Editor & Publisher explores falling online ad revenue

Online ad revenue for newspaper websites fell in the second quarter of 2008 for the first time since the Newspaper Association of America began making measurements in 2003, according to Editor & Publisher.
In a special report, E&P examines why revenue has started falling, what's being done about it, and what might happen in the next few years.

...one of the main reasons for the downturn is an over-reliance on classified advertising and combo sales packages. About 60% to 70% of online revenue for the industry as a whole comes from classified, confirms Randy Bennett, the NAA's senior vice president of business development. He believes Q2 declining results are "primarily tied to classifieds and the dramatic drop in classifieds overall, and newspapers' reliance on classified dollars to drive online."

According to the article, another part of the problem hindering online growth is the unreliability of audience measurement metrics. The overall public perception of the newspaper industry amid months of bad news and falling stock prices hasn't helped, either.
In addition, the article looks at potential solutions that may drive revenue up again in the near future.

To read the full report, click here.