Google is unquestionably the best at selling advertising on line. They can sell Text, Display, Video at a level that is unparalleled anywhere. True ?
The Newspaper industry obviously sucks at doing the same. Eric Schmidt said so in his editorial in the Wall Street Journal.
So why isn’t Google taking advantage of this unique opportunity ? Why not just offer a specially tailored version of AdSense for Newspapers ? They do what they do, create content. You do what you do, generate content and sell ads ?
Makes sense. Wont happen.
Why ? Because of the Google hypocrisy in play. This argument is no different than the same argument they made with Youtube and the music and film industries. All those movies, tv shows, music videos on Youtube were GREAT PROMOTION. The music and movie industries shouldnt blame Google if they don’t know how to monetize all the billions of views and impressions Google and Youtube provided the content industry. Right ?
But a funny thing happened along the way. Google caved on Youtube. Their message is no longer “if you cant monetize the traffic, tough luck”. Youtube is now sharing revenue with as many music and video content sources as they can. They are even setting up VEVO a satellite music video site built around Universal Music Group content.
There is absolutely zero chance that the end of this discussion is Google saying “You will take our traffic and like it”. Google is posturing. They recognize they have the advantage. Particularly if MicroSoft/Bing do nothing with Newscorp. Its only a question of how they use it.
Is this blind ambition? Or stupidity? Or just didn’t think about the consequences.
http://www.observer.com/2010/media/after-three-months-only-35-subscriptions-newsdays-web-site
Comment by forestvillian -
or maybe they increased or slowed the decrease in number of newspaper subscribers through the offering. Number of subs to the site isnt the sole metric
Comment by markcuban -
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So far, Adsense has been effective for direct marketing purposes, but what about brand advertising? Seems that most brand advertisers want their advertising/sponsorships integrated with quality and relevant content, not just random banner ads or the occasional interstitial ad upon entering a site. Until Google can easily quantify ad effectiveness in a manner other than click rate, I think Adsense will be limited to direct response advertising for weight loss, white teeth, and insurance etc.
Comment by pmk3 -
Don’t tell Google but if the Newspapers knew the real value of a click on their ads, and accordingly charged the advertisers, there would be no problem with journalism moving to the Internet.
bit.ly/7I8gQG
This graph on this site shows the amount CPM’s cost per industry, some a little over $12 and some only $3. I will have to go back and reference this factoid but only 2% of all ads on the Internet are clicked on only once. So if we take the first ten industries giving us ten industry CPMs and say ten advertisers per industry that would give us 100 ads and 100,000 views. Now only 2 of those ads would be clicked on. The total for the ten industries is $76.13 and the total for the 100 ads comes to $761.30 for the 100,000 views meaning each click is then worth $380.65. I could fly to Singapore from Tianjin for that.
Basically the cost per click method is way more valuable than CPM. I don’t know why more people don’t use it!
ADVERTUAL.COM
Comment by advertual -
Google AdSense does work with newspaper publishers – and many more – the challenge is they have yet to solve how to best sell news content and drive advertiser satisfaction. Google’s orientation to keywords works remarkably well in search but falls apart on news content pages. The story about a car crash may trigger ads for auto repair or auto insurance. Problem is that I – as the reader – don’t need either.
Solving for news is radically different and much harder than search. That’s why our own Pulse 360 sponsored links network is built around context and demographics – not keywords. A visitor to a news site is in discovery mode – after all it’s the news. The ad mix should be different than search.
News content has always been a tougher ad sell than endemic programming – think autos to autos, or travel to travel – but there is tremendous opportunity and upside. Our publishers like MSNBC and Gannett Digital continue to work with us to explore new ways to drive an important revenue source through Pulse 360.
We are one part of their monetization strategy which can include display inventory, video content, commerce offers and more.
Google has been trying but they might not have the best answer here. I’d encourage newspaper publishers to talk to all the players in the market before making a choice.
Comment by jaanjanes -
Mark, I am with you and have been following your newspapers critiques with much curiosity and am usually right where you are. I think the argument that you’ve made in the past is that the newspapers and even the local YP publishers have failed to leverage their local presence to their and businesses’ and consumer’s advantage. They are so focused on selling space, they forget about the relevance and the content in the ads. IF they focused on the content and context of businesses ads, the Adsense model would kick in and consumers would be delivered to ALL of their outlets, including online. Google gets what it gets not so much by having a superior sales model as it does by owning Internet search. It’s easy to provide an ad for a plumber or a car dealer, it’s difficult to provide the right plumber or best car dealer for your needs.
Newspapers and YP publishers – especially the BOCs are leaving tons of money on the table trying to keep their old business models afloat. They don’t realize they’ve been effectively out of business for almost ten years and they are just managing the rate of decline, which is rapidly speeding up.
The need for local buying information has never been stronger, they just can’t get out of the own way. Google or someone else will figure this out, but I doubt that Google will ever develop a local sales force on par with newspapers.
