Magazine article Editor & Publisher

Misery Loves Company

Magazine article Editor & Publisher

Misery Loves Company

Article excerpt

Dot-com ads in red all over

Dot-com advertising may have been "easy come," but newspapers hope it won't be "easy go." As dot-com ad spending drops in all media, newspapers are suffering, too, although they are working hard to reignite the category for the holidays.

The most recent numbers are scary. Newspaper dot-com ad revenue dropped to $21.4 million for August, the lowest monthly total for the year by far (March was the highest at $63.8 million), according to Competitive Media Reporting (CMR). July's total was almost as low as August's.

Some executives, however, believe newspapers won't be hit as hard as other media by the dot-com shakeout. "Of various media forms, newspapers will be affected least, because they are only used by companies that have matured enough to be out there with the conventional retail battle," says Bruce Silverman, executive vice president of Initiative Media, a media-buying agency in Los Angeles.

The dot-com shakeout, which started last spring, forced some companies out of business and prompted others to reassess their advertising.

A major casualty was Value America Inc. (http://valueamerica.com), a huge online retailer and newspaper advertiser that declared bankruptcy in August after spending more than $27 million in newspapers in 1999 and 2000, according to CMR.

Priceline.com (http://priceline.com), another big advertiser, closed part of its business and reduced its advertising. The grocery delivery sites Webvan.com (http://webvan.com), Streamline.com (http://streamline.com), and Peapod .com (http://peapod.com), also have cut back or stopped their newspaper advertising. And CarsDirect.com (http://cars direct.com), a leading automotive site, stopped using newspapers in the third quarter after trying them in a number of markets early this year.

"We tested different online and offline media, and we've been reallocating dollars to what works best," says Vice President of Marketing Chuck Hoover, a former newspaper executive. San Francisco is the only market where CarsDirect.com is still using newspapers, he says.

Although many dot-coms are dropping out of newspapers, some remain, including Mercata (http://mercata. …

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