Following Perfect Market’s release today of the Vault Index and Infographic (left, by JESS3), which shows that serious news stories have markets for both audience and advertisers, a reporter asked this question, which is worth addressing:
Does the Lindsay Lohan piece at $2.50 actually net less total revenue than a $26 immigration story? Or does it still pay off well because it gets so many more hits? If the serious stories draw high CPM, why are there so many sites doing Lohan and so few doing immigration?
The Lindsay Lohan story did net less revenue than Immigration for news sites (sites like TMZ and other entertainment sites weren’t considered in this analysis). We don’t know about how many sites are doing Lindsay Lohan vs. immigration – in the case of news sites they seem to do both. The traffic difference is not as great as you might think. In fact, in this case, immigration was a bigger traffic driver than Lindsay Lohan, something corroborated by Google Insights (chart below):
Our analysis shows that quality journalism on important stories can capture both reader and advertiser demand for quality journalism around important topics.
Most news sites aren’t set up to capture the full value that’s out there with respect to immigration (and other very specific news stories) because they rely on sales efforts and strategies that are too broad for individual story targeting – they either sell against a geographic audience (local), broad demographics (men, 18-24) or they sell into broad content categories (national news, sports, etc). And any unsold page views get remnant rate ads at bargain-basement rates. Because none of these approaches captures reader interest or advertiser demand at a more granular level, the value is locked up at that level, inaccessible to publishers.
The larger point is that news publishers in particular are not making this revenue calculation of immigration vs. Lohan to begin with, anyway – and they likely won’t, from a journalistic ethics perspective. So it’s news that the topics they see it as their mission to cover are actually producing revenue, as opposed to a common assumption that these stories are loss leaders. There ARE advertisers for these topics, especially when you factor in search advertising.
— Tim Ruder, Chief Revenue Officer