Commentary
Behavioral Targeting To Rescue Newspapers?
- by Wendy Davis , Staff Writer @wendyndavis, June 3, 2009
Speaking this a.m. at the Computers, Freedom and Privacy conference in Washington, D.C., Hintze floated the theory that behavioral targeting could provide revenue to fund reporting on policy issues that don't lend themselves to contextual ads.
"In some cases, we can know the fact that a person reading this in-depth article about our relationship with North Korea happens to have an interest in sports, and so we can show an ad that might be effective," Hintze said.
His remarks were in response to a question posed by Federal Trade Commission's Jessica Rich. Making the reasonable point that policymakers need to know whether the potential benefits of targeting outweigh the targeting risks, Rich asked for evidence that personalized ads are more effective than generic ones.
Hintze instead focused on the revenue that personalized ads bring in -- which he said ranges from four to 10 times that of non-targeted ads. But that statistic doesn't address whether the ads are effective with consumers or whether marketers are paying more because they assume that such ads must be worth the extra cost.
Still, Hintze isn't the first person to tie the plight of newspapers to questions about behavioral targeting. The FTC itself said recently it will examine whether behavioral targeting can help the struggling newspaper industry.
But it's hard to see how online behavioral targeting will offset lost revenues for newspapers, given that the total revenue associated with such targeting is still quite low. RBC Capital Markets Corp. estimated this week that behavioral targeting could account for 15% to 20% of the online display marketplace, which it pegs at $9 billion. That would come to $1.8 billion at most. As things now stand, that's nowhere near enough to compensate for the newspaper industry's lost ad revenues, which, according to Alan Mutter, fell from a high of almost $50 billion in 2005 to around $38 billion last year.
Wendy Davis is a Senior Writer at MediaPost. You can reach Wendy at wdavis@mediapost.com
I don't get this argument.
BT by definition makes the data/behavior behind a user more important than the context and environment in which it is consumed.
Newspapers were valuable because they aggregated an audience; which sustained an expensive content creation model. But BT devalues the Publisher aggregation/context -- BT doesn't care whether you are on a newspaper or MySpace.
If these are equal, the likely effect is to increase the value of the MySpace inventory and decrease the value of the newspaper inventory.
That might sound great for data companies like Microsoft, but unlikely to save newspapers, ne?
What am I missing here?