Supping with the devil: Google, Yahoo & newspapers

Farhi’s excellent article contains some information on the US newspaper industry’s continuing dalliance with Google and Yahoo. That dalliance takes the form of three joint ventures. For the most part, they’ve been heavily under-reported. Here are the agreements as Farhi sees them:

  • Online classifieds: Yahoo + newspapers
  • Yahoo has struck up a partnership with 19 newspaper companies that own 264 daily papers. Here’s how Farhi describes the mechanics of a deal which apparently results in the newspapers “taking a majority of each dollar generated”:

    When an advertiser seeking to hire, say, a nurse, in St. Louis buys an ad through the St. Louis Post-Dispatch, the newspaper places the ad on its site, which is co-branded with HotJobs and automatically linked to HotJobs’ national listings. As a result, the advertiser gets his message in front of both local job candidates and others across the country. HotJobs, in turn, gets a local sales agent – the Post-Dispatch – to sell more listings.

  • Online display: Yahoo + newspapers
  • An extension of the above project based around behavourial targeting. Here’s how Farhi describes it:

    Using Yahoo!’s search capabilities and technology, the companies hope to marry national and local display ads to their visitors’ interests. People interested in, say, pickup trucks (as identified by tracking software and registration questionnaires), would likely see national ads for Ford, and perhaps for local Ford dealers, when they logged on to a newspaper’s site.

    As he points out, CPMs for behavioural ads are a lot better than for untargeted banners. (Always assuming, of course, that newspapers can deploy the required technology without alienated their readers on privacy grounds.) Exactly how much better? According to Paul Ginocchio of Deutsche Bank, some members of the Yahoo consortium could see online ad growth rates of 40% for the next two years. . .

  • Online display: Google + newspapers
  • Google has moved on from its not-entirely-successful experiments in selling print ads on behalf of publishers. The search giant is currently running an experimental ad exchange (or trading system) that allows 225 newspaper sites to sell ad space on an auction basis.

    Under an experimental program that was expanded this summer, Google is running auctions that enable thousands of smaller advertisers to bid on ad space – size, section and date of their choosing – on some 225 newspaper Web sites. The newspapers are free to accept the offer, reject it or make a counteroffer (Google says more than half the bids have been accepted). The process is streamlined by Google’s technology, which automates billing and payments.

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