This document discusses whether online advertising revenue can sustain journalism. It notes that online advertising is a $1.19 billion industry that provides 45% of newspaper company advertising growth. However, newspapers must balance providing online content and advertising without cannibalizing print revenue or readership. The document examines different types of online content and advertising, such as banners, sponsorships, and classifieds, that could generate revenue but must be implemented carefully to support rather than compete with print journalism.

1. Business Model: OnlineBusiness Model: Online
Advertising Is BreakingAdvertising Is Breaking
Records, But Is ItRecords, But Is It
Enough to FinanceEnough to Finance
journalism?journalism?
International Symposium on Online
Journalism
University of Texas
April 8, 2005
Jim Debth, Internet General Manager

2. It better be…!It better be…!
My job…and yoursMy job…and yours
depends on itdepends on it

3. A CaricatureA Caricature

4. A Story…In the BeginningA Story…In the Beginning
• Are we part of it…or do we competeAre we part of it…or do we compete
against it?against it?
– RadioRadio
– TVTV
– AudiotexAudiotex
– BBSBBS
……And nowAnd now
– InternetInternet

5. In the “Olden Days”In the “Olden Days”
• Experiment
• Value added
• Shovelware content
• Small audience
• Understaffed/overstaffed
• Expenses hidden
• Revenue inflated

6. A Whole New BallgameA Whole New Ballgame
• ExperimentExperiment
• Value addedValue added
• Shovelware contentShovelware content
• Small audienceSmall audience
• Understaffed/overstaffedUnderstaffed/overstaffed
• Expenses hiddenExpenses hidden
• Revenue inflatedRevenue inflated
• It’s a businessIt’s a business
• Where’s the revenueWhere’s the revenue
• 24-hour coverage24-hour coverage
• Huge audienceHuge audience
• ……YTDYTD
• Expenses scrutinizedExpenses scrutinized
• Double-digit growth…Double-digit growth…
expectedexpected

7. A Symbiotic Relationship…Still
• Content is KingContent is King
• Advertising pays the billsAdvertising pays the bills

8. My Hero…Online to the RescueMy Hero…Online to the Rescue
• $1.19 billion industry segment$1.19 billion industry segment
• 3% of newspaper company revenues3% of newspaper company revenues
• 45% of newspaper advertising growth45% of newspaper advertising growth
• ¾ of consumers use the Internet¾ of consumers use the Internet
• Local advertisers spent only 2.1% of ad budget onlineLocal advertisers spent only 2.1% of ad budget online
• 44% of local advertising went to newspaper sites44% of local advertising went to newspaper sites
• 70% from classified categories ofreal estate, automotive70% from classified categories ofreal estate, automotive
and recruitmentand recruitment
Borrell & Assoc.Borrell & Assoc.
““What Local Web Sites Earn: 2005 Survey”What Local Web Sites Earn: 2005 Survey”

9. The LandscapeThe Landscape
• People want more and more informationPeople want more and more information
– Information seekers - eyeballsInformation seekers - eyeballs
• More and more news is availableMore and more news is available
– Information providers - usInformation providers - us
• 24-hour a day information24-hour a day information

10. It’s All About EyeballsIt’s All About Eyeballs
• Advertisers go to where they can find themAdvertisers go to where they can find them
• We are in a position to provide a broaderWe are in a position to provide a broader
audience combining print and onlineaudience combining print and online
• Print circulation declining…or maintainingPrint circulation declining…or maintaining
• Online circulation explodingOnline circulation exploding

11. A Strong 8-5 AudienceA Strong 8-5 Audience
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
12am 2am 4am 6am 8am 10am 12pm 2pm 4pm 6pm 8pm 10pm
Target AudienceTarget Audience
Pages ViewedPages Viewed
Unique VisitorsUnique Visitors

12. Statesman Web sitesStatesman Web sites
AudienceAudience
When you advertise with the Statesman.com Web sites*, you willWhen you advertise with the Statesman.com Web sites*, you will
reach a young, educated and affluent audience.reach a young, educated and affluent audience.
AgeAge
Median age** = 35Median age** = 35
77% are ages 25 to 5477% are ages 25 to 54
Household IncomeHousehold Income
60% with incomes of $50,000 or more60% with incomes of $50,000 or more
40% with $75,000+40% with $75,000+
EmploymentEmployment
85% are Employed85% are Employed
60% are in Multi-Income60% are in Multi-Income
HouseholdsHouseholds
EducationEducation
40% have a40% have a
College DegreeCollege Degree
* visited statesman.com, Austin360 or classifieds on statesman.com in the “past 7 days”
** among those age 18+. total metro = 40 years old
GenderGender
52% Male52% Male
48% Female48% Female
Source: 2003 Gallup Poll of Media Usage and
Consumer Behavior, Austin MSA

