Analysis On Murdoch And Switching Off GOOG: The Dirty Little Secret About Search Engine Traffic...

I have been trying to tell the same for some time now: the usual metrics of the number of pageviews and CPM/CTR do not work well with digital content valuation, let alone monetization. They mostly ignore the social status (authority), reliability, and often accuracy and timeliness of a news source or coverage -- the very added values people are willing to pay for. Not all people, of course, and not the same amount of money, but this is the point.

The Twitterati (and Wireati or SAIarati?) do not get it. For them, clicking on a headline seems to be the same as clicking on a five-page exclusive by a Nobel Prize Laureate that in addition has the excerpts from the author's unpublished book, his/her pictures or a video interview.

Here it is also when the ideology of "free" hits the wall. It claims that because the cost of copying and distribution of digital content is free (or nearly free), then all Internet content can and should be free; those who want to charge for online content only build walls around valuable info, hamper progress, or, like Murdoch, Drill or Perry, are "too old" to get the basics of the new network economics.

But again, there is a difference (measurable in $$) between a headline ABOUT a piece by a Nobel Prize Laureate and the piece itself. The headline can and should be distributed for free; the piece should not -- at least, not necessarily. Selling it through a well-design micro-payment or subscription system can generate more money than any "free" advertising ever would (Unless, of course, the readers of this particular piece are also avid Poker players, in need of a digital degree, and a libido busting elixir.)

Greg, you make some good points. Too often all content is considered the same under current monetization rules. But a pageview of an article about a Nobel Prize Laureate is not equal in value to an article *by* the Nobel Prize Laureate. And advertising is a very poor way to monetize news content anyway. But it is surprising how angry people become when they hear Rupert Murdoch saying he will shut off Google. They are convinced they know Murdoch's business better than he does, which is nonsense.

Hey Tom,

Yours is a more thoughtful analysis of Murdoch's strategy. In my opinion, the knee jerk reaction of others - that Murdoch doesn't know what he is doing - is short-sighted.

In my opinion, content creators should seize the opportunity Murdoch is creating to benefit themselves. I write about this in my post: "New Media is an opportunity to break the old media vicious cycle of "using" others to make money!" http://bit.ly/4dEcOP

Thanks Katherine. I think content will be king because at the end of the day, what else is there? At the moment, GOOG et al have the world upside down, but that will change.

I couldn't disagree more.

Show me one publisher that has built targeted landing pages for their search traffic and I'll show you a publisher that is happy to take whatever traffic Google is sending them for free. And once they know the value of that traffic they'll even pay for it. Don't tell me the traffic has no value. The traffic has plenty of value if you have systems in place to capture it. Publishers are complaining about getting shot in a gunfight when they never loaded their pistols.

Pageviews? You jest!

Making money on content is about traffic in and traffic out. This is the web economy. Clicks are the transactions that take place in it billions of times a day. It is a user controlled medium - where the user has value is in what she does, her clicks NOT the content. The content is not a means to an end but the means to another beginning.Amazon grew this way via affiliate. Google grew through paying for traffic. It still spends BILLIONS on it.

When you can count and attribute media you have a performance medium. CPM? Performance always wins because it's based on the thing that is most valuable. What people want to do. Mr. Murdoch, welcome to the user controlled medium.

The dirty little secret? The dirty little secret is as many businesses including Google have been getting smarter and smarter through testing, targeting and optimization of landing pages and traffic from Search and other referred media, consumer publishers have sat idle content to get money for nothing from banner advertising. The secret is that there's NO money in that!

Jonathan, I did not say that Google traffic has no value I said that some people assume it has more value than it actually does. The fact remains that advertising has become a very poor way to fund news content no matter where you get the traffic. Advertisers increasingly don't want to pay for pageviews they want to pay for performance and that's fair enough. But that's not a model that helps publishers fund their content no matter how much optimization they do and landing pages they create.

"that's not a model that helps publishers fund their content no matter how much optimization they do and landing pages they create."

