May 15th, 2009
Bloggers could rescue newspaper industry with "Adtribution" business model
It’s ironic that bloggers, who have been blamed for stealing content and readers away from newspapers, may now be in the front lines in helping to save newspapers.
The New York Times and Google have been reported to be in talks to distribute advertising that is linked to a news story when it is quoted by a blog, or any other web site. This is the “Adtribution” business model I proposed nearly a year ago.
Nicholas Carlson reported that Arthur Sulzberger, chairman of the New York Times Company, had visited Google’s headquarters, and a source close to the talks said “one or two models” were discussed:
- A potential agreement in which any time Google’s search crawlers find a Web site carrying New York Times content and Google ads, Google would split the revenue it gets from those ads with the Times.
- Google would somehow help the New York Times actually embed ads within its text so that when blogs or other Web sites use that text, the ads go with it.
A New York Times spokesperson told Mr Carlson that the two companies had been collaborating “for quite some time.”
This Adtribution model could help generate new revenues for newspapers. Bloggers quoting from a news story would agree to post ads connected with that story and would receive an automatic license to use that content. This method would leverage the distribution power of bloogers, benefiting the New York Times and other newspapers in distributing news stories, and also benefiting the newspaper advertisers.
If NYT and Google adopt the Adtribution model, others are sure to follow.
A key question is how much extra revenue would Adtribution provide? The recent “Technorati Attention Index” shows the New York Times to be #2 out of 50 sources quoted by blogs.
However, Google’s AdSense program, which places advertising on newspaper sites and other third-party sites is not very profitable for Google: it makes 19 times more profit from its search engine based advertising AdWords. [Please see: Google Is Really Bad At Monetizing Content Yet CEO Schmidt Lectures Newspapers]
Other ad networks could provide better revenues for newspapers using the Adtribution model. But New York Times has an advertising agreement with Google and might be prevented from using other ad networks.
Tom Foremski reports on the business and culture of Silicon Valley at the intersection of technology and media. He also writes at Silicon Valley Watcher. See his full profile and disclosure of his industry affiliations.
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