13. Newspapers…the Information ProvidersNewspapers…the Information Providers
• We have the editorsWe have the editors
• We have access to the informationWe have access to the information
• We have the staff in the newsroom andWe have the staff in the newsroom and
the feet on the streetthe feet on the street
• We have multimedia…We have multimedia…
– PhotosPhotos
– ……now Videonow Video

14. It’s All AboutIt’s All About
AudienceAudience

15. The Statesman Family of Web sitesThe Statesman Family of Web sites
Source: Sage Metrics, Site Log file analysis
Austin’s Leading Local News and Information Web sitesAustin’s Leading Local News and Information Web sites
• Austin 360Austin 360
– Entertainment, Family Activities, Movies, DiningEntertainment, Family Activities, Movies, Dining
– 2/3 of Austin360 visitors don’t generally visit2/3 of Austin360 visitors don’t generally visit
statesman.comstatesman.com
• StatesmanClassifiedsStatesmanClassifieds
– Austin’s #1 Employment, Real Estate, Auto,Austin’s #1 Employment, Real Estate, Auto,
and Merchandise sourceand Merchandise source
• Over 28.8 million Page Views / monthOver 28.8 million Page Views / month to Statesman.com sitesto Statesman.com sites
• Over 991,000 Unique VisitorsOver 991,000 Unique Visitors (March 2005)(March 2005)
• Over 260,000 Registered UsersOver 260,000 Registered Users and growingand growing
– 78% of registered users do not subscribe to the paper78% of registered users do not subscribe to the paper
– 24% of registered users say they don’t read the paper at all.24% of registered users say they don’t read the paper at all.
Source: Sage Metrics, Site Log file analysis

16. America’s “Most Wired” CityAmerica’s “Most Wired” City
Source: Scarborough
Research 2003, r2-12
% Go To Newspaper Web sites (past week)% Go To Newspaper Web sites (past week)
RankRank Top 5 Media MarketsTop 5 Media Markets
11 Washington, D.C.Washington, D.C. 29%29%
22 AustinAustin 23%23%
44 BostonBoston 21%21%
33 AtlantaAtlanta 20%20%
55 Seattle/TacomaSeattle/Tacoma 19%19%
% Use the Internet (past 30 days)% Use the Internet (past 30 days)
RankRank Top 5 Media MarketsTop 5 Media Markets
11 AustinAustin 72%72%
22 Washington, D.C.Washington, D.C. 71%71%
33 Seattle/TacomaSeattle/Tacoma 71%71%
44 DenverDenver 70%70%
55 San Fran/San JoseSan Fran/San Jose 69%69%
% Bought Items Online% Bought Items Online (past yr.)(past yr.)
RankRank Top 5 Media MarketsTop 5 Media Markets
11 AustinAustin 53%53%
22 San Fran/San JoseSan Fran/San Jose 53%53%
33 Seattle/TacomaSeattle/Tacoma 52%52%
44 BostonBoston 52%52%
55 Washington, D.C.Washington, D.C. 51%51%
Austin residentsAustin residents
are online…are online…
……they buythey buy
online…online…
……and they use theirand they use their
newspaper’s Web sitesnewspaper’s Web sites
to get what they want!to get what they want!
Source: Scarborough
Research 2003, r2-12

17. Austin360: The EntertainmentAustin360: The Entertainment
GuideGuide
Source: October 2004 online
survey of Autin360 visitors
• Movies, Music, Family Events,Movies, Music, Family Events,
Personals, Dining, Games, andPersonals, Dining, Games, and
Message BoardsMessage Boards
• Connects with Austin’s active andConnects with Austin’s active and
fast-paced lifestylesfast-paced lifestyles
• A recent survey of Austin360A recent survey of Austin360
visitors said that…visitors said that…
– 85% have broadband Internet85% have broadband Internet
accessaccess
– 60% go to movies in a typical60% go to movies in a typical
monthmonth
– 64% dine out in a typical week64% dine out in a typical week
– 78% went to a a movie, concert78% went to a a movie, concert
or other activity because ofor other activity because of
Austin360Austin360
– 82% are book buyers (past 682% are book buyers (past 6
months) and 81% boughtmonths) and 81% bought
recorded music or moviesrecorded music or movies
Source: October 2004 online survey
of Autin360 visitors

