But time may be running out. Now, for the first time,
pure-play Web companies have the biggest share of the local online-ad
market. In 2007, Internet companies had a 43.7% share of the $8.5
billion local online-ad market, while newspaper companies had a 33.4%
share, according to the media research firm Borrell Associates. Just
three years ago, newspapers had 44.1% of the local online-ad market.
(Directories such as the Yellow Pages have 10.1%, and local television
outlets 9.3%.)Local media companies, because they are based in
the communities they serve, would seem to have an edge over Internet
sellers when it comes to persuading the diner or corner hardware store
to take out an ad. But they have largely failed to convert that
advantage into sales. Instead of tailoring their sales to local
businesses, many newspaper companies initially focused on selling ads
to bigger advertisers who were already buying space in their print
products.
That Wall Street Journal story hits the coffin nail on the head.
Newspapers are losing their own core market because they didn’t
understand the scale of the internet. They still thought mass when they
should have realized that small is the new big.
That is, online, newspapers still threw their lot in with the big
advertisers who had been the only ones who could afford their mass
products. They didn’t see the mass of potential spending in a new
population of small, local advertisers who never could afford to
advertise in newspapers but who now could afford to buy targeted,
efficient, inexpensive ads online. There’s growth — yes, growth —
there. But newspapers ignored that — apart from some half-hearted
attempts to come up with crappy online Yellow Pages — and handed what
should be their local market over to Google and other online companies
that set up efficient means to sell a lot of little ads, which equals
big revenue.
I saw this first hand in many companies. Print
sales teams didn’t know how to sell online. Oh, they’re trying to catch
up now, but it’s often too late, for advertisers are already using
their competitors; newspapers lost the opportunity to usher small
advertisers onto the internet. Even the online sales teams at newspaper
companies didn’t how now to sell small; they were — as I once put it in
a meeting — putting all their effort into saving the old $100,000
advertiser and saw getting 1,000 $100 advertisers as a distraction. The
new-media divisions had already become big and old. They weren’t
nimble. They lost out.