The troubled economics of online advertising

Ed: Analysis paralysis. Can't see the forest for the trees.

US: The troubled economics of online advertising

Posted by Sarah Schewe on June 11, 2008 at 12:13 PM

It isn't a secret that the American newspaper industry is experiencing difficult times, as core print revenues and circulation are falling. Many think that online news, which has been accompanied by double-digit online advertising growth in recent years, can make up for the decline in print. But several studies and articles think otherwise.

"The Web audience is growing at a great clip, while print circulation is not. And online revenues are growing faster, too, albeit from a smaller base. If the trend continues, there's little doubt that -- "eventually" -- online becomes the main business," said Bill Keller, theNew York Times Executive Editor, in a 2007 interview with IwantMedia. 

But as sanguinity faces off with the numbers, perhaps we shouldn't hold our breath for "eventually." 

Internet revenue is growing -- in 2003, newspapers collected a mere $1.2 billion from online advertising; last year the figure was nearly $2.7 billion. "We're growing at a double-digit rate," said Randy Bennett, of the Newspaper Association of America...