Audience

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4.6% - Percentage drop in ad revenue for online news sites in 2009

The past year brought a substantial increase in the audience for online news sites. In 2009, they saw a 9.25% jump in average unique visitors over 2008, according to a PEJ analysis of the Nielsen Net Ratings list of 4,600 news and information sites. In 2009, the only other media sector to see a rise in audience was cable news, and that was due in large part to a 19% jump in Fox News prime-time audience.

But despite this rise in traffic, online advertising revenues declined for the first time since 2002. According to online research firm eMarketer’s projections based on the first 8 months of the year, revenues in 2009 were expected to fall to $22.4 billion from $23.4 billion in 2008—a 4.6% drop. This follows a modest 10% growth rate in 2008. As recently as 2006, online ad revenue was expanding by about one-third annually.

Some categories fared better than others. Search, which flows mainly to aggregators like Google, was projected to grow 3% while display advertising, the kind that news sites are most dependent on, is slated for a 2% decline. And classified ad revenue was projected to plummet 31%.

The eMarketer firm does have a more optimistic projection for 2010, predicting that as the economy slowly recovers, online revenues will reach $23.6 billion, a level slightly higher than 2008 earnings.  

For more about the economics of online news, read the Online chapter of PEJ’s annual report on the health of the journalism industry, the State of the News Media 2010.

By Jim Brady

The availability of real-time audience and traffic information has been having a major impact on digital journalism for more than a decade. The question that’s more frequently debated is whether having this information has had a positive or negative effect on the craft of journalism and how we serve our readers.

Like most issues relating to online journalism, this question is often framed in black-or-white terms. Many purists complain that having this information turns news home pages into popularity contests and whittles away at one of the tenets of journalism: our insistence on telling readers what they need to know, not merely what they want to know. Many news digerati believe this traffic data should be monitored minute to minute, and be a driving force in determining what's being promoted on news sites.  I think both positions are wrong. The answer—as it usually does—lies somewhere in the middle.

The availability of a new tool is not, in and of itself, a good or bad thing. It's how the tool is used. If you refuse to use traffic information out of some misguided desire to be pure, that’s a tremendous mistake. If you are updating your home page based purely on what’s getting the most traffic at a given time, that’s an equally big mistake.

The amount of information available to those of us who have run large web sites is amazing. We know, at any point in the day, how much traffic our web sites are getting, how much traffic has gone to every piece of content, how many unique visitors have come to the site, which domains outside visitors are coming from, how long readers are staying on our sites, how many pages they're hitting, how many clicks every link on our home pages are getting, and much more.

True digital professionals have a deeper understanding of what impacts traffic patterns, which prevents them from jumping to the wrong conclusions. When I was executive editor at washingtonpost.com, my philosophy was simple: We should watch the numbers closely on a daily basis, but we should not let real-time, hourly information drive our editorial strategy. When a Washington Post story would get a link from the Drudge Report, Google News or Yahoo's home page, it would often drive hundreds of thousands of page views to that article. While I appreciated those page views greatly, I knew that traffic to that one article did not suggest a trend, since that traffic came almost exclusively from one link on one site. Conversely, traffic to advice columnist Carolyn Hax's weekly live discussion didn't drive the kind of traffic a Drudge link could, but we knew that visitors to Hax's chat—and to most of our live discussions—were incredibly loyal users of our site. So we focused on live discussions as an important part of our overall strategy, despite the fact that traffic to that feature alone might not to justify that decision.

In most ways, usage metrics are an invaluable tool. If analyzed properly, they can signal trends that sites can take advantage of. One example involved the Post’s Pulitzer Prize-winning fashion columnist, Robin Givhan. A few years ago, she wrote a column about then-Vice President Dick Cheney wearing what she deemed an inappropriate outfit during a somber ceremony at Auschwitz.  That column went viral. So did her next column, on then-Secretary of State Condoleezza Rice wearing a skirt and boots at a U.S. Air Force base in Germany. The popularity of these two columns tipped us off to the fact there seemed to be an appetite for columns that explored the intersection of celebrity and fashion. So we made a concerted effort to promote Robin’s subsequent columns on that topic, and not surprisingly, they also did well.

