Online newspaper Advertisement Rates

Newspapers Online Traffic Is Strong, So Why Are Ad Rates Weak?

comScore Media Metrix has just released some traffic stats for newspaper Web sites that look good at first blush - but the closer you look, the worse the news gets. The good news is that 123 million Americans - 57 percent of the population - visited a newspaper site in May. The bad news: These supposedly premium Web sites, with their supposedly premium ad inventory, are getting an average CPM (cost per thousand ad views) of $7, which is barely enough to cover the cost of reporters' cubicles.

For this, you can blame the fact that as more and more content gets produced - creating the so-called long tail - it also creates new advertising inventory, often depressing prices. And there's no end in sight. It would take an online shakeout akin to the extinction of the dinosaurs to alter this dynamic.

While some advertisers still buy partly based on the context in which their ad will appear - that is, they'd rather see their ad running on than a local neighborhood blog it's become more common, particularly in shaky economic times, for them to buy cheaper ads down the long tail. As long as they reach their audience, many advertisers bargain, it doesn't matter where the ads actually run. If you think $7 is a bad CPM, consider this: according to comScore, the overall CPM online was $2.52 in May. That's the phenomenon of buying down the long tail at work.

But many long tail businesses aren't burdened with the costs of dead-tree infrastructure, or old-model payrolls, so they can stomach lower rates better than businesses - like, y'know, newspapers - that have to worry about their past. Obviously, the newspaper industry is looking to solve this in several ways, including charging consumers for online content, but that alone won't fill its yawning online revenue gap - nor will some of the newer, more intrusive ads that now are often seen on newspaper Web sites, such as ones that briefly expand to fill a browser window. These ads have been championed by the Online Publishers Association for the last year, and can garner CPMs of $100.

Once users have traveled past the home page of a newspaper Web site - if that's their first stop at all - they go in thousands of niche directions that don't get enough traffic to be real moneymakers. In short, the comScore data is more proof that online ads are never going to support the sites of general-interest publications. Lots of us visit them, but it doesn't add much to the bottom line.

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