Tuesday, June 30, 2009

Fascinating post about Web traffic

The Nieman Journalism Lab has a fascinating post about a Yahoo! link driving record Web traffic to the web site of The New York Times.

The Times got more than 9 million page views in a couple of hours as a result of the link, but couldn't make much money from the traffic.

This story relates to my previous post about how newspapers should think about building their business on the Web. Perhaps raw traffic isn't the best measure of success, or what newspaper people should be looking for. Just as fighting for tighter copyright laws isn't the right path. It's attracting the right traffic that counts - and providing services to users and advertisers that benefit them financially.
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63 comments:

  1. Does anyone actually see ads online?
    Firefox + AdBlock Plus + Filters = no ads.

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  2. John I couldn't agree with you more. I love your blog. The reality is that for many newspapers finding away to generate revenue comes too late. One only has to look at the state of the newspaper industry to understand the economic law of supply and demand, particularly demand.

    April

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  3. Media experts suggest that one only has to tune into the downward spiral of the newspaper industry to witness the classic example of the economic law of supply and demand, particularly the law of demand. Newspapers of all sizes, many of which have been around for more than 100 years, are struggling to stay alive in the face of diminishing advertising revenue, dwindling readership, and increased competition in the digital landscape. According to a 2008 Pew Research Center survey, more Americans received their news online than in a printed newspaper. This trend in consumers’ preferences has forced every newspaper, including national papers such as the New York Times, Los Angeles Times and The Washington Post, to create an online presence. But for many newspapers that failed to embrace the possibilities of the Internet more than a decade ago, such a presence comes too late.
    McConnell and Brue (2004) state that the law of demand is consistent with common sense. In essence, consumers typically purchase more of a product at a low price than at a high price. In the case of newspapers, the high price to place an ad in the printed version of the newspaper compared to placing an ad on a Google or Yahoo site at a lower price served as an obstacle that deterred large and small advertisers from doing business with traditional newspapers.
    Eric Ulken, of Knight Digital Media Center, contends while he is no economist, the problem facing the news industry comes down to the simple fact that “the Internet is a simple efficient market governed by the law of supply and demand. Because there surplus ad inventory online – particularly low-grade inventory – prices are falling," he wrote. Meanwhile, the challenge for newspapers remains how to make money from their online content. As the demand curve shifts, industry experts conclude that newspapers options come down to charging a subscription fee for online content or banking on online advertising. Industry experts point out that the subscription model has worked well for The Wall Street Journal, which has been charging online subscription rate for about 13 years.
    The Wall Street Journal reported tremendous growth in 2008. Following its lead, Newsday, The Denver Post, and Christian Science Monitor have announced plans to begin charging for online subscriptions. To attract advertisers, newspaper websites not only need millions of visitors, but must provide advertisers greater value for their limited ad dollars. Media experts and consultants contend that in today’s digital age and linked economy newspapers must produce relevant content and go where the people are – the online universe and social networking sites such as YouTube, MySpace, Facebook, Twitter, among others. Economists McConnell and Brue (2004) state that the law of demand is consistent with common sense. In essence, consumers typically purchase more of a product at a low price than at a high price. In the case of newspapers, the high price to place an ad in the printed version of the newspaper compared to placing an ad on a Google or Yahoo site at a lower price served as an obstacle that deterred large and small advertisers from doing business with traditional newspapers.

    Reference: McConnell, C., and Brue, S., (2004). Economics: Principles, Problems, Policies
    (16th ed., chapters 1, 2 and 3). The McGraw-Hill Companies.

    ReplyDelete

  4. The Times' inability to make much money from 9 million page views (times a handful of ad positions) demonstrates the kind of missed opportunity that news Web sites can't afford. News sites need to be smarter at creating and selling ads in the moment, just as they capitalize on news in the moment. In this case, imagine the benefits to Bing, a major Times advertiser, if its ad package had included ads on a big breaking news story like this one. The rate may be discounted, but the ads would have big value to a key advertiser as part of a larger deal.

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  6. Web traffic will always be attractive, but I really think that targetted traffic is more important. I also have to agree with you about the news papers to be online.

    I read only online and I'm sure you do too.

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