US newspapers lost advertising revenue found

And why the answer to the problem is not about scale. 

Thomas Baekdal compares the decline of advertising revenue for US newspapers with the rising ad revenue of Google and Facebook.
Thomas Baekdal compares the decline of advertising revenue for US newspapers with the rising ad revenue of Google and Facebook. Full post at http://bit.ly/2cLUkYb

Everyone in media in the US saw the graph a couple of years ago showing the cliff that the newspaper industry has fallen off with respect to advertising revenue since the beginning of the first decade of the 21st Century thanks to a simple bit of graphing by Mark J. Perry.

Now, media watchers have added the numbers and shown where that money went. Ben Thompson of the Stratechery blog added in Facebook’s revenue rise to show one reason why newspapers in the US are facing even greater headwinds, even as the US economy starts to show a little more life. Thomas Baekdal took it one step further, adding in Google’s revenue. It almost mirrors the decline of newspaper advertising, although Google’s rise seems a bit steeper.

I want to make an important point, though: Google didn’t actually kill the newspaper advertising market. Google replaced it with an entirely different market. It’s the same money, but Google isn’t in the same market as the newspapers. It instead created its own market and brands decided that was a better place to be.

I would also say that Google, via its Android mobile OS, also shifted its advertising model deftly to mobile. When you combine this graph with Mary Meeker’s graph about the attention minutes that people spend, you see why Google’s growth continues.

Mary Meeker's 2016 comparison between the percentage of time that people in the US spend with their mobile devices and the difference in mobile ad spending. Full presentation available here http://bit.ly/2dE9vUO
Mary Meeker’s 2016 comparison between the percentage of time that people in the US spend with their mobile devices and the difference in mobile ad spending. Full presentation available here http://bit.ly/2dE9vUO

In the US alone, Meeker estimates that there is a $22 b opportunity in the difference between the amount of attention that people are spending with their mobile devices and mobile advertising spend.

But it is not all doom-and-gloom. Baekdal also points out:

This is an incredibly important distinction to understand. Google isn’t winning because it’s big or that it has so much more scale. It’s winning because it created a way for people to have high-intent moments, which brands can reach with their ads.

We have shifted from having a single advertising market (all based on low-intent exposure), to having two different advertising markets… and the media only fits into one of them.

I would counter that the old print mass media fit into the scale model. However, there are many other media businesses that were never about scale, and if you look at some of the models that are showing success, they are about finding a committed niche, whether geographical or topical and serving it well. That might be B2B media, such as Rafat Ali’s travel business focused Skift, which just announced a new vertical to tackle, Chefs & Tech. In Tulsa Oklahoma, The Frontier has 500 subscribers, as of April, willing to pay $30 a month for local investigative journalism. De Correspondent in the Netherlands broke 40,000 subscribers last December.

Of course, this is all about reader revenue, not necessarily how to replace the fat revenue that advertising used to deliver to local newspapers. I don’t think that ad revenue will ever come back so we need to find a new model for local news and information, and I don’t think the answer is scale. Media cannot scale cost effectively to compete with Google and Facebook.

As for new models, maybe we already have one in the US, TV, but that isn’t going to go as deeply local as newspapers once did. But I think we’ll see more experimentation in local news media over the coming years supported by truly local entrepreneurs. But sometimes it’s good to know what isn’t working so you can move on to try other things.

Big news stories: A threat or opportunity for paid content strategies?

January was a very stormy month here in the UK. We live just outside of London, and it has been quite soggy with our local park being flooded to some extent for much of the past month. People were swept out to sea as they tried to snap photos of the fierce waves. Photos and videos flooded news websites and the social web. People love weather stories, but as we saw during the storms, they rely less on traditional media to tell and share those stories.

David Higgerson, the digital publishing director for the regional websites within Trinity Mirror, is right when he catalogues the hyper-competitive environment that local journalism, especially, but journalism in general faces in a world where cameras are everywhere and distribution via social media is lightning fast and engaging.

