When analysing the topic of newspapers’ digital advertising revenue, it is clear that the future of news is online and printed newspapers are becoming obsolete. Almost all mainstream printed newspapers are available online. However, in order to prevent financial decline, newspaper websites contain many advertisements which are often out of context. Finding a sensible solution of how to increase revenue of newspaper websites has been unsuccessful; though, the online audience may have increased, it is not creating enough financial profit.
Major newspapers, such as The Washington Post or The New York Times, may for example, sell premium ad-space for “15$ to 50$ for every thousand impressions” (Clifford, 2008). However, these papers as well as others of various sizes rely on "middlemen" i.e. ad networks, in order to sell less desirable spaces for as little as “1$ per one thousand impressions” (Clifford, 2008). According to industry insiders, the networks usually charge advertisers double this amount, or higher (Clifford, 2008). This shows that newspapers are in a constant struggle with advertising networks, as they need them to exist. It is important to understand that newspapers are still businesses with shareholders that must find a balance between serving some kind of imagined public good, while also serving shareholders.
The drastic change from print to the media has warped the view of the printed word for the global audience. It becomes difficult to predict the future of newspapers, as surveys show that the younger generation utilize television, cellular devices and computers for their news and feel that “the press is yesteryear’s thing, a horse-drawn buggy on an eight-lane interstate” (Baker, 2007). In order for newspapers and their affiliated websites to appeal to the youth, they must revamp their current campaign to entice the younger audience. However, “newspaper companies have been unwilling and unable to embrace change” (Myers, 2008). Though the use of advertisements on news websites is necessary, it limits the website from further growth by disregarding the actual content and simply running as a business.
Current downfalls in the Newspaper (Online and Print) Market
What once was the most “powerful news source,” that was administered by “media moguls” such as Joseph Pulitzer and William Randolph Hearst, has now been defeated by the “weight of a crippling economy, decline in ad revenue and the advent of Internet news” (Giangreco, 2009). However, the internet is quick in retrieving information and presenting it to the public within seconds, contrary to the printing press. Some may argue that the quality of information on the internet lacks “extra fact checking, research and editing,” which a newspaper accomplishes (Giangreco, 2009). Some states within America have gone as far as shutting down printing presses because it is slowly becoming a financial burden for states such as “Denver and Seattle,” and even the “L. A. Times, the Chicago Tribune, the Philadelphia Inquirer, and the Minneapolis Star Tribune” – all newspapers that were once popular amongst the global audience- have filed for bankruptcy (Giangreco, 2009). These facts may cause worry for the common, avid reader of newspapers, yet it is not enough for business shareholders within the news making world to continue printing.
Though many agree that the death of newspapers is due to the sudden increase of internet news, Lee Coppola, dean of the School of Journalism and Mass Communication at St. Bonaventure University believes the problem is a lot deeper and that the recession is not the main cause. “The advent of the Internet and the popularity of the Internet, the ability to convey information electronically so quickly is really the root cause of the problem newspapers are having. And then of course on top of that the economy crumbled and the advertising dollars dried up, which further exacerbated the situation" (Giangreco, 2009). This statement by Coppola exemplifies how the need for advertisements amongst the newspapers online has become a crutch for most newspapers who have become handicapped due to the ever-growing news that the internet attains in a matter of seconds. In order to intrigue young readers newspapers have attacked the web with full force, creating social networking pages and becoming more personable with readers through blogs, however this does not generate any finances for the paper itself; therefore, the only proposed solution of a “pay wall” to access the news websites are the only easy way to increase their profit, but this will cost shareholders to lose their readers. As stated by Giangreco “at this point, to start charging for content might mean losing their readers to other online sources entirely,” which ultimately defeats the purpose of global growth (2009).
