Ethan Zuckerman’s online home, since 2003

Is ad-supported journalism viable in a pay-for-performance age?

While a great deal of what I write here is underinformed speculation, this piece is unusually speculative and underinformed. It’s possible that I’m flat out wrong about the idea I’m developing here. I’m putting it forward with the hopes that folks will react with examples and data that help prove or disprove this theory. Being told that I’m unambigiously wrong with good data demonstrating my error would be very helpful. Simply being told I’m wrong – less helpful.

A friend works for the local newspaper, the Berkshire Eagle, editing a weekly arts and calendar section. I visited her at her office the other day and surprised – staggered, actually – at the size of the office. While the paper relies on dozens of unpaid correspondents and pay-per-piece freelance contributors, it also has eight editors, several reporters, professional compositors/paginators, and departments for administration, circulation and ad sales. My friend guessed that, with everyone in the office, day and night shift, there were at least sixty full-time employees responsible for producing, distributing and monetizing the paper.

I don’t mean to suggest that this is excessive, or that the newspaper’s (legendarily tightfisted) management is running anything other than a lean, efficient operation. While the office is responsible primarily for the 26,000 circulation daily newspaper (not bad for a paper that serves a county of 135,000 people), it also publishes a 6,000 circulation paper focused on the northern Berkshires and southern Vermont. And the mighty four-color presses in the basement produce an additional Vermont paper, helping defray the costs of production. (Given the parent company’s financial difficulties, and the downgrade of their bonds deep, deep into junk status, any efficiencies are surely appreciated.)

What I was amazed by was how much advertising and subscription revenue the paper must generate to support dozens of full-time jobs. I haven’t been able to find revenue numbers specifically for the paper, but a back of the hand calculation suggests that it must be generating significantly more than $2 million a year in subscription and ad sales to support salaries and production costs. It’s quite possible that subscription is what keeps the paper alive – at a retail price of $176.88 for daily home delivery, subscriptions could generate a couple million a year. (I assume not everyone is paying retail price, which means that some significant part of the paper’s revenue picture comes from advertising.) I find the advertising side of the business harder to comprehend, however.

I help run a fairly popular online citizen media site, which is visited by roughly 300,000 visitors a month. We’re doing a great deal of strategic planning at the moment, looking for ways to broaden our revenue base from foundation support and corporate parterships to include online advertising revenue. As we run the models, the numbers aren’t especially pretty. Suffice it to say, very few of our models project us making a million dollars a year in online ad sales. Fortunately, we’ve got less than half a dozen full-time employees as well as an army of volunteers and contractors, so we don’t need nearly as much revenue to support our work as our local newspaper does.

The difference in ad pricing between online and print advertising is something I’m finding mind-boggling. Advertising inserts in the Berkshire Eagle are priced at a base rate of $45 per thousand customers for two print pages, targeted by zipcode. Those prices don’t include production costs – the advertiser is responsible producing the inserts and delivering them to the production facility. The cost covers the insertion of the ad into the appropriate papers and their delivery.

This model of advertising pricing – called CPM (cost per thousand) – is what early internet companies tried to use to monetize content. In the early days of Tripod, we called our friends who worked for glossy magazines, found out what they were charging for ads in CPM terms – usually $20-$60 – and asked our advertisers to pay at least as much. Our logic? Since you can’t click on a magazine ad, they simply build brand, while ours build brand and can lead to sales.

We were able to earn $45 CPMs for a little while, until advertisers started to question our logic. In some cases, they saw other sites offering much cheaper rates; in other cases, they questioned whether the ads really were leading directly to sales, as they could track who’d clicked on the ads. CPM rates fell across the industry. Some sites continue to make pretty good money on a CPM basis, especially sites with highly targetted content likely to appeal to a certain type of customers. Federated Media, an advertising network that focuses on technology content, offers CPM ads from $3 to $26. Most content providers don’t see rates that high. According to Technorati’s 2008 state of the blogosphere, US bloggers who accept advertising saw a mean CPM of $4.20, but a median of $1.20 – that implies a small number of bloggers earning high CPMs for highly targetted content, and a lot of folks selling impressions at $1 per thousand.

The real problem for web publishers like Tripod wasn’t the fall in CPM rates, but the switch to “performance-based advertising”. As advertisers started to wonder whether ads were really leading towards sales, they started to pay not on an impression basis, but on a click basis. This makes much better sense for an advertiser – a click is a sales lead, and a marketer can decide she wants 500 new leads a month and will pay for 500 clicks. The problem with pay per click from the content provider’s point of view is that clicks depend a great deal on the creativity of the ad. A truly great ad might get clicked 2-3% of the time, while a lame one could get less than 1% clickthrough, eating valuable ad inventory.