But imagine, just for a moment, if we’d had paywalls around our sites – be they full, pay-or-sod-off paywalls or pay-as-you-go model. What do you think would have happened? Would people, up to their ankles in water and without power be digging out their debit cards to log on via their mobiles? Would worried relatives elsewhere in the country link your website to their Paypal account to keep up to speed with your live blog?

No, of course they wouldn’t. They’d have gone to Twitter, where police forces share information by the minutes. Followed new pages on Facebook, where the Environment Agency was actively driving users when appearing on broadcast media. They could have searched Google and found any one of the traditional national newspaper brands now hoovering up any agency copy they can find. Or checked out the BBC, which is superb at cross promotion. Or discovered hyperlocal sites run for passion or for money … and never again thought twice about us.

David is right, and paywalls are not the easy solutions that most journalists dream of as much as we might wish it were so. David closes by saying, “We have the potential to create great content, we just need to find the revenue model.” That is it in a nutshell. To quote advice given to a friend about his journalism start-up: “You know you can create value. But can you capture it?”

While local newspapers have much greater competition for attention and audiences, their real challenge has been competition for revenue. At the moment, we have two business models that have had some success: High volume predominantly ad supported, and a mix of ad and reader revenue. National or formerly national newspapers with international strategies, (think The Daily Mail and The Guardian), are pursuing an advertising-based business model based on scaling their audiences aggressively. But the pure scale model really isn’t an option for local journalism. Digital advertising operates and delivers meaningful returns with millions, probably tens or hundreds of millions of uniques. Most local sites on their own don’t operate at that scale. Some groups are looking at network plays amongst their sites, like Advance’s MLive network in Michigan in the US (disclaimer, I worked for MLive in another lifetime between 1997 and 1998). However, that isn’t an option for all local groups.

That means either reader revenue or alternate revenue streams, and the latter are showing some promised. Some local news groups are trialling digital services businesses, and it was one bright area for local media in the US last year. The Dallas Morning News has bought a number of digital ad and marketing companies to help it build meaningful digital revenue. (Notable as well is that they dropped their paywall recently.) A Newspaper Association of America report showed last year showed a 91 percent increase in marketing service revenue. It’s good to see that kind of growth somewhere in the business.

Paid content models used to be a binary choice, hence the name paywall. However, paid content strategies have evolved, and I don’t simply mean moving to the metered model as opposed to the hard paywall strategies. Modern paid content strategies have grown more nimble, more flexible. During big stories like storms, news groups like the New York Times and the Wall Street Journal have opened up their sites. This can be a great marketing opportunity to highlight the richness of your content, even in this new media environment. Paid content strategies also should provide publishers with a richer stream of data so that they can deliver better experiences and better products both for audiences and for advertisers.

David is spot on about being clear-headed about the competitive challenges, and he is also right that the real test now is finding the revenue model for local journalism. For the revenue to come, the products will have to change as well. If we’re not competitive with social media or more to the point working with social media to provide audiences with the best verified content, then we need to step up our game. Ever the optimist, I’d like to think that there is an opportunity for local news organisations to curate and verify this local information. To me, this is about smartly staying at the centre of a new local information and conversation eco-system. The bottom line is that whether it is storms or other breaking news, we have to compete for audiences. If we can do that, I think we’ll remain relevant to audiences and advertisers.

News organisations must engage with RTB advertising

Journalists tend to focus on the shifts in media consumption as they try to make sense of the disruption in their industry, but they have often overlook the shifts in adverting beyond the precipitous drop in newspaper advertising since 2005. That collapse, more than 60 percent since 2005 in the US, has been driven not just by the decades-long decline in circulation but also that there are simply cheaper and more efficient ways for advertisers to reach audiences than passive banner or print advertising. The collapse in newspaper ads has driven some news groups into bankruptcy, driven many small dailies to become weekly publications and has driven news groups to shift the balance in revenue from advertising to reader revenue.

