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Power User 2004Newspapers' Online

Audience in a Broadband World

Michael FibisonAssistant Director, DigitalMORI ResearchMichael_Fibison@moriresearch.com

952.835.3050, ext. 232

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In This Presentation Business Model Review

Existing and Emergent Models

Study Overview & Key Findings Sites and Methods

Power User Who are They?

What are Their Content Interests?

Marketshare

Online/Print Interplay

Advertising & Commerce

Recommendations

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Sites involved•The 2004 sitesThe 2004 sites

AJC.comAZCentral.comBoston.comChicagoTribune.comContraCostaTimes.comDallasNews.comLubbockOnline.comMaineToday.comNewsOK.comQuadCityTimes.comSignOnSanDiego.comTBO.com

•Interviews2,000 Phone Interviews

23,414 News sites

•Fielded in November-December

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Comparisons & Weighting Methodologies

– General Internet Users• 18-minute telephone survey• Random-digit dialing• Must have used Internet in

past month• National sample of 2,000

– Online Newspaper Users• Online “pop-up” Survey• 12 Sites, chosen by NAA• Minimum of 1,000 per site

Weighting– General/Phone

• Weighted to U.S. Census for age, gender, ethnicity & census zones

– Online • Data balanced across markets

2,000

12,429

2,000

23,414

Online - 2002Online - 2004Phone - 2002Phone - 2004

Respondents

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Dominant online business models

Classified upsells: Allocation model, forced bundles, upsell

Enhanced classifieds products: Real estate builder, agent, broker and apartment and rental

packages, auto dealer inventories, employment products/services

Banner ad sales: National sales, network sales, i.e. Real Cities network,

remnant deals Local sales Rich media Sales blitzes

Email campaigns: Contests and rewards programs Direct mail and email bundled buys

                                                               

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Digitized Display Ads: Upsell and allocation models

Search Local search – opportunities

Yellow Pages Contextual Search

Google Ads Paid Content

Subscription to Web content News archives Packer Insider/Journal Interactive

Digitized versions/subscriptions NYTimes News Tracker

Online only classifieds

Emerging online business models

Digitized Display Ads: Upsell and allocation models

Search Local search – opportunities

Yellow Pages Contextual Search

Google Ads

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Key Findings Connectivity: Home broadband doubles,

affecting everything Competition: Yahoo! remains threat; AOL

declines Utility: After news, top online content drivers

are online banking, maps and movie times Tracking: Number of people paying for

online content doubles from 2002 Google: Search site goes from 0 to

superpower in news, entertainment and shopping

In the distant future, historians will have a common term for the period prior to the appearance of Google: the Dark Ages.

-- Joel Achenbach, WashingtonPost.com

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Key Findings

Buyers: Seven in 10 newspaper Web site users have bought online in the past month

Influencing: Internet, TV & newspapers seen as equals for influencing purchases

Disintermediation: Online store sites (Target.com) show growth in online shopping; newspaper sites flat

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Profile of a Power UserWhy advertise to NP.com users? Because they’re

not losers. • Who uses newspaper Web sites?

– 84 percent recently shopped online

– 82 percent recently bought online

– 88 percent are employed

– 69 percent are online daily @ work

– 63 percent check news daily

– 58 percent frequently bank online

– 57 percent have home broadband

– 54 percent have college degrees

– Mean age: 38

– Income: $71,000

– Hours online/week: 19

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Hours Spent Online Mean, Past Seven Days

Base: ’02 & ’04 Telephone respondents; ’02 & ’04 Online respondents

%

11

Most Frequently Go Online

Base: ’02 & ’04 Telephone respondents; ’02 & ’04 Online respondents

%

PowerUsers

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Type of Internet Connection

Base: ’02 & ’04 Telephone respondents; ’02 & ’04 Online respondents

52

40

23

10

3

40

37

49

2

29

57

50

8

1

63

25

17

6

Telephone modem

Home high speed

Office high speed

School/Library

DK/ Refused

Phone - 2002Phone- 2004Online - 2002Online - 2004

%

13

Times Go OnlineDaypart Trending; Note modified dayparts

Base: ’02 & ’04 Telephone respondents; ’02 & ’04 Online respondents% %

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Content: A Need to Know

• News Content• Utility & Functionality• Power User Differences• Paid Content

Pioneer X plaque, launched 1972.Currently 6.5 billion miles from Earth,

still communicating.

