Google and company to gobble up UK papers' classifieds

[KiwiCoromandel]

British newspapers must learn to tap into the potential earnings power of the Internet as they face losing traditional classified advertising revenue completely by 2020, Guardian editor Alan Rusbridger told Reuters.

Rusbridger said on current form, classified advertising such as recruitment would disappear in less than 15 years as advertisers turn to the internet and search engines such as Google.

"Advertising is migrating, it's happening and it's happening quite fast," he said in an interview late on Tuesday. "(And) if that's where the audience is going then that's where your content has to be."

According to data released in October, spending on online advertising in Britain jumped 40 percent in the first half of 2006 to £917 million ($US1.8 billion), putting it on course to overtake spending on national press advertising before the end of the year.

Rusbridger said classified adverts were declining at the Guardian by about 9 per cent a year, while internet advertising on its websites grew by about 50 per cent but from a low base.

The Guardian, which says it carries more recruitment advertising than the Times, Telegraph and Independent newspapers combined, has also led the market in developing its website Guardian Unlimited, which has won several awards.

Analysts at the media team at brokerage Numis said classified advertising made up approximately 12.5 per cent of total revenue at national newspapers.

"Look at the way Google is cleaning up at the moment," Rusbridger said, in reference to advertising revenues.

"There's no point in complaining about that. They've been quicker and smarter and Google has proved that there's a lot of money that can be made from selling advertising against content."

But some in the industry have complained that search engines, which automatically return search results from newspapers, magazines and books, are making money from advertising on content without paying for it.

BBC broadcaster and former Sunday Times editor Andrew Neil was reported by the Scottish press this week as telling an industry conference in Glasgow that newspapers needed to start having a "conversation" with Google over payment for content.

But search engines usually link to a publication's own website, steering the all-important traffic, and Rusbridger said it was difficult to know how to react.

"Maybe it's a cliche but you can't decide if Google is the friend or the enemy," he said.

"It seems to me that most papers are interested in reach before revenue and so they're trying to build up the biggest audience that you can in the expectation that the advertisers will want to get there.

"Google is helping build traffic and that is why at the moment no one is really complaining."

In September, global publishers said they were planning to launch an automated system for granting permission on how to use their content.

The group, which is led by the World Association of Newspapers, announced its move following a Belgian court ruling which said Google was infringing the copyright of French and German language newspapers by reproducing article snippets in search results.

"It's no good being like Belgium and acting unilaterally," Rusbridger said.

"Google realises that they are never going to want to get into the content business and they will have nothing to aggregate (without) the content business.

"(So) at some point there may be a mutual incentive in them giving us some kind of licensing scheme whereby for each click there is a tiny bit of revenue for print. I don't think any of this is going to happen overnight but it's an interesting idea."

source:Reuters

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