At the end of the day, part of every online editor’s job is to build loyalty and get readers to come back to your site more often. To do that, you have to balance what gets traffic with what you're best at. If you’re lucky, those will be the same thing. But they usually aren’t. At washingtonpost.com—even with the educated, affluent audience we have—I  was pretty confident that a story about the celebrity meltdown du jour would get more traffic than our story on President Obama’s current thinking on the Department of Agriculture. But The Washington Post’s bread and butter is coverage of the federal government, politics, diplomacy, national security, local news and local sports, not national entertainment news. To put it another way: If The Washington Post decided to promote stories on its home page based purely on traffic potential, what makes it unique would quickly evaporate.  So any analysis of traffic also has to keep this in mind.

Just about everything about journalism has changed in the past five years, but there’s one that I don't think has: I believe people still want The Washington Post, the New York Times, the Wall Street Journal and other papers to play a gatekeeper role. If we start letting real-time traffic drive our home-page promotion, for example, we're on the path to becoming Digg. What Digg does is terrific, but it's not what newspapers should be doing. There was nothing in our traffic history to suggest that stories about military veterans were of particular interest to our readers. But when Dana Priest and Anne Hull uncovered the poor conditions at Walter Reed Army Hospital, the story went global in hours. That kind of journalism will be increasingly at risk if we get too caught up in the race for page views.

There’s a great scene in the film “Platoon,” where Willem Dafoe explains to Vietnam newbie Charlie Sheen what gear he needs and doesn’t need from the heavy backpack he’s been issued. The same logic needs to be applied to metrics and news Web sites. A good editor has to know what information is valuable and actionable, and what information is tainted and thus useless. After all, as the saying goes, a good craftsman never blames his tools.

By Walter Shapiro

It might seem like the height of 1950’s old-media arrogance to argue that too much information about the habits and preferences of readers threatens quality journalism. “The customer is king” is a time-honored mantra of business-world public-relations wizards, even if most American shoppers do not feel like royalty. With the notion that readers should pay for news as outmoded as wedding dowries, a decision to cater to the expectations of the audience would appear to be the only route to journalistic survival.

But a recent three-year stint as the Washington bureau chief for Salon.com left me brooding about the unanticipated side effects of this kind of reader sovereignty on the web. Salon boasted an admirable commitment to investigative reporting and probably devoted as high a percentage of its gross revenues to aggressively covering the 2008 presidential campaign as any publication in America, with the exception of Politico. As the rare stand-alone news Web site that is a publicly traded corporation, Salon’s precarious economic condition has been well-documented. But despite a tight editorial budget, its writers and editors aspired to journalistic excellence.

So what was the problem? Part of it was ideological. Salon has always been a left-of-center magazine reflecting its roots in San Francisco. But it also received constant feedback from the marketplace to become shriller. As an early adapter of the  practice of allowing readers to post their own letters on the site, Salon inadvertently created its own left-wing shock troops who castigated any writer who deviated from the simplistic “Bush is a war criminal” and “all Republicans are evil” party line. Salon’s editors gamely tried various schemes to elevate the tenor of the letters threads. But this chorus of ideological invective had a pernicious effect on all but the most thick-skinned writers.

The larger difficulty—and one not stressed enough in the discussions of Internet journalism—is the tyranny that comes from real-time readership numbers. The dark side of reader power is not unique to Salon or to political Web sites. It casts a shadow not only on Internet-based publications, but also raises questions about the viability of proposed economic models like micro-payments to sustain quality newspapers.  

I came to Salon with three decades experience in print journalism. Like almost all newspaper reporters and magazine writers, I had spent my career bathed in the narcissistic fantasy that every person who subscribed to a publication for which I worked eagerly devoured every word that I wrote. I blithely assumed that my personal audience was the circulation times three for pass-along readers.

