Journalism Could Be Funded By Advertising… If The News Organizations Gave A Reason To Advertise

from the disconnect dept

Mathew Ingram draws our attention to a thoughtful analysis of the journalism business model question, where it’s noted that even a smaller amount of online advertising could clearly support journalistic endeavors — especially if you take out the costs of printing newspapers and delivery. The problem, according to the analysis, is that advertisers have been way too slow to move from print advertising to online advertising. If there were a way to speed up the process, there would hardly be any complaining at all.

From a numerical point of view, this sounds right, but it may be missing a big piece of the puzzle. Throughout all of these debates, no one has explained why those advertisers should support newspaper websites. Those newspapers have done little to add real value over the past few years, while plenty of other online sites have actively embraced their communities, and done so in a way where advertisers can derive much more value putting ad dollars towards those communities, than the “hands-off” communities created by so many newspaper sites. The problem isn’t that advertisers have been slow to switch to online advertising, but that the newspapers have done a terrible job building sites where it’s worthwhile to advertise, and haven’t done much at all to provide advertising options that are valuable. Instead, they treat it like a backlit version of the newspaper, where they’ll show display ads. Yet, advertisers are quickly learning that display ads are ignored, and they also recognize that newspapers have done little to nothing to cultivate true online communities. So why should they advertise on a newspaper site when they can get much better returns elsewhere?

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Comments on “Journalism Could Be Funded By Advertising… If The News Organizations Gave A Reason To Advertise”

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Ima Fish (profile) says:

The reason ads are not working for online newspapers is because there are too damn many of them.

As I’ve said before, there was a time when the most efficient means of distributing news was for each city to have at least one printing press publishing a newspaper.

However, it makes no sense for there to be thousands of individual news sites floating around the web. If the AP, Reuters, and UPI each had their own sites, and everyone who wanted to read those sites had to choose between those three. There would be much more concentrated traffic which would lead to much more advertising money.

But when you spread out those three news sources to thousands of different sites all over the net, it’s not surprising that individual viewership declines and overall ad revenue decrease.

Janet Altman says:

The truth of the matter is that conventional advertising is pretty much dead in the water. We’ve moved on and have more of tendency towards social networking these days and getting connected to our direct demographic market, not buck shotting the whole crowd.

And plus, there are digital security issues. One has to be very sure of who they do business with online. And that takes a relationship of trust.

Fortunatly, there are places that one can self-educate with online about that matter. For instance, that has all the up do date information and progresseive thought for users.

Offer a site that is bullet proof and combine social networking aspects into it and I guarantee you will see a flocking.

Dave says:

Ignoring ads

Ads are ignored in all forms of public media. How many bus advertising signs do you remember? How many TV commercials do you tune out in favor of a minute’s worth of conversation? How often do you punch around the dial when a block of commercials comes on your radio station?

The issue is NOT that advertising is ignored. Much of it is.

So is much of the news content on a website.

Readers come looking for relevance and ignore that which is not. But — and this is truer for hyperlocal news sites than it is for national sites — ads can be just as relevant as the news content.

The Newspaper Next project (way too touchy-feely for my taste but they make a good point here) identifies “things that need to be done” as the basis for a useful web community. “Help me find the right things to buy” is one such thing. And on an average news day, when the community is not exploding in flames, it’s about as important as “help me know what happened in the last 24 hours”.

The issue might be not that ads are ignored, but that the form — the print display ad, ported over to the web — isn’t compelling enough. People come to websites looking for text — information. A brief content-driven ad that is mostly text is far more likely to be read, in my view, and is therefore more likely to be useful. The public radio underwriting model of a brief explanation of what the product does instead of a zippy slogan is applicable here.

And it’s absolutely true that news websites lag far behind internet pure plays in creating sites that engage readers rather than just push content into their faces. (Love the “backlit newspaper” analogy and I plan to use it!)

Imagine if the New York Times had invented Facebook and Twitter and Flickr and rolled all of it into

Crabby (profile) says:

Re: Ignoring ads

Dave, you point out some valid issues with advertising.

Another point I’d like to raise is that when I go to a newspaper website, it’s to read things. I don’t like flashing banner ads, moving pictures, and horrid wrinkle-face crones morphing into Botox beauties in front of my face. I will read ads that interest me; but wiggly jiggly ads that annoy me get censored when I resize my browser window so I can ignore them. And yes, I’ve put Post-it notes on my monitor to cover up some of the more obnoxious offenders!

Anonymous Coward says:

Just an idea, but what if a newspaper were to create a collapsible frame (default collapsed because no one likes annoying frames) on the right side of the screen with the classifieds? You could take it a step further by adding in an option to enter a zip code so that you can check the classifieds from other areas.

The big news organizations gain more value by having local content and the local papers gain national exposure for their classifieds. you could even add in a search function to add even more value.

As I write I’ve realized that I’m suggesting a upscale version of Craigslist, just with out things like tranny hookers.

Andrew D. Todd (user link) says:

A New Kind of Advertising.

Mathew Ingram is correct as far as he goes in stressing that the problems of newspapers lie in advertising. However, he sees advertising in somewhat narrow terms, not in the larger sense of Marketing. Marketing includes advertising, but it also includes other things, such as product development, retail distribution, etc. In the largest sense of the word, marketing is the core of business management.

Some kinds of businesses advertise a lot more than other kinds of businesses. A lot of the traditional businesses which have bought advertising are in economic decline. Consulting a table of conventional advertising expenditures (ie. nonclassified, sold through an advertising agency) from 1999, I found that the automobile industry accounted for about a third of such advertising expenditure, and that adding in other durable goods, such as computers and electronics brought the figure up to about half. General retailers accounted for another quarter of the total advertising expenditure. There was an interesting trend that discount stores were spending disproportionate amounts of money on television advertising. Classified advertisements were to some degree pumped up by the real estate boom. Conventional types of advertising are designed around the old markets they supported.

The money saved by falling manufacturing costs is being diverted to services of one kind or another. The successful marketeer will have to learn to work with new kinds of clients, with different needs. It is quite possible that a conventional newspaper would simply not be able to adapt to the new and different conditions.

Hypothetical Assignment: Ms Jenny Smith would like to open a day-care center, and she has secured the agreement of the rector of the local Unitarian church to use the church basement for that purpose. Ms. Smith does not have a MBA, or any appreciable business training, has never been a shopkeeper or anything like that. Let us assume that she majored in English in college (with so-so grades); took a lot of nonmajor “service courses” in Ballet (which she enjoyed rather more, but by the age of eighteen, it is much too late to start a professional dancing career); wound up working at student wages in the university day-care center; and afterwards went back to school for a masters in Early Childhood Education, and duly passed the appropriate state certification. She needs to locate a relatively small number of parents willing to pay several thousand dollars a year for a multi-year period, and to provide “friends and family” references over the next twenty years. Discuss.

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