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Newspapers to become dinosaurs?

Well-funded competitors like Yahoo and Google are only starting to target the local market, so local media still have time to respond.

However, newspapers still face long-term damage to their business from online local-search products, far greater than the damage done to classified advertising revenue by competitors like Monster.com and HotJobs.com, a new study, “The Geo-Google Threat: Search Engines Target Local Advertising,” reported today.

The study, by The Neil Budde Group and the Advanced Interactive Media Group, reports some newspapers may be forced to drop from daily to less frequent publication and that print margins are likely to erode as advertising migrates online and advertisers opt for pay-for-performance and self-service ad models.

In addition, it states, yellow pages may become more immediate competitors to newspapers, noting that in two countries the leading yellow-page publishers have purchased large classified-advertising publications for integration into online search services.

“For local publishers, which have already been fighting the ‘new monsters’ eating away at their classified advertising, this may be a far greater challenge than the first Internet wave,” said Neil F. Budde, one of the report’s lead authors.

The 59-page report, prepared with data compiled by eMarketer, reviews the threat from yellow pages, international dot-coms like Google and Yahoo’s Overture, and direct, targeted ad placement online by key local advertisers like car-care shops, plumbers and restaurants.

It includes a four-page “action plan” to help newspapers and other local media meet the competitive challenge and even grow their market share of ad spending.

“The ability to directly target advertising at consumers, and to determine exactly what the response to those ads has been, gives local advertisers more power than ever before to focus their spending where it works,” said Peter M. Zollman, the report’s other lead author.

“Few local publishers have realized yet how this will endanger their business, and even fewer have responded with effective local search tools for their advertisers.”

Source: Onrec.com

Posted by nakul at May 18, 2004 09:10 AM | TrackBack