Google and Overture both figured out how to navigate the pay-per-performance world, setting up ad auctions where advertisers could bid to place their ads on search results pages, paying per click. Ads that were rarely clicked were placed lower on the results page, resulting in fewer clicks and incenting the advertisers to improve their copy. While highly targeted ads (an ad for roofing services in Pittsfield, MA) might be worth several dollars a click, most ads sell for a dollar or less a click, often much less. An ad that sells for a buck a click and gets 1% clickthrough is functionally a $10 CPM ad, which suggests that lots of ad inventory (the nickel-a-click stuff) selling at sub-$1 CPM.

Pay per performance seems to be the way of the future. JP Morgan analyst Imran Khan sees performance ad revenue growing more quickly than impression based and representing roughly two-thirds of the online market. CPM-based advertising is apparently less appealing to advertisers and may fall in price.

That’s why $45 CPM seemed pretty high to me. Not that there isn’t ad inventory that might be worth the price. The New York Times has recently started selling ads on its front page for $75,000 on weekdays, a $75 CPM, given the paper’s print circulation of slightly over a million. The front page of the national paper of record is a pretty good way to gain some attention for your product or service. But that’s not what we’re talking about – we’re talking about the sort of inserts supermarkets put into your newspaper to promote a 3 for 1 sale on nectarines. Those tend to catch my attention only when I’m looking for kindling. It’s hard to believe that they are, reader for reader, worth 60% of what a front page ad on the New York Times is worth. Or that they’re worth paying $4.50 a click, which is what would yield a $45 CPM in a pay per click environment, assuming 1% clickthrough.

Perhaps these prices aren’t entirely rational.

Scott Karp wrote a lovely piece for Publishing 2.0 about 18 months ago called “Newspaper Online vs. Print Ad Revenue: The 10% Problem“. The title refers to Karp’s astute observation that “print circulation is about 10% of total audience reach, while online advertising revenue is 10% of total ad revenue — the economics are nearly the perfect inverse of what they should be.” In other words, online readers of the Times were worth roughly 1/100th of what offline readers were in advertising terms. (They’re worth even more inasmuch as most are paying subscription fees.) There’s all sorts of ways to make these numbers make more sense – circulation bureas estimate that issues of the Times are read by multiple people, which means each of those print ads viewed multiple times. But the fact remains – online ads sell for much, much less than offline ones.

The comment thread associated with the piece is helpful, and includes a number of readers trying to help explain the disparity. Online advertising isn’t especially mature yet, one suggests, and therefore significantly cheaper. The ability to target specific geographic markets makes newspapers more useful for non-virtual retailers. (Hmm. Given that the Times has been losing local audience and becoming a national paper over the past decade, this one is harder to swallow.)

A comment from Joshua Jeffryes rings true to me:

When I worked in Advertising the ineffectiveness of advertising was hardly a secret. But customers couldn’t measure the effectiveness of ads. So they paid and continue to pay ridiculous prices for them.

Online ads, on the other hand, are measurable. They work just as well, if not better, than print, television, etc., the difference is that for the first time ad customers know exactly how ineffective they are.

Basically, there are two ways to explain the disparity in online and offline ad cost. One is to argue that paper ads are, for some combination of reasons, ten to a hundred times more effective than online ads. The other is to argue that advertisers are better at pricing online ads than offline ads.

In the days before the internet, advertisers made choices between billboards, radio and TV ads, the phone book and newspapers. All these ads work on an impression basis – it’s very difficult to measure the effectiveness except via anecdote (I put up lots of ads and my sales increased) or by asking customers to bring the ad to you as a coupon. In comparison to the sort of detailed information on performance you can get from Google Ads, measuring the performance of newspaper advertising seems impossibly inexact.

Let’s posit for a moment that the price of newspaper ads may have more to do with how much money a newspaper needs to earn to keep the presses running, rather than how effective they are at producing new business for advertisers. It certainly may make sense that the Eagle has to sell inserts for a CPM of $45 to continue producing the paper without suffering large losses. Why are advertisers willing to pay these prices without strong evidence that they give an effective yield? They may not have much choice – other options in a community where many customers are offline are also pay per impression and may be similarly expensive. The worry the local Price Chopper has is that if they don’t produce an insert and the Big Y does, perhaps they lose their share of the local customerbase. Without good methods to track the effectiveness of the print ads, the Eagle’s ability to sell ads may have more to do with comparable ad rates in other local newspapers or radio stations.

