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2010-08-18 / Media Watch

What if it doesn’t work?

Greg Pearson

There are some people gleeful about the alleged impending death of traditional media (newspapers, magazines, television and radio) and the rise of news sites on the Internet. But what if advertising on those news sites doesn’t work or not very well?

That’s the question Daniel Lyons poses – and seems to acknowledge in the affirmative – in his Aug. 2 story in Newsweek (www.newsweek.com/2010/07/25/arianna-s-answer.html). He quotes Vanity Fair columnist Michael Wolff, who also runs the ad-supported, news-aggregator website, Newser (with 2 million unique visitors monthly), as biting the hand that feeds him.

“Maybe it’s time that someone says the unsayable,” says Wolff, “that online advertising just doesn’t work. A website turns out to be a not very good advertising vehicle.”

Yes, we go online to specific websites to buy movie and airline tickets and make dinner and hotel reservations, but those aren’t news websites.

As Lyons asks, “When was the last time you clicked on an Internet ad? Or even noticed one?”

What if those of us in the news media are basing our futures on a faulty electronic premise? Suppose advertising on www.richmond.com, www.timesdispatch.com, www.chesterfieldobserver.com, www.styleweekly.com, www.richmondbizsense.com and www.nbc12.com is a poor advertising investment because of the medium?

Those of us in the news business are really in the advertising business. If the advertising doesn’t work, how long can we keep reporting the news?

An additional problem is the ever-increasing number of websites chasing those advertising dollars. Relatively speaking, a news website is an inexpensive startup compared to publishing a newspaper or getting a broadcast license from the Federal Communications Commission. With such a low entry level, a two-person website can simply rewrite or reproduce someone else’s news in their spare bedroom, and they’re in business.

Lyons reports that comScore, which tracks ad spending and traffic on the Internet, says the average cost to reach 1,000 people (CPM) on the Internet is $2.43 and declining. “Nobody expects ad rates to bounce back up – ever,” he writes. According to Wolff, Newser’s CPM has dropped 20 percent in the past two years.

Will this become the second .com bust?

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