With Everyone's Ad Revenue Nose-Diving, One Newspaper Chain Goes Mobile

(MoneyWatch)  Online advertising may be one of the only fast-growing sources of revenue for U.S. newspaper companies, but the question is whether it will prove to be "too little, too late" to save the those that treaded water while the Internet tsunami approached.

As is the case almost every Monday, more bad news greeted newspaper execs this morning. The latest rounds of numbers indicate that the major newspaper companies experienced double-digit losses in ad revenue the first five months of this year compared with the same period last year.

One major regional chain owner, Media General, announced an 18.1 percent fall; McClatchy (as previously reported here) fell 15.4 percent; Gannett lost 11 percent; and the New York Times lost 10 percent.

Analysts are now calling 2008 potentially the worst year ever for an industry already shaken to its core by falling circulation, loss of classified ads, layoffs, and rumors of worse to come.

Yet, the silver lining in most companies' revenue is online advertising, which continues to show strong growth. By now the trend lines are so clear as to no longer be debatable. Newspaper operators, if they are to survive, must not only make the transition to digital publishing as fast as possible, but they need to figure out how to stream their content onto the emerging mobile platforms that increasingly are capturing the audience of tomorrow.

In this context, last week's announcement by yet another major chain, Cox Newspapers, that it had launched 19 mobile web portals is an encouraging sign that at least some mainstream chains are taking positive action to reverse their industry's precipitous decline.

Cox partnered with Quattro Wireless to provide local news markets in its circulation areas with the new mobile service. Since there isn't time to reinvent the wheel, Cox was smart to pick a partner with a suite of technology, ad operations and ad sales services. Four of Cox's initial 19 sites include the Statesman.com (Austin, Tex.), PalmBeachPost.com (Palm Beach, Fla.), DaytonDailyNews.com (Dayton, Ohio), and WacoTrib.com (Waco, Tex.).

Besides offering visitors access to breaking local and national news, the mobile sites contain search features for locating local restaurants, events, music, and movie listings. Most importantly, from a business perspective, the sites represent a way for advertisers to reach a local, targeted audience on a mobile device.