Industry Insight: Personalization—with Consent—Could Save Advertising

By: Matt DeRienzo

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Advertising should be more effective than ever, by orders of magnitude.

We used to have only two-dimensional messages in print, cast out to a mass audience. They reached a lot of people who weren’t in the market for the product being pitched and competed with a sea of irrelevant ads in grabbing the attention of the people they were targeting.

The old adage that “half my advertising is effective, I just don’t know which half” comes to mind, but the share was more realistically about 5 percent.

But we preached frequency and reach, and a lot of cars and mattresses were sold, chiropractic appointments booked, and journalists’ salaries paid with the proceeds.

Today, we can target digital ads not just by zip code, not just by gender, age, and various other demographic factors. We can target to specific individuals based on what websites they’re visiting and their search history.

Yet there’s a crisis in the advertising-based business model for publishers. They’re not making it on digital advertising.

Of course, a huge factor for publishers is that the model in which we pitched advertising adjacent to strong content has been upended by programmatic targeting. Another is the staggering digital advertising market share dominance of Google and Facebook.

But there are signs of a deeper problem with advertising. Publishers have been in a panic about the rapid adoption of ad blocking technology, and the flaws of programmatic targeting have become more obvious.

Common sense dictates that the more targeted the ad, the more effective it will be. But not if the audience views that targeting as invasive and rebels against it.

Instead, we should think about personalization of advertising—and monetization for publishers in general—in more, well, personal, terms.

Ideally, readers would welcome—and invite—advertising onto their desktop and mobile screens, and into their inbox to help them live their lives. Just like newspaper readers still look for their local grocery store insert.

But we know that a completely automated approach to this, with programmatic targeting, is flawed. Many users of ad blockers cite privacy concerns of targeting, in addition to the annoyance of pop-ups and other intrusive ad formats. And why, every year when I buy my son the Hess truck for Christmas, do I then see 5,000 ad impressions following me around the web, trying to sell me the thing I just bought?

And if readers were actually requesting the kind of information conveyed in advertising, it’s unlikely they’d want it in a banner ad format. (Not to mention pop-ups, or autoplay videos.)

A truly personalized advertising experience would require consent, and buy-in, and participation from the reader, and a process managed at least in part by humans, not algorithms, from publishers.

But viewed holistically, it could open the door to monetization beyond advertising.

Some publishers have come around to the idea that a few thousand readers paying for digital news subscriptions can be more lucrative than low-CPM rate advertising revenue from millions of page views from non-paying readers.

What if we stopped chasing scale and built a customer relations management system for our readers that focused not just on getting them to pay for a subscription, but on their advertising needs as well?

Maybe their subscription is discounted if they tell us a lot more about themselves, or if they select from a group of local businesses the ones they want to hear from, and in what format.

Native advertising formats would quickly replace banner ads, one could bet, and click-through rates would dwarf the old popup ad model of getting the attention of someone who was trying to avoid you.

A natural extension, and a potentially lucrative one for publishers, would be e-commerce. Again, what could serve a reader and an advertiser better than giving them a direct link and method to buy to the thing that they are actively looking for?

A few publishers have experimented with paid news subscriptions that give the reader an ad-free experience in exchange. But advertising that is truly personal—useful to them, and a great user experience that they’ve actually requested—could be a much better pitch.

 

Matt DeRienzoMatt DeRienzo is a newsroom consultant and a former editor and publisher with Digital First Media. He teaches journalism at Quinnipiac University and the University of New Haven in Connecticut, and is interim executive director of LION Publishers, a trade organization that represents local independent online news publishers.

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Published: January 19, 2017

3 thoughts on “Industry Insight: Personalization—with Consent—Could Save Advertising

  • January 19, 2017 at 7:55 am
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    Hey Matt,

    The atomization of culture and community by the Internet as an opportunity! I am so attracted to that line of thinking. The jobs people need done have not changed; it is just that newspapers are less effective as am advertising medium and as a news medium. And you see this as a grand opportunity. Stunning!

    Would love to dig deeper with you. Hope E&P passes my email to you.

    Reply
    • January 19, 2017 at 6:07 pm
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      You can get me at mattderienzo @ gmail.com

      Reply
  • January 31, 2017 at 11:32 am
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    It seems simple to me. Subscription based only. Scrap the ads and lower the cost of the subscription to something marketable. Say, $3.65 a year. That’s 1-cent a day. Grow the readership this way. Implement ads at a later time. There should be no free news except the headlines you read at Starbucks or the grocery store while you are standing in line. If they want it, they’ll buy it. If not, they won’t. Tighten up the access. Mark my words: the end result will be a landing page with an email and a password to access the content and that’s it. You’ll have to subscribe to gain access. The day of free news is soon to die. Those who read the news will pay for it. I subscribe to a newspaper both in print and digital still and I’m only 34 yrs old. In fact, my favorite part of my day is opening up my mailbox and getting my paper, so long as the paper is not damaged! In my mind, it’s the only way to digest your news. I’m sort of rambling now. Much easier to explain my thoughts in person.

    Reply

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