Frédéric Filloux has a great look forward to 2014 with his normally insightful advice on how digital media will survive to see 2015. I completely agree with him that the glut of online advertising is driving prices downward. I part company with him about RTB – real-time bidding. RTB, aka programmatic or algorithmic buying, can seem dauntingly complicated on its face, but after you cut through the acronym-intense eco-system, it is really quite straightforward. RTB is simply an automated way that advertisers can place ads on sites based on the audience they want to reach and the price they are willing to pay. RTB platforms mine the rich data-stream being collected about you.

It is a natural evolution of the data-driven targeted advertising system that we’ve seen develop since the late 1990s. To quote Alan Mutter, this is why media economics have shifted from reach to each. It’s not about advertisers casting their message as far and wide as possible but by precisely targeting their message to audiences they think are most open to their message. RTB can target age, income, geography and other demographic factors.

Again, for journalists who aren’t on the business side, it’s important to understand that RTB is mostly used for selling remnant advertising. What’s remnant? Your sales team sells as much of their ad space as possible – direct sales – but they may not be able to sell all of your pages. Unsold pages are remnant, and these unsold pages have traditionally been sold on ad networks. RTB is really just an evolution of the ad network model. News groups have become wary of ad networks because the returns are so abysmally low compared to advertising they sell on their own, and news groups and Filloux are worried that RTB, with its auction model, will simply put even more downward pressure on ad prices. Filloux says:

Thanks to Real-Time Bidding (RTB), publishers actually fuel the price deflation by auctioning their leftover inventory on various marketplaces. In doing so, they generate some revenue – at the expense of the format’s per unit value (in such auctions, expect no more than 5-10% of nominal prices). In addition this process mechanically applies negative pressure to premium placements because the advertisers will opportunistically purchase a guaranteed and targeted audience wherever available.

He is right to a point, but we’re already seeing smart engagement around RTB. RTB, and indeed all digital advertising, is about data, and just as news groups like the Financial Times realised that owning their customer data is key to their business, news groups are realising that if they power their own RTB exchanges with their own data, it can be a competitive advantage. Condé Nast launched a premium RTB exchange two years ago, and last year, they appointed an RTB senior director, Alanna Gombert. She said that that their RTB rates are similar to their direct sales rate card. She talks about premium RTB, and that is consistent with the magazine group’s premium content.

While news groups operate in a different space than a magazine publisher like Condé Nast, they still have the opportunity to create private RTB exchanges to leverage their data. This is especially true for large newspaper groups with rich user data that they have gained with their paid content strategies. Paid content is as much about user data as it is about shifting the revenue mix. Filloux doesn’t say that news groups shouldn’t engage with RTB, but I think they must engage with it. Data driven advertising is not only a reality that cannot be ignored, it can also be an opportunity. Fortunately, news groups got the memo. As Digiday wrote yesterday, the New York Times and the Washington Post have already appointed RTB chiefs. Own your future; don’t fear it.

Advertising innovation is key to digital transformation at news organisations

When I heard that Canada’s La Presse had spent three years and $40m building its iPad app, my jaw dropped. It is one of the most expensive content development projects I have heard of, and my personal view is that such exorbitant development costs don’t make sense in the digital era. Of course, then I heard that La Presse wasn’t charging for its app or for the content, and I really couldn’t believe that this was a sane strategy.

I was not alone. Steve Faguy, a freelance journalist in Montreal, had much the same thoughts. However, Faguy landed an interview with Guy Crevier, the publisher of La Presse, about the project, and Crevier says that there is a method to their madness, a method which will very soon be tested.

Crevier says that he is very sceptical about the success of paid content strategies and believes that only a few large US and European papers with a vast offering of exclusive content, especially business content, will make paid content strategies work. Faguy quotes Crevier as comparing digital paid content to cancer treatments that merely delay the inevitable. This has led many newspapers to cut staff, which leads to a downward spiral of lower quality and lower readership.

