(Disclaimer: I used to work for a large newspaper in the online advertising department)
The cost to advertisers for running a print ad depends upon a number of things (day-of-week, ad size, section, placement [above/below the fold], etc.), but also the perceived value. One of the numbers papers live and die by are the audited circulation numbers. This is what they then turn around and say to the advertisers: run a full-page in the A section on Sunday, and you'll get your ad in front of ___ (1,000s) of people!
Advertisers believed they were getting value for the money, and all was good. Until the interwebs did two things:
- 1. It allowed the advertisers know how many people actually "saw" their ad ("impressions") and
- 2. how many people clicked their ads
Suddenly, online advertising didn't look like such a great deal at all. And as the print circulation numbers went into their death-spiral, the papers had nowhere to turn. Their revenues from online aren't enough to keep just the online part running, let alone the rest of the deal.
Partially to blame is the calcified mentality that Print Is King and online is "for kids." The other thing is the executives refused to believe their business model was dead, that their news distribution model was dead (who wants to read yesterday's news today?) and their management style (top-down) was dead.
They thought the iPad would save them (that's why newspaper apps require a 'subscription' -- they're still in that mentality).
They look on with envy at Huffington Post (ugh) and Daily Beast (puke) -- two successful online "news" organizations that are doing what they can't: make sufficient money on line.
Basically, they're dead dinos. It will take nothing short of a complete reboot (i.e., fire everyone VP/General Manager or above) to get them going again, maybe.