15

Content & Services Used Most Often

Combining Daily, Several times a week & Several times a month

Base: ’02 & ’04 Telephone respondents; ’02 & ’04 Online respondents

97

92

91

89

86

60

85

47

50

35

56

33

E-mail

BreakingNews

National/WorldNews

Local News

Weather

SportsNews/Info

Online '04 Phone '04

News Hound

s

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Content & Services Used Most Often

Combining Daily, Several times a week & Several times a month

Base: ’04 Telephone respondents; ’04 Online respondents

58

58

50

49

47

46

44

43

30

30

14

21

18

28

30

22

Online Banking

Maps & Directions

ET News

Movie/TheaterTimes

Dining/Leisure Info

Health Information

Finance/Investment

Travel Info

Online '04 Phone '04

40

38

33

31

30

22

19

6

13

19

21

21

12

4

14

6

EventsCalendar

NewsArchives

Online Games

Chat

Multimedia

Obituaries

DownloadMusic

ResearchGenealogy

17

Paid for Online Content/Services Past Year

Base: ’02 & ’04 Telephone respondents; ’02 & ’04 Online respondents

%

Most likely to pay:- Men- Broadband users- Newspaper site users

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Local Online Marketshare

• Online Reach– The Issue of Never– News– Entertainment

• Alternate Distribution

Courtesy Parul Vora, MIT Lab new media scientist

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Reach: EVER used Internet for…The Issue of Never

No52%

Yes48%

Phone ‘02

Phone ‘04

Base: ’02 & ’04 Telephone respondents

No50%

Yes50%

No54%

Yes46%

Phone ‘04

Phone ‘02

No52%

Yes48%

Local News Local Entertainment Info

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Reach: Ever Used Online for Local News/ET

Demographic Insights

Base: ‘04 Telephone

54

39

58

58

44

30

50

53

44

48

46Total

Men

Women

18-34

35-54

55+

Access @ Home

Access @ Work

Modem

Home High-Speed

Office High Speed

News

54

44

61

60

49

27

54

64

48

52

50Total

Men

Women

18-34

35-54

55+

Access @ Home

Access @ Work

Modem

Home High-Speed

Office High-Speed

Entertainment

%%

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Marketshare: Local NewsOnline Sources

Base: ’02 & ’04 Telephone & ’02 & ’04 Online respondents – used online service for local news past 6 months

62

55

39

37

23

1913

12

22

28

29

37

39

40Local newspaper site

Google

Yahoo

Local TV station site

MSN

AOL/America Online

Local radio station site

Other

Phone '02 Phone '04

86

29

24

11

2114

13

37

39

42

61

94Net online

newspapers

Competitors(Net)

Yahoo

Google

MSN

AOL/AmericaOnline

Other

Online '02 Online '04

%%

22

Marketshare: Local EntertainmentOnline Sources

Base: ’02 & ’04 Telephone & ’02 & ’04 Online respondents – used online for local entertainment past 6 months

51

36

38

20

21

2921

7

7

16

16

17

25

34Yahoo

Google

MSN

Local newspapersite

AOL/AmericaOnline

Local TV stationsite

Local radio stationsite

Other

Phone '02 Phone '04

78

30

18

10

14

7

8

15

20

23

35

81Net online

newspapers

Net localcompetitors

Yahoo

Google

MSN

AOL/AmericaOnline

Other

Online '02 Online '04

%%

23

Interest in Receiving News On…Shown: Very/Somewhat Interested

Base: ’02 & ’04 Telephone respondents; ’02 & ’04 Online respondents

%

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Online/Print Interplay

• Newspaper Readership• Audience Duplication• Effect on Other Media• Why Use Newspaper Sites

Instead of Print Newspapers

‘The Future of the Newspaper is printed via Radio’Teknik för Alla, Swedish popular science magazine

