How online publishers can stop ad revenue from crumbling


A day after the Associated Press practically accused Google of stealing its content, Google CEO Eric Schmidt stepped before the Newspaper Association of America to explain his vision for the future of journalism. Yes, advertising will still work, Eric predicted, but the internet will continue to break down some ad models that rely on scarcity, because on the internet everything is ubiquitous.

What, oh what, can online publishers do in this cruel new universe where marketers can target customers online without paying high prices to web publishers? Why, get clever. Here are four ways publishers can defend their ad pricing.

1. Decommoditize your readers. Yes, marketers will use technological tricks such as retargeting to serve ads to publishers’ readers without paying the publishers themselves. But publishers who add additional data about their readers could continue to charge high CPMs. Surveys, sign-up questionnaires, click-streams within a publishing network can all pinpoint audiences that are prime targets for marketers. Surely there is information inside the publishers’ walls that can add value to justify higher ad rates.

2. Contextualize your content. Bloomberg.com, for example, offers a stellar closed advertising system in which marketers can target banner ads to certain keywords in ad copy, or within site searches. Brands are willing to pay for context that makes sense.

3. Band together. We received an idea from the vice president of a national news magazine that certain online publishers could form a group to resist behavioral targeting, or at least compare data sets among their readers to add unique value to marketers. The groups could align like-minded news organizations, industry verticals, or even customer verticals. Imagine, for example, a series of publications that encouraged retargeting only within their content networks — perhaps even allowing noncompetitive advertisers to target each others’ similar audiences. An insurance company wanting to serve banners to affluent men could chase respondents to an expensive men’s watch brand, and vice versa.

4. Forecast results. Come on guys. We research media on behalf of marketing clients, and every time we ask an online publisher for forecasts on basic performance measures — click-through rates, conversions, traffic, sales — we get a dazed, hurt look. “Results? Um, we don’t discuss results…” Until your salespeople can tell us what advertisers will get by advertising on your web sites, we’ll be tempted to put the money elsewhere.

Some didn’t like our recent BusinessWeek column suggesting ad rates will plummet for marquee web sites. We say, don’t ignore the future. Dig deeper. Data cuts both ways, and if you play it right, you can charge for it. Hat tip to Miconian for inspiration.

Photo: Amanky

One thought on “How online publishers can stop ad revenue from crumbling

  1. Good post Ben, and thanks for the link.

    Epicurious.com is a good example of item #2, as they allow targeting by recipe search keyword, and even by metadata related to the search results.

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