Crevier also puts the $40m development costs in context:

“How much do you think it would cost me tomorrow morning to replace La Presse’s printing presses? It would cost me between $150 million and $200 million. And when I build a plant to print La Presse, I’m limited to 250,000 to 300,000 (copies) maximum. What does this money bring in future obligations? It brings me expenses of $100 million a year in paper, ink, trucks.”

Ok, that’s all fair enough for $40m is far cheaper than $300m. But how will the app generate enough revenue to pay for a staff of 200-plus journalists if the app and content are both free? The answer is premium ads. The app was designed to include special ad slots that La Presse hope they will be able to charge $16,000 for. In Faguy’s original critique of La Presse’s strategy, he highlighted a Radio Canada report that points out that this is much higher than other digital advertising in the Canadian market, and that the app doesn’t use standard digital ad formats so advertisers will need to do custom work to advertise in the app.

Raju Narisetti, Senior Vice President and Deputy Head of Strategy for the new News Corp, sounded a sceptical note on Twitter.

It is a bet-the-farm strategy, and one that requires that the app be a runaway success. I have to applaud La Presse in putting some thought and innovative effort into their future ad strategy. But will the audience be big enough and engagement be high enough to entice advertisers to pay the premium? We will have to see, but it will be a fascinating experiment.

La Presse’s experiment is just one of many now being run by different organisations, and this innovation, whether it is Buzzfeed’s native advertising play or Quartz’s novel in-stream advertising, is not only a good thing but an essential thing for the industry. Frédéric Filloux has an in-depth look at Quartz’s business/advertising model: it’s novel approach is bolstered by being in The Atlantic stable of print and digital publications, but the site has been able to attract very high value advertising. Filloux writes:

A year ago, the site started with four brands: Chevron, Boeing, Credit Suisse and Cadillac. Today, Quartz has more twenty advertisers from the same league. Unlike other multi-page websites, its one-scroll structure not only proposes a single format, but also re-creates scarcity.

The limited number of ad slots may create a cap for growth, but as he points out, Quartz is powering towards its break-even point ahead of schedule.

I’m a journalist, and I am thrilled to see a level of commercial innovation that we haven’t seen since the late 90s. I don’t think it will address all of the issues that journalism faces in the attention economy, but at least we’re starting to fight the good fight.

NewsRewired 2013: Three things driving QZ.com’s journalism

Quartz, the newest member of The Atlantic Media network, launched in 2012, but by July, it already had 5 m users and said that it had already passed The Economist’s web traffic in the US and would soon pass the Financial Times, and Jay Lauf, the publisher of the site, kicked off Journalism.co.uk’s News Rewired 2013 talking about the strategy behind the site’s success.

Lauf started by saying that digital media need to ask: Where does your audience come from? Do they come to you directly, via search or social?

Direct: 10 to 15 percent of traffic – While it is nice to think that people come straight to your homepage, he compared that to the fanciful idea that his young daughter comes to him every night as he eats dinner and asks for his advice, any nuggets of wisdom he might impart. It’s a nice idea, but as every parent knows, this isn’t reality. Similarly, journalists believe that their audience online are coming to them directly to learn the news of the day. Even on big sites like CNN and the New York Times, direct traffic is only 10 to 15 percent of traffic. That leaves 85 percent of your traffic off the table, Lauf said.

Search: 25 percent and stalled – A couple of years ago, the focus on was on SEO. It was the search game, a game of trying to “trick the robots, writing for machines not audiences”. He said that some journalists were encouraged to misspell the names of celebrities so that these sites could capture the 50 percent of traffic from people who commonly misspelt those celebs’ names. “That leads to a lot of questions. What does this mean for the quality and intellectual honesty of journalism?” Lauf asked, adding that it was a “waning game”

From a business standpoint, he said that search traffic referrals have “flat-lined” at about 25 percent, so a focus on SEO still leaves a lot of traffic.

