Urgent Deadline for Newspapers: Find a New Business Plan before You Vanish
It was a tough year for newspapers. The owner of The Los Angeles Times and Chicago Tribune declared bankruptcy; The New York Times borrowed against its headquarters and even accepted ads on its front page. Detroit's two dailies announced the end of home delivery on all but three days of the week. According to Wharton faculty, if newspapers can't find a new business model quickly, they may soon be printing final editions.
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The Times to Sell Display Ads on the Front Page
In its latest concession to the worst revenue slide since the Depression, The New York Times has begun selling display advertising on its front page, a step that has become increasingly common across the newspaper industry.The first such ad, appearing Monday in color, was bought by CBS. The ad, two-and-a-half inches high, lies horizontally across the bottom of the front page, below the news articles and a brief summary of some articles in the paper. In a statement, the paper said such ads would be placed “below the fold” — that is, on the lower half of the page.
In the past, The Times has printed an occasional front-page classified ad — two or three lines of text at the bottom of the page. And a few years ago it began selling display ads — which are much larger and can combine images and text — on the front pages of sections inside the paper.
But The Times did not sell displays on the first page of the first section, a move regarded by traditionalists as a commercial incursion into the most important news space in the paper.
Most major American papers sell front-page display ads, including The Wall Street Journal, USA Today and The Los Angeles Times, but some others, including The Washington Post, do not.
The Times would not disclose the rates it charges for ads on the front page. Ordinarily, such space would be coveted by advertisers for its prominence, but it remains to be seen how well it will sell in the current climate, in which ad spending is plummeting.
An ad on a paper’s front page “really stands out; it’s very attractive,” said Beth Fidoten, senior vice president and director of print accounts at Initiative, a media buying firm. Generally, she said, papers do not charge significantly more for that space than for other premium spots, “but the way it’s usually done is the advertiser has to make a significant commitment to multiple ads.”
The New York Times Company, like newspaper publishers around the country, has taken several steps to cut costs and increase revenue in the last two years, including reducing staff through buyouts and layoffs, cutting the physical size of its pages, selling or closing subsidiaries and raising subscription prices.
The company recently reported that in November, revenue from continuing operations fell 13.9 percent from November 2007; from January through November, it was down 7.6 percent. Advertising revenue at The New York Times Media Group, consisting of The New York Times, The International Herald Tribune, the radio station WQXR-FM and Baseline StudioSystems, an online database, declined 21.2 percent in November from the same month in 2007.
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