AudioDizer and VideoDizer Blog

Wall Street Journal Reports that Newspaper circulation is falling faster than ever:

Most of the nation’s biggest newspapers saw circulation tumble at an increased rate, a sign that the migration of readers online may be picking up speed.

The Audit Bureau of Circulations reported Monday that average weekday circulation at 534 daily newspapers fell 3.6% for the six months ended March 31, compared with the year-earlier period. The rate of decline is accelerating: ABC had reported an average weekday circulation drop of 2.1% in the year-earlier period and 2.6% in the six months to November.

Sunday circulation fell even more, losing 4.6% on average.

Newspapers need to take advantage of what is working for them - online distribution. This not only means experimenting with podcasts, video, ad formats, etc but also means experimenting with different forms of distribution. They need to try and find ways to improve the consumer experience with online distribution. Right now everything is just flat text and every story has the same format - kinda boring if you ask me.

AudioDizer, Wall Street Journal, newspaper

Newspapers Lose
More Print Ads,
But Gain Online
ASSOCIATED PRESS
September 4, 2007; Page B2

NEW YORK — Advertising revenue at U.S. newspapers fell 8.6% in the second quarter, as an accelerating decline in print ads more than outweighed gains in online advertising, an industry group reported.

Print-only advertising at newspapers slumped 10.2% to $10.5 billion in the second quarter, marking the fifth consecutive quarter of decline, according to figures compiled by the Newspaper Association of America.

Online advertising at newspapers continued to grow, rising 19.3% to $795.7 million, although that was a slower rate than the 22.3% gain recorded in the first quarter, and the 35% gain in the fourth quarter of last year.

Newspapers still make up the largest category of overall advertising expenditures in the U.S., but advertisers are steadily shifting money out of print advertising to the Internet as people increasingly go online for information and entertainment.

Read the full article at The Wall Street Journal.

Wall Street Journal, advertising, revenue

This article describes how Google/YouTube and advertisers are experimenting with various advertising formats and types in video.

Are Skins, Bugs or Tickers
The Holy Grail of Web Advertising?

By KEVIN J. DELANEY and EMILY STEEL
August 13, 2007; Page B1

Video Web sites have spent the past year searching for the Holy Grail of online advertising: ads that don’t annoy consumers and still fetch high prices from advertisers. Now some believe they’re beginning to figure out what works and are starting to cash in.

Sites ranging from Google Inc. to Break.com1 have been experimenting intensively with replacements for the preroll, the video ads that users are forced to watch before viewing a clip. Advertisers liked prerolls because they could use commercials already produced for TV in the spots, and Web publishers loved the high prices they commanded. But users grew annoyed by the intrusion, and Google’s YouTube and other video-sharing newcomers rose to popularity partly by ditching the format.

A BETTER SOLUTION?

See some examples of the video ads:

• Bug2 (Break.com)
• Skin 3 (Heavy’s Husky network)That left a big question mark hanging over the online-video industry, which saw huge growth in consumer usage but couldn’t point with certainty to ad formats that would pump up long-term revenue. Now, with early results from their experiments with other formats, some video sites say they’re more confident they have an answer, and some advertisers say they’re seeing good results.

The sites and advertisers are now citing success with such things as graphics that slide over the bottom of the video-viewing screen that allow them to market to users without interrupting the clip. A user can usually click on the graphic — sometimes known as overlays, bugs or tickers — to pause the video and see more information from the advertiser. Other marketers are seeing results with ad graphics that surround the video player screen, often known as player skins, especially when used in concert with video ads dropped into clips like TV commercials. And the preroll itself has been reinvented, now limited to as little as five seconds and sometimes including timers that count down the length of the commercial in order to grab consumers’ attention without turning them off.

“Two-thousand-eight is going to be the year when we’ll see video advertising grow because a lot of the experimentation will have happened this year,” says Gokul Rajaram, a Google director of product management. “People are going to start acting on the data.” Research firm eMarketer Inc. projects that U.S. spending on Internet video advertising will rise to $4.3 billion in 2011 from $410 million last year. And Google Video announced Friday that it would stop charging fees for any of its videos, planning to rely solely on ad revenue.

