Paid Content, E-commerce and Turning the Knobs Down on Ads

New plans for paid content platforms, from players as varied as I.B.M., Google and NewsCorp, earned plenty of attention earlier this week. Some have boiled the story down to a potential battle for publisher-clients between Google and Journalism Online, the start up from Steven Brill, Gordon Crovitz and Leo Hindery which has been at the center of the paid content story all summer.

In that potential dust-up, it’s notable that the Journalism Online plan calls for taking a 20% commission on subscription revenues (plus a 3% commission on credit card transactions), while Google says it would charge 30% for clients using its revamped Checkout platform. Newspaper Association of America graphicThe plans were a response to a request for proposals from the Newspaper Association of America that published them in a report to its members this week.

Here are a two items that have been largely overlooked in the coverage so far:

First, the Journalism Online e-commerce model (available at the Nieman Lab) will let publishers change variables like the price of subscriptions or micropayments to fit their own markets. Publishers will also be able to turn the knob on advertising, apparently, changing settings so that “paid subscribers see fewer, different or no advertisements.”

Could this finally lead to the ad-free news that some consumers have sought for so long? The Journalism Online model does not aim to replace advertising revenue with subscriptions. Instead, the model says advertising revenue lost to the pay wall (and subsequent decline of unique visitors) by commanding a 30% cpm premium on the subscriber base that remains. Clearly, a no-ad product would come at a premium, but how much would publishers have to charge subscribers who want to turn that knob all the way down?

Second, Brill et al. say their platform will let publishers sell products against content. The 15th and last item on a list of product capabilities is the “ability to sell related goods via participating retailers (such as books within book reviews).” As we noted earlier, the UK’s Telegraph has developed an e-commerce platform that now accounts for roughly 30% of all revenues. They sell everything from home gardening products to panama hats. And, instead of erecting paywalls around general news content, they have subscriptions and micropayments for secondary products like fantasy soccer and puzzles.

Sadly, the Journalism Online plan does not provide an estimate of how much money news sites could make by selling products through a contextual e-commerce platform. But, if the Telegraph’s experience is any guide, what seems to be an afterthought here could become a significant revenue stream for the group that can pull it off.

How Perez Hilton and Blogads are monetizing Twitter

Yesterday afternoon, gossip blogger Perez Hilton, with his 1.3 million followers on Twitter, tweeted the words, “Sponsored: I love to mix bright colors with classic styles to shake things up! Tweet style tips to #gapstyletips to appear on!” A cursory search on Twitter shows hundreds of users issuing tweets using the suggested hashtag. And if you visit the CocoPerez site (a female-oriented blog that Perez recently launched) you’ll find a kind of talk box aggregating all these tweets with the GAP brand prominently displayed on top.

perez hilton sponsored tweets

Blogads CEO Henry Copeland told me in a phone interview last night that his company prefers this kind of community approach to sponsored tweets rather than simply having Perez blast out a single link to a sponsor (although he said that the advertising company is also selling more straightforward Twitter links).

“It definitely helps to have someone like Perez to tweet to spark the thing,” he said. “We also find that it can sustain itself because if you’re a reader of Perez Hilton and you see a box and right above that is a message saying tweet your dating advice” — another ad campaign run on Perez’s site — “then you’re very likely to do it.”

perez gapThe effectiveness of the campaign, he said, often depends on the size of the box, where it’s located, and how it’s “modulated.” In that sense, the advertising, though tied into Twitter, is very reliant on Perez’s popularity on his blog.

Copeland estimated that Perez can drive about 20,000 clicks on a sponsored tweet if it’s worded correctly. He said that he’s had no problem selling the Twitter component in ad deals, but so far it’s only been rolled into larger advertising packages.

“All the deals that we’ve had Perez tweeting for have been part of six figure deals,” he said.

I asked Copeland about the new FCC rules being talked about that will force bloggers to disclose any sponsored word-of-mouth marketing campaigns.

“Frankly, I think we’ve been going overboard,” he said. “Every tweet has the word ’sponsored’ either before or after it, and I think it makes it pretty obvious. Basically a fifth of the message is disclosing … I certainly think it’s very imporatant to not only disclose, but to make prominent the fact that it’s sponsored.”

