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Are Newspapers Squandering Yahoo Ad Opportunities?



By Roderick Ioerger

image The newspaper industry has been feeling a lot of pressure for some time now to reverse the industry trend and restore revenue growth. In November of 2006 Yahoo and a consortium of seven newspaper companies came to an agreement opening up 176 different newspapers to one of the world largest online communities.

Yahoo’s HotJobs service was the key piece of the revenue puzzle, allowing the newspapers to take advantage of the technology platform that Yahoo had already created by driving sales of the HotJobs service for hundreds if not thousands of local businesses in each market. The other element and maybe the more important one long term for the newspapers is the use of Yahoo’s technology to be able to sell advertising across the newspapers entire web site.

In all outward appearances it appears the partnership has started out extremely successfully, with some online outlets reporting a 50% or more growth in online sales, while still cross selling their own recruitment products. But many newspaper executives now fear that it will be difficult for the papers to maintain that type of growth moving into the second year of the agreement.

Predictions were made that newspapers could boost their online ad sales and see positive over all sales gains as soon as 2009, but that gain doesn’t just come with no strings attached. The doom and gloom of the situation is only created by the inactivity of the newspapers to support this growing new revenue opportunity. Remember the newspapers now have access to Yahoo’s advertising technology, so if they can keep their sales of the HotJobs product flat or even if it marginally declines the newspapers should still be able to develop ways of driving incremental revenue, shouldn’t they?

Many traditional media outlets still seem to be suffering from the same transitional challenges that they were suffering from two and three years ago. The web presents a massive advertising opportunity, but the media outlets cannot rely on just turning on the advertising and counting their pennies. Work needs to be done to maintain the new revenue sources as well as expand further upon the new advertising opportunities Yahoo’s ad serving technology presents to the companies.

While employment classifieds have historically been major winners for the newspapers, there are many other options for advertising, especially in an online world where the price for advertising opportunities can be increased based on the volume of a regional audience.

The newspapers have created a create opportunity in their partnership with Yahoo but the real question is will they take notice and step up to the plate or will they just bemoan their inability to keep a single source of revenue growing exponentially?

Roderick Ioerger is a long time online marketing and travel industry veteran.