New York Times And Google Look To Use SVW's Adtribution Model
Silicon Alley Insider yesterday reported that New York Times and Google are in talks about introducing a new type of advertising that is embedded in a news story and travels with it when it is quoted on other web sites.
Nicholas Carlson reported that Arthur Sulzberger, chairman of the New York Times Company, had visited Google's headquarters, and a source close to the talks said "one or two models" were discussed:
- A potential agreement in which any time Google's search crawlers find a Web site carrying New York Times content and Google ads, Google would split the revenue it gets from those ads with the Times.
- Google would somehow help the New York Times actually embed ads within its text so that when blogs or other Web sites use that text, the ads go with it.
A New York Times spokesperson told Mr Carlson that the two companies had been collaborating "for quite some time."
This is the same "Adtribution" advertising model proposed by Silicon Valley Watcher nearly a year ago:
The Adtribution model is simple: if you publish a section from a news story you would also agree to publish the ads that are associated with that content. By doing that you receive a license to republish that copy. This method takes advantage of the distribution power of bloggers and the Internet, while also rewarding the content creator because the advertising associated with that content is also distributed.
Google could produce a tool in which any section of a news story that is copied and pasted into a new web page would automatically also copy and paste the associated Adtribution advertising. The Google tool would carry Google's AdSense advertising. Other advertising networks could produce their own, similar Adtribution tools for their advertising. It could also be built into popular publishing platforms for bloggers such as Wordpress and Movable Type.
If the Adtribution model is widely adopted, bloggers would be in the front lines of helping to save newspapers. It's an interesting twist in that bloggers have been blamed for stealing content and readers from the newspapers and contributing to their downfall.
However, there are several issues that would need to be addressed. How would the revenues from advertising be split between the New York Times, Google, and the website owner/blogger quoting the news story?
Also, how much money would this make for the New York Times? Google is very good at monetizing advertisements on its search pages with its AdWords advertising program. But its AdSense program, which places ads on newspaper sites and other content web sites, performs poorly.
SVW's analysis of the two businesses, AdWords and AdSense, shows that its profit margin on search ads (AdWords) is nearly 40 per cent; its profit margin on AdSense (content ads on other sites such as the New York Times) is less than 5 per cent.
In 2008, AdWords produced 19 times more profit than AdSense. How motivated is Google in implementing an Adtribution model? It can make 19 times more money in building out its search engine advertising.
[Please see analysis here: Google Is Really Bad At Monetizing Content Yet CEO Schmidt Lectures Newspapers]
Also, how much money would a Google based Adtribution model produce for the New York Times given the poor performance of Google's AdSense ads? Other ad networks, such as Federated Media, which produce higher revenues for publishers than AdSense, could adopt the Adtribution model and generate more money for publishers.
The New York Times has an agreement with Google that might prevent it from using other ad networks.
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