Danny Sullivan is getting a lot of points for his post beating up on News Corp. titled If Newspapers Were Stores, Would Visitors Be “Worthless” Then?
Far be it from me to defend Rupert Murdoch.
But I have to take issue with the premise that newspaper executives are idiots for not realizing the immense value of random visitors from random places who stumble across a newspaper story.
It ain't there.
As so often is the case, Sullivan uses an analogy, then takes it to absurdity:
At the store, the news exec owner greets visitors by asking them what the hell they want. Perplexed, they visitors say they heard about these stories and wanted to know more. The exec shouts at them. “Get the hell out of my store, you freeloader! This is for members-only. We don’t need riff-raff like you in here.”
This is bullshit, of course. Nobody's doing that, not even Rupert Murdoch, whose bellowing is nothing more than a negotiating ploy to try to squeeze some cash out of Google, which -- thanks to zillions of website owners signing up for its opaque AdSense deals -- has more cash than it knows what to do with.
Website users are not fungible. Some of them are very valuable. Some of them are worse than worthless, consuming resources or otherwise making a nuisance of themselves beyond reason. If there is a magic to operating a successful website, it's in figuring out how to identify the valuable ones and harvest that value, while not wasting time, energy or other resources on the others.
To use the storefront analogy: When I have people in line to buy big-ticket merchandise, I'm not going to shut down the cash register line so I can provide personal assistance to the guy who's agonizing over whether to buy a 50-cent postcard.
And the "Lookie Lous" who are shopping but not buying? So long as they don't get in the way of the real customers, or start knocking the china off the shelves, they're not really a problem. But I'm not going to go out of my way to serve them on the off chance they might accidentally drop a quarter on the floor.
A more appropriate analogy -- and one more easily understood by journalists -- might be that of a bar. If you're sitting in a bar warming a seat but not consuming anything, are you a customer? If you're eating the free peanuts but not drinking, are you a customer? Not all visitors are customers.
Once upon a time, I blocked Google from being able to index (or even access) Associated Press stories from our local newspapers' websites. It was not a stupid thing to do, not at all.
Here's why. At that time, we were not participating in any national ad networks. Every pageview delivered to anyone outside a newspaper's geographic market was a net loss in two ways: One, it consumed some server resources (not a huge deal, but servers do have costs). Two, when the ad server delivered a local ad to an out-of-market user, it reduced the effectiveness of that advertising campaign in measurable clickthrough per thousand pageviews.
Now, some things have changed. We're participating in national networks. We can serve nonlocal ads to nonlocal Lookie Lous. We can -- and do -- sell and deliver behaviorally and demographically targeted advertising, and provide anonymous targeting data to national networks. So we don't block Google, and in fact we're working aggressively to optimize our sites for searchability.
But don't try to tell me that there's significant money in random visits by random people from Elbonia. There's no there there.
One of the chronic problems that crop up whenever people write about newspapers is a failure to understand the nature and scale of the business. This isn't unique to people outside the news business; few journalists have any real grasp of the business underpinnings of their employers.
When the Star Tribune sold for around a billion dollars in 1998, it wasn't a statement about the value of newspapers. It was a statement about the value of a king-of-the-hill position in the advertising market of a top-15 U.S. metropolitan area.
That newspaper's value has plummeted, of course, as it has suffered from a brutal combination of economic recession, higher costs and an explosion of competition that's knocked it from its position of dominance.
And it may be that no one can "control" the hill in 1998 terms any more.
But the hill is still immensely valuable, and those who criticize newspapers for choosing to focus on the local advertising business are generally ignorant of the amounts of money involved.
Keeping your eye on the real value is the right thing to do. Don't be distracted by Lookie Lou.
Comments
Not all out of towners are Lookie Lous
And yet you say this without irony...
Worthless visits
Some responses
Martin said "Not all out of towners are Lookie Lous." This is absolutely true and very important -- but it's more important for some types of content than others, and more important in some markets than others.