Granted it was a fool’s paradise. But never once in my career was I lectured about readership numbers. If my editors had shared focus-group or polling information with me, the data would have been vague and out-of-date. There was no way to determine how many readers skipped immediately to the sports section after yawning through the first paragraph of my latest newspaper column.

But Salon—like every major publication on the web—receives real-time data about how many computer users have a particular article on their screens at that moment. In theory, this rich bounty of information should make it easier for an online publication to satisfy its readership. In reality, the message from readers was that they craved what they already knew and demanded constant reinforcement of their pre-existing attitudes. Economic survival depended on higher traffic, so there was a built-in incentive to billboard articles that were the most popular with readers.

Most well-designed online publications (Salon, Slate, The Huffington Post) have layouts that highlight five, six or maybe eight stories at a time. Since many readers refuse to scroll down an entire web page searching for a story that intrigues them, the prime real estate on an online publication’s home page is more valuable than a newspaper front page or a magazine cover. (A quasi-invisible story is not apt to attract links and that lessens the odds that it will pop up on a search engine).

What this meant in practice at Salon was that an article might have as few as six hours to prove itself with readers before it was yanked out of a position of prominence. Needless to say, the shelf life of an article that grappled with a campaign issue like health care was about equal to butter in an un-refrigerated dairy case. Rants about Fox News or Sarah Palin often received many times the readership of investigative articles on the Iraq war or densely reported political pieces about swing voters in Indiana. During September 2008—the second most heavily trafficked month in Salon’s history—the dozen leading stories in terms of readership included: “The Sarah Palin pity party,” “What’s the different between Palin and Muslim fundamentalists? Lipstick,” “The pastor who clashed with Palin” and “Sarah Palin’s wasteful ways.”

As a result, Salon's internal culture and stray comments by editors worked to discourage writing about important topics (campaign-issue analysis, non-war-related foreign news) because they invariably earned lower readership numbers. In a newspaper, a great lead anecdote might lure readers into an article on a non-sexy topic. But on the web, all the salesmanship has to be provided by the headline. Clever headline writing is rarely an option online, since heads and decks have to be written to fit the irony-free sensibilities of search-engine algorithms.  

Of course, this obsession with traffic figures does not mean that all news Web sites will turn their coverage into a paparazzi patrol on the lookout for the latest about Britney, Lindsay and Paris. What I do fear is that worship of real-time readership numbers will send online journalism to the frivolous fringes of serious topics. Emotion invariably trumps substance. You can always gin up more traffic sniping about what Chris Matthews just said about Tim Geithner than by discussing the details of the Treasury Department’s latest bank rescue plan.

My experience at Salon has whetted my appetite for online journalism. I recognize that we are in the midst of a technological transition akin to the one that was launched when a German printer named Gutenberg threw his first book party. But what Internet journalism requires are self-confident editors (and owners) who can resist the blandishments of quick-react readership statistics and allow laudable stories time to build their own audience. Otherwise, we will all—reporters and readers alike—find ourselves stuck in heavy traffic with nothing but fluff to read.

From time to time, the Pew Research Center's Project for Excellence in Journalism will provide a forum for journalism practitioners and analysts to discuss crucial issues affecting the news industry. Today, we debut that feature, called Discussion Point, with essays from two veteran journalists who most recently worked in online news, Walter Shapiro and Jim Brady.  


In his essay, former Washington Post.com Executive EditorJim Brady contends that the most important thing about web traffic metrics is how you use them. As the former executive editor of washingtonpost.com, Brady focused on combining the world-class journalism of the Washington Post with the endless possibilities of the online medium. During his tenure, the site won numerous awards inlcuding a national Emmy award, a Peabody Award, four Edward R. Murrow awards, and Editor & Publisher award, two Digital Edge awards, and two Scripps Howard Foundation National Journalism awards.


