By David B. Wilkerson 
 

The average number of unique visitors to newspaper Web sites grew 10% in the first quarter, according to a Nielsen Online analysis issued Thursday, even as the industry struggles to translate that readership into bigger dollars.

Nielsen's latest study, commissioned by the Newspaper Association of America, showed that newspaper-operated Web sites attracted more than 73.3 million monthly unique users in the quarter ended March 31, compared with 66.4 million in the first three months of 2008.

Newspaper-site visitors generated an average of more than 3.5 billion page views per month in the first quarter of 2009, an increase of 13% over the same three months a year ago. The page-view total is the highest since the NAA started keeping track of the data in 2004.

"In an increasingly challenging media environment, consumers know they can turn to newspapers - whether in hardcopy or digital form - for insightful analysis and comprehensive reporting on the issues that impact their lives day in and day out," John Sturm, chief executive of the NAA, said in a statement.

In making its case to advertisers, the NAA pointed out Thursday that more than 28% of participants in a Scarborough Research study with household income of $100,000 or more have visited a newspaper Web site in the last seven days. About 83% of that group either read a printed newspaper or visited a newspaper's digital equivalent over that span.

The problem for newspapers, especially in the past two years, has been to keep online advertising revenues growing in conjunction with the rising digital audience.

Newspapers do provide important, high-quality information, but it's just impossible right now for them to command premium ad rates in the digital environment, according to Dave Gusse, president of NSA Media, a division of media-buying firm Mediabrands.

"In short, advertisers are not willing to pay a premium for quality content at this point," Gusse said in an email. "Newspapers have long enjoyed competing in a market where there was little or no competition, with most cities having only one major daily newspaper...Online offers hundreds if not thousands of outlets in every market in the country, which makes it a buyer's market."

With print revenue in decline for some time, digital revenue rose sharply during the 2005-07 period, particularly in the classified arena, fueled by a real-estate boom in many parts of the U.S. and solid job growth.

However, as the recession deepened, online revenue growth slowed, stalled, and, as the economy cratered in 2008, moved into negative territory, where it remains. Recent earnings reports from Gannett Co. (GCI) and New York Times Co. (NYT) showed no signs of improvement on the near-term horizon, though New York Times Co. Chief Executive Janet Robinson said there are indications that some advertisers are planning to spend more in the second half of 2009.

Meanwhile, staggering losses in print ad sales, led by 30%-plus declines in classifieds, have forced a number of newspapers to close or to threaten closure. Bankruptcies are also on the rise.

In March, Hearst Corp. opted to shut down print operations of the Seattle Post-Intelligencer, turning it into a Web-only publication with a small editorial staff. A month earlier, it warned that it might shut down the San Francisco Chronicle unless it could find a way to drastically cut operating costs.

Also in February, E.W. Scripps & Co. (SSP) shut down Denver's Rocky Mountain News, while Philadelphia Newspapers LLC and Journal Register Co. (JRCO) filed for Chapter 11 bankruptcy protection.

Last December, Tribune Co., (TRBCQ) publisher of the Chicago Tribune, the Los Angeles Times, the Baltimore Sun and other major dailies, filed for Chapter 11 bankruptcy protection. The parent of the Minneapolis Star-Tribune followed suit a month later.

-David B. Wilkerson; 415-439-6400; AskNewswires@dowjones.com