Change from Print to Online Newspapers
The drastic change from the traditional printing of newspapers, to the new and improved
digital form of news on websites has taken over the world of news globally. The race to utilize the internet for “commercial purposes” has not gone unnoticed by newspapers, as they have now become a passenger on the “online vehicle” (Velsmid, 1996). By creating this new realm of news, the print world has embraced the change in hopes of increasing their profit through advertisers purchasing ad space on their websites. Unfortunately, the change from print to online newspapers has not benefited newspapers as expected. A survey conducted by a graduate student at the University of Nevada gathered the following results which exemplify the financial loss of newspapers, “44% of the newspaper websites have no significant display advertising and 28% have no full-time staff members. Some 25% do not even know how many visits they get each day”(Outing, 1997). After viewing these statistics, it becomes clear that the online business of news has not been profitable, due to the difficult task of tracking site viewers, advertising agencies and adequate writers. Thus, the ultimate goal of increasing advertising revenue fails because newspaper websites become an unreliable source to base an investment of millions on, due to its scattered statistics. A View from the top: Contrasting views of Publishers Phillip Crawley and John Cruickshank
The issue of increasing advertising revenue past 8-12 % is a struggle that both the publisher of the Globe and Mail, Phillip Crawley and the publisher of the Toronto Star, John Cruickshank, are diligently trying to overcome. Crawley’s proposed solution is to dedicate a portion of the paper towards a lifestyle section, where advertisers can place their ads on colored glossy paper. Though an expensive route, it has generated some profit for the Globe and Mail (Crawley, 2011). However, when asked about the online future of the news for the Globe, Crawley and his team have simply given up, “we would much rather dedicate our time towards the potential future of our newspaper than waste millions of dollars on our website. During this time, it seems more profitable to attract advertisers through our paper rather than our website” (Crawley, 2011). Though the route that the Globe and Mail has chosen is clever, it fails to integrate the younger audience, who utilize the web more frequently. Therefore, the Globe has distanced themselves not only from an extremely profitable way of attracting a new audience through the internet, but have also limited their ability to grow as a newspaper.
Contrary to Crawley’s approach, publisher of the Toronto Star, John Cruickshank felt that the redesign of the Globe has compromised the paper’s integrity and “is not playing the role it should, as it was too much of a risk with no national benefit of Crawley’s idea” (Cruickshank, 2011). The Toronto Star has chosen a different route when dealing with the issue of generating profit through advertisements online. Though the Globe has generated some profit through their idea, the Toronto Star maintains a higher standing with attracting many more advertisers in comparison to the Globe and Mail (Cruickshank, 2011). A point of interest for one to analyse is that last year Cruickshank commented that the Toronto Star has no reason to appeal to the youth; as they are students who are in a financial struggle on a daily basis and are not the sole consumers of the paper (Cruickshank, 2011). This statement can be validated as the audience for newspapers are fixed, and according to Cruickshank “if you are 75 years old, you are 75% likely to purchase a newspaper, if you are 50 years old, you are 50% likely to purchase a paper, thus this pragmatic system follows a “cohort by cohort” regime” (Cruickshank, 2011). In order to attract advertising agencies to advertise with the Star, the paper must become more appealable to a younger audience, and for Cruickshank, this means a total reconstruction of the Toronto Star website. “We need to completely rethink how to approach our audience, simple sample programs will not suffice” (Cruickshank, 2011).
Unfortunately, the Star website generates its most hits during grand events that occur and concern the public, such as Jack Layton’s death, natural disasters and the G20 conference. Access to these issues online is mostly free, thus causing no profit for the paper itself and the only way to attract an audience is by reducing the actual print content and increasing the amount of tabloids, sensationalized news and video content online (Cruickshank, 2011). According to Cruickshank, newspapers have become more focused on creating a relationship with the web to create interesting news with citizen journalists than monetizing the websites’ content (2011). “We need to think differently, step outside of the box and become an outsider looking in, what would interest us as a global audience and attract us to the web?” (Cruickshank, 2011) This concept, though thoughtful, is not practical as the Star is losing profit daily due to their lack of an online audience, causing advertisers to “back out” and Cruickshank feels that “ we’re getting what we deserve” (Cruickshank, 2011). Lastly, Cruickshank concluded his discussion about the Toronto Star’s website by stating that “the online world doesn’t value the setting of ads or content that stories and photos create” (Cruickshank, 2011). Therefore, regardless of the amount of ads the Star or any news website receives, they will risk the loss of viewers as it becomes, quite frankly annoying to sift through ads in order to read the news online.