Social – sharing and ‘dark social’ – However, the rest is coming via sharing, either through social and sharing networks – Twitter, Facebook, Google+, Pininterest – or through ‘dark social’, simply sending links via IM or email.*

He said that we could all debate the value of the audience from these sources, but Lauf said that if a news site wasn’t winning with SYBAWs – smart, young and bored at work readers – they were dead. He said that media consumption had moved from pull (with the image of US newspaper sales box) to push (social media and mobile notifications).

Lauf summed up the new news consumer with the quote:

If the news is that important it will find me.

For Quartz, the question is how they get into these streams, these social streams that will SYBAWs are using to monitor news. They focus on three things:

Be visual “Embrace the fact that the web is a visual medium. Liberate content from the conventional constructions of the print world.”
What’s the thing? – Lauf said, that every story has a nugget, a data point, a new angle that gets to heart of something new and interesting. We love to share nuggets. “That doesn’t mean that story can’t widen, but think of headline first. Think of headline as a tweet. Will people share this? Will it travel?”
Radically simple, responsive design – They have created a radically simple site that looks clean on the desktop, the tablet and mobile. They don’t need separate tablet or mobile apps because the site looks good on all platforms, and it uses an infinite scroll. They didn’t clutter the site with a dizzying choice of 50 links when “people came to read only one story”, Lauf said.

They have also carried this radical simplicity to their ad strategy. Lauf said:

We rethought the way that we designed advertising. We wanted to avoid a Piccadilly Circus of drop-downs, pushovers and distractions.

The ads appear in Quartz’s news stream, much like ads now appear in the Facebook mobile news feed. They are labeled as sponsored content, and they are shaded subtly differently in the navigation.

They have 50 full-time staff, split almost evenly between business and administrative staff and editorial staff. Developers sit side-by-side with editors and journalists, he said.

In July, just ten months after launch, Quartz announced that it had 5 m users, and they claimed that they had already passed The Economist in terms of traffic in the US and was setting its sights on overtaking the Financial Times in the US. (A claim that the The Economist disputed saying that ComScore consistently under-reported their US traffic.) Quartz predicted just yesterday that it would be profitable by 2015.

Quartz might be based in the US, but it is obvious that it has global ambitions if for no other reason editor Kevin Delaney requires his journalists to speak fluently at least two languages. Of the site’s 50 or so full-time journalists and contributors, they speak 119 languages.

As the publisher, Lauf might be on the business side, but he ended on an inspirational vision for journalism. He said:

I started out as a journalist, a wide-eyed idealist, and I’m still a wide-eyed idealist. I still believe deeply what we’re doing on the business side is essential and important work. Intellectually, honest journalism is the underpinning for a democratic society. If we can figure out how to make this commercially valuable for hundreds of years to come, we all win.

Amen. With some of the long-standing tensions between the business and editorial sides of news organisations especially during this time of cuts and chaos in the industry, it is essential to hear business side leaders making the strong case that smart commercial thinking supports the mission of journalism. Business leaders in journalism are not all ‘bean counters’ obsessed with the short term. If we can solve the commercial problems and develop new revenue streams and rejuvenated business models, journalism, journalists, audiences and democracies all win.

* If you’re unfamiliar with the term dark social, Journalism.co.uk did a recent podcast on that. It’s called dark social because it is listed simply as ‘direct’ traffic from analytics services. This could be traffic from people directly typing in the URL, people sharing the link via IM or email or people using secure search.

Clark Gilbert’s five business model ideas that are changing the news industry

After writing about how print-digital integration was absolutely the wrong response to digital disruption, I’ve been going back to more of the ideas of Clay Christensen and Clark Gilbert on how the news industry should respond to disruption. I would strongly encourage you to take an hour and a half of your time and watch Clark Gilbert speak at Harvard University’s Nieman Foundation. I had read his ideas, but he’s even more forceful and compelling in person (or via video).

