Presentation at the INMA Seminar in Copenhagen "Re-creating Value in an age of Abundance"

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Monetizing newsmedia :
where is the problem ?
02/2010 SIPA/Ouest-France
Hello everybody,
My boss asked me « why do those web sites, with such big
audiences, don’ get more ads ?
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Where’ the problem ?
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Newspapers web sites announce huge
audience!
330 000 copies, 5 millions UV/month
330 000 copies, 6 millions UV/month
123 000 copies, 2,9 millions UV/month
02/2010 SIPA/Ouest-France
The fact is, in France as elsewhere, newspapers web sites
have huge numbers, much higher than their circulation.
We’ talking of millions UV each month, up to 10 or 20
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times more than copies sold.
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Great audience, but no ad
02/2010 SIPA/Ouest-France
But this is the main problem : Great audience, but no money.
And no business model.
Newspapers don’ get on the web the money they lose in the
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print …
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What metrics do we hear about ?
• Circulation of a daily newspaper
• Unique visitors of a web site in one month
• Advertising revenue : display …
02/2010 SIPA/Ouest-France
I’ quite surprised with the metrics used by media pundits,
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journalists, and even publishers.
I’ been reading about the weakness of circulation (daily
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circulation), and of the strength of the web sites audience
(counted in Unique Visitors per month).
For advertising, you never know whether they talk about total
advertising revenue or commercial advertising, excluding
classifieds.
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=
02/2010 SIPA/Ouest-France
In English you say « counting apples with oranges ».
How can we seriously compare a daily circulation with a
monthly unique visitor ?
I guess it’ forbidden in primary school !
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Advertising revenue
=
eyeballs * value of these eyeballs
Question 1 : how many eyeballs ?
What audience do you sell ?
02/2010 SIPA/Ouest-France
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What is audience ?
Audience = Users * Usage
Talking about UV is not enough, we must talk
Usage.
Usage = visits * page views
Or
Usage = visits * time spent
02/2010 SIPA/Ouest-France
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The great illusion of news sites
audience
• In France: 36,7 millions people on the net
•Spending 39 hours 41 minutes per month
•Out of 50,4 millions aged 15+
• Out of them:
•23 millions visit at least one news site (Google
news included), at least once in a month
•7 visits per month on all sites
•Spending only 41 minutes per month
Ø That’ less than 1 min 25 sec per day !
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02/2010 SIPA/Ouest-France
A closer look to figures is flabbergasting !
In France, many people spend a lot of time on the web, ans
it’ soaring.
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But they are not much interested in news sites !
Less than one and a half minute per day for those who visit a
news site !
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The voice of him that crieth in the
wilderness …
02/2010 SIPA/Ouest-France
We could almost say that our news sites are like …
We newspapers people do like voice of God journalism …
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The forgotten power of print
• In France:
–41 million read at least one newspaper at
least once in a month (UV !)
–35,3 million at least once a week
–24 million readers per day
–Spending 28 minutes per day
ØThat’ 20 times more than news web sites !
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02/2010 SIPA/Ouest-France
Print is declining (paid circulation).
Print is loosing money (mostly from classified and
subscribers)
But print is still very powerful : One french out of two spends
almost half an hour per day !
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Wanna talk
eyeballs ?
02/2010 SIPA/Ouest-France
From an audience point of view, there is no comparison
between newspapers and news web sites
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Wanna
talk
revenue?
02/2010 SIPA/Ouest-France
This explains why news web sites do not bring a lot of
money …
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Advertising
=
eyeballs * value of these eyeballs
Question 2 : value of these eyeballs ?
What money do you get per eyeball ?
02/2010 SIPA/Ouest-France
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A quick survey, just to check …
• Information gathered from 12 INMA
fellows
• Print : circulation, readers, number of
issues, number of pages seen/read, time
spent, …
• Web : Unique Visitors, days of visits, page
views, time spent
• For both : advertising turnover, excluding
classified
02/2010 SIPA/Ouest-France
I wanted to check this new theory.
I asked my Inma fellows some figures.
Don’ ask me which newspapers. Figures are coming from
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different european and north american countries, with very
different levels of web performance.
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Counting apples with apples
•Myaveragenewspaper :
– 300 000 copies, 36 pages, 70 % seen/read, weekdays
– 900 000 readers per day, 25 minutes per reader
– €45 millions advertising (excluding classified)
•myaveragenewspaperonline.com :
– 4,4 millions UV, 11,7 million visits per month
– 5,4 page views and 6,3 minutes per visit
– €8 millions advertising
02/2010 SIPA/Ouest-France
To compare things seriously, I’ show you the figures of a
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fictitious newspaper, which is in fact an average of all the
different newspapers I could get the figures from.
I first tried with Ouest-France data, then with another
newspaper, then a third one, and so on.
I got the same kind of results with 11 newspapers out of 12.