No one claims to have totally cracked the video-advertising code, and many sites and advertisers remain in the throes of experimentation, with mixed or disappointing results to date. Some say the industry hasn’t yet figured out how to make video ads as interactive and effective as they can be. Most big advertisers are still uncomfortable having their ads appear alongside the unfiltered videos created by amateurs on user-generated sites like YouTube. And there’s a consensus that video sites need to reach common standards for formats and how to measure ads’ effectiveness before marketers can adopt them without the endless hassles of customization.

A skin, one of a few new Web advertising formats, wraps a movie ad around a video.
Still, the early results are encouraging. Ogilvy Interactive, the digital arm of WPP Group’s Ogilvy & Mather, has found that ads connected with online videos perform about three times as well as online sponsorship ads and banner ads when it comes to a consumer’s brand recall. The branded skins on video players are one format that has worked well for Ogilvy clients including Foster’s Lager and International Business Machines Corp.

“It’s not intrusive, and it allows you to sponsor and create an association with good content,” says Maria Mandel, executive director of digital innovations at Ogilvy Interactive.

The best results have come when the agency has used skins in combination with placing 30-second spots within the clips. Ogilvy is readying an ad effort for IBM that includes a specially designed video player that has IBM skins and plays technology or business content along with IBM ads. The agency is working on placing the player on magazine and newspaper publishing sites. Brand recall and consumers’ intention to buy a product, another key measurement, are high with such ads, says Ms. Mandel. For those reasons, Ms. Mandel says many of her clients are shifting money out of traditional media into online-video ads.

Video site Heavy.com4 says skins are the ad format consumers have most consistently responded to, clicking on them for more information between 1% and 2% of the time they’re displayed. (Industry-wide, the rate is generally just a fraction of a percent with many other kinds of ads.) Heavy’s video site, which NetRatings Inc. says had 720,000 users in June, this month is starting an online-video ad network called Husky where it will sell ad skins to appear alongside videos on other publishers’ sites, such as Newgrounds.com5, which offers content such as games and cartoons.

“We have a very good format,” says Simon Assaad, Heavy Inc.’s co-chief executive. He says a single skin usually generates less ad revenue per viewer than a preroll ad, but a site can show multiple skins during each video of several minutes. As a result, the total ad revenue per video clip — in the rough range of $30 per 1,000 times it’s viewed — can be equivalent.

Meanwhile, Break.com has offered TV-commercial-like ads within videos, but another format it introduced a few months ago, which it calls a “bug,” has been generating more excitement among advertisers. Break.com had 3.8 million U.S. visitors in June, according to NetRatings.

Time Warner Inc.’s New Line Home Entertainment used bugs last month to promote the DVD release of “The Number 23″ on Break.com. Using the ad format, a graphic on the film slid onto the bottom of a video as it played; the graphic offered viewers who clicked on it more information. About 2.5% of everyone who saw the ad clicked through to learn more about the DVD release. “That’s certainly much higher than standard advertising click-through rates on the Web,” says Ian Schafer, chief executive of interactive ad agency Deep Focus Inc., which worked on the campaign for New Line.

Deep Focus is working with other clients and Web sites on similar ads, and Break.com says it’s close to selling out its bug inventory. “This has been the most effective ad unit attracting advertisers and users,” says Keith Richman, the CEO of NextPoint Inc., the parent of Break Media. “Users who frequently complain when they don’t like things haven’t complained at all.”

VideoEgg Inc., a San Francisco-based company that runs an online-video network and develops interactive-video ad technology, started experimenting with ads that went beyond the preroll format last fall. These include video spots that roll at the end of clips, tickers that resemble the headlines that stream underneath TV news programs, picture-in-picture ads and animated bugs. Right now, the picture-in-picture ads are performing the best, with click-through rates averaging 4% to 5%, says Troy Young, VideoEgg chief marketing officer.

