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Online Ad Revenue on the Rise

Posted September 22, 2010 by admin @ 1:55 pm

Print Ads

Print advertising used to be the staple of the advertising industry. Lately it seems as though this medium is quickly becoming a casualty of the digital revolution. The New York Times Company stated today that it expects revenues for print advertisements to drop by at least 3%, which isn’t very surprising. Sales for the print editions of this American media company’s communications empire are falling right along with their marketing counterparts because the two platforms go hand in hand.

At the same time, the Times believes that revenues from digital marketing will increase by about 14%! This story illustrates several key points. First off, print ads are no longer profitable. The old days are officially gone. Sure, there are a few die hards who will stick to the old fashioned printed newspaper and its ads, but they’re a demographic on the way out. Print ads can be very costly and there’s no point in putting them out when almost no one’s going to see them.

Secondly, digital marketing has numerous advantages over its printed equivalents. Newspaper ads are static and not engaging in the slightest. They display flat content and publishers have no way of determining their effectiveness. Compare that to a cost per click (CPC) campaign or a cost per action (CPA) that allows you to view your ad’s productivity in real time. Additionally, users are able to access the digital New York Times for free, which means they’re more likely to read it and view the ads it contains. Readers usually have to pay for the print version, either via subscription, at a newsstand, or elsewhere.

The Times is going to start charging people for its digital paper soon, and that will alter this flourishing dynamic. There’s no telling how large an impact this modification will have on online marketing, but it’s fairly safe to say that readership will decline after the transition is complete. This will likely deter some marketers, yet it could also end up benefiting those that decide to stay on. An online subscription service means a smaller audience whose demographic data should be at advertiser’s disposal. That means publishers can create extremely targeted ads to appeal to the select audience. In the long run, the Times will probably feature less ads; however, the remaining publishers will see substantially larger click through rates because they’ll be able to fine tune reader preferences.

Filed under: Company Headlines

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