So what happens if the market rationalizes, if pay per performance advertising becomes a viable way to reach the majority of consumers who consume a particular publication? This may be what’s happening to papers like the New York Times. As print circulation decreases and online readership increases, it seems like the newspaper could still afford to produce high quality journalism. But if online ads sell primarily on the basis of their effectiveness, and print ads sell for other historical, competitive and less rational factors, revenue could fall sharply as readership increases. There’s certainly no shortage of speculation that the Times, like almost all newspapers, may be in trouble (though the Times’s response to a particularly gloomy Atlantic article is a masterpiece.)

Whatever objections I have to the Berkshire Eagle’s charming habit of making yesterday’s weather the lead story in the day’s paper, I don’t want it to go out of business. And I really don’t want the New York Times to go under. But I’m starting to worry about the irrationality of the model that’s supported journalism for the past several decades.

I remember a conversation before an academic conference in 2006 with a New York Times reporter. In typical conference fashion, we’d been paired up, blogger and “real journalist” to discuss the future of journalism. Talking informally the night before, the reporter said, “I don’t really understand how it is that Bloomingdales underwrites our Africa coverage, but as long as they’re doing it, I’m not complaining.”

I’m not either. But I am worried. What happens when Bloomingdales wises up and concludes that they’d save a small fortune by advertising online, targetting only to readers who actually live near their stores?

Here’s my concern. If I’m right and print advertising costs are fundamentally irrational, then it’s possible that the way we’ve built media in the United States can’t survive a transition to a more rational market. That would be bad. Newspapers aren’t just businesses – they serve a critical function in a democratic society, informing citizens so they can make intelligent voting decisions, lobby their elected representatives on issues of their concern and hold political and business powers accountable.

What if the idea that commercial enterprises should carry out the public interest function of journalism is built on a fundamentally broken model? What if advertising worked pretty well as a way of subsidizing public interest journalism only so long as advertisers didn’t understand the effectiveness of their ads? Putting aside all the other reasons why commercial journalism may be flawed – the tendency of newspapers and television channels to seek readers by publishing “edutainment” rather than investigation, the worry that papers will hesitate to publish stories that might embarrass advertisers – what if ad supported journalism is only viable in a world where we radically overvalue the worth of ads?

That would be a bad thing. Seth Godin argues that there may be lots we’re willing to either throw away from the local newspaper or have covered by new online providers, but we need to ensure that there’s still a way to engage in serious investigative journalism: “I worry about the quality of a democracy when the the state government or the local government can do what it wants without intelligent coverage. I worry about the abuse of power when the only thing a corrupt official needs to worry about is the TV news. I worry about the quality of legislation when there isn’t a passionate, unbiased reporter there to explain it to us.”

Godin believes that we’ll find another way to provide for this coverage. “Maybe it’s a public good, a non profit function. Maybe a philanthropist puts up money for prizes. Maybe the Woodward and Bernstein of 2017 make so much money from breaking a story that it leads to a whole new generation of journalists.”

Maybe. I wouldn’t count on it. My friends who are engaged in online projects to conduct “difficult journalism” – the sort of investigative reporting Godin is talking about, as well as international coverage, are worried about revenue models. We get support from the foundation community, but foundations can’t provide support forever, and all would like to know when we’re going to be able to work without their support.

We’re all looking at models that include some advertising support. What if the model that brough us Upton Sinclair and Woodward and Bernstein – impression advertising – can’t bring us into the future because it’s based on uneven distribution of information and bad math?


Friend and colleague Doc Searls has an important post that I wish I’d read before writing this. He sees a similar set of problems with the rise of pay for performance advertising, and argues that systems where buyers find sellers – which he calls VRM (vendor relationship management) systems – will be an important force for supporting journalism in the future. Worth reading.

22 Responses to “Is ad-supported journalism viable in a pay-for-performance age?”

  1. Ivan says:

    Good stuff e. Would add a couple of elements to the mix:

    -actual cost of printing advertising on paper. Newspaper companies say that newspapers typically receive 90% of revenue from print. I recall reading somewhere that the physical infrastructure of running a print operation also averages around 90% of fixed costs. Here’s a link to a story for the first half, about the CSM:

    http://www.reuters.com/article/domesticNews/idUSTRE49R6OY20081028

    But even if it isn’t 90%, it’s still a significant cost. Again we’re talking capital or fixed costs (printing plants, delivery trucks, warehousing, etc), and probably some significant percentage of operational costs as well – the people and supplies needed to print. And when revenues decline, those fixed costs remain; it’s hard to incrementally shrink capital costs.