In his essay, former Salon.com Washington Bureau Chief Walter Shapiro warns about some of the journalistic pitfalls of tracking online readership. Shapiro is a columnist for AOL's PoliticsDaily.com, which is launching this week. During more than three decades in journalism as a columnist and political reporter, he was worked online (Salon.com), for daily newspapers (USA Today and the Washington Post), for weeklies (Time and Newsweek) and for monthlies (Esquire and the Washington Monthly). He is the author of "One-Car Caravan," a book about the 2004 Democratic primary season. 



In 2008, local television remained the most popular source of news in America. More than half of the U.S. public (52%) told the Pew Research Center for the People & the Press that they regularly watched local television news. But the number of people who watch local TV news has decreased over the last decade. Even more surprising, falling ratings and falling revenue befell the sector in an election year.

Viewership of local news declined or was flat across all timeslots in 2008, a continuation of the audience erosion first observed two years earlier. Affiliates of the four major networks saw sharp audience declines in both evening and late-night news, while ratings for morning newscasts held steady. The trend towards shifting timeslots or adding newscasts to adjust to changing lifestyles and viewing habits seems to have slowed in 2008, as struggling stations made fewer scheduling changes.

To learn more about the major trends in radio in 2008, read the Local TV chapter of the State of the News Media 2009 report, which offers specific analysis of the eight main sectors of media and special reports such as the Year in the News, Lessons from the Election, a study of citizen media sites and more.  

Chart Source: Nielsen Media Research, used under license
Chart Note: Numbers represent ABC, CBS, Fox and NBC affiliates

To a greater degree than some other media sectors, radio appears to be more prepared for the digital transition. The recorded voice is mobile and can transform among other platforms with relative ease. Additionally, audio has tended to hold its audience better than some other sectors. 

Traditional AM/FM radio remains the dominant way people listen. But, the advent of computers and portable devices has caused its hold to slip. People can now listen to what they want, when they want. And, shrinking ad budgets has hindered—but not devastated—the ability of traditional radio to make money. Stations have been able to gain advertising online and through podcasts, but how news will fare amid the changes remains to be seen.

To learn more about the major trends in radio in 2008, read the Audio chapter of the State of the News Media 2009 report, which offers specific analysis of the eight main sectors of media and special reports such as the Year in the News, Lessons from the Election, a study of citizen media sites and more. 

In an especially challenging year, some media sectors managed to post profits and increase audiences. But most of the news business saw declines in both.

Across media sectors, audience and economic shifts indicate that cable news was the big winner in 2008. With both ad revenue and audience gains of more than 25%, the three cable news channels stood far above other news media. Online news also showed growth in both areas, but display advertising, on which news largely depends, grew a mere 4% through the first three quarter of 2008, and was expected to show declines. And, except for very slight audience growth in audio, all other sectors saw declines in both ad spending and audience, with newspapers and print magazines faring worst.

These trends in economics and audience are among the key findings from the State of the News Media 2009 report. In addition to looking across media sectors, the report offers sector-specific findings on the eight major sectors of media—newspapers, online, network TV, cable TV, local TV, magazines, ethnic and radio.




 

The most compelling transformation in media consumption is not really where people are getting news but how.

That is the key message, if one looks closely, in the findings of the newest biennial media consumption survey from the Pew Research Center for the People and the Press.

The data reveal the contours of an emerging “On Demand Culture” for news and information—a culture made possible by the digital revolution.

This new culture, however, appears to differ from what some technology pioneers imagined. Citizens are not, generally, becoming their own journalists, replacing news professionals. The numbers for that are strikingly limited.

Instead, already in large numbers, people are becoming their own editors, checking for news throughout the day, hunting through links and aggregators to find what they want, sorting among many sources, while also looking for overviews of what’s new today—and sharing what they find with friends.

In short, news consumption is shifting from being a passive act—tell me a story—to a proactive one—answer my question.

The On Demand Culture is also defined by what has not changed. People continue to want news from neutral non-partisan sources—by a margin of 66% to 23%. And the numbers on this remain rock-solid, even among consumers of partisan talk shows.

