas.
Some niche advertising, especially employment/recruitment advertising will remain at risk. Newspapers best chance of reclaiming dominance in this vertical will be through use of its local Internet dominance.
Other vertical classified advertising – auto and real estate – are at risk, but could be dominated by online papers if they choose to make the effort.
The trick is staying focused on the cause of newspapers “owning the Internet.”