Newspapers Beat Local TV to Video Ad Dollars

Thousands of online Web sites streaming original, consumer generated, or syndicated video are becoming a nightmare for local television broadcasters, according to Borrell Associates Inc.

The media research firm found that newspapers are making more money from online video advertising than local TV stations, $81 million to $32 million – almost 3 to 1. In each of three markets, Chicago, Los Angeles, and New York, local advertisers spent more than $5 million for streaming video commercials. 

TV stations have been laggards in figuring out the net's strength is targeted audiences, in contrast to broadcasters' traditional sales pitch of a mass audience. Newspapers, on the other hand, have been selling customized solutions, with particular success in converting help wanted and automotive classified advertisers. Here's an example of video classifieds from the San Antonio Express-News. 

Time Warner Cable (TWX) in North Carolina is producing original video advertisements for local merchants at GrandStrandnow.com.

This success for newspapers can fade and those not allied with a TV partner are at risk.  Producing original video is time consuming and expensive.  Distributing clips from Reuters (RTRSY) or the Associated Press can provide newspaper sites national content, but local TV stations certainly have the upper hand in the home markets.  The sheer volume a broadcaster can copy and paste will also be a challenge to print.  Further, when TV ad sales people sell a 15-second pre-roll along with a TV station's "brands," like local weather, sports, or consumer reporters, the broadcaster has a huge advantage.

“In five years, local online video advertising will surpass $5 billion, representing more than one-third of all local online advertising," Borrell forecast.