An ePublication from Ecommerce Partners

The "Deep Depressing Dive"

By | June 1, 2006 12:18 pm

Like Goldman, Wall Street securities firm Merrill Lynch is – at the core of its business as an investment bank – supposed to serve its clients with the best, most sober advice about where to sink their capital. It’s of course a serious responsibility, so it was a bit arresting to see Merrill give their recent report (May 26) on the outlook for the US newspaper industry the emotional title, “Deep Depressing Dive”.

Merrill’s team, led by analyst Lauren Rich Fine, had obviously been considering the same evidence, about the migration of advertising revenue from newspapers to online sites, that led the Interactive Advertising Bureau and PriceWaterhouseCoopers accountants to announce (May 30) that the first quarter of 2006 produced a record $3.9 billion in web-advertisement spending, a striking 38% increase on the same three months last year.

Merrill’s gloomy forecast for newspapers is that they will see more ad revenue next year, but only by a rise of 1.1%, down from the 1.4% they had previously expected. “We remain concerned regarding the newspaper industry’s outlook”, Merrill concludes, “as the dual impact of changing media consumption habits and the migration of highly lucrative

classified ads to the Internet are squeezing margins and hampering growth.”

Oddly, in the online world the newspaper industry is making an effort to claw back advertising. I say oddly, because it’s downright peculiar. In online sites of media interest it has placed a banner ad that carries a picture of the Founding Fathers. Its text asks: What made the freedom of the press so important to the Founders And it answers: Maybe it was the coupons. For a punchline it proclaims: Newspaper advertising a destination not a distraction.

Do you think this works? Could anyone?

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Founded in 1998, ECommerce Partners is a full-service, ecommerce and interactive agency headquartered in New York City. Best known for our unique process methodology, we combine Internet expertise, creative talent, and business know-how to help clients across a variety of industries achieve rapid, measurable online marketing results.

True to our motto, "We build businesses, not just websites," we provide large and mid-sized companies with a full range of Internet marketing, website design and ecommerce solutions geared to maximize online revenues.



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