Google 'raising more per user than newspapers'

By not using a cost-per-click (CPC) advertising model, British newspapers are failing to generate millions of pounds in revenue, a new report has warned.

Accountancy giant Ernst & Young has published research which suggests that newspapers could increase their revenues by adopting the sales tactics used by portals such as Google.

It noted that most newspapers which operate online use the cost-per-thousand-impressions model.

However, had they chosen to adopt a CPC strategy - and assuming they would generate the same revenue per unique user as Google - each newspaper website could have made between £120 million and £250 million during 2007, Ernst & Young continued.

Luca Mastrodonato, media and entertainment analyst at the firm, said top newspaper sites were earning between ten and 13 pence per unique visitor per month whereas Google would generate £2.40.

Furthermore, because many users spend considerable time on social networks, "by circulating millions of untargeted adverts publishers may be missing out on opportunities to increase their ad revenue to the advantage of online specialists", the spokesperson added.

Recently, the Internet Advertising Bureau, in conjunction with PriceWaterhouseCoopers, estimated that online advertising revenues during 2007 are likely to have grown by 25 per cent to $21.1 billion (£10.5 billion).