    Surely it’s the case that the baseline costs of producing paper adds have a similar cost structure. That will drive up the CPM. How much of that is the
    differential, v. the old Madison Ave saw – we reach 50% of our audience with advertising, we just don’t know which 50%?

    -the scarcity cost. Given the limits to publication space, (monopoly), what’s the price for gaining access to a scarce resource, or what’s the fixed cost for printing supplementals.

  2. Thomas says:

    In addition to Jeffryes’ comment, what happens when editors begin to see their traffic in terms of ad revenue by article–i.e., articles on X topic get many more clicks than articles on Y topic. On paper, you can’t evaluate these things separately, but online you can. What impact does that have on the role of journalism in the wider culture? More on that here.

  3. Terry says:

    Ad-supported journalism always produces absolutely shit journalism. Only orgs which have a steady source of income, with no strings attached, can produce worthwhile journalism – BBC, al-Jazeera, CSM, a few bloggers.

  4. Ethan says:

    It’s a really good point, Thomas. Sites like Huffington Post are profoundly aware of what stories are getting a lot of attention, and I suspect this governs their focus over time. Another place where access to data is likely to change behavior… and maybe not all for the better.

  5. It’s true, that the current state of affairs means the online media we get can be produced only at 10% of the cost base of what we have been used to. No more investigative journalism, no more intelligent coverage.

    Part of the problem lies in trying to finance the online media purely by advertising:

    http://kaljundi.com/2009/01/15/this-is-just-the-beginning/

    The problems and effects are not just in online vs traditional media, they are also in free vs paid online services.

  6. Ethan,

    Thanks for your thoughts.

    I have been trying to promote a solution where newspapers could offer value-add for paying readers… but beyond Bill Densmore, this gets little interest… :-(

    http://civilities.net/PaperTrust

  7. PJ Brunet says:

    I was blown away too when I visited a local paper. Two security guards at the door doing nothing, a classified ad guy doing nothing, huge leather-furnished lobby with gorgeous interns frolicking back from lunch in high-heels. I’m thinking to myself, this four-floor palace is on priceless waterfront property, a few blocks from all the downtown nightlife, entertainment, restaurants, and will soon fall to bloggers working from home serving files from the cloud.

    Unbelievable, they wanted to hire me to copy/paste writers’ stories from email to a CMS! I was flabbergasted, you’re telling me these newspaper writers can figure out an email program but not a CMS?

    Regardless, I have seen that report too, I totally disagree about “performance” advertising. It’s not true, we are going in the opposite direction. There is no shortage of advertisers, webmasters know this. Google alone has about 1.5 million advertisers buying traffic. There is a shortage of traffic and attention, it is the nature of this business, and every web guru should know it by now. You ask the big web publishers if they care xyz advertiser makes sales, that is not a concern because there is a waiting list of advertisers ready to pay for that ad spot.

    It’s not my fault your product isn’t interesting, it’s not my fault you don’t make sales. But you’ll pay me anyway because you don’t even know yet if you’re going to make sales. In fact, most of the time I don’t even know who is advertising on my pages, because everything is geo-targeted and running on a sophisticated algorithm, the ads I see aren’t necessarily the same ads that you see. You’re not paying me for sales, you’re paying for impressions and clicks. It’s my job to get the traffic. Selling your product is your problem.

  8. Ethan,
    [full disclosure: I am a former publisher of the Eagle, now retired from newspapering but blogging and doing media consulting]
    Regarding the non-profit approach: it works for public radio and TV; it could work for an online news site—Minnpost.com, StLBeacon.org, and VoiceofSandDiego.org are startups in that field. But it’s hard to see a non-profit model working at the scale of the Berkshire Eagle, North Adams Transcript or Bennington Banner. Local for-profit online news operations will be the only options for local small-town journalism if/when newspapers are no longer viable in places like that.

