Generating Revenue from Online Advertising

One way for digital newspapers to generate revenues is to become part of Google’s Adsense ad network. By using Adsense for site search results, newspapers can add a Google search engine to their websites, and earn income from ads displayed on the search results pages. Forty-seven percent of publishers surveyed are members of the Google network, while others are part of other networks that exist in the market, such as Yahoo and Terra Ads, each with a 6.7% share of the affiliated media market, while Batanga has 7.3%.

Other ways of capturing revenue from on-site advertising include direct advertising, through banners, sponsored links or classified ads.  As shown in the chart below, 92% of online newspapers include banners in their editions, while 57% include sponsored links, and 50.8% reserve space for classified ads.

As we noted in Part 1 of this series, the growth potential offered by the online advertising market is based on continuing to monetize the large audiences of print newspapers by passing them on to their online editions. The proportion of profits digital newspapers garner from online advertising as compared to total revenues is still very low, so publishers will have to come up with different strategies to attract advertisers, in both ad formats and content.

Changes in content production

The production of newspaper content has changed considerably since the advent of the Internet. The format requires more flexibility in regards to the supply of content, which is not just text, but also videos, mp3, PDF files, etc. That, coupled with the speed with which information flows, requires content to also be worked on from a visual standpoint in order to provide a faster reading. Another important fact is the recycling of information, such as analysis pieces published in print format, which can then be distributed by the online sites.

Of those surveyed, 32.6% said that their editorial operations are fully integrated, while only 13.6% said that editorial staffs for their paper product and online product are still totally separate.  As for updating content, the newspapers said they update their sites several times a day, while only 17.7% of those surveyed said they update their online editions only once a day.

Also of note is the importance of interaction with social networks, along with the creation of news blogs to facilitate interaction with readers.  Of those surveyed, 83% use both Facebook and Twitter to interact with their audiences.  YouTube and content syndication through RSS protocol (Real Simple Syndication) are the other two most widely used social media tools by traditional media, with Flickr and Fotolog, two online photo sites, coming in a distant fifth.

SOURCE: Lecture presented at the Inter American Press Association (IAPA) by Francisco Vazquez, President and founding partner of E&P Research, and Rafael Bonnelly, Director of Digital Strategy and Social Marketing at NCA & Associates

Related article:

Research: Advertising in Newspapers Online: a Promising Market (Part 1)

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