News outlets such as the New York Times and NBC News still haven’t figured out how to get their big advertisers to buy space online, a recent study by the Pew Research Center's Project for Excellence in Journalism found. [5]
Pew studied 22 news organizations, and found that even “the top news websites in the country have had little success getting advertisers from traditional platforms to move online.”
That’s a problem, since by 2016 revenue from digital advertising is expected to outpace all other platforms – even television.
So while companies like Google and Facebook begin to print their own digital dollars, news outlets may get stuck in the cold.
The struggle to increase digital advertising revenue is the biggest financial challenge facing the media industry, as newspapers look to replace vanished print advertising and television networks look to extend their advertising heft online.
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The number of users flocking to online sites every day continues to increase, but this has yet to generate substantial enough digital advertising revenue to offset declines elsewhere, leading to more layoffs. Organizations can only cut so much staff, so boosting revenue is a must.
When Pew conducted its study, nearly a quarter of all online ads were what are know as “house ads,” or ads for the news organization itself.
At Time.com, 56 percent of its ads were for Time properties.
It’s hard to make money if you are paying yourself for advertising.
Compounding the issue of not luring the big advertisers, news operations are also failing to use targeted or innovative advertisements.
Of the 22 organizations studied, 19 of them demonstrated little to no ads directed at the interests of specific users, a practice that is essential to the likes of Google and Facebook.
Those companies can base the advertising for different users based on their past searches or location, thus increasing the chances that they are effective. As a result, advertisers will pay a higher rate for those ads.
Only three news operations showed “significant levels of targeting” -- the New York Times, CNN and Yahoo News.
But all news organizations are relying on “static banner ads,” those ads that extend across the top of a page or along the side and sit there. Those ads tend to be less effective than “rich med ads” like video ads.
More news operations are engaging in online video, from the Wall Street Journal to Reuters to the Times, and integrating advertising will be key.