Discovery Communications, which advertises with VideoEgg, says its online-video advertising results exceeded the company’s expectations compared with other forms of online ad placements. Discovery recently ran a campaign with VideoEgg for its TLC network’s “LA Ink” show, including ticker and video-in-video ads. A spokeswoman said the ads “performed incredibly well, garnering a click-through rate four times higher than the standard.”

Internet heavyweight Google has been experimenting with various video-ad formats on YouTube and partner sites for months, including overlays and TV-commercial-like ads of different lengths and placement. Mr. Rajaram says the best format will vary by site and content. But he says the overlay ads, which insert text or graphics like a ticker tape at the bottom of the video, are one format that is a candidate for the industry to create standards around.

Mr. Rajaram says Google is experimenting with using contextual-targeting — making the subject of the ad match the content it appears alongside — for video-related ads, though he declined to specify how that worked at Google. But some start-ups have developed technology that analyzes the audio track of clips for key words that help select ads that might be more relevant to the user, such as by showing a car ad when someone in the clip is speaking the name of a specific auto maker.

Allstate is one of the advertisers who tested different ad formats and placement on the Google Video site over the past year. One test involved running 15-second commercials in the middle of music videos, but no users clicked on the ads or dialed the 1-800 telephone number they listed. The insurance giant says music videos weren’t the right place for such ad content and vows to keep experimenting.

“We didn’t see overwhelming success,” says Lisa Cochrane, Allstate’s vice president of integrated marketing, who says the company is looking to test shorter length ads of seven or eight seconds.

Wall Street Journal, advertising, google, video, youtube

Ad Notes
Traditional Media Expected
To See Decline in Ad Revenue
June 13, 2007; Page B3

Radio and newspapers are expected to see declines in ad revenue this year, while network, cable TV and most magazines will see growth.

With marketers expected to continue shifting ad dollars out of traditional media and into digital alternatives, certain categories of old media will be badly hit this year, according to TNS Media Intelligence, which tracks ad spending in different media. Ad spending on newspapers is expected to fall 2.9%, on top of a 2.4% decline in 2006, while radio and business-to-business magazines are also expected to fall.

Television is a mixed picture. Spending on spot TV — ads bought on local TV stations as opposed to national networks — is expected to fall 5.5%. But network TV spending is projected to be up 1.3%, while spending on cable is seen as rising 5.9%.

Still, the fastest growth continues to be in digital. Spending on Internet display advertising is expected to account for the biggest gain in the market, growing 16% this year.

TNS doesn’t track spending on several other major forms of digital advertising, including search and “rich media” such as video, which are getting increased attention from advertisers.

AudioDizer, Wall Street Journal, advertising, newspaper, revenue

This article describes how the online strategy has failed for newspapers and what one paper in Arkanasas is doing to embrace the technology to make it work for them.

By WALTER E. HUSSMAN JR.

May 7, 2007; Page A15

One has to wonder how many of the newspaper industry’s current problems are self-inflicted. Take free news. News has become ubiquitous, free, and as a result, a commodity. Anytime you are trying to sell something that becomes a commodity, you have lost much of the value in providing that product or service.

Not many years ago if someone wanted to find out what was in the newspaper they had to buy one. But not anymore. Now you can just go to the newspaper’s Web site and get that same information for free.

The newspaper industry wonders why it is losing young readers. Those readers might be young, but many of them are smart, not to mention computer-savvy. Why would they buy a newspaper when they can get the same information online for free?

Newspapers initially created their Web sites with the best of intentions. After all, newspapers are in the information business. And rather than fight the new medium, the Internet, why not embrace it? Wanting to be the leading information providers and thereby have the most popular Web site in the community, they posted all of their news online for free.

