According to a report by Pew Research Center released on Monday, digital advertising is on track to overtake all other platforms by 2016. Though there has been little success in trying to get traditional advertisers to move online, the focus should not be on transferring the models of legacy media advertising to the digital world, but rather using new media to develop better models. This is already happening with advertising exchanges that offer an alternative to advertising networks, the largest of which are owned by Google, Yahoo and Microsoft. Of course, the tech savvy companies are at an advantage here—developing new models is easier than switching from the old to new. Nonetheless, how can digital advertising better serve the news?
1. Different Ways of Targeting
Probably the most-discussed aspect of the report is its findings about online targeting. With fears of privacy and security issues over the collection of user data, individual-targeted ads are supposed to allow publishers to charge more money. Most of the news sites in the survey had low levels, or “non-apparent” targeting, while only three of the 22 sites surveyed had a high level of targeting. They were CNN, Yahoo, and The New York Times. The fears over privacy issues are certainly warranted, as clearing one’s browser history had little effect on targeted ads. But interestingly, the researchers found that some sites used a method of targeting not based on users, but based on the news story. For example, The Atlantic, which fell under their “low levels or non-apparent targeting” category, had ads by Shell for clean energy around a story about the military’s support of green technology. Content can dictate targeting as much as user information can.
2. Looking Beyond the Banner
Paid search accounts for most of online advertising, but the report points out that this “does not naturally work well with news content.” For news sites, the most popular form was banner ads, 46.1 percent of ads of the surveyed sites were static banners. This category is expected to grow, but not as fast as video ads. Though online news sites featured no video ads in video content, and stand-alone video ads made up only 1.3 percent of advertising, EMarketer predicts that online video ads will grow by 43 percent in this year alone.
3. Going Local
In Professor Joseph Turow’s companion report, he addresses how the Internet can facilitate relationships with local publishers. Small businesses have increasingly more venues to advertise to locals through Internet giants like Facebook and Google. The local market also offers more opportunities for targeting, through partnerships like the Yahoo Newspaper Consortium. Content is distributed through Yahoo’s network and the partnership helps facilitate targeted ads for local businesses.
4. Future of Advertising—What it Means for TV and the News
Every year in the U.S., television is home to about $70 billion in advertising. Turow predicts that as advertising models change for TV, there will be a profound impact on newspapers and other digital publishers. Already, “technology firms are trying to ensure that marketers will be able to apply to the home television screen the strategies, tactics and technologies” of the Web. With this kind of development not only will there be new opportunities for targeted advertising, but a further evolution of the digital publishing business model.