We have newspapers in great tourist destinations that make good money from destination guides that are part of our newspaper websites, and for that sort of content, inbound traffic from search engines is very important. Real estate is in the tank at the moment, but in a normal economy and especially in a growing market, out-of-town traffic to real estate listings is very valuable.
So I certainly don't mean to suggest that out-of-town traffic is never valuable.
But I'm arguing against the absolutist viewpoint that the search engines are raining nothing but gold on newspapers. Much of the search engine traffic is looking for answers to random questions such as how to get dog pee out of carpeting, and such traffic is of such low economic value as to be effectively worthless.
Anonymous said "anyway, Lookie-Loos, as you're using the term, are the readers. " No, absolutely not. Readers who live in the local market and are interested in local life and become regular, engaged users are solid gold paying customers. As I've often said before, they're paying for content with the most scarce coin of all: attention.
But let me give you an example of readers whose attention is not solid gold. Back in the mid-1990s, the Raleigh News and Observer built the first general news site on the Internet, called Nando.net. Something like half its traffic came from overseas, and the biggest single source of that was Africa. Nando had no ability to sell advertising to businesses that wanted to reach early Internet adopters in Africa, so the attention of those users was valueless, and the traffic -- which hammered the servers and ate bandwidth -- was a liability.
Damon said "more than 60% of visitors to our wire stories are local and about a quarter came via search engines." I think that's another thing that's changed since the early part of this decade. Google News no longer sends any traffic to AP stories elsewhere on the net, if it can avoid doing so, and for general Web searches, other sites such as CNN, BBC and MSNBC are considered much more authoritative by the search algorithms.
*No* ability?
I had forgotten about Nando.net
I'm not anonymous
Hi Suzanne
Sorry, Suzanne, I turned off the "identify yourself" feature because spammers had been using it to insert their link spam. I probably should turn it back on.
To clarify, to the previous "anonymous" poster -- I didn't work for Nando. I was in Minneapolis at the time.
As I recall, McClatchy bought the N and O, Chris Hendricks took over Nando, and he hired Eric Grilly to run the one-man ad department. Eric chose to focus on domestic ad sales. I guess Eric was just an idiot for failing to hear the clamor of advertisers demanding to reach the African market. (That's sarcasm, in case you can't tell.)
Some responses...
by the way
Names
OK, OK ... I've turned on the feature that prompts you for your name when you leave a comment, so that I can tell who's speaking. Yet another spam magnet that I'll have to watch.
Some responses
Yeah, as I said, far be it from me to defend Rupert Murdoch. He and his lieutenants are saying asinine things. But actions speak louder than words. While Murdoch is stomping and huffing about making people pay, and his Dow Jones chief, Les Hinton, is ranting about "digital vampires," the truth is that Murdoch is operating 27 free over-the-air TV stations, and producing and selling content to a thousand others, and Hinton is operating free over-the-Internet Marketwatch.com and a stable of other free sites.
Nothing they say is real. None of it is about rights or fairness or sound public policy; it's 100% poker theater aimed at eventually adding to the pile of money at Rupert's end of the table. It's pretty much the same as how Fox News deals with facts; they're not important. It's a game of power and money.
It's highly specific for the person looking for the answer. But my business is helping local advertisers move merchandise, and from their perspective, that user is random and irrelevant.
This is the scale issue that I identified in my original post. BT ranks #1 on Google for getting dog pee out of carpeting, but that delivers less than a thousand pageviews a month. Try calling somebody on Madison Avenue with a deal at that scale.
So we're left with ad networks that deliver literally tens of dollars. AdSense and Content Match advertising works fine for the ad networks, because they have the scale to compensate for the extremely high failure rate of such systems. For local sites they're the equivalent of finding quarters dropped on the floor.
Local advertising by local businesses to local customers is a huge business, and that's where local newspapers need to concentrate. Any value from random users is close enough to zero to not really matter. The equation may be quite different for the Wall Street Journal, the New York Times and USA Today. But they're three newspapers out of thousands.
WSJ traffic
Local News
Chasing pennies
Google steers local traffic to new sites, too
Nando.net...
Local is Local Interest