NYTimes.com: Social Nets Squeezing Ad Prices

PaidContent.org does a great job of summarizing the New York Times feedback on the pricing and online ad inventory issues for all media, and therefore all media revenues derived from the web and print.

We believe that it’s possible that in the future, overall profits may be down for major media firms, but their profit margins may actually be higher, as they adjust their own internal cost structures and expectations. But then again, that’s just one theory.

Goldman Internet: NYTCo.’s Nisenholtz: The Rise Of Social Nets Squeezing Prices
By David Kaplan

Janet Robinson, president and CEO of the New York Times Co. (NYSE: NYT), gave the audience at Goldman Sach’s Internet Conference an overview of the company’s “strides” on the digital side. Among a string of stats, she pointed out that the company took in $330 million in digital revenue. But the issue of price realization for its online properties compared to its traditional print business was picked up by Martin Nisenholtz, SVP, digital operations. One issue Nisenholtz hammered home was the abundance of inventory coming from social networks, which has driven prices down.

— Changing pricing dynamic: Does the migration of print audiences and ad dollars to the web result in a zero sum game? Nisenholtz: It’s not just about print migrating to online, it’s all media. It’s hard to discuss the print revenue streams and the online streams on a linear basis, as these are new businesses. How you compare to a newspaper print ad to an online ad is difficult. The display business at NYT.com is a big part of the revenues. We’re seeing tremendous amount of inventory getting created, mostly from social networks. And they’re being monetized at very low rates. At the other extreme is a highly customized inventory. And that’s what you see at NYT.com. You see Apple’s (NSDQ: AAPL) ads on our homepage. Those are very high rates campaigns and you can see at one-to-one rate compared to print. Asked about the growth of its newspaper ad alliance, QuadrantOne, Nisenholtz said it was too early to say.

Other key points mentioned in the response:
— Influenced by Yahoo
— Times Select and the paid model
— The death of print classifieds
— About’s display weakness
– Acquisitions

Read more here

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