Newspapers Cope With Ad Slowdown: Hold Back On Inventory And Ad Nets

The NYT weighs in on newspapers' struggles amid the online ad slowdown and surveys a number of different strategies being employed. McClatchy, for one, says they are decidedly reducing the number of online ad units in invetory. "It is a case where yeah, you could probably sell another advertiser by creating another ad space," but that would tend to depress overall revenue, says Christian Hendricks, VP for interactive media at McClatchy (NYSE: MNI). The publisher's Q2 internet revs climbed 12.5 percent, which represents about 11.8 percent of its total ad revs from that period.

-- Setting limits: John Frelinghuysen, a partner at Bain & Co., tells NYT that limiting the ads on a page is a good idea. "That high level of unsold inventory often creates a real challenge in terms of sustaining pricing or growing pricing. In most media, especially in television, the traditional model has been that you drive sellout, and that gives you the ability to drive pricing over time." The piece looks at non-newspaper sites like Weather.com have been doing.  Paul Iaffaldano, the general manager of the TWC Media Solutions Group, which sells ads for Weather.com and its sister cable channel, says it holds back ad space daily. As a result of the reduced inventory, Iaffaldano tells NYT that the site's CPMs have risen 10-15 percent over the last year.

-- Avoiding remnant nets: McClatchy is also planning on reducing its reliance on ad nets. Hendricks: "We don't want to get in the habit of filling every little space we have with remnant." NYTimes.com is also pulling back on the use of ad nets. Denise Warren, the chief advertising officer of The New York Times (NYSE: NYT) Media Group, says the company sees some value in using remnant ad nets when the site experiences a sudden surge in traffic—such as when coverage of the chaos in the financial markets led to ballooning pageviews recently. Warren: "We couldn't sell that inventory because we didn't know it was going to exist, so if we have an ad network we're able to have all those extra CPM's."

Related

• Interview: MediaNews' Singleton On What's Ailing Newspapers: It's The Economy, Not The Internet
• Zillow, Newspapers Launch Real Estate Ad Network; Looking To Each Other's Strengths
• Not The Typical Quarter: Newspaper Websites' Revenue Growth Interrupted In Q2; Slowdown Continues
• Even As Local Online Ad Spend Surges, Newspapers Can't Win
• NAA: Newspaper Sites' Q2 Traffic Up 12.2 Percent Over '07; Numbers Are Flat Compared To Q1

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