Tell that to the numerous B2B publishers that have built their digital business models this way and are doing quite well compared to their consumer counterparts. I'm sure they'll find your and Mr. Murdoch's point of view quite amusing.

Jonathan, I don't think the B2B publishers you mention are having to spend the same amount of money in creating content as say the Wall Street Journal, New York Times or even regional newspapers. Sure, you can create online publications that are profitable as long as you employ as few people as possible and rely on automated ways to collect and publish content, and on "user" generated content. Huffington Post is a poster child for that approach.

Do you really believe that Murdoch just needs to do some optimization and create a few landing pages and all will be hunky dory? Do you really believe that Google traffic can be monetized so that it can help support the work of hundreds of Murdoch's top journalists and editors? You should call him up and tell him how to do it - you'll be the savior of the newspaper industry. Seriously. They need all the help they can get.

What I do think is that if Murdoch spent the same amount of time & money monetizing the WSJ traffic & user base as they do in creating content they can be profitable. What do they really know about matching their content with their visitors and their interests? You can't have a successful digital business unless you respond to this. Let's not even get into their failed efforts in Social Media.

We all know the newspaper business is dead. But it is the will of the people holding the smoking gun. The gun may say "made by Google" but newspapers had plenty of time to get into the ammunition business. It was their arrogance and laziness fostered by an old media mentality that masked the inevitable.

The fact of the matter is that as much intent is generated on the newspapers sites as anywhere else on the web. Google does not generate intent. It delivers a way of fulfilling it. Sites like WSJ need to leverage the the fact that they are as much ahead of the Google value chain as behind it and get into the marketing technology business. They are sitting on a goldmine of audience, content and data. It's not Google's fault that they know what to do with it better than the WSJ themselves.

One thing that concerns me in all of this is how in depth reporting will suffer if everyone simply takes their news in sound bites and snippets. But as Jonathan says, Google is only an enabler. People are demanding the services they want in this digital age.

Newspapers are going to have to adapt. The choice does not exist. If Mr. Murdoch cuts off all access to Google he is not going to solve his problem, he is going to make it worse. He is going to have to answer a tough question - how do we deliver value to the market as it exists today?

Certainly kicked off a strong debate, which is needed. Firstly, it strikes me that no one has the answers - there is no 'holy grail' and its about testing, trailing and iterating what might work. That, I suggest, is what Murdoch's doing. If your company is split two ways on an approach (for every advocate of the subscription model in news corp, they'll be equal opposing views), send the CEO out - kick up a stir and draw in some qual analysis amongst all the quant stuff you've been doing with analytics.

That said, the problem is upon us and it threatens the very essence of how journalism is delivered. Change is undoubtedly required, but it needs new thinking to deliver it. I don't buy the 'all you have to do it optimize on site user funneling to sustain their interest and make money'. That doesn't cut. The reason is because if we all operated rationally, all the time, in a predictable manner, we wouldn't be trillions of dollars in debt and we'd all buy our coffee at 'I don't have a big brand name' for half the price than starbucks.

The fact is, even if you're able to profile users so accurately you know them as well as google, they may still have to refrain from clicking the 'click me, click me' link you've displayed below the content their viewing (having arrived from twitter) because they've got a gazillion other choices to make on how to spend their time, and dinner's burning in the oven.

Likewise, do I think Murdoch's apparent decision to remove NC news sites from google is the right one? That's a tough call. I've thought for a long time that there has to be other model's than straight ad funded stuff. There is only so much ad money around. But removing content from google could only have the effect of sending users to competitors who display content for free. Do modern consumers identify with brands so vehemently they'll pay for content they can get free elsewhere? Probably not, and maybe there's part of a solution right there.

What I'm saying is simply this - neither polarized views, IMO, will win out. It needs new approaches, new thinking, and most importantly a dedication to live through the eyes of users. What do they really want? Can we create new ways to engage them? Can we create new products that they value and we can make money from?

It's all about the sum zero game, where everyone's a winner.