Newspapers Dominate Online Local Spending

In a new survey, reported in MarketWatch and MediaPost, Borrell Associates says that newspapers are dominating the online local ad segment. According to MediaPost:

Overall, in 2007 newspaper Web sites netted over $2 billion in local online advertising. Thus, according to Borrell, they dwarfed online Yellow Pages sites–which got 9.5% of local online ad spending–local TV Web sites (also 9.5%), and radio stations, which got just 2.1%.

The Borrell study also found that video is the fastest-growing segment within local online advertising–expected to rise from $363 million in 2007 to $1.2 billion in 2008.

MarketWatch adds:

The biggest newspaper sites generated most of their revenue from nonprint advertisers for the first time, with online-only customers accounting for 59% of the newspaper sites’ total ad revenue in local markets.

Historically the newspaper numbers have been larger because of newspaper accounting practices that included as “online marketers” print advertisers that paid any additional money to be included in the online product. So the statement above is very significant. The MediaPost piece quotes a Harvard study, however, that contradicts the Borrell findings from Q3 2007.

Determining who is a local advertiser on newspaper sites is also a tricky business. The working assumption in the Borrell data must be that most if not all advertisers on those sites are targeting local. It’s a reasonable assumption but may not be correct in every case. I haven’t seen the report so I can’t determine if sites like the WashingtonPost, USAToday, LATimes or NYTimes are being counted here. These are all newspaper sites that have national reach.

Here are the top 30 newspaper sites:

1. NYTimes.com — 17,177
2. USATODAY.com — 9,939
3. washingtonpost.com — 8,478
4. Newsday — 6,450
5. Wall Street Journal Online — 5,409
6. LA Times — 4,607
7. Boston.com — 4,364
8. Chicago Tribune — 3,891
9. Daily News Online Edition — 2,956
10. New York Post — 2,851
11. SFGate.com/San Francisco Chronicle — 2,785
12. Philly.com — 2,300
13. International Herald Tribune — 2,250
14. Village Voice Media — 2,224
15. Chicago Sun-Times — 2,186
16. Atlanta Journal-Constitution — 1,974
17. The Houston Chronicle — 1,946
18. The Seattle Times — 1,840
19. DallasNews.com – The Dallas Morning News — 1,828
20. Seattle Post-Intelligencer — 1,785
21. The Politico — 1,672
22. Orlando Sentinel — 1,522
23. NJ.com — 1,455
24. Azcentral.com — 1,435
25. Baltimore Sun — 1,332
26. MercuryNews.com — 1,315
27. The Detroit News — 1,256
28. The San Diego Union-Tribune — 1,180
29. Detroit Free Press — 1,168
30. The Washington Times — 1,161

Source: Nielsen (1/08); traffic in thousands

Whatever the reality, newspapers have stepped up their online efforts and online-only sales. They capture a larger share of geotargeted national brand (display/CPM) dollars than other, competing segments in local. And many are now scheming about how to get more of the SMB spend, including using some of the same “agency” strategies that yellow pages have successfully employed.