On a recent Backwards Gang episode of the Gillmor Gang (hard to tell which one eh?), Jason argues about AdSense being more like Direct Marketing and that it will be the incumbent form of marketing for next few decades. He also touches upon the YouTube/AdSense relationship at his blog
Well, he’s partially right but he’s missing one important part of the recipe.

I agree that AdSense is more like Direct Marketing than advertising and  it’s way more efficient than prior forms af advertising given that it’s pay-per-click.
The important piece of the puzzle that Jason is missing is the quality list, something of a cornerstone for Direct Mail or Email advertising.
A better list is a better open-rate, and a bigger ROI.

The fact that AdSense is only contextual is a shortcoming, and for both Google and the advertisers, making it more efficient will make more money for each respectively.

Despite it being pay-per-click, more click-throughs mean more revenue for both Google and the advertiser.

Where is the quality list in AdSense?

You could argue that it’s in the context of the web page, but this is only superficially true.

To rev things up, or “press on the gas,” as Jason would say, a bit of behavioral targeting needs to be added to the mix.

Get more of these ads in front of people who really want them, or are at a particular point of the buying cycle and your CTRs will go up, and revenue will follow.

This can all work in conjunction with contextual data, but will enhance contextual delivery immensely.

So while I agree with Jason’s prediction that AdSense will dominate for years to come, I think Google must improve upon it, or else risk losing marketshare to a behaviorally enhanced version of adsense that may provide a similar ROI, but in a condensed amount of time, which equates to money.

If Jason thinks that Google will rise to Microsoft levels of dominance in this space, they are going to have to address the quality list or lead, in this case, by the use of behavioral targeting.

I think they will. In fact, I think  it will be an integral part of their Cost-Per-Action experimentation that began when the rumblings about click-fraud were at a peak.

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Interesting article. I’d read the whole thing.

In short, a bunch of anonymous claims that online folks should have a greater leadership role in newspaper organizations.

They are speaking mostly of editorial, but I’d say it’s even more important for the business/strategy side to be run by folks who grasp the technology. After all, if you don’t understand something like RSS, how can you envision using it to make money, or even realize it’s the most important initiative we have in front of us. There is no getting around the fact that we are managing a software product.

Like Gretzky said, “I skate to where the puck is going to be, not where it has been.”

On a more immediate note, the article touches upon something I’ve been debating for a while.

“. . .We live in a Google economy, where a wealth of news and information is at our fingertips. There’s simply too much available, so easily and free, for it to make sense for most news companies to charge for most of their content. ”

Which makes me think, I strongly believe that if every article newspapers ever published online was still available at it’s original location, their monthly traffic would be double what it is today. Maybe more.

I see no reason why ad programs like Google would not scale monetarily with traffic, which means they’d probably be  bringing in double  the amount of revenue from those programs.

Which leads to the question of whether  that sum would be  greater than the potential sum of sold archives. I think it would be, but time will tell.

In addition, there is the unmeasurable other 99.99% of the visitors to those pages that won’t click a google ad, but appreciate our content being available.

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Anyone in the Newspaper/Web business is aware of print-to-web products. Here is an example from the Allentown Morning Call.

The idea is that these special sections, which are often(but not always) advertorial, are put online in an awkward format, but since advertisers are willing to pay an upsell fee, it can end up being a decent percentage of the online revenue.

Something like that. It varies.

A more horrific example is when the print product is emulated with a Flash flipbook.

I think it’s high time that newspapers ended this ridiculous practice. It’s harming their reputation by making them look clueless in the online marketing arena.

If you want to offer the PDF of the print product, do so. But let’s not feign to be doing anything for our print advertisers by throwing this crap up. The usability is so horrible, it is of practically no value to the users, which means it can’t be of any value to the advertisers.

It’s no wonder that local online advertising is a hard sell. It’s been presented in a way that lacks any real value and the advertisers sense that.

Sure, it might hurt in the short-run, but maybe it doesn’t have to. Offer the advertisers an option to do some “real” online marketing with that forced upsell.

The real issue is the conflict of interest of saving declining print revenues, while trying to build online ones, as I mentioned about classified ads in my last post.

This conflict includes circulation revenue, as pointed out by Richard Addis, and expounded upon by Jeff Jarvis. I’ll only add to their points that circulation revenue covers print and distribution costs. When those costs are largely removed, there is no need to pass them on to user, and that’s the reason why web content is free.

At one point someone got it into their head that people were paying content. They weren’t. They were paying for print and distribution costs.

And all of this really goes back to my point about the value of the distribution channel.

When you control the channel, which could be the press, or it could be a cable box or a radio frequency, that channel has value.

When the channel is a commodity like the web, your content doesn’t necessarily become less valuable, but all other content is potentially equally valuable.

That means that you need to change the way you create content and do business. I hate to quote myself, but  I think an old post of mine was on the right track.

I once had an editor tell me that the value of our newspaper’s organization was in the process we had created for producing good journalism.

Not so.

For newspapers, the business value was that they owned a press, and therefore a distribution channel, not in any of the journalism that resulted.

Read that carefully. I’m not saying there was no value in the journalism. It held tremendous value. It still does.

That editor, though, was not giving due credit to the medium. The product which is created is a direct result of the medium which it is created for. Remember your Mcluhan, folks.

I rushed this post do to a busy schedule, but I think the conclusion is somewhat clear.

Newspapers need to free themselves of the baggage that is weighing down their online strategies. Let print be print, and online be online, and don’t let one hinder the other.

May the best man win.

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It’s amazing how much we talk about using Attention data and other sophisticated practices to bring us more relevant information and marketing.

Meanwhile all the text ads on a particular page about Cost-Per-Action (CPA) advertising are about Certified Public Accountants.

We have a ways to go, I’d say.

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