Nor are people turning away from the news more generally. Seven in ten Americans (71%) still start their day by getting news—a number roughly unchanged in the decade Pew has been asking. And eight in ten get still news at some point in the day.

Some people may hone in on other numbers in the new Pew Research Center survey. The figures for almost every traditional media platform are now at historic lows. For instance, the number of Americans who said they read a newspaper “yesterday” has fallen by 40% since the 1990s—to 34%. The number of people who watched the nightly network newscasts yesterday has fallen even further—by half—to 29%. Radio news is at 35%. Regular readership of weekly news magazines is down to 12%.

But those statistics continue long-standing and familiar trends. There are many more platforms and outlets for news—so, naturally, each one tends to have a smaller piece of the pie.

Focusing on those numbers alone misses the fact that the newer outlets consumers are going to are most often digital versions of the old brands, or aggregators whose content comes from traditional sources. Whether one looks at the Pew Research Center survey data or the various online ratings services, older news organizations dominate in the new technology.

The significance of this platform shifting is economic, not a reflection of lost brand loyalty. The Internet is not generating the kind of advertising revenue the old platforms did and increasingly appears as if it never will. The shift to online thus erodes revenue, but not because the audience is abandoning the values and practices of those traditional news operations.

What’s changing is how people interact with the news when they acquire it—and the old news deliverers certainly must adapt to these new expectations.

A majority of Americans (51%) are now what Pew Research calls “news grazers,” people who check in on the news from time to time rather than going at regular times. And those numbers are likely to grow. Nearly eight in ten (78%) of those under age 25 fit this description.

This grazing suggests part of the new relationship. This news acquisition is initiated, more than before, by the curiosity of the user, even if it also encompasses learning about things by accident as well.

To get a deeper sense of this more proactive consumption, consider a list of other user-initiated activities that register sizable numbers. More than half of Americans (53%) say they use search engines to hunt for news on particular subjects at least once a week. When people are getting news online, more often than not (50% vs. 41%) they follow links and arrive at a news site rather than going directly to the home page of a favorite news organization. Nearly half (47%) have emailed a news story to a friend (up nearly 20% from 2006). Nearly a quarter of Americans (22%) now have customized web pages that include news and this includes 12% of the least involved news consumers, the so-called “disengaged.” Fully 15% of Americans now receive email alerts for news.

Hunting for news using search engines, customizing your news front page, emailing friends with news, and setting up news email alerts—this is the consumer editing his and her own version of the news rather than passively accepting the news as it is delivered to them.

Almost a quarter of Americans (23%) also read blogs about politics and current events at least occasionally. One in five (20%) reads user comments on the news and also look at what stories have been most emailed by other users (18%). These activities all involve consumers wanting to know what their peers—other citizens—are interested in. All of these are part of the new, more active, form of citizen conversation of interacting with the news after consuming it.

Even forms of media that have been largely passive in nature—television and radio, are becoming more active. With television and radio, unlike the newspaper, consumers are accustomed to sitting down and letting it come to them rather than flipping through the papers and picking and choosing what to read. Now, this picking and choosing is happening with video and audio in sizable numbers. A third of Americans (33%) now watch video news clips online at least sometimes, while nearly a quarter (24%) listen to online audio of news.

Yet it would be a mistake to jump to the conclusion here that citizens are replacing journalists and taking over the news for themselves. What we are seeing, at least so far, amounts instead to something more nuanced. Citizens are taking over how they consume the news—but not moving on in significant numbers to gathering and reporting it on their own.

Consider that only 4% of Americans have ever posted their own news content, including videos or photos. Only 7% post comments about news stories, even on occasion.

Even among those most engaged with the new technology, the numbers are not large. Only one-in-five of the most technologically oriented users, that 13% that the Pew Research Center calls the “Net Newsers,” post a comment on news stories even just occasionally. And only one-in-twelve have ever posted a photo or video.

One fear people had about new technology also has not appeared to have materialized. The user-driven nature of the web raised the prospect that people would no longer learn about a broad range of events that they would focus only on a few subjects they were particularly interested in.

