Posted May 30, 2008 4:31 pm by with 21 comments

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A study by Borrell Associates found that almost all newspaper web sites are profitable – thanks to online advertising. Advertising revenue accounts for over half of revenues locally, and 57.3 percent, goes to online advertising like Google.

They studied 3,100 sites owned by newspapers, radio stations, TV stations and independents to find out where they are making the most ad revenues.

According to Borrell, there are some important “firsts” in the newspaper industry. For the first time, newspaper online local ads topped more than $2 billion. Also, web sites of the biggest newspapers have switched from print or radio ad revenue to more than half of their revenues coming from non-print advertisers.

Local newspaper websites are getting the largest share of local ad spending among media companies. The study, called “What Local Media Sites Earn” found local newspaper websites capture an average of 11.7 percent of local advertising dollars. The highest earner in the top 200 papers generated over 78 percent of local spend in its market.

“Local Web sites continue to ride a wave that defies even the most optimistic forecasts,” Borrell says. “Local online revenues are growing at a phenomenal rate of 50% this year — even more astonishing considering that retail sales have suffered such a sharp drop.”

Other forms of advertising revenue for newspapers keep falling. Broadcast Television sites brought in 6.9 percent of local spend and local radio gets just 0.8 percent. It’s probably going to get worse:

“We expect revenue for print directories to decline more than any other local medium — 39% — over the next four years, from $12.7 billion this year to $7.7 billion by 2012.”

In the past newspapers depended on classified ads, but the Internet (including sites like has cut into their profit. The study advised newspapers to not depend so heavily on the revenue and focus more on building online ad revenue. Newspapers who’ve done so have been more profitable.

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  • MarketingDeviant

    Online is the new future for newspaper. Using less paper to create a greener world! Besides, online articles are basically going to stay there forever!

    MarketingDeviant’s last blog post..Hide a Knife Behind a Smile

  • Jayson

    Newspapers are a shoe-in for internet success if you ask me. Full-time writers, local exposure and motivation to find new revenue (dwindling print).

    It would be hard to have a successful newspaper and an unsuccessful website.

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  • Nicole

    Online ad revenues may indeed be going up. I however would like to see long term impact, in terms of the effectiveness of such advertising. At the end of the day, advertisers will spend money if it generates business for them. The current fad is online advertising, but quite how effective it is, is yet to be studied.

  • Jayson

    I’m not too sure that online advertising hasn’t been studied – I would argue that it’s been studied a lot, and that tons of people are making money from online advertising and are actually advertising online, because it works.

    For most products and most industries online advertising is extremely effective – IMO

  • Goran Web Design

    I think that its good to see. I was of the impression that they were not successful in general online. It us the consumers that are now getting them online. I have not bought a single magazine in about 2 years.

  • iPod Touch

    I have to agree with Jayson here. If the newspaper is successful offline then chances are it will be successful online. If they keep the same writers it will be an online, more interactive, version of the physical paper. The stories will be the same so will attract the same audiences, apart from those without internet access.


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  • seo guy

    They usually have various gobs and classified listings attached that in most cases are paid. There are tons of opportunities for these companies to make money really.

    seo guy’s last blog post..23 creative ads for your inspiration.

  • trexpenn

    I’m one of those who stopped subscribing to newspapers and basically gets my news (local and global) online or from TV. The previous poster raised a valid point though with regards to the effectivity of the ads, as in my case, I never bother looking at the ads at all.

    trexpenn’s last blog post..Dimdim Unleashes the “Eagle”

  • iPod Touch

    Without revenue from advertisers do you think the physical papers will cease to exist?


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  • Goran Web Design

    Its the question if everything will be online. I am sure people actually buy magazines. Was reading that Woolworths in the UK is stopping selling CD’s and they sell 1/3 in the UK because on-line is 10x more. So lets see what happens in the years to come with future technology where we download the magazines to our magazine tablets.

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  • Brad King

    Having run two news websites and worked for a third, I would ask this question: how is the “profitability” measured?

    Many times, ancillary costs are not built into the model (for instance, rent, ect) and instead they are lumped entirely in the print operation.

    Also, I would love to see the metrics on where the revenues are coming from. I’ve poured through scads of budgets and I’ve not seen many operations that were truly ad-supported and profitable. Most profitable sites do something radical: they sell products (think Amazon or Ebay).

    If you factor in revenues from conference registration, subscriptions (yes, people still pay), and other forms — monies can be quite high.

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  • dotti

    When I read the printed paper I miss the links offered online for referral to source, the ability to comment, the ability to click and go to the website for more info…