Re-Checking Some Ad Numbers

Sorry it took so long, but we’re finally getting around to analyzing some numbers thrown around on the NY Observer about how much news Web sites earn. To be sure, the main assertion is true: and, and to a lesser extent, make beaucoup bucks and that’s increasing as ad dollars move to the Web.

But the Observer made a few calculations that differ from our guesstimate. They estimated some $12 million per month in Web ad revenue for, for example.

While CNN’s quoted ad rate starts at $9, a lot of Web ads these days are making a lot less. That’s especially true for ads in the general interest news areas that tend to attract the bulk of traffic at a site like CNN.

Try it yourself. In some of the most popular news stories, you’ll see “commodity” ads for things like, mortgage lenders and jobs sites. They don’t pay anywhere near the $9 rate. Click into any U.S. or World news story, typically “bad” news. (“Teen Wounded in School Shooting,” “49 Dead in Moscow Roof Collapse,” or maybe something about hurricane Katrina today.)

Plus, the Observer calculated based on CNN’s total monthly pageviews. But paid ads don’t appear on every page, and it’s relatively unheard of for a site to sell out completely, for both technical and market-driven reasons.

The bottom line: and its competitors do make millions of dollars from ads, and probably millions every month. But probably not $12 million. Further, a lot of the cost structure, as the Observer hints, is carried by TV. So profit becomes a nebulous thing. In other words, how much news could afford to have if the TV side weren’t bankrolling the news coverage?

Believe us, we wish the .coms were cash cows raking in gazillions of dollars. And it probably will happen — the trend is in that direction. It’s just that the figures aren’t quite there yet.