Opinion

Stories I’d like to see

Ad technolology that may threaten newspapers; winners and losers of the fiscal cliff

Steven Brill
Nov 20, 2012 12:51 UTC

1. Another threat to newspapers’ business models?

This article in the New York Times last Friday and this one in the National Journal pinpoint two important developments in the media business that could collide to pose yet another threat to the financial viability of journalism.

The Times article describes the rise of “programmatic advertising,” in which new online tracking technologies allow an advertiser to follow a consumer whose profile fits the advertiser’s targeted demographics wherever the consumer goes online rather than just make an educated guess about the websites that consumer is most likely to visit.

Before programmatic advertising, if an upscale restaurant chain decided that its best prospects were well-to-do men who live in major metropolitan areas and travel a lot, it might buy ads in the business sections of high-end newspapers or on business travel sites. Now the restaurant chain can follow those targeted people to any website they visit. It doesn’t have to buy ads on the sites where the target is most likely to be found but can instead simply bid on an electronic ad exchange to buy the cheapest ad that will reach someone with those demographics no matter where he or she goes (a gossip site, for example).

This erodes the premium  upscale newspaper sites can charge. The individual consumer is what’s important and now identifiable, not the place where he sees the ad.

Thus, the Times reports in this article, “The shift is punishing traditional online publishers,” and that online advertising revenue at its own newspaper actually fell 2.2 percent in the last quarter as a result of a decline in the rates the Times is able to charge for Web advertising. That’s a trend reflected lately in the results of most other major newspapers.

Why is the Ford Foundation donating to Kaplan Education and Jerry Springer?

Steven Brill
Aug 7, 2012 12:54 UTC

It was widely reported last week that the Ford Foundation has given The Washington Post a $500,000 grant to hire four extra reporters for a year “to work on special projects related to money, politics and government,” according to a staff memo issued by the Post’s top editors. This followed a May announcement that the foundation had given a million dollars to the Los Angeles Times to expand coverage in areas ranging from local immigrant communities to the state prison system.

These reporting initiatives are worthy endeavors aimed at fortifying great newspapers whose profits have been savaged by the rise of the Internet. However, The Washington Post Co (though not the newspaper) is still quite profitable. The company reported operating income of $77.8 million in the first half of this year. In fact, the Post Co division that owns a group of local television stations is enjoying boom-time revenue this year because of the flood of 2012 political advertising; operating income in that unit increased 43 percent in the first half of this year over last year.

The Post Co also owns the Kaplan education business, and although Kaplan’s for-profit universities are suffering because of a government crackdown on abuses related to marketing and student loan commitments, its test preparation division has shown improved results.

  •