Archive for June, 2011

News Websites – Advertising Goldmine

June 15, 2011

Many newspapers have decided to start charging for access to their websites because they apparently cannot figure out how to sell enough advertising to pay for news gathering. The web should be an advertising goldmine for newspaper companies because readers may visit a site multiple times during the day to see if some stories have been updated or significant local events have occurred.

Broadcast television manages to pay its stars millions just from advertising money. Google and many other sites are doing very well without charging users. These sites have figured out how to finance their operations using advertising. Arianna Huffington did very well financing her online news site using advertising revenue. Local newspapers can do the same thing.

Online advertising provider Groupon recently turned down a $6 billion buy out offer from Google.

American newspapers have been selling advertising for over 200 years. President Thomas Jefferson once suggested to Nathaniel Macon that “Advertisements…contain the only truths to be relied on in a newspaper.”

Many people will buy Sunday newspapers and Thanksgiving and Christmas newspapers because of the ads in those papers.

News websites should be more attractive to advertisers than news-papers. Advertisers may know how many newspapers are sold, but they have no idea if anyone actually sees the pages containing their ads. The greatest ad ever designed cannot sell anything if the ad is on the back of the page used to line the bottom of a bird cage.

The ability to identify individual readers can allow news websites to customize ads for individual readers so that the ads they see will be for products they are interested in rather than ads for products they cannot use. Advertisers cannot benefit from paying to advertise feminine hygiene products to 70 year old men or lawnmowers to residents of high rise apartments.
Ratings services can estimate how many viewers have specific television programs on, but not how many viewers go into the kitchen or the bathroom during the commercials.

Computers record how many people access each web page and thus see the ads on the page.

Advertisers have long posted ads in any location where people might see them. Advertisers once placed so many billboards along major highways that government decided to limit such ads so people could see the scenery. If you watch basketball games you know that the tables used by the officials, broadcasters, etc. usually have ads in front of them.

Today potential customers spend much of their time looking at things on the Internet. Advertisers who want to reach customers need to place ads on popular Internet sites much like they place ads on popular tv shows.

Some companies seem to think all they need to do is set up a company website. Some potential customers will visit websites without prompting. Some people will even watch infomercials on television.

Visiting websites takes time and requires bookmarking the site. Potential customers can get too busy to take time to visit a website, particularly for everyday items. For major purchases such as vehicles or appliances customers might take the time to visit websites, but most won’t go from site to site trying to save a few pennies on inexpensive products.

Potential customers may visit a retailer’s website once or twice during a week to find out which items are on sale, but may forget some sale items before the sale is over. Ads on news or other popular websites can remind some customers of sale items and notify those who haven’t visited the retailer’s website.

Email ads can easily get lost among other email. Website ads are more likely to be noticed.

The success of the Groupon company demonstrates that website ads work. News web sites should be able to finance their operations with ads so they don’t have to chase off readers by charging them.

The web could have been set up so that all websites received some compensation from visitors, but it wasn’t. The web is free and those sites that make money on ads don’t need to charge.