Exacerbating the problem with free news was the decision by the newspaper industry, which owns the Associated Press, to sell AP copy to news aggregators like Yahoo, Google and MSN. These aggregators created lucrative news portals where the world could get much of the news that was in newspapers. So readers could now get free news not only on newspaper Web sites, but also from portals and aggregators that had a chance to monetize the content, most of which was created and financed by the newspaper industry.

With local radio and television stations also creating Web sites and posting their news for free, newspapers soon realized that much of the news on the broadcast Web sites had been created by the local newspaper. So, whereas before the newspapers were selling print ads while radio and TV were selling air time, now they were all selling the same medium: their Web sites. Since newspapers share their content with the Associated Press so other members can use it, radio and TV members are using much of that content to compete against the newspapers that created it.

Newspapers have for years been frustrated by radio stations which merely read the stories which are printed in that morning’s edition. TV stations often get much of their news from the newspapers, too. But reading it on the air is clearly different from posting it online, placing them in direct competition with newspapers’ Web sites.

All of this would be fine if newspapers generated lots of additional revenues from offering free news. But the fact is newspapers generate most of their online revenues from classified advertising, not from news. Gordon Borrell, CEO of Borrell Associates, estimated that newspaper Web sites generated 78% of their revenues from classifieds in 2006.

It turns out that a Web site is a very different medium from a newspaper. While consumers often find pop-up ads a distraction and banner ads as more clutter, readers often seek out the advertising in newspapers.

The Inland Cost and Revenue Study shows that newspapers will generate between $500 and $900 in revenue per subscriber per year. But a newspaper’s Web site typically generates $5 to $10 per unique visitor per year. It may be that newspaper Web sites as an advertising medium, and free news, just can’t generate the revenue to sustain a valued news operation.

In fact, online revenues for the publicly traded newspaper companies in 2005 varied from 1.7% at Journal Register Co. to 5.7% at Belo Corp. The only company higher was the Washington Post Co. at 8.4%. Yet newspapers typically spend 12% or more of their revenues on their news and editorial operations.

The Wall Street Journal Online now has 931,000 paying subscribers, more than the paying subscribers to all but three U.S. newspapers: USA Today, The Wall Street Journal and the New York Times. Our newspaper, the Arkansas Democrat-Gazette in Little Rock, does not offer our news for free on the Web site. We offer free headlines. On a few selected stories, we offer a few free paragraphs, designed to get people to read our paper. We also offer free classifieds.

Recently I had the opportunity to compare our Web site policy with the free news policies of other papers. For the six months ending March 31, 2007, the newspaper industry’s circulation was down 2.1% daily and 3.1% Sunday. By contrast, the Arkansas Democrat-Gazette’s circulation was up 1.24% daily and up less than 1% Sunday.

I was able to make another interesting comparison, too, with the Columbus, Ohio, Dispatch. Columbus and Little Rock are both state capitals. Columbus is a larger market, and the Columbus Dispatch’s circulation of 217,291 compares with 176,172 for the Arkansas Democrat-Gazette. Up until Jan. 1, 2006, both our paper and the Columbus Dispatch offered news content only by subscription. We even charged the same price, $4.95, for an online monthly subscription, and both of us offered the same style electronic editions.

But Columbus dropped its subscription model on Jan. 1, 2006, and began offering most of its news for free. Its Web traffic and revenues certainly increased. But what happened to its paid circulation?

The six months ending Sept. 30, 2006 was a good comparison, since it compared six months in 2006 when the Columbus Dispatch had free news on its Web site compared with six months in 2005 when it did not offer free news. The Columbus Dispatch’s daily circulation was down 5.8% while Sunday was down 1.1% for the six-month period. This compared with our loss of less than 0.4% daily and 1% Sunday.

When I looked at this comparison with Columbus, as well as the newspaper industry’s larger losses, it didn’t encourage me to change our Web policy to free news.

So what are we doing with our Web site? We have hired a videographer to complement our text coverage in the newspaper. We have added photo galleries to increase the number of photographs beyond what we can publish. We offer an electronic edition where you can search the entire edition by keywords, something you can’t do in the print edition. And we offer breaking news email alerts, something else you can’t do in print. In other words, we are offering value on our Web site that complements, rather than cannibalizes, our print edition.

