Slow Ad Shift Buys Newspapers Time

A new report from Bank of America Securities (summarized by Editor and Publisher) reflects that national advertisers have not in fact abandoned newspapers and are shifting ad dollars to the Internet more slowly than widely perceived:

The report found that, indeed, more than one-third of ad dollars flowing out of newspapers are moving to the Internet. The 48 advertisers spent roughly the same in 2004 as in 2003 on newspaper advertising; however, they upped their Internet spend by 29%. . . Yet, the shift is happening sporadically.

Assuming the report is accurate, this buys newspapers some time to create truly compelling online offerings. (Though there is the problem of shifting offline revenues online where ad models and price points are different.) Still, there's a lot of pain to go around in the industry right now.

Despite the belt tightening, there are lots of innovative things starting to happen online with newspaper sites. Just to point to one, the NY Times is using LookSmart's Furl to create a MyWeb-like content repository that can save content from anywhere online (if you download the toolbar). This is a service that has little or nothing to do with newspaper editorial content, and it helps justify the TimesSelect service.

The irony is that all these third-party aggregation sites that are siphoning readers from traditional newspapers rely on those same newspapers as content providers. For these and other reasons — newspapers play an important role in democracy — I'm hoping the newspapers figure out all this local search stuff.

At ILM:05, we'll have a panel (among other newspaper speakers) called Newspapers 2.0 (scroll) that will seek to expose and discuss some of the more interesting developments in the online newspaper space. Caroline Little, CEO of Washingtonpost.Newsweek Interactive, will also be a keynote speaker.

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