Clark Gilbert, Deseret News – April 25, 2013 from Nieman Foundation on Vimeo.

He quotes the president of an online newspaper division:

Overall, the newspaper industry’s involvement in the internet has been one where it had a lot to lose and it’s been trying not to lose it, as opposed to starting from scratch and having a lot to win.

Gilbert has created a disruptive division that is all about winning digital opportunities. About 47 minutes in, he lays out five business model ideas that are changing the news industry and are helping his digital division grow at 40 percent year-over-year.

  1. Digital revenue should a third of your business in 2012 and half of your business by 2015
  2. A digital buyer needs a digital seller
  3. New channels are the difference between Transformation A and Transformation B
  4. Digital marketplaces (Not Digital Publishing) will win
  5. Dual transformation requires new organisation

And he says that number 2 is non-negotiable, and watch the video at 51 minutes to see why Gilbert is even more adamant about that now. Your jaw will drop. Seriously, this is worth your time.

They have four digital advertising channels:

  1. Companies that want a legacy-digital bundle
  2. Large local digital only
  3. Small local digital only
  4. National advertisers that do a significant amount of targeting and re-targeting.

He said that he recently noticed that the legacy-digital bundle sales had plateaued, but one of his other channels (he didn’t say which one) is growing by 70 percent year-over-year, which is just one reason why they have 40 percent year-over-year digital revenue growth.

Number four will interest everyone who is in local media. He says that digital marketplaces are winning local.

Gilbert makes an even more forceful case than he did in Austin where I saw him in April that integration, especially on the business side, was absolutely the wrong idea. When the Washington Post integrated its print and digital, digital revenue growth stopped. When the Dallas Morning news integrated print and digital, digital revenue growth stopped, Gilbert said.

Contrast that with Gilbert’s company. In 2009, legacy revenue accounted for 90 percent of the business and digital came only from 10 percent. In 2012, he said that legacy revenue channels would account for only 33 percent of overall revenue. Digital revenue is now bigger than revenue at their TV station and their radio station, and it will soon pass print.

I’ll just finish with this comment from Gilbert:

News is not a business model. It’s a public good.

However, you can build a business around the brand that you create with this public good.

Fellow journalists, you should be fighting for this kind of thinking because Gilbert plows back a third of all the profit from the digital division to fund the newsroom.

Digital advertising does pay, just not for newspapers, yet

Last week, WAN-IFRA said what many of us in digital journalism have known for a while, that we’re losing the battle for attention. They said that digital news audiences lack the same “intensity” of print audiences. Put simply, digital audiences are less loyal and spend less time with each digital news source. WAN-IFRA CEO Christoph Riess has put the problem this way:

We are not losing readers, we are losing readership. Our industry challenge is engagement. Because someone is a subscriber does not make him a loyalist.

Several people in the industry have been trying to raise the alarm for years now. Two years ago, Ken Doctor pointed out that audiences were spending 7 hours a month on Facebook versus 20 minutes a month on the New York Times or 8-12 minutes on the average US newspaper site. US digital journalism pioneer Steve Yelvington has been talking about this for years, speaking about the problem with audience frequency. As Steve said earlier this year:

Forget all the newspaper industry puffery about how we’re reaching more people than ever. Frequency and time spent are the important metrics.

And the reality is dismal.

From a business standpoint, this has meant that while digital advertising spend has increased dramatically, news organisations’ share of that digital revenue still remains piteously low. As WAN-IFRA noted:

Overall digital advertising market rose from US$ 42 billion to US$76 billion from 2007 to 2011. Only 2.2 per cent of total newspaper advertising revenues in 2011 came from digital platforms.

