I wrote about the pricing disparities between print and online media a few weeks ago, curious why my local newspaper was able to charge a $45 CPM for advertising inserts, while top websites are able to charge a fraction of that sum for highly targeted leads. Commenters on my site and elsewhere suggested a variety of explanations, from speculation that online advertising simply doesn’t work very well (an explanation I find pretty unsatisfactory) to the observation that my newspaper has a pretty effective monopoly in delivering timely sales information to my neighbors (a much more believable explanation.)
Jeff Jarvis points to a story in today’s Wall Street Journal that helps me understand the disparity in pricing – and efficiency – between online and offline advertising. Baylor Health Care Systems, a large Dallas-based NGO, compared the effectiveness of three ways of finding job applicants – web-based ads placed on search engines, ads on job boards, and ads in newspapers and magazines. The results were pretty stark:
In the first six months of the program, Ms. Bouthillet says, the search-engine ads delivered 5,250 applicants, at an average cost of $4. By contrast, Baylor paid an average of $30 for each of the 3,125 applicants who came via job boards, and $750 each for the 215 applicants who replied to a newspaper or magazine ad.
Baylor’s experience isn’t the only point of comparison between search and print advertising. A UPS recruiter points to an online campaign that yielded great response for part-time drivers and sorters, at roughly a fifth of the cost of conventional advertising. This advertising, the article points out, is geographically targeted – Baylor might only be looking for Dallas-area hires, and UPS needs to hire drivers in specific areas. In other words, it’s precisely what local newspapers have traditionally been good at… and there’s every indication that it’s cheaper to deliver job candidates via Google.
It’s worth noting that one reason that online job advertising works is that so many job hunters are online – the first bit of advice many laid off employees are receiving is that they need to get online to seek new opportunities. No one’s telling my neighbors that they need to get online to get specials on tangerines at the local supermarket – once they’re online and supermarkets are targeting them via Google rather than via the Berkshire Eagle, that newspaper is in a lot of trouble.
To be clear, I’m interested in following this issue not because I want to join the pack of bloggers calling for the death of newspapers. The point I tried to make in my earlier piece was that the model that made high-quality journalism possible in a print age – local and national advertising – is probably not possible in a digital age. Yes, publications (mine included) need to find ways to monetize online attention, and that almost surely means selling ads online. But it’s unrealistic to hope that online advertising is going to yield even a fraction of what print advertising continues to yield. The numbers above from the Wall Street Journal suggest that online advertising can be 200 times as efficient as print advertising, which implies that online advertising may only yield a tiny share of the revenue we’ve grown to expect online.
In other words, we should be watching projects like Mother Jones very carefully. Nonprofit news models are one of the possible ways we’ll continue to afford to produce difficult journalism, and one of the few that’s proven itself. Syndication models, like the model of GlobalPost, are exciting, but I’m not convinced that newspapers that are in financial trouble will continue to pay syndicators for content.
The ugly truth is this – we know we need good quality journalism and we don’t know how to pay for it. My contention – it’s probably not going to get paid via online advertising, as much as I wish it would be.