Newspapers Do Not Have to Miss the Online Rally

There was an interesting article in The New York Times yesterday titled “Online Rally May Sidestep Newspapers.” The main point of the article is that online divisions of major newspapers are missing out on digital dollars due advertisers’ low appetite for high-CPM sponsorship opportunities and the rise of ad networks and exchanges.

While the article was a good overview of the current challenges faced by digital newspapers, it falls short of presenting a case for a solution, or any hope for one at all. I hold a very different view. While newspapers may be struggling right now, it is partially due to a reliance on older business models that don’t necessarily take into account the shifts that have been made in how media is purchased. Rather than waiting for the economy to improve, or banking on unproven new ad units, I believe that shifting strategy to accommodate some of the newer trends is what is needed. Therefore, in no particular order, here are three initial ideas for newspaper organizations looking to maximize the online opportunity in display advertising.

1. International monetization: According to several sources, a full 40% of top U.S. Web properties’ visitors come from outside the U.S. For a large newspaper site like The New York Times, The Washington Post or the Dow Jones properties, an international focus can have massive revenue and profitability implications. Increasing international yield is likely a multi-year, multi-step plan that may include network partnerships and eventually establishing a larger international footprint. With the world getting smaller and more digital, this is a must for long-term revenue.

2. Audience monetization: One of the themes of New York Times piece I did not agree with was the notion that newspapers have to lose to ad networks when it comes to efficient audience targeting and optimization. The exact quote was: “They’re (ad buyers) basically trying to buy the same audience at a third of the price.” With the advent of products like Undertone’s U360 AudiencePlus, newspapers can leverage the same strategy to deliver targeted audiences in scale and at an efficient rate.

3. Ad unit analysis: A typical online newspaper – keeping with the overall industry trend of the past few years – has several ad units both above and below the fold. Obviously each additional ad unit, if sold, carries an incremental revenue opportunity. However this must be counterbalanced with the effect that more ad units have on performance, as more units to interact with equals less opportunity for each additional unit to garner the desired action. Create scarcity by eliminating some of the low revenue-generating and clutter creating units: below-the-fold standard ads, text boxes, or small ad units. This will make the most important placements that much more valuable and high-performing for advertisers.

When I look at the digital newspaper space, I do not see gloom and doom. I see trusted organizations that bring top-notch content and huge brand equity to the table. A focus on improving digital offerings will pay off with long-term success.