A survey of over three hundred members of Britain's Periodical Publishers Association shows that more than two in three failed to hit their online profit targets during the past twelve months.

The PPA study, carried out by McKinsey & Company, disclosed publishers' more cautious approach to the internet in the wake of a difficult year. Many had been compelled by disappointing revenues to re-evaluate their online strategies.

The study also noted publishers’ acceptance that separate editorial and advertising departments for print and online titles were unviable – over 80% of the survey sample are now merging on-and off-line activities. Says McKinsey director Nick Lovegrove: "Almost completely, we are seeing the convergence of online and offline.”

According to Lovegrove, the "dot bomb effect" has hit content owners harder than most, with profits-per-site averaging minus 210%. But despite disenchantment with the technology sector and a question-mark over the online ad market, a third of publishers claim to have at least one profitable website, while many mid-size firms believe there are opportunities for expansion and aim to invest more in 2001 than last year.

"Magazine owners are not abandoning the internet, but there is an awful lot more realism," PPA chairman Kevin Hand (chief executive of Emap) will today tell the organisation’s annual conference.

News source: Financial Times