PerfectMarket

Business Solutions for the News Business: A Response to Google

 

 

Pablo Chavez, Google's Director of Public Policy, posted the search giant’s comments  in response to the Federal Trade Commission’s Staff Discussion Draft on the future of journalism in the Internet era.

It’s no surprise that the comments from the Googleplex are well researched, detailed and insightful as to the plight of newspapers in the digital era. We’ve long been proponents of the idea that Google is good for journalism. It’s always of interest to see how Google frames the argument.

Here’s what stood out in Google's comments to the FTC about the future of news:

“Because quality journalism matters so much to our users and to society as a whole, Google is committed to helping news organizations develop innovative ways to serve consumers and foster revenue generation models that will sustain the continued vitality of the news industry. These models will succeed only if they meet the needs of two groups: Consumers looking for news that is relevant to them, and advertisers who wish to reach those consumers with information about their products or services. On the consumer side, Google makes it easy for users to find the news they are looking for and to discover new sources of information.”

We have consensus: news needs new business models to survive in the digital era. Google notes an important (and Perfect Market-friendly) distinction between business models that service the consumer and those that service advertisers. Newspapers must capitalize on the interests of both groups.

This is, of course, what we’ve aimed to help publishers do with The Vault — so publishers can better understand both what users are looking for and what they are clicking on. All parties (advertisers, search users and newspapers) get a better result from such a tailored system.

“As a result, we send more than four billion clicks each month to news publishers via Google Search, Google News, and other products. That is, every minute we send approximately 100,000 visitors to news publishers around the world.”

These numbers make it clear: newspapers cannot ignore or discount search traffic. The problem right now is, news organizations have not mastered a system for getting the most revenue out of search traffic. Imagine the possibilities if publishers harness even 1/4 of those 4 billion clicks!

“Each click – each visit – provides publishers with an opportunity to show users ads, register users, charge users for access to content, and so forth. As we discuss in detail below, how publishers interact with users who visit them through Google is largely in the publishers‘ hands.”

It’s interesting to see the behemoth, Google, which so many have decried for its blood-sucking ways, making such a laissez faire statement about what publishers do with search traffic. It’s clear, then, that publishers have an opportunity: Google sends them the traffic, it’s their job to MAKE something of it.

“Maximizing the monetization of online traffic will require innovation and experimentation in how news is delivered online, and how advertising can support it.”

Such was the internal mantra behind Perfect Market’s development of The Vault. We aim to provide news publishers with an innovative dashboard that enhances data for our customers by overlaying the performance and revenue potential of their content libraries. In this aim, Google and Perfect Market agree: the key to sustainable business models lies in harnessing online traffic and maximizing advertising on those pages.

“In the news field, the structure of the Internet has caused the unit of consumption for news to migrate from the full newspaper to the individual article. of the rest of the publication. Among the challenges caused by this new atomic unit of consumption is developing a different approach to monetization: Not only must each individual article be self-sustaining, but beyond this, publishers must provide sufficient context for first-time readers so that the reader will then stay on the publisher‘s site and view other articles, photos, videos, databases, or other content.“

Here, Google notes an important change in the way people are consuming news. It’s no longer a matter of sitting down and engaging with an entire paper. These days news stories are read one-by-one in the moment the event occurs or sometimes days later.

This fact, what Google calls, the “atomic” quality of news consumption, is actually a boon to newspapers, if they correctly understand the potential of individual stories and provide intelligent analysis around packaging related content around individual items.

This is one of the most exciting things about The Vault — it allows publishers to understand their content libraries on an “atomic” level, one story’s potential at a time. In the background, Perfect Market automatically aggregates related articles on the page, for a deeper contextual understanding of the topic. It is this “new atomic unit of consumption,” and the cogent packaging of it, that offers the most promise for new business models and monetization.

Add to this more granular approach to news a better understanding of advertising potential and you have a powerful combination:

"An online advertiser can measure the effectiveness of advertising at a very granular level and target ads very precisely and relevantly. With contextual advertising, for example, Google serves relevant advertisements on its publisher partners‘ websites that are tailored to the particular page or article that the user is viewing. The advertisers can get detailed information about how effective a particular ad is – including how often the ad was clicked (or otherwise engaged with) ... ”

There is only one thing, in my mind, missing from Google's observation. Why shouldn’t publishers have access to the same information that online advertisers have access to? Armed with such analysis, publishers are better equipped to serve (as Google has championed) the interests of consumers while still providing premium content to advertisers.

Certainly, the way of the future for newspapers and other mainstream media outlets is in new business models which grant publishers greater control of their content’s destiny.

Google maintains throughout its positioning that much of this battle must be done by publishers themselves. At the same time, it's clear that a publisher’s best chance for winning the digital “war” is in arming themselves with the best, the most up-to-date, and relevant insights into their content, advertising, traffic and revenue potential. This is Perfect Market's raison d'être.

— Lee Glandorf

Follow Lee on Twitter: @LeeGlandorf

Tags: google, lee glandorf, perfect market, search economy, journalism online, the vault, revenue from search, future of news, revenue tools for publishers,