The impact of web traffic on revenues of traditional newspaper publishers 1 Introduction Google has commissioned this study to review how newspaper publishing has changed in the internet era, and how business and revenue models, as well as consumption patterns, have developed in recent years in Europe (Section 2 and Section 3). This study then estimates the value of the web traffic to newspaper publishers in France, Germany, Spain, and the UK (Section 4). To quantify the impact of web traffic on publishers’ revenues, this study developed an econometric model that estimates the contribution of different drivers of a publisher’s online and offline revenues, including circulation statistics to capture the contribution to print revenues; website traffic statistics and existence of a paywall to account for online revenues; and advertising spending of the publisher and GDP, which are general business and macroeconomic drivers of revenues. Compared to a traditional “market sizing” approach, econometric analysis isolates the impacts of different revenue drivers in order to more accurately attribute their contribution to the publishers’ bottom lines. For example, it allows one to assess the differential impacts of print and online readership, or provide data-driven insights into the value of the visitors. The econometric analysis is based on a sample of 66 newspaper publishers with both online and offline publications across France, Germany, Spain, and the UK, and covers the period between 2011 and 2013. Disaggregated data for online and offline segments were not available on a consistent basis across countries. The availability of separated online revenues would have allowed for the assessment of the impact of total web traffic on that segment only; however, the aggregated data do not impact the robustness of the results. In addition, considering the total revenues allows the analysis to examine possible cross-segment effects of website traffic or circulation. The analysis has looked at the impact of total web traffic, defined as traffic driven to news sites directly through a publisher webpage (“direct traffic”) and traffic driven by third party sources which include news aggregators, search engines, social networks and blogs (“referral traffic”), on news publisher’s total revenues. It further assesses the impact that referral traffic alone has on their revenues. A methodology appendix provides more details on the methodology, on the data employed, and on the results obtained in the impact estimation. Deloitte LLP. 5