What you will continue to hear over and over and over, from the likes of former Guardian editor Peter Preston, is that print still pays the bills. They will tell you that you can’t make money online. Preston cherry picks figures from the recent Journal Register bankruptcy filing in the US, pointing to that fact that print revenue is down 19% but still represents 50% of the group’s revenue. However, he conveniently leaves out that digital revenue at the news group is up 235% from 2009 to 2011. Yes, they probably started from a low base, but it is pretty impressive growth. Many news groups in the US have seen their digital revenue growth slow or stall this year, and at least the Journal Register team can point to 32.5% growth this year alone.   

The reality is that you can make money online but that newspapers are not competing effectively for digital advertising. As WAN-IFRA noted, “Search advertising accounts for 58 per cent of all digital advertising and 13 per cent of all advertising expenditure”. US news analyst Alan Mutter noted in April:

The share of the U.S. digital advertising market garnered by newspapers shrank to the lowest level in history in 2011, according to newly published data.

With the growth of digital formats like highly targeted search, mobile and social advertising vastly outpacing the ability of publishers to develop competitive new products, newspapers sold only 10.3% of the $31.7 billion in digital advertising purchased in 2011.

When the Newspaper Association of America first started counting online sales in 2003, newspaper websites carried 16.7% of all the digital advertising in the United States.

There is money to be made online, but newspapers aren’t the ones making it. That’s the problem and, unless newspapers focus on creating not just large audiences but loyal audiences, that problem won’t be solved. Newspapers also need to build up knowledge about those audiences to better serve them journalistically and to provide better targeted advertising.  Those are the challenges we need to meet, and we need to ignore the voices in journalism that say we can’t make money with digital. They have ruled the debate for far too long and have delayed us from meeting the real challenges of digital. 

News business models: ‘No silver bullets, just shrapnel’

I’m at the Online News Association conference in Washington. The first panel was of editors from a new regional news website in Washington,TBD.com. Jim Brady, general manager for TBD.com, had an excellent response to the question of how the site would make money. He said:

There are no silver bullets, just shrapnel.

What he meant by that was that they were pursuing multiple revenue models to build a sustainable business. They have launched with a traditional ad-supported model with a few twists including selling advertising through a network of local blogs. In the future, they are considering a range of products and services including mobile ads and a mobile apps development service.

KPMG: UK readers far less willing to pay for digital content

Normally, I’d just add this link to Delicious, but the data is worth highlighting. KPMG has found that 81% of UK “would go elsewhere for content if a previously free site we use frequently began charging”. Only 19% would be willing to pay in the UK, while globally (the same research looked at consumer behaviour in a range of countries) 43% of consumers are willing to pay for digital content.

However, there are possibilities for publishers to pay for content that “almost three quarters of  UK consumers are willing to receive online ads in exchange lower content costs”. They are also more willing to have data collected if it would result in lower content costs. “48 percent of UK consumers would be willing to accept profile tracking, up from 35 percent in the 2008 survey.” Publishers and marketers need to take care though as 90% of consumers also expressed concern about their privacy and security online. That is high, although a slight reduction in the figures from 18 months ago.

A key finding from the report shows how consumers would like to balance privacy and targeted advertising. Tudor Aw, Head of Technology, KPMG Europe LLP, said:

(UK consumers) do see the value in allowing service providers to have access to the information necessary for more tailored services, but they are only prepared to do this if the risks are controlled and, crucially, if there is some value in it for them.

The research is well worth a look, especially for those whose revenue strategies are tied to advertising, but also for any business looking to deliver better targeted services to their customers through better use of data.

The Click-Through That May Be Hurting Your Brand – Advertising Age – DigitalNext

Kevin: An interesting article on Advertising Age about click through rates. One thing that's important beyond the narrow focus on this article is that sometimes the easiest to measure statistics aren't necessarily the most important statistics. Indeed, it might say something just about that ease of measurement rather than its relevance. The take-away from this research: "While click-through rates showed a strong positive correlation with interaction rates and brand favorability, only a minor positive correlation could be demonstrated between CTR and purchase intent. "