Issue 5, March 29th, 1940

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Read Print or Online Newspaper, Past Week

Demographic Insights

Base: ‘04 Telephone

74

75

74

73

76

88

75

62

74

75

75Total

Men

Women

18-34

35-54

55+

Access @ Home

Access @ Work

Modem

Home High-Speed

Office High Speed

Print Newspaper

33

21

33

32

23

21

28

25

20

30

25Total

Men

Women

18-34

35-54

55+

Access @ Home

Access @ Work

Modem

Home High-Speed

Office High-Speed

Newspaper Web site

%%

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Duplication: Newspaper Print/SiteRead in the Past 7 Days

Market Average

Read Print Only

- 55-plus: 68%

- Modem users: 60%

Base: ’04 Telephone respondents

Read Online Only

- 18-34: 8%

- Home broadband: 7%

Read Online Only6% Read Print

& Online20%

Read Print Only54%

Read Neither

20%

Read Neither

- 18-34: 30%

- Earn <$50k: 25%

Demographic Insights

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Media Use Since Reading Online Newspapers

% Saying “About the Same”

Base: ’02 & ’04 Telephone respondents; ’02 & ’04 Online respondents read online in past 6 months%

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Media Use Since Reading Online Newspapers

% Saying “Use Less”

Base: ’02 & ’04 Telephone respondents; ’02 & ’04 Online respondents read online in past 6 months%

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Why Use Internet instead of Print

Base: ’02 & ’04 Telephone respondents; ’02 & ’04 Online respondents read online in past 6 months

Expectation is for more …

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Online Advertising

• Local Advertising Source• Influencing Purchases• Frequent Behaviors• Classified/Display Online• Bundling Expectations

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Primary Source for Local Advertising

Base: ’02 & ’04 Telephone respondents; ’02 & ’04 Online respondents

48

17

15

8

4

2

2

28

13

6

8

3

15

0

26

17

14

10

3

10

7

14

51

17

6

3

2

4

Local newspaper(print)

Television

Shoppers/Giveaways

Radio

Yellow pages

Local newspaperwebsite

Internet (other)

Phone '02Phone '04Online '02Online '04

32

Advertising Influenced to Make Purchase

Base: ’04 Telephone respondents; ’04 Online respondents

29

38

25

38

23

8

18

31

51

32

21

17

8

7

Local newspaper(print)

Television

Shoppers/Giveaways

Internet (other)

Radio

Yellow pages

Local newspaperwebsite

Phone '04

Online '04

33

Frequent Shopping BehaviorsCombining Daily, Several times a week & Several times a

month

Base: ’04 Online respondents; ‘04 Telephone respondents

47

38

34

26

19

25

28

14

6

7

Shop forMerchandise

Read ProductReviews

Available Jobs

Check Store Hours

Homes/Apartments

Online '04 Phone '04

19

15

15

14

8

9

8

6

4

4

Autos for Sale

OnlineAuctions

Book Travel

DownloadCoupons

OnlinePersonals

34

Print-to-Online AdvertisingEver Used

Base: ’02 & ’04 Telephone respondents; ’02 & ’04 Online respondents

35

Interest in Print Classifieds Online

Base: ’04 Telephone respondents; ’04 Online respondents

83%

64%

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Online Sellers

Sold online in past six months?

Base: ’02 & ’04 Telephone respondents; ’02 & ’04 Online respondents

Telephone• E-bay (77%)• Half.com (4%)• Amazon.com (3%)• AOL (1%) • Newspaper site

(4%)• Other local media

site (4%)• Other (20%)

Base: If sold online

Online• E-bay (77%)• Half.com (9%)• Amazon.com (8%)• Newspaper site

(8%)• Yahoo! Classifieds

(3%)• AOL (1%)• Other (15%)

Top Sources

8

5

4

10

Phone'02

Phone'04

Online'02

Online'04

37

Online Commerce

• Online Shoppers• Online Buyers• Amount Spent Online• Online Sellers

38

Researched Goods/Services OnlinePast Six Months

Base: ’04 Telephone respondents; ’04 Online respondents

No41%

Yes59%

Phone ‘04

No16%

Yes84%

Online ‘04

75% of online respondents have researched merchandise, goods or services online in the past month

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Purchased Merchandise, Goods or Services Online

Past six months

Base: ’02 & ’04 Telephone respondents; ’02 & ’04 Online respondents

68% of online respondents

purchased something

online in the past month.

