A troubling trend as emerged as more U.S. newspapers cut back on print to minimize overhead expenses and focus on their websites. Online advertising sales are slowing down. According to publishing executives, probable causes for this are the rise of electronic advertising exchanges that sell ads at cut-rate prices as well as the weak economy of the U.S.
For an industry savaged by the erosion of print advertising dollars, increasing digital profits is important for survival. With this, the double-digit online growth rates enjoyed by many newspapers today could be obsolete.
Newspaper executives have hyped digital advertising as a bright spot in an industry despite being plagued by declining print readership. Some publishing executives, however, are still optimistic about the long-term outlook for digital. They blame the state of the economy for the slowdown of online advertising sales.
Another problem that is less temporary is the rise of ad exchanges that put pressure on ad prices. Advertising exchanges are electronic platforms allowing buyers to bid on and buy advertising space at drastically low prices. There are many websites that rely on these exchanges to sell unclaimed advertising spots.
Retail clothing stores, auto dealers, and other local advertisers still use newspaper websites to reach people online, however, that segment is facing insurgent competitors such as daily deals site Groupon Inc, search giant Google Inc , and e-commerce leader Amazon.com Inc.