Blogads, a North Carolina company, currently represents hundreds of bloggers across all niches for advertising. So far, the sponsored Twitter campaigns have remained almost exclusively with Perez, one of the most widely-trafficked blogs in the Blogads network.

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Should the New York Times be responsible for its Google ads?

Stinky Journalism has an investigative report out today highlighting the fact that has been displaying advertisements touting sleazy health claims that it has decried in past editorials.

An article “With Resveratrol, Buyer Beware” published in the Science section of the New York Times on Aug. 18 takes aim at various Web advertisers—specifically age-reversing drug supplement companies—hawking their wares using deceptive cyber practices. However, omitted from the story is that The New York Times itself is at best nonchalant in its ad screening practices, and at worst complicit in trafficking these same deceptive Web sites–not disclosing the conflict they are lining their own pockets with ad revenue from this scam.

But where are these ads being displayed? Through contextual advertising from Google, it seems (though at least one didn’t come from Google). Given that Google is a third-party advertiser that is serving up the ads independently from the New York Times, should the Times be as responsible for these ads as they are for ones they place on their own?

Based on my own experience with Adsense, I know you can reject ads that are appearing on your site, but because of the contextual nature of them it’s not always easy to keep track of the hundreds of ads that are served up when users come in from different searches. You could be running sleazy ads in your archives that you didn’t know existed. So it seems unfair to expect the newspaper to keep track and squash every single questionable ad being served up by Google.

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Glenn Beck Boycott Continues; Traffic Crashes “Color of Change” Server

glenn_beck_1210As we’ve reported a couple of times a number of advertisers, including Walmart, CVS and Best Buy, have pulled their ads from Glenn Beck’s Fox News program, joining a group of more than 30 following a campaign by after Beck’s ‘Obama is racist’ comments. While the efficacy of this program remains in question, it is worth noting that the the Color of Change website is currently down. Is this a result of great publicity or a nefarious cyberattack?

More advertisers have joined the Glenn Beck boycott in the last day, but as we’ve made the point that the boycott has little to no negative impact on the program: ratings for the controversial show have never been higher, and the advertisers who are “boycotting” the show have only moved their ads to other Fox programs.

In fact, some believe that the boycott has backfired due to the sudden rise of grassroots groups defending Glenn Beck on line. The Examiner reports:

An extemporaneous, nationwide movement is rapidly taking shape to support Beck.  Facebook groups, Web sites, home-grown e-mail blasts, viral marketing and individual telephone call list campaigns have appeared in record numbers supporting Beck.

Johnny Simpson, of Digital reports that the backlash against the boycott “has cost GEICO Insurance and Sargento Foods a total of 12,500 [Beck supporting] customers,” showing enormous support for the growing media personality.

As of 12 Noon today, August 24th, the Color of Change website is giving a “503 Service Unavailable” error message. Could the down site be a result of some nefarious attacks by Glenn Beck supporters? Or just a result of fans of the site eager to show there support of the boycott? Too soon to tell.

Until the advertisers boycott’s include the Fox News network, it’s unlikely that the Beck-specific one will have any consequence on the show itself. Except of course the increased notoriety and ratings that have come with the boycott.

Updated: Color of Change publicist Brandon Hatler claims that the site has experienced technical problems as a result of the incredibly high volume of traffic.

The New Ad Network

Ad networks have come along way from those annoying punch-the-monkey banners used to fill remnant ad space.

But while innovative networks like Glam Media are continually building new tools and services to connect online publishers with highly targeted ads for their audiences, the majority of them still focus on national advertising paired with content rather than the reader.

Within the new ecosystem and framework we’ve been outlining, the role of ad networks would greatly expand to connect pubishers with advertisers, audiences (and other publishers) on a local and on metro-wide level.

The best way to do that is to “work with the content providers who know their local barber and their local pizza place and help them sell their ads in a larger network,” says Mark Potts, who recently launched GrowthSpur (disclosure: Potts’ played an important role in brainstorming for this project.) Not only does his team provide a range of tools for content providers like invoicing, analytics and search engine optimization, they also provide professional training in how to sell advertising.