This is why I’ imagined this average dailynewspaper and
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its web site.
You can benchmark your own performance, and I would love
to receive more data to improve this analysis.
The idea is to build ratios, comparing the web site figure to
the same figure for the print edition: a visit ratio, a page view
ratio, a time spent ratio, and an advertising ratio
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Counting visits
•Print :
•900 000 readers per day * 25,8 days per month =
23 220 000 « visits » per month
•Web :
•11 700 000 visits per month
Ø Web/print ratio on visits : 50 %
02/2010 SIPA/Ouest-France
So let’ count.
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Visits : newspapers have visitors, they call them readers.
This average newspaper has 900 000 visits per day, and is
published on weekdays. That makes 25.8 issues per month.
Thus, we can say this daily gets more than 23 millions visits
per month, while its web site gets a bit less than 12 millions
visits.
The web vs print ratio is 50 % on visits.
Does it make sense to you ?
Any trouble ?
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Counting page views
•Print :
•36 pages, 70 % seen/read => 25 « page views » per
« visit »
•25*23 220 000 visits = 580,5 millions page views per
month
•Web :
•5,4 page views per visit
•5,4*11 700 000 visits = 63,2 millions page views
Ø Web/print ratio on pageviews : 11 %
02/2010 SIPA/Ouest-France
Now counting page views.
Out of the 36 pages of the daily, 70%, or 25 pages are read
or seen by an average reader, That makes 25 page views
per reader per day.
Which makes 580 millions page views per month, while the
web site gets 5,4 pages views per visit, say 63 millions page
views per month.
The web vs print ratio is 11%. Print edition brings 9 times
more page views than the web site. This number can change
from one newspaper to another, but the print issue is always
much more powerful for delivering page views.
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Counting time spent
•Print :
•25 minutes per reader per day (per « visit »)
•25 * 23 220 000 visits = 580,5 millions minutes
•Web :
•6,3 minutes per visit
•6,3 * 11 700 000 visis = 71,3 millions minutes
Ø Web/print ratio on time spent : 13 %
02/2010 SIPA/Ouest-France
This is a difficult one.
Time is pretty well measured for web sites, but it’ not so
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precise for newspapers.
So, we’ do it, but stay cautious with the results.
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Newspapers in my panel have pretty strong web sites.
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What do we get ?
• Visits : 50 %
• Page views : 11 %
• Time spent : 13 %
• Advertising revenue : 19 %
02/2010 SIPA/Ouest-France
Only one surprise, but a big one: the advertising
performance of web sites is pretty good, above the page
views or time spent ratios.
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Time spent and advertising
revenue (web/print ratios)
50,0%
45,0%
40,0%
35,0% Time spent Turnover
30,0%
25,0%
20,0%
15,0%
10,0%
5,0%
0,0%
02/2010 SIPA/Ouest-France
For any of the 12 newspapers, you can check that the
advertising ratio is higher thant the time spent ratio. All
newspapers have more revenue per minute spent on their
site than in their print issue.
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Conclusion 1 : confirmation
Print newspapers are extremely powerful
at delivering eyeballs.
That’ why they get so much advertising.
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02/2010 SIPA/Ouest-France
The figures are OK with my first analysis
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Conclusion 2 : confirmation
Newspaper web sites are not yet as
powerful as their print edition when
counting eyeballs
02/2010 SIPA/Ouest-France
No surprise
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Conclusion 3 : surprise !
Newspaper web sites generate
surprisingly good advertising revenue…
compared to the eyeballs they deliver!
They get more advertising revenue per
page or per minute than their print
counterpart.
02/2010 SIPA/Ouest-France
The good surprise
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There is a good
advertising business
model on news web sites !
02/2010 SIPA/Ouest-France
Unlike what we read and hear, there is a pretty good
advertising business model for web sites.
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For news web sites, the
problem is not
advertising,
it’ audience !
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02/2010 SIPA/Ouest-France
A good business model, but not to be compared with the
paer one.
It’ much very difficult for a web sites to reach the same
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performance.
Yes, this is the key.
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Hard time for newsmedia …
• Paid print circulation keeps on declining
• Classifieds are gone forever
• Web sites get little audience, thus
– Get less advertising money than print
– Don’ get much money from paid content
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ØThe old business model is dead
02/2010 SIPA/Ouest-France
Our future may not be radiant, with so many bad news.
Our web sites will never replace the print edition alone.
A web site will never get back the money our print edition is
loosing.
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New business models ?
• Think about smartphones, ipads , …
– Already get much more audience per user
– Thus will get more money, from ads, from content or
from apps themselves
• Think about downsizing your costs…
• Think about engaging your audience :
crowdsourcing, social medias …
ØThere is a bright digital future to build
02/2010 SIPA/Ouest-France
But there are many solutions.
Not one fits all.
Many.
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