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NEWSPAPERS and the INTERNET: A synergy rather than a threat

When the Internet first appeared on the media landscape there was much concern in the newspaper community. Wouldn’t people get their news for free from this new exciting and interactive media? Wouldn’…

When the Internet first appeared on the media landscape there was much concern in the newspaper community. Wouldn’t people get their news for free from this new exciting and interactive media? Wouldn’t the advertisers who pay the freight, flock to the Internet? Isn’t the new Net Generation going to turn away from reading . . . anything? Well, these foreboding predictions have not happened and in fact newspapers are enjoying new-found successes, partly from a revitalization prompted by the “Internet threat.” Readership is up, ad revenues are solid, and growth potential is indicated. What is behind this unexpected outcome?

Newspapers are now a growth business with weekend editions (Fridays, Saturdays, and Sundays) at the heart of that growth, according to a global survey by the Innovative Media Consulting Group. The successful newspapers have undergone a widespread change in design and content over the past three years. Driving this change are the lifestyle changes of readers, notably their available time budget, which is more precious and often centred around the weekend. For content there is a focus on improved presentation of special interests, analysis, commentary and editorial content in both the weekend and weekday editions. Growth in weekend advertising exceeds that of weekdays. However, although attracting younger readers is still a challenge for most newspapers, there is still no such thing as a “weekend Internet”.

On the time budget issue, it is true that people spend more of their leisure time accessing electronic media forms, and ad spending is distributed over the media choices accordingly. However, over the last three years there has been a reversal of newspapers’ long declining share of gross advertising spending. Furthermore, ad spending per consumer hour viewed for newspapers, is by far the highest of the major media (Veronis Suhler). Put another way, paper products give the advertiser unprecedented “reach,” some degree of target, and the best bang for the buck. Unlike TV or the Internet media, paper products reach many “eyeballs” and have the property of “stickiness” with respect to consumer attention. Newspapers are also offering innovative pricing schemes for advertisers that link pricing with results, not page space. Content and placement can also be used for targeting.

Like newspapers, TV, radio and the Internet have also undergone their own adjustments to capture consumer attention and ad revenues. The Internet, which lives by a “dog-year” time scale, has gone from high growth to decline over one year! A recent survey (by Nielson/NetRatings) indicates a steep 15% decline over the last quarter of 2000 for Internet use. This comes on top of a 10-x decline in “click through” rates on Internet banner ads over the past 18 months (Merrill Lynch). It would seem that the Internet may be reaching a plateau or “saturation” limit as a medium, and may be viewed more as a quick source of information rather than a leisure-time activity. Moreover, unlike newspapers, consumers are not willing to spend a single dollar to get content from the Internet. What’s interesting is the Internet has “branded” itself as the “free information media,” while newspapers are able to sell the same content in a medium appealing to “convenience and leisure.” Most importantly for both content and consumer purchasing decisions, newspapers offer security. The Internet has yet to overcome this huge hurdle. However it is early days, as the dot-com world scrambles to find new business models.

Newspapers and the Internet are synergistic. Most newspapers operate a companion Web site catering to a different audience, and with no affect on the paper sales. In fact, this combination has strengthened the brand image and reach of many newspapers. Moreover, the unique content of a newspaper appears not only on paper and on Web sites, but on Web radio, digital TV, portable telephones, — everywhere, all the time. Some newspapers have introduced a “GoCode” scanner (a tiny pen-like device). This allows readers to “read” bar codes beside articles and ads, making the newspaper an Internet portal with hyperlinks.

Why is this important?

The future for newspapers probably lies in a continuation of the recent trends toward a product that resembles a magazine. For the paper community, what will be important will be attention to consumer-use attributes such as “readability, portability, security, convenience, organization, branding, ‘browse-ability’, sharing, leisure appeal, notations and clipping, image quality, links with other media” — what might be broadly termed “the paper experience.” Newspapers can fill a vital role for keeping in sync with the changing lifestyles of consumers, particularly their need for brands and content they can trust. “What better use of valuable time is there than to spend it relaxing, reading trusted information, and investing in self-development?” said Mark Dixon, marketing director for The Daily Telegraph.P&PC

Alan R. Procter can be reached at a.r._procter@telus.net. For more information, visit www.futureviews.net