Comment by tjm3343 -
Newspapers are dead. They are a relic in today’s world. Only a handful will survive. No one needs them for stock prices, sports scores or national news. The medium moves too slow. Blogs, and social media are the future.
Comment by darryl3 -
I have a better question. If craigslist hurt newspapers so much, why don’t newspapers try to out do craigslist? Have a free classified section on their websites with ads throughout. They can even charge for featured placement on the website and they can advertise the service in the newspapers.
It won’t solve their problems, but it would help.
Comment by Rob Abruzzese -
@Noah because Google knows more about the reader than you and can do a better job targeting his/her interests. That’s what you’re paying for when you go google.
Comment by mateo2 -
I think the reasoning, from the paper’s perspective, would be quite different. Google is great if you don’t have an effective ad selling team or access to people interested in advertising. In exchange for google sourcing and serving, you agree to get paid what google decides to pay you. There is no data about what cut of the amount the advertiser is paying Google keeps for itself. If I’m a major paper with an ad sales team in place, why would I give up an unknown amount of revenue to Google when I can get ads directly and own 100% of the revenue?
I can broker deals myself and then use a serving company to serve & process the ads.
Comment by Noah -
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Why is it that there are so many rich bloggers out there? Obviously they’ve found a way to make news profitable. Maybe instead of trying to sell the news, or beg google to become a charity, content providers should use news articles as loss-leaders to other products.
From MC>who has gotten rich from blogging on their own personal blog ? The only money i know of is made by companies who aggregate bloggers
Comment by mateo2 -
How would “adsense news” differ from normal adsense? Adsense is unobtrusive targeted marketing. It works pretty much regardless of the platform. Whether it can make a news site profitable is another story.
Google already does share revenue with news content providers. Google News licenses news stories from a few sources. Google Fast Flip shares revenue with participating news sites.
The difference between YouTube and Google News is that YouTube is a destination site and Google News is a search engine. There is no need to share revenue unless news content providers can do something for Google. You and Murdoch seem to want a one-sided “you scratch my back, I enjoy it” model. I don’t understand why…
Google just released a new product that makes it even easier to delist from Google News. It makes a news site be able use robots.txt to delist from Google News while not delisting from Google Web Search, or vice versa.
Comment by mateo2 -
Mark,
I’m not sure I understand your argument. AdSense already has massive amounts of ad inventory on news websites. Furthermore, through the Google Content Network advertisers already have the freedom to target newspapers in a variety of ways:
1. They can go the good ‘ol fashioned route and keyword target news content
2. Target all websites within the News vertical (with or without a keyword overlay)
3. Site target specific newspaper websites
4. Target specific placements within those websites
It’s also worth mentioning that Google offers many ad formats for advertisers to utilize. There’s standard text ads, rich media, video ads, and several sizes of banner ads. There are also many tools Google offers to control the distribution and ROI of your ads.
The problem is that not enough advertisers view Content targeting (Ad Sense, Yahoo Content Network, Microsoft Publisher Network, etc.) as a profitable form of advertising. I’ve been in the Search biz for almost eight years and I know this is a pervasive viewpoint. Even on pure Search marketing it’s usually the small and mid-size companies (read: those with tight margins) who are the savviest advertisers, while the major brands are largely out to lunch on how to optimize the medium (mainly due to their heavy reliance on the McCann Ericksons and Omnicons of the world, who are new to digital marketing).
It’s going to be a slow process, but until legit brands learn how to utilize the plethora of tools at their disposal (and their sophistication continues to improve), AdSense will mainly be the realm of spammers and shady direct response advertisers. Once that trend changes I think the pool of money that ends up being split between Google and the Newspaper business will be substantially larger.
Comment by smokesquantity -
Well I am not too sure whether Google can really monetize news websites that well given what we have seen in the past at myspace and youtube.
But yeah, will I use Bing more than google if Bing has better news content: YES
And that must translate to some $$$. So lets hope atleast murdoch atleast tries out the Bing deal.
Comment by frosty -
They have a program for them, it’s called Premier Publisher. Most large newspapers are in the program by invite. They make much higher rates for the traffic they provide.
The overhead the newspapers have is the problem. They need to scale back bigtime. Otherwise they have no shot against Joe blogger.
Comment by mitchb13 -
Mark,
I’m not following your post here. Adsense can and IS being used on news sites. The problem is that the newspapers are not generating sufficient traffic to make the Adsense model work. Their cost of production is too high for Adsense rates.
If you are suggesting to create a separate ad network for newspapers and charge a higher rate to place ads there, then this has been tried repeatedly, to no success. The problem, as I see it, is that the audience of a general news site just isn’t very valuable. Its a consumer audience with about the only unifying factor is location, which isn’t much on the Internet. You can get a much better return on your advertising dollar spending it on Adsense or wherever else. Newspaper audiences, with a few exceptions, are a commodity, and the newspapers just don’t realize how much they are spending to collect a relatively worthless (online advertising-wise at least) asset.
Comment by liquorcricket -