Wednesday 19 March 2008

UK newspapers should change to PPC

British newspapers could increase their revenues by changing their online advertising models, according to a recent report by consultants Ernst & Young.

The study has suggested that newspaper groups need to change their CPM (cost per thousand impressions) online ad model, highlighting the online revenue gap between the national newspapers and Google which uses a Cost per Click (CPC) ad model.

Ernst & Young estimated that if newspapers had used CPC they would have earned online ad revenues of between £120 million and £250 million each just from their UK traffic.

"The online revenue gap between nationals and Google is also evident if we consider that the latter could have generated £2.40 per UK unique user per month from its websites in 2007 compared to top newspaper websites' £0.10 to £0.13," said media and entertainment analyst at Ernst & Young Luca Mastrodonato.

"This gap is an opportunity for newspapers as it shows that monetising online services in the UK is possible. But to do so, newspapers need to move away from the volume based CPM model towards more interactive ad models such as CPC (cost-per-click) or CPL (cost-per-lead)."

Mastrodonato went on to add that CPM had characteristics of display adverts in traditional media, "which sell on reach rather than interaction".

According to Ernst & Young, top newspaper websites generated £15 million to £20 million in ad revenue in 2007, compared to Google's UK ad revenue of £1.26 billion.

Category: PPC

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