Â Are newsies outsourcing theirÂ ad sales to search engines?
Most journalists are oblivious to, perhaps evenÂ dismissive of advertising.Â To some extent this is an ethical necessisty inÂ that news judgment should notÂ be influenced byÂ whether it will helpÂ or hurt advertisers or other commercial interests. That is the ideal. In the real world every journalist knows that there are industries, housing developments, mallsÂ and all sorts of pet projects that news outlets support with favorable coverage and, in the case of newspapers, with positive editorials. AndÂ there’s no harm in thisÂ so long as the boosterism is kept within acceptable bounds.
Nevertheless journalism has a palpable disdain for ad sales. I’ve alwaysÂ considered that aÂ childish attitude,Â as if the hard-bitten newsieÂ were like Paris Hilton, a trust-fund babyÂ whoÂ never worry aboutÂ tawdry detailsÂ such as ad lineage,Â cash flow or profit — largely because there used to be so much of the latter as to keep journalism living in the manner to which it had become accustomed.
Those days are gone. We’ve already seenÂ some wave of newsroom layoffs and I fear they are not the last. Earlier this week newspaper industry analyst Ken Doctor with theÂ market research firm Outsell forecast that news as a content category will experienceÂ “a negative combined annual growth rate of 2.9 percent from 2007-2010” and went on to say:
“Publishers have hoped that online growth would make up for what is now seen as inevitable print losses. But with about one in ten News revenue dollars earned online and publishers so far unable to increase their share of that increasing online ad pie, these hopes are dimming . . . The industry is now facing life-and-death struggle.”
Outsell went on to say that in addition to job cuts and other economies, “More than 400 U.S. titles have joined the Yahoo! news consortium, in hopes of ramping revenues and gaining new readers.”
But today Paid Content points to an analysis of the Yahoo deal by Reuters that takes a dim view of the deal. Here is theÂ Reuters link. Â I’ll let the article speak for itself on the particulars. Paid Content contrasted Reuters’ dim view of the deal to the rosy forecast issued some days earlier by
On principle I think it is beyond brain dead for the news industry to outsource its ad sales whether to Yahoo or to any other entity. Selling must be a core competency of the news industry or it is toast. And yet I understand that as a practical matter even the biggest news corporations cannot field as many ad solicitors as the search engine aggregators. And from the point of view of the national ad buyers, it is a convenience to deal with a fewer number of ad calls. Big buyers — movie studios, car companies, consumer products giants, electronics vendors, etceteraÂ — can get their ads placed with less effort by funneling them through, say, a Yahoo, than dealing with those 400 separate newspapers. But the newspapers must eventually get what my dad used to call the poop end of the stick. (Dad actually used strong language but I’m trying to clean up mine.)
Meanwhile, for weeks nowÂ a relatedÂ tidbit, that originated with the online tracking firm Hitwise has been rattling around my inbox. Hitwise wrote:
“Search engines, especially Google, are responsible for more News and Media category website traffic than ever before, according to the report. Print News websites received 29.7 percent more traffic from Google in March 2007 than in March 2006, and Broadcast Media sites received 35.9 percent more traffic from Google in the same time period.” (Thanks toÂ my occasional Floridian contributor, Der Cuz, for spotting this.)
OK, let’s do a quck recap. News entrusting online ad growth to Yahoo, and audience building to the search engines in general. Hmnnn. What does that leave as the core contribuition of news — bad attitude and sarcasm? Why does that not strike me as a sustainable business model?