In line with Potts’ aim to redirect advertising, we also see several untapped opportunities for ad networks to rope in new revenue through increased interconnectivity. One way to do that would be for independent publishers to help larger media brands and news organizations reach audiences normally overlooked.

Imagine for example if a local sports blogger covering the Illinois State Redbirds was to run targeted ads from ESPN Chicago and maximize the dollars gained from those ads. Potentially, both content providers would benefit, as well as the advertisers. And that would also allow the content providers to focus on what they do best: providing content.

“It’s often harder for larger media sites to reach local advertisers,” says Potts. “But if someone is already out in a community selling those advertisers on their site, they can also sell ads for the larger sites as well.”

Advertising in a Sustainable Not-for-Profit Model

We’ve been getting a lot of great feedback to our models, both online and out in Aspen, since we made them public yesterday. Some of the best comments have come from Jim Barnett, who questioned some of the results in our not-for-profit model both in the comments and later in a piece on theNieman Lab site.

He asks whether our model for the growth of advertising revenues–to 49% of all revenues by year three from 18% in year one–is possible or desirable at a lean not-for-profit new organization. First, to determine whether such growth is possible we looked to Joel Kramer, CEO at Kramer told David Westphal in a piece at OJR in October that he hopes 70% of MinnPost’s revenues will come from advertising by 2011.

Here’s the paragraph from the OJR piece:

Q. What was your hope, what is your hope on the mix of advertising and contributed revenue?

A. When we started we said our hope was, by 2011, 70 percent advertising, 30 percent membership. Right now it’s running about 50-50, maybe a little higher on the membership side. It’s pure guesswork because it’s a new model. The key is to get to a sustainable model by 2011. There are a lot of reasons to become optimistic, but the advertising side really needs to get better.

Kramer has since been hard at work developing display ad business (MinnPost was charging a $15 cpm earlier this summer) and new advertising units, including a Twitter-like service that he thinks could be a new form of classifieds for local news.

Our model only has 49% of revenues coming from advertising in the third year. Still, it’s a fair point to wonder whether not-for-profits should join the scramble for advertising and sponsorships when for-profits are having such a hard time of it themselves. Kramer himself comments on Barnett’s post to say our model appears to overestimate potential advertising and underestimate membership revenues. He also does a good job of answering Barnett on the pressures such a lean organization faces in separating business from editorial.

Again, we’d love to play that scenario out in our Google doc to see if those differences amount to a wash.

Advertisers’ Boycott of Glenn Beck Continues To Leave Fox News Unharmed

beck_8-18Even more advertisers, including Walmart, CVS and Best Buy, have pulled their ads from Glenn Beck’s Fox News program, joining a group of more than 20 following a campaign by after Beck’s ‘Obama is racist’ comments.

It was big news yesterday – given major play on HuffPost and discussed on MSNBC – and while it signals some success for the campaign, the fact that Beck’s network, Fox News, isn’t hurt at all continues to be ignored.

As a Fox News spokesperson told Mediaite yesterday, “The advertisers referenced have all moved their spots from Beck to other programs on the network so there has been no revenue lost.”

That is a point that has been reiterated since advertisers first started exiting the individual show, and it proves the advertisers are more concerned with appeasing a section of their base than actually taking a stand.

Fox News continues to pick up the check from each of these companies, and continues to benefit from Beck and whatever he says on his program. Meanwhile, until Beck’s commercial blocks are filled with ads for the Wall St. Journal, Fox Business Network and Fox Searchlight Pictures, which they aren’t, his show isn’t ultimately hurt either.

Meanwhile, the other side is mobilizing as well. On right-wing blog, and in a campaign on, Beck supporters are working on a campaign to get in touch with each of the companies who have moved their ads away from Beck’s show.

But the Beck fans don’t have to worry. If the advertisers really want to make an impact, they’d remove their advertising from Fox News in general. Of course, that won’t happen – the audience is too big. Instead, the pseudo-boycott by these companies will continue, and Fox will let Beck talk about whatever he wants all the way to the bank.

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