It’s All Well And Good Turning Print Journalists Into Video Journalists For the Web, But It Is The Smart Publisher Who Will Also Turn His Print Ad Salespeople Into Video Ad Salespeople, Too

Philip M. Stone - February 21, 2007

Newspaper publishers have caught on that multi-platform means multimedia and newsrooms around the world are training on how to shoot video for the newspaper’s web site. But it is the really savvy publisher who provides that same training to his sales people, too.

Each quarter US newspapers receive record numbers of Internet visitors and according to the Newspaper Association of America, more than 36% of all active web users in Q4 visited online newspaper sites, with newspaper online readership averaging 57.6 million visitors.

Now surely an audience like that is absolutely prime for video advertising by local merchants who can’t afford to reach those people via the 30 second commercial on their local television station.

That has not been lost on some publishers already.  A new Borrell Associates Report says that newspaper web sites last year earned $81 million in locally produced streaming video ads compared to just $32 million for similar ads run on local TV broadcast sites.

Perhaps local television is fearful of cannibalizing its over-the-air revenue it gets from local advertisers, but newspapers have no such worry. They are able to offer a whole new method of advertising that they have never been able to offer before. It doesn’t interfere with print revenues; indeed it will be the smart newspaper that offers joint video and print advertising packages.

And for the local merchant who has always dreamed of having video ads but never went that far because of production costs let alone the rate charged by TV, here is the perfect opportunity to get into video on a site that is well visited and trusted by its local readers. It’s really not rocket science.

And it’s a relatively simple task for an ad salesman with a $300 digital movie camera and some editing software to put together a one-minute ad for the local furniture shop, walk in the door, and show it on a Notebook to the amazed owner. Even more amazed will be the prospect when given a rate far lower than local television. 

The Borrell report, “The New Frontier: Local Online Video Advertising” points out that multimedia and multiplatform means that media companies now have a diversification of channels available to make the ad sale. “Print media are using the internet as a crossover platform to tap traditional TV advertisers, just as stations (and others) are trying to use the internet to tap traditional print advertisers,” the report said.

Borrell projects video advertising on media sites will increase by 130% this year and that by 2012 it will reach some $5 billion, about 35% of the projected local online advertising spend for that year, compared to the 5% it is today. That’s a lot of money out there that will be up for grabs.

At the moment its the larger markets like New York, Los Angeles, and Chicago that are getting the bulk of the video ad revenue – each worth about $5 million each -- but the next 37 largest markets are also involved, each earning more than $1 million in revenue from online video, according to Borrell. That means those markets can do much better and there are plenty of other markets that have not even started yet and are missing the gravy train.

And there is no law that an ad has to be restricted by the 30 seconds that TV uses -- indeed the experience thus far is that advertisers prefer to go over even 60 seconds and it’s all in how good they are in imparting information that will decide if a web viewer will stick around that long. So far, if the ad tells its message properly without too much imposition then people tend to watch.

The important thing for newspaper publishers is that they must keep reminding themselves that this is new revenue that only the web can provide. Everyone realizes that today an online ad is currently worth only about a fifth of a print ad and while most publishers are doing what they can to boost their digital revenues it could be 30 years before online revenue will equal print, according to Lauren Rich Fine at Merrill Lynch.  Video can go a long way to speeding up that process.

Video becomes even more important when one considers that the newspaper web share of online revenues is falling. Two years ago newspapers earned about 44% of the advertising spent online, but today that figure is down to 36%. Part of the problem is that newspapers concentrate on local banners and listings, yet that is the slowest growing sector in Internet advertising. (search is by far the biggest and fastest gowing).

Peter Conti, a Borrell senior vice president, summed up why newspapers can cash in big with video. “Local advertisers are the people who can’t afford TV advertising. It’s that kind of video and that kind of marketing that they’ve never been able to do or afford before, and it’s affordable on a much more effective and efficient medium.”

But local TV is not standing still. The Television Advertising Bureau says that 72% of TV station Web sites sold video ads last year, and 80 percent plan to in 2007. It claims that less than 33% of newspaper sites sold video ads in 2006.

If newspapers are going to make their video ad play then the window to do so is now.

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