    You’ve put your finger on the last remaining monopoly pricing product that newspapers have: distribution of preprints for supermarkets, big box stores and other retailers. These advertisers still have no better way to get the word out about their many weekly sales and specials; newspapers are the best, cheapest and most effective distribution channel they have, even at those rates. But as the demographics of newspaper readership change (the average reader is now around 60; penetration at youngest age groups is nil) newspapers are in danger of losing that pricing power, and of losing that business altogether. Meanswhile, if most newspapers measured which days of the week are still profitable, they’d conclude that Mondays, Tuesdays, Fridays, Saturdays and perhaps other days without much advertising or preprints, they are operating in the red and have little likelihood of becoming profitable again in the future. Before they get to the point where they lose money every day, they need to reinvent the model. This means, in my opinion, moving to a truly online-first news publishing operation (few papers can say they’re there right now—most still organize their newsroom flow around the nightly print deadline and publish online as a secondary chore), combined with a once-or-twice weekly print publication. Most of the week’s print advertising could be funneled into a weekend edition (distributed Friday and sold all weekend) full of features, longer “enterprise” journalism, analysis, guides to all other media (movies, TV, internet, travel, books, all that Sunday paper stuff). This would be a profitable model today in any market from metro NY to a rurul New England market. More importantly, it would recapture attention from younger readers now absent from newspaper readership.

  9. John Powers says:

    Reading this I thought about John Hagel’s unbundling of three types of businesses: IMB, CRB and PIC. I hadn’t heard of VRC’s before but that’s the missing piece especial for regional newspapers.

    The Achillies heal may not be so much the collapse of the current revenue model, but the debt taken on presuming the model would continue.

    Regional asset organizations it seems take care to insure that as regional newspapers fail that the production infrastructure doesn’t get carted away.

  10. Ethan:

    I don’t find this speculative at all — it’s spot on. And you’ve got an expert weighing in as Martin Langeveld (newsafternewspapers.blogspot.com) …
    A couple of points:

    – The real “reporting” staffing at The Berkshire Eagle is probably more like about 10 people. Everyone else is engaged in processing of one sort or another. Thirty years ago, the “real reporting” number was probably more like 25 or 30.

    – What would it take to support 10 feet-on-the-street reporters in Berkshire County at, say, $50K a year including benefits? And they how can you fund that? At current web CPMs, probably not with traditional undifferentiated advertising alone.

    – That’s why the Information Valet Project at the University of Missouri’s Donald W. Reynolds Journalism Institute is looking into the idea of creating a shared-user network for the news and information-service industry. It would allow users to voluntarily profile themselves, give them full control of their demographics and privacy, then allow them to selectively share information about themselves with websites in the network. They could be rewarded with special offers from advertisers and their home base infovalet (such as The Berkshire Eagle) would receive a cut of the reward. At the same time, the system could make it easy for you or other former print subscribers to vote for stories you like by subscription or click. See:
    http://www.informationvalet.org and also (coming up next Wednesday):
    http://newshare.com/wiki/index.php/RJI-Collaboratory

    – bill densmore

  11. Dave Chase says:

    Ethan – Very thought provoking. I continue to believe the core issue is that (at least on the local level) that local publishers are doing a miserable job of quantifying the value of their audience to their advertiser community and then have a flawed sales model to reach them. This post on the site David Cohn and Jeff Jarvis put together for the News Innovation Summits spells out what I believe are the Five Fatal Flaws killing local Internet plays. http://newsinnovation.com/2009/01/03/five-fatal-flaws-that-are-killing-local-internet-plays/

    If/when the newspapers find their print models unworkable, necessity will drive them to seek an alternative model with greater urgency than they have.

  12. Kate says:

    Some of the comments about the effect of advertising on coverage have made me aware — in my years in journalism, ad sales have never determined what I write or how I write it, or what stories I assign and run.

    Ad sales have determined how many pages I have in a section and nothing else.

    Even in the case of special sections, advertising allows us to run content on a specific topic, but I choose the topic and arrange the content with no reference to the advertisiers. I don’t even know who they are.

  13. Digidave says:

    You hit it right on the head Ethan – as did Godin in the post you referred.

    I’ve tried several times to figure out how to sustain a news organization (as we know them today) just off online – and the numbers don’t really add up. Or they do – but news organizations will have to shrink to about 1/4th their size – and still be struggling.

    We’ve had a bubble in the media industry for a long time.

    I think pay per performance will be the new advertising rule. But what I want is – pay-per-reporting ala Spot.us. Something where the money doesn’t go to advertising – but to the actual reporting itself.

    While you might need 300,000 uniques just to get $300 – on Spot.Us all you need is to find 30 passionate people willing to donate $10 each. The real question is, however, if people are willing to do this.

    I have no answers – but I’m watching.

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  15. There is nothing “irrational” about print ad prices, because print ads ARE far more effective than online ads.

    There are many reasons why online ads are ineffective.

    I explained all that here:

    http://www.brasstacksdesign.com/online_advertising.htm

    and here:

    http://www.brasstacksdesign.com/monetize_online.htm

  16. Ethan says:

    Alan, thanks for the perspective and the links to your posts. I noticed that while they have a number of interesting suggestions, they don’t have a lot of numbers of demonstrate your contention that advertisers prefer print.

