Business Model Case Study

US Newspaper Industry- Online Ad Revenues at Stake

OR

Abstract:
On-line version was considered the salvation for US newspapers due to a sustained decline in their print circulation and advertising (ad) revenue. However, the web ad revenues of the US newspapers also declined in the second and third quarters of 2008. The global financial crisis, the continued flight of classified advertisers from newspapers, and the drop in display advertising were considered the reasons for the slump. In order to reduce the loss in ad revenues, some newspapers relied on ad networks to sell their ad space. However, newspapers that did not rely on ad networks found that 50% of the ad space of the newspaper websites went unsold. At the same time, since the networks charged more, some newspapers wished to avoid them and decided to limit ad space. Some others used blogs, photo slide shows and podcasts to attract advertisers. This move was expected to add on-line revenue to the newspapers. At the same time, the total ad revenue by the end of 2008 was predicted to be the lowest since 1996. Nevertheless, a positive prediction by the Newspaper Association of America that ad sales would increase in 2009 raised hopes for revival.

Pedagogical Objectives:

• To the dynamics of the US newspaper industry.
• To the print ad revenues of US newspapers.
• To the on-line ad revenues of US newspapers.
• To the initiatives by the US newspaper industry to overcome the slump in web ad revenues

Keywords : US newspaper industry; On-line advertising revenues; Print advertising; Economic downturn; Advertising (ad) space; Newspaper Association of America (NAA); Readership; Circulation; Ad networks