Digital Media Buzz > Contextual Search Broadens Newspapers’ Ad Revenue Stream

Contextual Search Broadens Newspapers’ Ad Revenue Stream

By Thursday Bram

Simply posting news stories online isn’t enough to attract readers, as newspapers are beginning to realize. But the approaches different papers are taking to adapt to the online environment vary widely: some papers are relying on new technologies to provide more lucrative advertising options, while others are focusing on developing new products that will increase readership both online and off.

Advertising options are getting the lion’s share of opportunity, especially in light of the continuing loss of classified ad revenues to Craigslist and similar sites. The Financial Times‘ search division has launched an entirely new product on the basis of exploring new ad revenue streams. Newssift pulls together news based on a contextual search — with the help of Endeca, a search provider, the Financial Times offers companies the opportunity to have op eds appear in search results involving their name or specific topics. These op eds represent a sort of advertorial that brings in revenue where other advertising options would not.

The response from advertisers has been positive, says Robert Formentin, the vice president of advertising at Newssift. “The response from advertisers has been overwhelming: Newssift’s unique approach to business search has opened a door to the future of advertising in a Web 3.0 world. Keywords have dominated online ad targeting for over a decade but this method has limitations that stem from the infrastructure it is built on; keyword-based systems that identify strings of character and match ads to them. Those keywords are viewed by computers simply as data. Newssift is developing the next phase of ad targeting — Conceptual Targeting — by providing advertisers with the ability to add descriptive information to their ads, so the ads themselves will contain meaning and be matched to relevant concepts within documents. Advertising that has been annotated for meaning will be more intuitively appropriate when placed within a document that is conceptually relevant.”

Other avenues of advertising being explored include video ads. Jivox is working with the Bay Area News Group, Lewiston Tribune and other newspapers to provide such a service without requiring newspapers to hire new sales staff. Other options include serving ads based on the geographic location of individual website visitors, an option being explored by the New York Times’ The Local with the help of Quova. The products paired with those ads are also multiplying. Newspapers still have incredible resources when compared to blogs and other online news media: trained reporters and sales infrastructure make it possible for many newpapers to experiment with various online formats and products.

Kerry Langstaff, Quova’s vice president of marketing, sees the company’s technology as a way to jumpstart local news: “The success of community-centric blogs and websites shows that consumers still value local news. By providing hyperlocal, community-centric content online, publications can not only re-attract local readers, but also advertisers interested in reaching a niche geographic audience. With revenue opportunities shrinking for media publications, a hyperlocal model can be used to create a new channel of advertising revenue within an existing infrastructure.”

A few newspapers are even taking an online-only approach: there’s a certain appeal to the significantly reduced costs that go along with eliminating the costs of printing an actual newspaper. The Alternative Press, an online newspaper serving 10 New Jersey municipalities totaling approximately 150,000 residents, has had some significant successes when it comes to attracting readership. While competing with six different print newspapers, the Alternative Press has received more than 10 million hits since October. There are a few factors in particular that Michael Shapiro, the editor-in-chief, points to when discussing the site’s success. “We believe we are being successful because we are truly local in every sense of the word (local ownership, local reporters, local columnists, local board members, marketing via local events etc.) and because we are able to keep costs low while providing high-quality objective news in a user-friendly format.”

While the technology, including a custom content management system, that the Alternative Press relies on to function is important, the newsroom’s flexibility is far more crucial to its operation. Only Shapiro and the head of the sales and marketing department are full time. The sales staff and reporters work in part-time and freelance positions. Furthermore, the newsroom is entirely virtual. The staff, including both full-time employees, work from home.

Many newspapers are struggling to make the shift to a primarily online audience — but many papers are finding success online. To become competitive online, it is crucial that newspapers continue to explore the opportunities made possible by going online.