    Bradley Johnson in Ad Age comes to a very different conclusion:

    “Internet proved a bright spot. Measured spending on internet display advertising last year surged 33% for the 100 LNA, according to Ad Age DataCenter’s analysis of data from TNS Media Intelligence. Web display ads — banner ads and the like — accounted for 6.8% of LNA measured spending in 2007, up from 5.1% in 2006 (and more than double 2003′s 3%).

    Internet gains, however, couldn’t make up for some big losses in old media. The biggest loser: newspapers, where the LNA slashed measured spending 8.5%. The top 100 also trimmed TV spending 1.2%, according to Ad Age’s analysis of TNS data.

    Put another way, these top-tier marketers increased measured internet spending by $1 billion; slashed newspaper spending by $674 million; and cut TV budgets by $406 million. ”
    See: http://adage.com/article?article_id=127793

    I don’t disagree that there are many problems with web display ads, but these figures seem to support a shift away from newspaper display ads to online advertising, both display and pay per performance.

  17. Scott Klein says:

    Thanks for writing this, Ethan. I think it’s helpful should start a good conversation.

    However, you’ve chosen as your example — coupon inserts — an ad market that actually has some rationality to it. Advertisers can track exactly how many people actually take an action based on any given ad. And believe me, these advertisers place and price their ad buys accordingly, and with brutal precision. So-called “direct response” ads are a mature and relatively rational market that if anything should have similarities to internet ads. Which is why, indicentally, direct response advertisers were quick to move to Craigs List or Google AdWords: Cheaper ad = better ROI.

    The lucrative brand advertising business is a horse of another color. These are the advertisers who pay $75k for the NYT front page, and a multiple of that for full-pages inside. While newspapers have studiously added some rationality to such buys — usually by doing, gratis, pre-awareness and post-awareness studies of product familiarity for their best advertisers — it is this business about which was said “I know half of my advertising budget is wasted, I just don’t know which half,” and I think the one whose irrationality is at the core of some of the biggest revenue problems our industry is facing.

  18. Pete says:

    “..we need to ensure that there’s still a way to engage in serious investigative journalism” – sure, but as someone pointed out the other day, investigative journalism, even when you include simply providing detailed coverage of local City Council decision making, makes up less than 2% of the content of almost any newspaper. Covering City government decisions (let alone doing more in depth investigation) *is* an essential civic function of the press, however print press so rarely delivers it that we give Pulitzers to people on the rare occasions they actually do this thing we say they should be doing all the time. The faster print press dies and all the advertising revenue goes (of necessity) to online journalism, the better as far as I’m concerned.

  19. Yes, the internet brings efficiency & accountability to the market – whether that market is antiques & collectibles on eBay, or advertising on content sites.

    You have some good thinking & points in this post – but you’ve missed one big ad segment. Perhaps because it’s already gone for most newspapers.

    Classified ads were, when you think about it, an inherently abusive institution. For the newspaper reader, they were an eye-strain, and took forever to find what you were looking for. For the advertiser, well, just try to get a classified ad into, say, the LA Times. It’s a pain in the ass.

    And then along came CraigsList, and when given an alternative to the monopoly, the public voted with their mouseclicks.

    It’s taking longer to hit the display ads. But it will. It is possible that some new model will arise that combines the strengths of CPM and affiliate marketing to put a fair value on the message being delivered to a highly targeted audience. Many people are getting all arcane about trying to figure out how to leverage the social media space, WOM, gestures and all that.

    I share your concern over the squeeze on good journalism, and when I read stories like the one in the LA Times today about how the County (the biggest local gov’t entity in the US) is being covered by only 4 reporters now (one of them part-time), it fills me with dread.

  20. I’ve been saying this for a long time: online, newspapers simply don’t have the monopoly on advertising that they did: it’s Google’s world, and most ad money goes on search. And the only ‘content’ sites that can make viable money from advertising are platforms like Facebook that have globally massive numbers.

    I’m currently building a site – HelpMeInvestigate.com that is attempting to explore non ad-based business models. It’s ‘open source journalism’, a platform for people rather than content. I hope it works, but if it doesn’t at least we’ll know more than we did before.