18. Newspapers…What We DoNewspapers…What We Do
• Provide contentProvide content
– Editorial and AdvertisingEditorial and Advertising
• Create an audience baseCreate an audience base
– Circulation (offline and online)Circulation (offline and online)
• Market the audienceMarket the audience
• Put buyers and sellers togetherPut buyers and sellers together
• Sell advertising to support the effortSell advertising to support the effort
(journalism)(journalism)

19. Same Old…Same Old…Same Old…Same Old…
• We just need to find the successfulWe just need to find the successful
business modelbusiness model
• Our new audience advantageOur new audience advantage
– Mass (OK…old advantage)Mass (OK…old advantage)
– Content targetedContent targeted
– Demographic targetedDemographic targeted
– Segment targetedSegment targeted

20. Let’s Assume…Let’s Assume…
• Journalism schools are assuming theJournalism schools are assuming the
futurefuture
– EditorialEditorial
– TV - videoTV - video
– Radio - audioRadio - audio
– Internet - multimediaInternet - multimedia

21. The Internet…Whatever You WanThe Internet…Whatever You Wan
• TextText
• GraphicsGraphics
• PhotosPhotos
• VideoVideo
• BlogsBlogs
• EmailEmail
• RSSRSS
• MobileMobile

22. Online Needs to Stand and Deliver…Online Needs to Stand and Deliver…
• Banner adsBanner ads
• SponsorshipSponsorship
• Paid searchPaid search
• Text linksText links
• EmailEmail
• RSSRSS

23. Let’s Put Advertising into ContextLet’s Put Advertising into Context
• In print – ads with storiesIn print – ads with stories
• Online – ads with storiesOnline – ads with stories
– Most effective position – ads in contentMost effective position – ads in content

24. It’s a Matter of PerspectiveIt’s a Matter of Perspective
• Page viewPage view
– How interested are people in what I’m writingHow interested are people in what I’m writing
– How much is the traffic worth and are people clickingHow much is the traffic worth and are people clicking
away from the content to the adaway from the content to the ad
• ContentContent
– News that people are interested in readingNews that people are interested in reading
– Product that people are interested in buyingProduct that people are interested in buying
• LoyalLoyal
– Reader that comes to our site to read contentReader that comes to our site to read content
regularlyregularly
– User that advertisers can sell toUser that advertisers can sell to

25. How Content Drives RevenueHow Content Drives Revenue
• HomepageHomepage
• GlossyGlossy
• Banner adsBanner ads
• EmailEmail
• Story pagesStory pages

26. Homepage BannersHomepage Banners

27. Glossy – Special SectionGlossy – Special Section

28. Targeted PlacementTargeted Placement
BannersBanners are the Branding and Direct Response vehicles of theare the Branding and Direct Response vehicles of the
Internet.Internet.
Advertisers can target specific channel’s based on demographic informationAdvertisers can target specific channel’s based on demographic information
supplied by “user registration”supplied by “user registration”
468 x 60 Full Banner468 x 60 Full Banner
300 x 250 Medium Rectangle300 x 250 Medium Rectangle
120 x600 Skyscraper120 x600 Skyscraper
120 x 240 Vertical Banner120 x 240 Vertical Banner

29. SponsorshipsSponsorships of key sections like Business, Health, Weather,of key sections like Business, Health, Weather,
Sports, Music, Events and more…Sports, Music, Events and more…
Owners receive permanent placementOwners receive permanent placement
and top billing on all pages within aand top billing on all pages within a
section of statesman.com or Austin360.section of statesman.com or Austin360.
An ownership can be a powerful part ofAn ownership can be a powerful part of
any marketing plan.any marketing plan.
Associate your brand with ours.Associate your brand with ours.
Page & Channel OwnershipsPage & Channel Ownerships

