Before going any further, it must be noted that the value of an online reader for newspapers has been determined to be currently far less than that of a print reader by new media and newspaper man Vin Crosbie. (see previous posting)  But at the same time, Crosbie says he's "working to change that".

And with more people moving online and younger generations growing up connected to the Web, Internet news users are bound to hold more and more importance for newspapers and, just as notably, advertisers.

Advertising: Circulation figures are meant for advertisers who need to know how many eyes are scanning the pages promoting their product. Newspapers, despite declining circulations, have managed to maintain advertising revenues principally by raising their print ad rates.

But it looks like that's about to change for the worse. 

Deutsche Bank Securities media analyst Paul Ginocchio says on Poynter that "Advertisers do think in CPM (cost per thousand). If circulation is down 3 percent or more, that probably means no rate increase. So, yes, this (2006) could be the year that ad revenues go negative."

Weathered newspaper editor and writer Tim Porter says that with "Circulation down, advertising (is) sure to follow." He uses the example of the film industry which is waking up to the fact that the demographic it is most popular with (12-39 year-olds) is also the one with which newspapers are the least popular. 

"To put the importance of advertising in newsroom terms, consider that the price of a full-page movie ad in the New York or Los Angeles Times is about $100,000 (says L.A. Weekly) - about the annual cost of a reporter. The math isn't good. Lose an ad, lose a reporter." 

Talking with a communications professor last week, I was reminded that newspapers continue to be the best medium for sweeping national advertising campaigns. This may be true. 

But who wants such broad advertising when it's more cost efficient and effective to get specific through targeted Internet advertising? 

Advertisers no longer dictate to consumers what they need. People know what they need. They also know where and how to get it. All they want to find out is who is providing the best deal.

Why circulation must be redefined: In a similar manner, newspapers can no longer dictate the news they think consumers need to read. People know what they want to read. They also know they can find just about everything they're looking for on the Internet without having to buy a newspaper, 90% of whose content probably doesn't interest them.

They now expect that their news will include features such as explanatory infographics, audio and video which enhance a story. And they expect to be able to react and interact with columnists and fellow readers about topics of personal interest.

Print: The printed word is not going to die. But print newspapers' idea of circulation will change.

"Newsosaur" Alan D. Mutter thinks that newspapers should "right-size" their circulation, "paring their circulation rolls to concentrate circulation on the demographics and geographies that advertisers want to reach," which "will merit premium advertising rates, thus protecting and potentially enhancing the top line.

Executive editor of The Miami Herald, Tom Fiedler, quoted at Editor & Publisher expects that "Newspapers will become supplemental reading for a very elite audience," and that online editions "will be where the popular press lives."

Online: Newspapers that succeed online will have to:

1. diversify their content into niche publications
   
2. provide quality coverage and fresh articles in an innovative multimedia packages
   
3. incite conversations among their audience

When you think about it, these three characteristics aren't much different from what newspapers have been doing forever: many print topic-specific inserts and sections; all strive to provide the most well-reported, breaking news and analysis; and their readers share the printed paper and discuss the news among themselves.

But the manner in which these things happen changes dramatically on the Web, and with them, the idea of circulation.

Most readers click only a couple of articles on a newspaper website and maybe watch a photo slideshow and video. Many are also increasingly avoiding the home page through RSS and hyperlinking from other sites.

Such reading habits could evoke the Newspaper Association of America's long time notion that readership, not circulation, is what really matters.

But even the idea of "readers" is rendered obsolete on the Web because many, especially young people, create their own content and interact online. Media consultant Steve Yelvington says, "Now is the time to focus your Internet content strategy on participation and online community development, and to work to change your newsroom culture to embrace interaction."

In these respects, the term "circulation" does not even apply to newspapers' online sites. It also changes the relationship that newspapers have with advertisers.

Chances are, as print circulations decline and Internet use rises, newspapers will maintain some of their large national advertisers to include in their print versions and maybe on their website homepages. But as targeted online advertising evolves, it will most likely be left up to automated services based on key words and topic relevancy. 

There may, however, be an alternative model.

The online conversation as circulation:  Apart from improving democracy, the conversation that newspapers initiate with their reporting could turn out to be the online substitue of print circulation.

It has become a widespread practice for bloggers to link to newspaper articles and their peers commenting on the articles, which effectively increases newspaper "circulation." Newspapers should likewise list trackbacks at the end of their articles for everyone who links to them.The article then acts as a hub.

What would be interesting for advertisers is if there were a system that allowed their ad not only to be specified to content, but to follow the trackbacks from the hub article to pages of bloggers. Advertisers could pay a premium price to be seen at the hub. It would then be understood by bloggers that linking to a Mainstream Media article, which is mostly free content, meant also allowing the article's advertising to be displayed on their site when linked to by the trackback; a sort of indirect, non-monetary payment for having read the article that could in a way make up for paid circulation loss.

The advertiser would then also pay additional small amounts for every time a Web surfer linked to a trackback from the main article's page. A system may even be worked out where newspapers share some of the revenue with bloggers.

Additionally, newspapers could hold online conversations with journalists, editors or invited experts sponsored by an advertiser or two. That way, the conversation remains open, interesting and free for the user, but the newspaper and invited guest will still make some money.

These are just a couple of ideas. New business models concerning online "circulation" will undoubtedly develop with time and experimentation so that quality journalism continues to have its necessary financial base.

In the meantime, the Audit Bureau of Circulations should find a way of including newspaper websites in circulation figures so that advertisers have more concrete figures on which to base their online advertising. This will only help newspapers as their Internet projects evolve.  

Source: Corante (Vin Crosbie), Tim Porter, Poynter, Steve Yelvington, Editor & Publisher, Newsosaur