That hasn’t happened. Fully 62% say it’s more important to them to get an overview of the day rather than getting news on their favorite subjects. And they still like discovering things by accident. Nearly three quarters of Internet users (73%) say they “come across” news online when they didn’t intend to, meaning something will catch their eye and they will click on it.

These subtle contours of the “On Demand Culture” make sense. People want to customize their news to a point, but they still want to know more generally, what’s new and what’s happening. They want answers to their questions, but they also want to know what is interesting that they couldn’t anticipate. And, for now, while they like sharing with friends and discussing the news, they still want sentinels to gather it for them, professionals whose practices and norms are known, for they have neither the time nor the desire to become their own news gatherers.

In short, the newest data on news consumption suggest that technology is serving our curiosity about the world, but not changing it.

Tom Rosenstiel, PEJ Director

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Fox News continues to dominate viewership during the day just as MSNBC continues to trail behind, with about a third of Fox News' audience.

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Fox News continues to command a substantially higher number of viewers at prime time, but along with CNN, it's viewership fluctuated considerably in 2007. MSNBC trails behind, though its performance was steadier.

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The news wasn’t very good for the newspaper industry on Nov. 5 when the Audit Bureau of Circulations (ABC) released its latest circulation figures. On average, paid weekday print circulation for the 500-plus dailies that reported figures was down another 2.6% for the six-month period ending in September 2007.

But what if newspaper analysts, and especially advertisers, focused on a different number rather than that sobering 2.6% drop? What if they found out that on average, 90 papers in the top markets in the nation were reaching 64% of the adults in their communities at least once a week?

After two decades of circulation declines, and with the growth of newspaper Web sites, the industry says that traditional print circulation numbers no longer tell a fair or accurate readership story. And so along with the Nov. 5 circulation tally, the ABC issued three new measurements of newspaper readership. The bottom line, according to the new metric: In print and online, newspapers are connecting, at least on a weekly basis, with almost two out of every three local citizens.

As part of an initiative with Scarborough Research and the Newspaper Association of America (NAA) called “Audience FAX,” the ABC issued measurements of a newspaper’s weekly print readership, online readership and the combined print and Web readership. That number — “net combined audience”— represents a looser definition of a newspaper reader by counting people who read either the print or online version as rarely as once a week. And the overwhelming majority of “net combined audience” still comes from the readership of the traditional print product.

The newspaper industry is hoping this new metric will help convince advertisers that their product is a good investment. Quoted in media reports on the new readership numbers, Stephen P. Hills, president and general manager of the Washington Post, said "Part of the reason it was created is we think we haven't done the job we should in marketing this industry."

This isn’t the first release of audience metrics that integrates online and print readership. Last fall, the NAA released the Newspaper Audience Database, which focused on online-only readership and the concept of “duplicated audience”—those who consume both the print and online versions. But the new Audience FAX signals a coordinated effort to arrive at a measurement of total newspaper readership.

A look at that readership does paint a rosier picture. Among many new measurements issued in the ABC/Scarborough/NAA report, the seven-day net combined audience showcases an impressive level of penetration. To arrive at the overall figure of 64%, PEJ took the average of the net audience reach for 90 papers in the top markets identified by Scarborough. In this report, Scarborough defined a market as a paper’s geographic area of paid circulation.

Newspapers shown to have the greatest penetration of weekly print/online readers in their respective newspaper markets are the Rochester Democrat and Chronicle (86.3%), the Roanoke Times (85.6%) and the Green Bay Press-Gazette (83.6%). Those with the lowest penetration in their markets are El Nuevo Herald in Miami (17.6%), the Philadelphia Daily News (24.1%) and the New York Daily News (29.1%).

Given that this is the first time the audience metric has been released, there is nothing to accurately compare it against. But one test will be to monitor this number in the future to see if by this yardstick, combined newspaper audiences are declining or growing. Another key test will be the response of advertisers.

Niki Woodard for PEJ