November 11th, 2009
Rupert Murdoch and the dirty little secret about Google traffic...
Every time Rupert Murdoch complains about Google and says he will cut off access, a mass of Twitterati, Digerati, and Diggerati think the old man has lost his marbles and doesn’t “get it.”
Surely, they chorus, all that traffic that Google sends to the Wall Street Journal is the equivalent of sending a fire hose of cash straight into his pocket. Why would he want to turn off that traffic?!
The answer is that he wouldn’t, if that were indeed the case.
The ugly truth is that Google traffic is hard to monetize. It’s not the bonanza that people think it is.
Google traffic is low quality, it is people who stumbled upon the article. Usually, about one-half is new to the site, it had never been there before. The other half already knows who you are. For well established brands this offers incremental value.
More importantly, Google traffic doesn’t help the newspaper advertisers much because they are trying to buy a specific sector, a specific readership. For example, the Wall Street Journal advertisers are very business and stock trade oriented. For other newspapers, the advertisers want that particular local metro. Having random readers brought in by Google from all around the world, doesn’t do much for the advertisers or the newspapers.
Yes, you can get away with selling those extra pageviews to your newspaper advertisers but they get to see the metrics too, and it doesn’t take them long to figure out that much of the Google traffic isn’t the traffic they want. That, in turn, lowers the amount of money they will pay for all the pageviews that a newspaper brings in.
Mr Murdoch knows his businesses much better than the Google traffic supporters. He can run the numbers and see if the revenue from subscriptions will outpace relatively weak revenues from Google traffic.
He can selectively use Google and other search engines, and news aggregators, to pull in traffic to “free” content and then shut it off. He has lots of levers to pull in terms of figuring out an optimum for running his business.
In contrast, Google doesn’t have any levers to pull. It relies heavily on access to new content. After all, why use a search engine to find what you already know?
Novelty is extremely important to Google. Yet its only answer to content producers has been “we bring you lots of traffic.” The dirty little secret is that that traffic is very difficult to monetize, it has a low value. Even Google has trouble monetizing its Google News traffic.
Google is very much at the mercy of all the Internet’s content producers and whether they let it in, or leave it outside.
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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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