  21. Erik says:

    I’d say the main question is why anyone would worry about losing a newspaper that makes “yesterday’s weather the lead story in the day’s paper”? In fact, the way I see it, much/most of what people fetishize as “serious journalism” falls into the same category… just think of all the millions of trees killed to cover the Barack vs. Hillary show, which as we now see was really just a glorified high school popularity contest. Even a lot of the int’l coverage that I read I’d have to admit could fairly be described as the sports section for intellectuals. And if it can’t pay for itself, it’s not much more of a tragedy than if they have to cancel next year’s Datonya 500 for lack of ticket sales. Big whoop.

  22. Imran says:

    I just did an analysis on using adverts as a business model for journalism that you might be interested in:

    http://blog.awesomezombie.com/2010/03/journalism-advertising-business-model.html

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  4. FridayNet » Blog Archive » Bookmarks for January 15th through January 17th - [...] …My heart’s in Accra » Is ad-supported journalism viable in a pay-for-performance... - [...]
  5. Posts about Internet Marketing Experts as of January 17, 2009 | The Lessnau Lounge - [...] -celebrities such as Seth Godin for marketing and Aaron Wall for SEO and Matt Cutts for Google …
  6. Funding the future « The Freeman’s Journal - [...] by freemansjournal in Uncategorized. trackback Thought provoking and interesting piece from Ethan Zuckerman on future funding for …
  7. Will the Washington Post kill Book World? | TeleRead: Bring the E-Books Home - [...] fairness to the Post: Is ad-supported journalism viable in a pay-for-performance age?, in Ethan Zuckerman’s blog. Book sections hardly …
  8.   links for 2009-01-18 — contentious.com - [...] …My heart’s in Accra » Is ad-supported journalism viable in a pay-for-performance age? "Here’s my concern. If I’m right …
  9. A Financial Serape for the Gray Lady « Caracas Gringo - [...] Zuckerman (…My heart’s in Accra ) says that if “print advertising costs are fundamentally irrational, then it’s possible that …
  10. Journalism in an irrational market « Virtualjournalist - [...] Salveggi Ethan Zuckerman, who runs the citizen media site Global Voices Online, has an eye-opening post on the …
  11. Links for today | Links para hoje « O Lago | The Lake - [...] Is ad-supported journalism viable in a pay-for-performance age?, Ethan Zuckerman [...]
  12. Carnival of Journalism: Are we asking the right questions about online revenue models? - Invisible Inkling - [...] Ethan Zuckerman asks if ad-support journalism is viable, using the example of a 25k print circulation newspaper as a …
  13.   Ethan Zuckerman: Print Ad Prices Are “Fundamentally Irrational” — contentious.com - [...] Advertising has long been the main source of revenue for mainstream journalism — but have advertisers ever really gotten …
  14. Let’s talk about the economics of a journalism | RatcliffeBlog - [...] to various recent postings about journalism, including Ethan Zuckerman, Seth Godin, Dan Gillmor, Amy Gahran and Lisa Williams. I …
  15. Rational rants mobile edition - [...] to various recent postings about journalism, including Ethan Zuckerman, Seth Godin, Dan Gillmor, Amy Gahran and Lisa Williams. I …
  16. APT on Shaky Ground: Yahoo’s Ad Sales Partnership with Newspapers | Sips from the Firehose - [...] Meanwhile, over at Ethan Zuckerman’s blog, he raises some very pertinent questions about newspaper survivability, based on the increased …
  17. The lie of print advertising (followed by good news) « BuzzMachine - [...] Zuckerman worries that the economics of print advertising in the past are unsustainable. And he’s right. Online [...]
  18. Future Business Model for Newspapers « Arctic Penguin - [...] Clearly their current business model (relying 90% on print advertising) is not sustainable. Ethan Zuckerman suggests that newspapers’ CPM …
  19. The Efficiency of Internet Advertising (A Eficiência da Propaganda na Internet) « JCC.COM - [...] Zuckerman worries that the economics of print advertising in the past are unsustainable. And he’s right. Online has [...]
  20. Goodbye, Capitalism | varnelis.net - [...] brought me to this post by Ethan Zuckerman, about the irrationality of newspaper advertising in a pay-for-performance [...]
  21. Towards new business models for professional media at Klintron’s Brain - [...] Josh Ellis’s article on what professional media is for and Ethan Zuckerman’s article on the coming collapse of advertising …
  22. Thoughts on Disurptive Journalism - Appfrica - [...] will need to change if the industry is going to sustain itself as the following anecdote from Ethan Zuckerman …
