Online and rally may sidestep newspapers

It was a good day for newspaper Websites when Mercedes-Benz USA introduced its updated E-Class cars this summer. Mercedes bought out the ad space on the home pages of The Washington Post, The Wall Street Journal and The New York Times, and had those sites create special 3-D ads for them, at an estimated cost of $100,000 a site.

The days after were not as good. While Mercedes was happy with the newspaper sites’ performance, it shifted money to cheaper, more tightly aimed ads bought through networks, which include bundle ad space from many websites. When Mercedes advertises its more basic models next year, it will largely avoid newspaper Websites and rely on networks. That lets Mercedes “be very targeted and efficient with our dollars,” said BethLange, digital media specialist for Mercedes-Benz USA.

But that also explains why newspaper sites are not holding on to ad dollars, even while overall Internet advertising is creeping back. Newspaper sites are the patent-leather stilettos of the online world; they get used for special occasions, but other shoes get much more daily wear. The beneficiaries of this behavior are networks and exchanges like AOL and DoubleClick Ad Exchange from Google, which dominate the buying and selling of extra space. At non-newspaper sites like Yahoo and Google, revenue from display advertising – the image-based ads on Web pages – seems to be turning. Yahoo’s display revenue on its Web sites increased 2 per cent in the third quarter, though it was down from a year earlier.  However, display revenue increased at Google from a year earlier.

Overall, the Internet is the only advertising medium expected to grow this year in the United States, rising 9.2 per cent to $54.1 billion, according to figures released this month by Zenith Optimedia, a media service firm. Newspaper sites cannot seem to catch that wave.

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