30. Get your ads extra attentionGet your ads extra attention
with animation and videowith animation and video
Rich MediaRich Media
AdsAds
Flash ads provideFlash ads provide
action and sparkleaction and sparkle
Ads with embedded videosAds with embedded videos

31. Newsletters & Special OfferNewsletters & Special Offer
EmailsEmails
• Email Newsletter SponsorshipsEmail Newsletter Sponsorships offeroffer
the opportunity to put your messagethe opportunity to put your message
into a daily email for one week whichinto a daily email for one week which
allows for repeated frequency of yourallows for repeated frequency of your
message.message.
• Newsletters*Newsletters*
Weekend Best Bets – 28,000+ subscribersWeekend Best Bets – 28,000+ subscribers
Daily HeadlinesDaily Headlines – 22,000+ subscribers– 22,000+ subscribers
LonghornsLonghorns – 21,000+ subscribers– 21,000+ subscribers
Afternoon UpdatesAfternoon Updates – 25,000+ subscribers– 25,000+ subscribers
Legislative SpecialLegislative Special – 17,000+ subscribers– 17,000+ subscribers
Seasonal NewslettersSeasonal Newsletters
• Legislature, Tour de FranceLegislature, Tour de France
• ““Special Offers” advertising toSpecial Offers” advertising to
newsletter subscribers who have opted-newsletter subscribers who have opted-
in to receive advertiser messagesin to receive advertiser messages
–– 69,000+ subscribers69,000+ subscribers
*January 2004 average

32. Oops…Let’s Not Forget…Oops…Let’s Not Forget…
ClassifiedsClassifieds
• Number one in revenueNumber one in revenue
• Number two in trafficNumber two in traffic
Let’s not forget…Let’s not forget…
It’s content tooIt’s content too

33. The Top Local Sales Sites …The Top Local Sales Sites …
Statesman.com is where Central Texans go to shop online forStatesman.com is where Central Texans go to shop online for
Autos, Homes, Jobs, and Classified merchandise.Autos, Homes, Jobs, and Classified merchandise.
The metro’s most extensive and most popular listings.The metro’s most extensive and most popular listings.
Statesman CarsStatesman Cars
Statesman JobsStatesman Jobs
Statesman ClassifiedsStatesman Classifieds
Statesman HomesStatesman Homes

34. The Local Marketplace…AlmostThe Local Marketplace…Almost
Monster, Trader.com, craigslist, ebay, etc.

35. Are we tipping the scale?Are we tipping the scale?
A real world example –A real world example –
Radio and TVRadio and TV

36. It’s a Balancing ActIt’s a Balancing Act

37. ContentContent
• How much content do we put online andHow much content do we put online and
whenwhen
– Does online content take away from the printDoes online content take away from the print
product?product?
– Does online content enhance the printDoes online content enhance the print
product?product?
– Are we building readership?Are we building readership?
• Are circulation numbers going down?Are circulation numbers going down?
• Are registration numbers going up?Are registration numbers going up?
• Citizen journalism???Citizen journalism???

38. AdvertisingAdvertising
• Is the advertising value added?Is the advertising value added?
• Is it incremental revenue?Is it incremental revenue?
• Are advertisers spending more moneyAre advertisers spending more money
online?online?
• Are they decreasing their print spending?Are they decreasing their print spending?
• Are the dollars they spend online equal toAre the dollars they spend online equal to
the dollars they spend in print?the dollars they spend in print?

39. CirculationCirculation
• Are we gaining a new audience?Are we gaining a new audience?
• Are we losing the one we currently have inAre we losing the one we currently have in
print?print?
• Are we reaching a new demographic?Are we reaching a new demographic?
• Aren’t we really talking about readershipAren’t we really talking about readership
(eyeballs)?(eyeballs)?

40. Bottom LineBottom Line
• 35 employees35 employees
– 11.5 content (journalism)11.5 content (journalism)
• 260,000 subscribers and growing260,000 subscribers and growing
• 28.8 million page views and growing28.8 million page views and growing
• 2004 – 30%+ revenue growth2004 – 30%+ revenue growth
• 2005 – more of the same2005 – more of the same

41. At the End of the Day…At the End of the Day…
Our future and our jobs dependOur future and our jobs depend
on our success…and our ability toon our success…and our ability to
“figure it out”“figure it out”

42. Oh…Right…Oh…Right…
The Answer to the Question…The Answer to the Question…
Yes!Yes!