40

Amount Spent Online

3

7

29

40

13

7

4

34

9

5

4

9

24

39

15

8

3

9

27

42

9

8

10

36

More than $5,000

$2,001 to $5,000

$501 to $2,000

$101 to $500

$51 to $100

Less than $50Phone '02Phone '04Online '02Online '04

Base: If made purchase online past six months, ’02 & ’04 Telephone & Online respondents

Mean Spent Online

Phone 2002: $990

Phone 2004: $980

Online 2002: $1,190

Online 2004: $902

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Sites Used to Research PurchasesPast six months

Base: ’04 Telephone respondents & ’04 Online respondents researched on Internet past six months

36

34

31

26

26

22

16

10

4

12

Google

Store websites

Yahoo

Amazon

Ebay

Electronic store websites

MSN

Comparison shopping sites

Local newspaper site

Other

47

40

35

35

34

29

17

15

11

7

7

8

Store websites

Google

Amazon

Electronic store websites

Ebay

Yahoo

Newspaper website

MSN

Comparison shopping sites

AOL/America Online

Competitor Sites (Net)

Other

Phone ‘04 Online ‘04

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Wrapping Up Conclusions & Next Steps

• Audience• Content• Marketshare• Media Interplay• Advertising• Commerce

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Key Findings: Audience & Content

• Audience– Newspaper site users are Power Users. They are:

• Better educated and more likely to be employed

• Spend more days and more time online than general Internet user

• More likely to have home and office broadband access

– Home broadband use has skyrocketed from 2002

– Influence of dayparts increases as morning/night use increase

• Content– Breaking news, national/world news nearly as hot as e-mail

– Utility features - movie times, maps - drive second-tier frequency

– Online banking growth offers opportunities in audience & revenue

– Home broadband increases online use of all content categories

– Use of paid content has grown twofold from 2002

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Key Findings: Marketshare & Media

• Marketshare– Half of online users have never gone online for local news

– Local newspaper sites are No. 1 online destination for local news

– The Google Factor:• 2002: 3 percent of online users go to Google for local news

• 2004: 39 percent of online users go to Google for local news

• Newspaper sites trail Yahoo! and Google for local entertainment

– Interest in receiving info via e-mail remains steady; wireless falls

• Media Interplay– 75 percent of online users read printed newspapers

– Duplication • 54 percent read print only

• 20 percent read print and online

• 6 percent read online only

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Key Findings: Advertising & Commerce

• Advertising– Print newspapers are No. 1 source of local advertising

– The Internet influences purchases as much as TV & radio, but:• Google and store Web sites are top choice

• Newspaper sites lag as online sources for informing purchases

– Online users are very interested in seeing print classifieds online

– Interest and use of online display ads shows promise

• Commerce– 75 percent of NP site users have shopped online in past month

– 70 percent of NP site users have bought online in past month

– Search engines are prime sources for initiating online commerce

– ‘Old’ directory services & functionality may be due for comeback

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What can I do?• Examine existing business models

– Based on daypart use of content, focus existing website users on classifieds and shopping opportunities

– Tailor sales collateral to exploit demographics of online audience – Power Users are Power Shoppers

• Train print sales staff on the value of online and then give them incentives and goals (and give managers goals and incentives)

• Examine emerging business models– Know your marketplace and try new things

• Will paid content work for you?

• Will digital subscriptions sell?

• Should you develop or partner for local search?

• How do you continue the use of display ads online?

• How do you grow online-only classified sales?

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Thanks

Michael FibisonMORI ResearchBiz: 952.835.3050Cell: 651.324.1244E: Michael_Fibison@moriresearch.com

Available online:http://

www.digitaledge.org/