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Internet journalism's potential
grows
By John Berthelsen
Advertising revenues that are transforming
global Internet journalism are continuing to surge and,
if anything, growing stronger during a feeble global
economy. First-quarter advertising revenues for 24
members of the US-based Online Publishers Association
soared 40.2 percent during the first quarter of 2003,
the association said. Anecdotal evidence indicates that
advertising on Asian journalism websites is growing as
well although no figures are available.
The
advertising surge is especially significant because it
follows skyrocketing Internet journalism ad revenues in
2002, indicating that the trend is continuing. Eighteen
online newspaper publishers surveyed by the trade group
found third-quarter 2002 revenue increasing by an
average 35.7 percent year-on-year. Separately, many
publications contacted reported that their Internet
sites went into the black for the first time in 2002.
Asia Times Online reported in April that after the
so-called bubble years of the 1990s, in which Internet
publications burned through a phenomenal amount of other
people's money, web journalism has finally begun to take
hold (see Internet hacks: Web news cashes in
, April 12). That may hold ominous
implications for newspapers globally, but it could well
save journalism itself. Many reporters and editors in
the print news business see themselves in basically a
dying profession.
Conventional news sources
remain flat
Certainly, both conventional print
and television journalism have endured a static or
declining audience and plummeting or lackluster
advertising revenues, partly as the global economic
slowdown of the last three years has strangled ad
growth. However, the decline is more ominous than that.
Readers and viewers have simply turned to other media
outlets - or given up following news altogether.
Newspapers and magazines have gone out of business at an
increasing pace.
However, most Internet
publishers report that the Iraq war substantially
increased their numbers of online readers, primarily
because of the web's ability to deliver news in real
time rather than on 12- or 24-hour cycles. It remains to
be seen if the journalism websites will retain those
readers with the war now largely over.
Asian
publishers catching on
While the major Asian
English-language newspapers unanimously ignored requests
for revenue and circulation figures on their Internet
publications, cruising the websites shows that ads have
increased substantially and that Asian newspapers, by
varying degrees, are starting to understand the
favorable revenue and cost implications of online
journalism.
The Bangkok Post website, for
instance, now carries ads for interests including the
Imperial Hotels Group, VAIO Computers, Sony products and
various art galleries. The South China Morning Post in
Hong Kong, which developed what might be Asia's
strongest journalism website several years ago,
restricts its viewers to subscribers. However, its
Marketplace section, called a "one-stop shop for all
shopping needs in Hong Kong," carries an extensive range
of ads for products including hotel rates, fashion and
apparel, perfume and cosmetics, books and travel
reservations, among other things. The New Straits Times
of Kuala Lumpur carries classified advertising online as
well as other items. The Jakarta Post carries ads for
Nokia.
Other papers are catching on more slowly.
The Taiwan News only has an ad for the Ping Tom Blue Fin
Tuna Cultural Festival. The China Daily carries a
handful of ads, both in English and Chinese. The Manila
Times carries only an advertisement for cards allowing
purchasers to buy telephone calling time at reduced
rates. All of the Asian papers, however, lag far behind
what is happening in the United States.
Broadband the key
Part of the rising
ad flow is because of the increased ubiquity of
broadband, which vastly increases the speed and amount
of information flowing to the viewer. It gives
advertisers and marketers the ability to produce what
amounts to mini-movies about their products. It allows
the viewer to interact with the product - to hear the
sound of racing car engines, for instance, or to "walk"
via virtual reality through houses for sale. These kinds
of ads simply clog the pipe for frustrated dial-up users
who have to wait too long to download them.
The
Internet also enables advertisers to target their
products better. They can determine response rates down
to the individual viewer because when the viewer clicks
on an ad, it sends a signal to the advertiser that he
has done so.
Because of this, Jack Klues, the
chief executive officer of Starcom MediaVest Worldwide,
calls the Internet "the most powerful pathway to the
consumer that the industry has ever seen". In a speech
in May, Klues said Starcom, the world's largest
media-buying company, is broadening its services to
enable marketers to reposition advertising to the
Internet.
Association of journalistic
heavyweights
Founded in 2001, the Online
Publishers Association includes such heavyweight
American publications as the Wall Street Journal, the
Washington Post, the New York Times, Newsweek, ESPN,
Forbes Magazine, Knight-Ridder publications and others
with a claimed 99.1 million Internet readers.
The trade group should be regarded somewhat
skeptically as having a vested interest in favorable
results. Nonetheless, it cites studies by Dynamic Logic
MarketNorms indicating that brand awareness is higher
for quality online sites than it is for the Internet as
a whole. Whether that is true or not, Internet
advertising does appear to have a strong impact because
ads can be dynamic rather than static.
Cheap
to advertise via the Web
It is also cheap. Ad
rates for the Internet are still far lower than for
conventional advertising, despite the fact that
interactivity gives Internet advertising more oomph.
Forbes Magazine reported in May that it costs about US$5
to reach 1,000 Internet users, against US$31 to
broadcast the same message on prime-time network
television to 1,000 viewers. What makes it worse for
television advertisers is that the ubiquitous remote
control allows viewers to simply click off ads during
station breaks.
The cost side of printing
journalism on paper bears no comparison. World newsprint
costs normally run above US$500 per metric tonne.
So-called back shop facilities - the plants that process
and print the news - represent staggering capital costs.
Traditional newspapers must own or lease large fleets of
trucks to deliver their product and employ large numbers
of truck drivers and bundle throwers to distribute them.
Online publications need little more than journalists,
computers and the Internet.
In addition, online
publications are not limited by geography. They can be
and are read worldwide. For many, if not most, of the
world's newspapers with strong Internet sites, online
readers outnumber print readers. Asia Times Online, for
instance, regularly hears from readers in the United
States, South Africa, Canada and a startling range of
other countries.
Affluent, adventurous
readers
The simple fact of owning a computer, at
a cost of about US$1,000, means these web viewers are
likely to be more affluent, more adventurous,
better-educated and younger than newspaper readers -
whose average age is now 46 years old and who pay an
average of about 50 US cents for the product.
Substantial numbers of Internet users sign on at the
office. They are a potent target for both advertisers
and journalists.
Between 43 percent and 52
percent of Internet users at the office make upwards of
$75,000. Another 21.7 percent earn more than US$100,000.
The vast majority - 70 percent - have a college degree
or higher. Baby boomers and generation-Xers dominate,
with 23.7 percent aged between 25 and 34, and 29.4
percent aged 35-44.
They are also increasingly
likely to go to the Internet for news. Some 35 percent
say they refer to the Internet first for news at work,
followed by 25 percent who rely on newspapers, 21
percent on magazines and 17 percent on radio. Broadcast
and cable television are at 9 percent (apparently there
is some overlap, since this totals 107 percent) -
watching television at work can get you fired, but
searching for the news on your computer probably won't.
The study also found that of those who use the Internet
at work, 76.8 percent are much more likely to log in
again at home.
(Copyright 2003 Asia Times Online
Co, Ltd. All rights reserved. Please contact content@atimes.com for
information on our sales and syndication policies.)
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