TV Web Sites Overtaking Newspaper Web Sites

Philip M. Stone - May 25, 2007

One salvation for newspapers wrestling to make their multiplatform approach to news as profitable as print used to be alone is that their web sites are so popular – 37.6% of US active internet users visited a newspaper site in Q1 -- but new studies show that local TV web sites are increasingly snapping at their heels, and at the end of the day the most important buzz word for advertisers will be “Reach”.

And there is enough evidence out there now that those local sites that make the best use of video, for news and for advertising, will be the winners.

Video news deals are constantly being announced to make TV sites even stronger, whereas most of the newspaper web site announcements these days are usually about joint classified advertising ventures with the likes of Monster and other such classified ad powerhouses, although some TV has made its Monster deals, too. 

There is no question, however,  that the newspaper web site of the future must compete with video on both the hyper local and national/international scene, or TV stations – whose very business is video --  will at some point  surpass newspaper web site readership.

And it’s already happening. For more than a year now WRAL-TV’s web site in Raleigh-Durham, North Carolina, has been the country’s number one news outlet when it comes to local reach within its community, according to Media Audit. 

And, according to its 2007 study, local TV stations now make up four of the top 10 media web sites with the most local reach (In San Antonio MYSA.com is the merged web sites of the San Antonio Express-News and KENS-TV). The best newspaper/web combined reach is The Washington Post with an 81% penetration of its Washington DC market, but its 43.4% web penetration is behind WRAL’s 45.8%.

Borrell Associates warned in February that the “sleeping giant” – local TV web sites – were waking up and would increase their online video ad takings by 178% to $89 million this year. Some 95% of local TV stations said they intended to be in the video ad market before the year was out.

And TV stations continue to make deals to ensure their news video offerings will bring in the crowds. CNN has joined with Internet Broadcasting, a network of 70 US TV news and information sites, so that CNN and the stations will share local, national and international video and on the advertising side Internet Broadcasting will offer to its markets select CNN.com advertising.

And CNN.com has apparently decided it doesn’t pay to charge for news video and the material now available on its Pipeline service will be offered at no charge come July.

In showing how TV is waking up, just this week WorldNow, a publishing platform used by 130 TV stations, has partnered with Magid Media Futures for audience surveys and MediaSpan has added 75 TV and newspaper sites to its ad network.

And as an indication of how important video ads are going to be, Google has now started an “in-stream” test distributing video ads to a small group of Web sites on a revenue share basis.  Web site visitors can bypass the ads, no more than 30 seconds in length.

European statistics indicate that video ads are where it is at, with readers becoming tired of static display ads.  Whereas click-through rates for standard banner ads are now just 0.18%, and pop-ups and layer ads are at 0.6%,  the click-through rate for video ads is around 4%, according to Adtech.

One US media company looking into what video can do for its newspaper  web sites is Media General, owner of both newspapers and television. Its  Richmond Times-Dispatch is trying out a system that not only allows the newspaper to post videos, but readers can, too, on the same subject, and the more video on site the more acceptable video advertising becomes.

A new Kelsey Group User View Study reported that 59% of those surveyed said they watch online video, with more than half saying they responded to such video by going, as directed, to another web site, actually going to a physical location, or actually making a purchase. Strong numbers to support the video advertising platform.

"YouTube has largely popularized the concept of watching short videos on a computer screen and has likewise familiarized consumers with the idea of watching short video ads," said the survey’s author, Michael Boland, Kelsey Group senior analyst. "A wide range of business models are coming to market in the hopes of tapping into the growing demand for video. We are in a 'wild west' phase of experimentation on all fronts -- content generation, licensing, search and monetization."

The report notes that already production companies are offering to produce and distribute video ads for small businesses at price points that are significantly lower than those of traditional advertising, bringing video advertising within the grasp of many small businesses for the first time. The report reasons that the value of video may be easier to comprehend for many small businesses compared with some forms of online performance-based marketing such as pay-per-click. Small businesses are interested in generating leads and foot traffic or phone calls. As a result, video has the potential to be an easier integration to a cross-platform product bundle.

Those local newspaper or TV web sites that can first offer their local businesses such online advertising platforms, therefore, could well be onto a financial bonanza.

As Gary Pruitt, McClatchy CEO, told a recent journalism symposium at Stanford University, “We take comfort from Charles Darwin’s observation that it’s not the strongest species that survives, nor the most intelligent, but the ones most responsive to change. We just need to be adaptable.”

He should have added the word “fast”.

ftm Follow Up & Comments