Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

Offline Publications Earn 50 Times More Online Than Web-Only Media

Posted by Tom Foremski - April 7, 2010

A survey by Perfect Market, an online advertising optimization company, found that publications that have an offline brand can earn as much as 50 times the revenues of brands that start off on the web. The exception is the web-only Huffington Post.

The study looked at the top 100 news and media sites and the top 100 "blogging" sites and used publicly available data from Compete.com.

[Compete.com estimates traffic from several sources such as search traffic and it generally undercounts traffic, however, it is a good measure of traffic trends.]

Stephen Walker, COO of Perfect Market, said:

The difference in performance was dramatic. Companies with major brands have an advantage in driving traffic, but they have an even greater one when it comes to monetizing traffic. The advantage in revenue is driven both by eyeballs -- six times as much traffic -- and monetization - 10 times higher revenue per thousands of page impressions.

This suggests that major media companies fortunate enough to have this head start should be careful to nurture and protect their brands on the online world

Foremski's Take: The advantage in terms of revenues is that established, offline publications, already have relationships with advertisers and it is easier for them to sell online advertising for decent rates. They also have an established readership, which they can leverage to launch their online publications.

Web-only publications usually don't have the resources to employ salespeople and must rely on online advertising networks for advertising. Online ad networks sell advertising for very low rates and they also take a large chunk of revenues, ranging from 30 per cent to as much as 80 per cent.

Despite their higher earning power, print publishers are having a tough time transitioning to an online business because their costs are much higher than their online revenues.


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