  23. links for 2009-01-24 – Innovation in College Media - [...] Is ad-supported journalism viable in a pay-for-performance age? "We’re all looking at models that include some advertising support. What …
  24. Quale forma di pubblicità online ci riserva il futuro? - [...] ritrovato in questo lungo post di Ethan Zuckerman (il quale si domanda se siamo giunti nell’Ad Performance Age), in …
  25. levjoy dot com - Are Ads Bringing Down Newspapers? - [...] The inimitable Ethan Zuckerman, a true renaissance man if I’ve ever seen one, just wrote an important — and …
  26. Ebirowoozo ku bunnamawulire obwonoona - Appfrica - [...] kuba mugezi nnyo okumanya nti ebintu birina okukyuuka bizinesi okusobola okwewanirira nga ekyokulabirako kino bwe kinnyonnyola: Ow’omukwaano omu akolera …
  27. Can online ads ring the bell? « Read all over - [...] Can online ads ring the bell? “If advertising costs are fundamentally irrational, then it’s possible that the way we’ve …
  28. SEO Book.com - The Integration of Media & Public Relations... ...
  29. Econs.net Blog » The Integration of Media & Public Relations - [...] Ad supported journalism will remain possible, but typically only if you focus on a niche, maintain a small editorial …
  30. The Integration of Media & Public Relations : india sem - [...] Ad supported journalism will remain possible, but typically only if you focus on a niche, maintain a small editorial …
  31. The Integration of Media & Public Relations | Searchsavant - The SEOintelligence Blog - [...] Ad supported journalism will remain possible, but typically only if you focus on a niche, maintain a small editorial …
  32. …My heart’s in Accra » The final word on the death of newspapers? - [...] their neighbor has posted a “death of newspapers” story since the beginning of the year, myself included. Polymeme, which …
  33. The Final Word on the Death of Newspapers? | EcoSilly - [...] and their neighbor has posted a “death of newspapers” story since the beginning of the year, myself included. Polymeme, …
  34. The Final Word on the Death of Newspapers? - 5WPR - [...] and their neighbor has posted a “death of newspapers” story since the beginning of the year, myself included. Polymeme, …
  35. …My heart’s in Accra » Rest in Peace, Rocky Mountain News - [...] for me in writing about the Rocky Mountain News’s demise. I wrote, a few weeks back, about the economics …
  36. …My heart’s in Accra » WSJ on online ad efficiency - more bad news for newspapers - [...] wrote about the pricing disparities between print and online media a few weeks ago, curious why my local newspaper …
  37. The numbers don’t lie. Or do they? « Virtualjournalist - [...] knew that number couldn’t be correct, as I recalled an instructive post by Ethan Zuckerman: While highly targeted ads …
  38. Wanted: A Social Network for Global Health News - [...] but that’s a topic for another post. (See Ethan Zuckerman for a really clear introduction to the value of …
  39. Crisi Economica E Google AdSense: I Perché Possibili Del Calo Dei Rendimenti AdSense « Best Web News Blog - [...] ho ritrovato in questo lungo post di Ethan Zuckerman (il quale si domanda se siamo giunti nell’Ad Performance Age), …
  40. lanostravoce@cicero » Crisi Economica E Google AdSense: I Perché Possibili Del Calo Dei Rendimenti AdSense - [...] ho ritrovato in questo lungo post di Ethan Zuckerman (il quale si domanda se siamo giunti nell’Ad Performance Age), …
  41. …My heart’s in Accra » Twitter.org? and building models for social media - [...] sounds right to me. I observed earlier this year that the internet is helping us realize that the value …
  42. …My heart’s in Accra » What if they stop clicking? - [...] friend Bo Peabody thinks we should be asking not just whether ad-supported journalism is feasible, but whether ad-supported social …
  43. Great Ideas. Shared. » Will Someone Please Invent iTunes for News? - [...] a good debate about newspapers, the role (and cost) of investigative journalism. But this isn’t it. [...]
  44. Pop-Up Ad Inventor Apologizes for Creating a ‘Fiasco’ | Sharing Interesting Stuff, Updates News & Free Tips - […] in a public place, like a newspapers, builds brands in a way that private, targeted ads can’t. (I’ve argued …
  45. http://www.theatlantic.com/technology/archive/2014/08/advertising-is-the-internets-original-sin/376041/ | The Today Online - […] in a public place, like a newspapers, builds brands in a way that private, targeted ads can’t. (I’ve argued …
  46. The Internet’s Original Sin | The Atlantic | Backfill for 'Note to Self' - […] I’ve argued that this is a legacy effect […]
  47. Plash | The Internet’s Original Sin - […] in a public place, like a newspapers, builds brands in a way that private, targeted ads can’t. (I’ve argued …

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