Why Newspapers Don't Make More Money Online

I've been trying to figure out why newspapers don't make more money online, and think I stumbled across one reason that's so obvious I previously overlooked it.

It's summarized well in one sentence on the Minneapolis StarTribune's advertising information page:

Just contact us and we’ll help you put together a marketing plan to meet the needs of your organization.

Why do I have to talk to someone in order to give the StarTribune money? If I talk to someone on the phone, I'm essentially taking money out of my ad budget and giving it to the person on the other end of the line. And this person's interests are clearly not aligned with my own since they're likely paid a commission, or at least expected to meet certain revenue goals.

An ad platform that enables me to place ads without human intervention makes the most efficient use of my ad dollars.

Say I want to place a job listing:

To register for Star Tribune Jobs online, simply fill out the following information and hit the "Register" button. You will be contacted within one business day and assigned a confidential id and password.

It's shocking to me that in 2007, large daily papers continue to rely on humans to conduct tasks that Google automated in 2004.

Large dailies are making a lot of their own news lately with layoff and buyout announcements. A lot of this is blamed on differences in advertising dollars spent in online vs offline versions of their product.

When I look at the difficulty involved in buying online advertising through a newspaper vs. the many other alternatives available for online ad dollars today, I wonder if their lack of investment in a competitive ad platform may have something to do with the under-performance of their online properties?

Self-serve is the secret to Google AdWords. That and the impression advertisers can micro-control and customize their ad expenditures.

The good old days when space ad salesmen could whip out their rate cards and make advertisers dance to their tune are over.

I made this point earlier this summer to a group of very sharp digital intraprenuers at a major newspaper publishing chain.

They seemed to "get" it, but three months later, they haven't done anything about it.

The same is true of the traditional radio advertising format. Though Clear Channel communications and their huge list of nationwide stations is leading the way with online advertising content, they still rely on the ad rep to prospect and sell the offerings.

Google's move into this area was considered a threat initially but I am sure will be welcomed in time. If Google can change the radio advertising monolith, it is only a matter of time before they dominate the advertising revenues of news papers as well.

Comments

1. Posted by: Brad V. on August 19, 2007 12:19 AM:

I agree with your post! To say the newspapers are lagging behind the rest of the cyber world would be an understatement. They still have the Us vs. The Internet mentality.

The same thing is (but on a different level) is happening to the record companies. Why are they still releasing so many CDs when most people buy their music online now?

Some industries appear to be afraid of technology, even though it can actually help them connect with customers and increase revenue!

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