Industry Insight

Local News Publishers Need to Dig Deeper for a Better Advertising Model

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Google and Facebook have made a lot of money from platforms that have been blamed for the viral spread of misinformation, intentional disinformation campaigns and hate speech. In the process, they’ve also commoditized digital advertising and disrupted the traditional business models that support the journalism that cuts through that misinformation.

Despite occasional bluster to the contrary, publishers have realized they can’t ignore the scale of the platforms and must play along when it comes to the organic distribution of content. And the Facebook Journalism Project and Google News Initiative have poured hundreds of millions of dollars into helping journalism companies figure out what comes next.

Local news publishers have also put significant efforts into the world of programmatic advertising that the big platforms have dominated, despite the low margins of selling others’ inventory, and the inherent cannibalization of their own rate integrity.

Advertising is where the world of local journalism should consider taking the sharpest turn away from digital behemoths. Publishers can’t compete on rate, can’t compete on microtargeting, can’t compete on inventory.

And there are serious problems for both advertisers and consumers in how the big platforms and programmatic networks operate. For the advertiser, there’s rampant fraud, lack of transparency about what percentage of impressions are actually seen by humans, risk of brand harm when ads are in proximity to offensive content. For the reader, little to no vetting of ads that can range from deceptive to outright scams.

Local publishers’ shift away from chasing clicks and toward a base of local, loyal, engaged, paying digital subscribers presents a head start in offering advertisers a captive, high-quality audience that will see their message in the context of high-quality, relevant journalism they sought out.

Providing readers an advertising experience that builds trust—as publishers talk a lot about doing on the news side—could be a taller order. Are news organizations ready or able to say goodbye to Taboola and Outbrain plugins and other programmatic revenue that monetizes clickbait schemes and scams? How about the recent controversy at the Washington Post, which does rigorous journalism on the science behind and very real impact of climate change, but accepts $25,000 to run a full-page ad promoting false information about the topic?

Can news organizations really solve the misinformation and trust problem if they don’t confront it on the advertising side? Profiting from misinformation running alongside attempts to combat misinformation?

With a goal of actual growth in net revenue, publishers would have to go beyond whack-a-mole weeding out of the most egregious false, misleading or inappropriate advertising.

Podcast advertising gets some of the strongest results of any medium because of engaged, loyal audiences, and also the “testimonial” format…listeners get to know and trust a podcast host, and if it’s clear she’s used the product and vouches for it, it’s a much easier sell.

Similarly, spending on branded content, sponsored content and native advertising, across various formats, is booming. The medium begs for publishers and advertisers to collaborate on the message and to gear it toward what would actually be useful to readers, vs. what might assault their senses (flashing billboard!) or trick them.

Julia Campbell, who runs the Local Media Association’s Branded Content Project, said that the COVID-19 pandemic has accelerated the shift. “Advertisers couldn’t fall back on traditional messaging. They had to go deeper and explain how they were keeping people safe, their employees working, what they were doing to help the community,” she said.

And there are numerous categories of advertisers who share news organizations’ goal of fighting misinformation and solving the problems customers have in their area of expertise. Think, for example, about the messaging problems faced by hospitals, banks, restaurants, universities and so many other institutions amidst a pandemic.

If publishers can shift their mindset toward choosing the advertisers they want to work with, that they’re enthusiastic about, that they can vouch for, that they can collaborate with to serve readers, the dynamic will be powerful, and profitable, for everyone involved.

Matt DeRienzo is editor-in-chief of the Center for Public Integrity. He has worked in journalism as a reporter, editor, publisher, corporate director of news for 25 years, including as vice president of news and digital content at Hearst's Connecticut newspapers, and as the first full-time executive director of LION Publishers.

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BillHuey

I was very interested in the title of this piece, because, as the author of the first new model of advertising effectiveness in 50 years*, I have long believed that marketing is ready for a more nuanced and nimble approach to advertising.

This, in particular, attracted my attention:

“Local publishers’ shift away from chasing clicks and toward a base of local, loyal, engaged, paying digital subscribers presents a head start in offering advertisers a captive, high-quality audience that will see their message in the context of high-quality, relevant journalism they sought out.”

I completely agree, and I believe that this is the royal road for publishers to return to profitability and stability in an industry that has been turned on its head by the digital revolution. But they must become smarter and more disciplined on the business side as well as the editorial side, as Mr. DeRienzo suggests.

This means a sharper focus and stronger messaging about the benefits of newspaper advertising in the marketing mix, as well as more intensive training of the sales force to help advertisers strengthen their own targeting and messaging. One of the things Facebook got right was to deploy teams to help advertisers become accustomed to its platform. They even staffed a presidential campaign in 2016, with results that made the campaign staff look like heroes and masters of a new world of targeting.

There is no better time to re-shape and strengthen the newspaper value proposition, if publishers resolve to invest. Covid has turned the world upside down and created new distribution channels, and marketing everything from house wares to diapers to automobiles has changed forever.

* “Advertising's Double Helix: A Proposed New Process Model" Journal of Advertising Research, (May/June), 43-51.

Sunday, January 24