Citigroup’s Justin Diddams has been analysing newspaper companies’ efforts to garner earnings from their online presence. He is not hopeful.
The last “high water mark for Australian advertising” was in 2008 according to Diddams, with 845 million newspapers sold at an average of 50 ads per paper. That means five years ago 57 billion advertising impressions were sold, he says.
Fast forward to 2012 and the story is very different in today’s online news age.
Last year, online page impressions for all Australian newspaper websites were 13.7 billion.
“People don’t get exposed to ads if they read news online as they click on singular items rather than flicking through a newspaper and being subliminally exposed to almost all the paper’s ads,” Diddams told Markets Spectator.
“Online is valuable but there isn’t enough ad impressions to generate the same revenue,” he says. “Newspapers have an inventory problem in terms of monetisation.”
At 1146 AEST News Corp’s Australian shares were down 30 cents, or 1.7 per cent, to $17.05. Fairfax’s stock was up 1 cent, or 2.1 per cent, to 49 cents.
Business Spectator is owned by News Corp Australia.