Lookie Lou isn't really a customer
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.