Online publishers upbeat despite economic downturn

LONDON Fri May 16, 2008 11:15am EDT

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LONDON (Reuters) - Online publishers are doing well despite an economic downturn, and the ones who are best positioned to succeed are strong brands with quality content, the head of the Online Publishers Association said on Friday.

Web sites have an edge over traditional media by offering advertisers the ability to target consumers in a cost-efficient and highly focused way, the association's president, Pam Horan, told Reuters during the OPA's "Forum for the Future" in London.

"This ability to highly-target the right consumers, and do it in a way that is very efficient, means that online publishers should continue to see significant advertising growth even during this difficult economic period," Horan said.

The expected growth rate for online advertising spending in the U.S. this year is a still robust 23 percent, down from 25 percent last year, according to data from eMarketer.

While both global media brands and local online publishers should be able to weather the storm, the ones with the strongest brands and quality content are likely to be most successful in attracting advertisers, Horan said.

In an ever-expanding global economy, foreign readers are becoming increasingly important for publishers, Horan said. Advertising categories such as travel and financial news are particularly well placed to make money from foreign visitors.

The continuous evolution of digital publishing platforms is another reason why the prospects for online advertising revenue are brighter than for traditional media.

The mobile Web, video and social media are seen as key growth areas for advertising revenue.

But Horan said the jury was still out on how publishers and advertisers can monetize social networks, such as Facebook.

"We see great examples of how it can be leveraged for brand building and traffic but as a revenue stream it still remains to be seen."

The time spent on a site has to be put into perspective, she cautioned. Community activities account for only seven percent of the time U.S. consumers spend online each month, according to the OPA's Internet Activity Index.

That compares to more than 40 percent of their time spent with content, making it the most significant category of online activity and thus the most important category for advertisers.

(For a blog from the OPA conference go to here)

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