Limited Cost, Viewers and Staff available for News Online
Issues such as cost, viewers and staff are seldom given importance when addressing the issue of profit loss for news websites. In order to capitalize online, newspapers need to be well equipped with sufficient funds, efficient staff and an abundance of viewers. The majority of the cost involved in online news content goes towards the salaries for those managing the website, accounting for “55% of the typical budget” (Outing, 1997). This statistic shows that it is challenging to pay the journalists and management, as well as maintaining a well-organized, accountable website, as the funds are distributed unequally. Viewers of news websites are also limited, as those in management cannot accurately estimate the number of daily visitors to their sites (Outing, 1997). Of those that could cite a number, “45% estimated that they have fewer than 2,000 visitors per day; 17% said they get between 2,000 and 10,000 a day; and only 13% estimate they get more than 10,000 visitors a day” (Outing, 1997). These facts explain how there is no substantial growth to analyse concerning viewers of news websites, as statistics vary and mostly are decreasing day by day rather than increasing. Staff needed for the news websites to operate is another obstacle for most newspapers. According to Outing’s article “28% of the sites have no full-time staff, with print employees doubling up to run the online operation” (1997). This leads to only 27% of newspaper publishing companies have full-time employees; 24% have five to 10 employees; and only 16% of the web newspaper sites have more than 10 employees (Outing, 1997). So where does a news website begin to solve these issues? How can newspaper publishing companies prevent bankruptcy? Unfortunately, the ultimate solution has yet to be created; therefore, trial and error for the time being is the only way to overcome this obstacle.
The Downfall of Newspapers Online on a Global Scale
The ongoing challenge of succeeding online with news websites is not limited to the United States or Canada. Newspapers around the world such as Switzerland and the Netherlands have “lost half of their classified advertising to the internet” (The Economist, 2006). This means that other social media sources have taken over the traditional newspaper causing a great loss for newspapers globally. The situation has become so unmanageable that In September 2008, the World Association of Newspapers decided to end all connections with Google and Yahoo by preventing a proposed partnership, as it was viewed as a “threat to newspaper revenues worldwide” (Helft, 2008). The WAN expressed its concern with the internet potentially stealing once avid readers of the paper by stating that “perhaps never in the history of newspaper publishing has a single, commercial entity threatened to exert this much control over the destiny of the press” (Helft, 2008). Therefore, one must recognize that web, though a tactful approach to increase a newspaper’s audience creates a problematic situation for the newspaper itself.
The Future of Print and Online Media
In due time, the newspaper of the future may become unrecognizable to the conventional newsprint edition familiar to “older readers”(Nordenson, 2008). For example, the newspaper may become a combination of print and internet, or solely rely on the internet such as the “Seattle Post-Intelligencer, the Christian Science Monitor and the Ann Arbor News” (Perez- Pena, 2009). For now, the movement from the printed newspaper to whatever comes next will most likely include many obstacles for both the newspaper industry itself and for the consumer. According to the executive editor of the New York Times, Bill Keller, “the foreseeable future of our business will continue to be a mix of print and online journalism, with the growth online offsetting the (gradual, we hope) decline of print” (Keller, 2009). It has also been said that the actual paper of the newspaper may disappear, as it is “dying” and “replacing it with pixels provides a better experience” (Sulzberger, 2010). In fact, prestigious papers such as The New York Times, have announced that they will stop printing sometime in the future, the date however is still a mystery (Sulzberger, 2010) .The possibility of the printed word to be completely wiped out from the world and focusing on its online audience is a huge step towards embracing modernity. However, it is difficult to estimate how much profit this change will make for most newspaper companies. With many external factors that are not given importance when addressing the issue of online newspapers, the ability to increase revenue online becomes grim. Therefore, creating a situation of loss regardless of which option is chosen.
It is proposed that soon enough; journalists will discover that the web “allows for writers to concentrate on developing expertise in a narrower set of issues and interests, while helping journalists from other places and publications find new audiences” (Hirschorn, 2009).Thus, sources such as The Huffington Post, The Guardian and OpenFile may be the future of news. The Huffington Post alone attracts over one million comments made on the site each month, which are viewers that newspapers are receiving. The success of online news may be due to the fact that most of the content is free and provides a certain connection between the reader and the writer. This form of “volunteer journalism” provides the journalist with a form of literary freedom, which intrigues a larger and a younger audience. As a result, newspapers should consider to refocusing and exhausting their talents through the content, than simply conforming to what the shareholders want. Making these technological changes, and in some cases, literary changes, may increase popularity of the news website, and may instill respect and credibility for the content amongst young readers. By celebrating modernity and accepting change, it will become evident which newspapers become parts of the past, and which choose to become the future.