Collectively, the American newspaper industry spends $7 billion on news and editorial operations. This includes everything from copy editor salaries to sports travel expenses. In addition, the Associated Press spent about $600 million world-wide in editing and creating news. By offering this news for free, and selling it to aggregators like Google, Yahoo and MSN for a small fraction of what it costs to create it, newspaper readership and circulation have declined.

These declines are accelerating. In 2004 and prior years, industry circulation declines were usually less than 1%. Since March 2005, these declines have been 2%-3% per year. With declining readership comes declining ad revenues, which are followed by layoffs.

The newsroom layoffs are most troubling, as less news with less quality, context and details results in more declines in readership and later, declines in advertising. If the $7 billion spent covering news becomes $6 billion, and later $5 billion, it is not just the newspaper industry that gets hurt. Journalism will be diminished in America with less investigative and enterprise reporting; indeed, less reporting of state houses, city halls, school boards, business and sports. Clearly a lot is at stake.

It is time for newspapers to reconsider the ultimate costs and consequences of free news.

Mr. Hussman is publisher of the Arkansas Democrat-Gazette.

Wall Street Journal, newspaper

Circulation results for the top 20 newspapers were reported by the Audit Bureau of Circulations. Overall circulation numbers fell 2.1% in the latest 6 month report. Sorry about the formating of the data…

Newspaper, Daily Circulation, Percent Change in Last 6 months

1. USA Today, 2,278,022, +0.2%
2. The Wall Street Journal, 2,062,312, +0.6%
3. The New York Times, 1,120,420, -1.9%
4. Los Angeles Times, 815,723, -4.2%
5. New York Post, 724,748, +7.6%
6. New York Daily News, 718,174, +1.4%
7. The Washington Post, 699,130, -3.5%
8. Chicago Tribune, 566,827, -2.1%
9. Houston Chronicle, 503,114, -2%
10. The Arizona Republic, 433,731, -1.1%
11. Dallas Morning News, 411,919, -14.3%
12. Newsday, Long Island, 398,231, -6.9%
13. San Francisco Chronicle, 386,564, -2.9%
14. The Boston Globe, 382,503, -3.7%
15. The Star-Ledger of Newark, N.J., 372,629, -6.1%
16. The Atlanta Journal-Constitution, 357,399, -2.1%
17. The Philadelphia Inquirer, 352,593, +0.6%
18. Star Tribune of Minneapolis-St. Paul, 345,252, -4.9%
19. The Plain Dealer, Cleveland, 344,704, +0.5%
20. Detroit Free Press, 329,989, -4.7%

You can read the full article on The Wall Street Journal here

AudioDizer, Wall Street Journal, newspaper

This article creates more support for services like AudioDizer…

Ad Growth Online Slows as Sources For News Burgeon

By SARAH ELLISON and SUZANNE VRANICA
April 23, 2007; Page B8

Even with all the grim news the newspaper industry has faced in recent years, publishers have consoled themselves that they have a lifeline. If they could switch content away from print and onto the Internet — bringing advertisers with them — they could save their businesses.

Last week, that lifeline began looking frayed. New York Times Co. warned Thursday that online advertising growth this year won’t be as strong as the 30% it had projected. On the same day, Tribune Co. reported that the growth rate for first-quarter interactive revenue was sharply lower than a year earlier. Gannett Co. likewise said online revenue growth slowed in the first quarter from a year earlier.

Several other major U.S. newspaper companies have yet to report for the first quarter, including McClatchy Co. and Washington Post Co., although on Friday the chief executive of Washington Post’s online arm, Caroline Little, said growth was “slowing slightly across the board but is still very healthy.”

