The top ten American online newspapers grew 16 percent in 2008, reports Nielsen Online. Online newspapers also saw a 27 percent jump in repeat visits. “Despite the current troubles for the traditional newspaper industry, people are visiting newspaper sites more and more often to stay on top of current events,” said Neilsen’s Chuck Schilling. The real problem is not that the Internet is killing the newspaper; it’s that advertising has not caught up to the paradigm shift in information. "The challenge for newspaper publishers today is to learn how to capitalize on this active online readership and translate their increasing engagement into revenue,” said Shilling.

We’re in an awkward period that comes with technological advances. A new medium is replacing the old ones, but, not fitting into the old models, proves difficult to monetize. If you look at the history of advertising and the media, there was never a ‘day-one profitably.’ With each new medium, advertising had to adapt, and it did. Slowly.

Since the number of people of buying online is great, and will only continue growing, online advertising should, in theory, be a much more successful portal to sales than print ads, which multiply the steps needed for a brand to convert a sale. In theory.

Part of the problem is that online newspapers haven’t integrated advertisements comfortably into their format. How can a banner ad be less successful than a quarter-page ad in a print local section? The print ad is not interactive, most likely is not in color, and is not context- or reader-sensitive.

A banner ad can be all these things. And maybe that’s part of the problem, at least the interactivity. While in print ads, all of the information is right there in the ad, banner ads often offer less information. To get the full effect of the ad, you have to navigate away from the page you’re on to the brand’s website. Interactivity is great, but how enticing is it to leave the site you’re on to understand what an ad’s selling?

By Mark Alvarez