Dow Jones & Co., publisher of The Wall Street Journal, reported 30% growth in online ad revenue in the first quarter, up from 26% a year earlier. Dow Jones’s business model is different from that of other publishers, however, because much of the Journal’s Web site is subscription-only, which reduces the amount of traffic but allows the Journal to charge higher advertising rates, because paying customers are thought to be more committed.

Analysts agree that the results at the Times and Tribune reflect a broader trend. “We absolutely see slower growth coming,” says Kip Cassino, vice president of research at Borrell Associates, a media-research firm. “Generally, newspapers tend to believe things that have been good are going to get better. And that’s not always the case.” Borrell says the growth rate in online ad spending in newspapers will likely fall to a percentage in the low 20s this year from 28% last year.

To be sure, that may reflect a broader deceleration in the growth of Web advertising. EMarketer, a market-research firm, predicts the overall growth of U.S. online-ad revenue will slow to 18.9% this year from 30.8% last year. It predicts newspapers will do slightly better.

But last week’s news came as the number of online news outlets proliferates. Rival media such as TV stations and magazines have beefed up their presence, adding to threats posed by Web giants such as Google and Yahoo and popular sites such as CNN.com. Even the social-networking site MySpace has added a news feature and is boosting its ad-sales efforts.

Media buyers also indicate marketers are beginning to look beyond traditional journalism sites, realizing many news junkies go elsewhere, too. “Advertisers are getting less scared of blogs and newsgroups and now are beginning to take money away from the traditional newspapers’ sites,” says Greg Smith, chief operating officer of Neo@Ogilvy, an interactive ad agency owned by WPP Group’s Ogilvy & Mather, New York.

One major issue for many newspapers online: Roughly 70% to 80% of their online revenue is tied to a classified ad sold in the print edition — known as an “upsell,” says Paul Ginocchio, a newspaper analyst at Deutsche Bank. And as newspapers see a sharp erosion in classified advertising for real estate and jobs, their Web sites are being hit as well.

Analysts say papers need to find new categories of advertisers. “Newspapers need to move beyond the traditional classified sources they’ve relied upon,” says Borrell’s Mr. Cassino.

Underlining this pressure is a shift under way within Internet advertising. The ad formats that have so far proved strongest for newspapers — banner ads, pop-ups and listings — are losing ground to formats such as search marketing. Ad buyers say automotive, entertainment, financial-services and travel companies — all major newspaper advertisers in print and online — are aggressively shifting dollars into search marketing.

“There is a dramatic shift going on,” says Eric Bader, senior vice president, director of digital connections at Publicis Groupe’s MediaVest. Marketers like search advertising because it leads customers to exactly what they are looking for, and is easy to measure, he says.

The problem for newspapers is that the benefits of search fall disproportionately to the Googles and Yahoos of the world. Newspaper companies are increasingly looking for deals with such portals, and 13 publishers, including McClatchy, MediaNews Group and Hearst, recently signed a comprehensive deal with Yahoo that will require the newspapers to use Yahoo search on their Web sites.

Yahoo and the newspapers would sell ads on each other’s sites, and the revenue would be shared. Content from the papers would be featured on Yahoo’s channels. But some newspaper executives worry that the deal takes too much power away from the newspapers.

Still, the biggest opportunity may simply be for newspapers and other Web properties to persuade more advertisers to put more money onto the Internet. A survey of 273 U.S. advertisers last year found that 67% of the companies with annual revenue of $500 million or more will dedicate less than $1 million to online ads, according to JupiterResearch.

Write to Sarah Ellison at sarah.ellison@wsj.com and Suzanne Vranica at suzanne.vranica@wsj.com

AudioDizer, Wall Street Journal, newspaper

There was an article in the Wall Street Journal published on March 8 discussing the Dow Jones & Co’s Wall Street Journal’s decline in ad revenue.

The decline was due to a dropoff in revenue from technology, financial, general and classified advertising categories. Though dollar amounts weren’t provided - they were definitely hit across the board.

I wonder what happened to the rest of the industry. More reason to use AudioDizer!

AudioDizer, Wall Street Journal, newspaper