Contextual ads drive demand for semantic news

Thanks to the Internet and free web sites, news content is more popular and more current than at any previous time in history.

Online advertisingNews publishers, old and new, enjoy brisk online consumption and sharing of their free content among more than a billion readers, while advertisers reap the benefits of having cheap color full-motion ads placed in front of more potential online customers than either TV or print media could ever reach.

And yet those same publishers are generally less profitable than ever, as advertisers pay fees that fall well below the publishers’ production cost. In return, advertisers receive little clickthrough traffic and even fewer sales. As Rob Norman of Advertising Age notes, “The advertiser has not followed the user.”

Advertisers have not served sufficiently compelling and relevant ads, particularly on small mobile devices. Publishers, meanwhile, have struggled to relate ads to content, ensuring that potentially lucrative targeted ads for female readers aren’t misplaced alongside boys’ basketball stories.

Consumers won’t patronize advertisers that aren’t relevant — and advertisers won’t pay a premium for poor ad positions. Until relevant ads be can closely and automatically tied to related news content, it becomes difficult for publishers to justify ad cost-per-impression rates that would come anywhere close to meeting the cost of news production.

There is little doubt, however, that competitive pressure, combined with advances in semantic search among the major search engines, are gradually forcing advertisers and publishers to overcome fading financial and technical barriers. The move is well afoot to create and syndicate semantically targeted news that can be automatically displayed with contextual advertising.

Slowly but surely, publishers have begun to calculate that advertisers and audience expectations for smarter content are cost-justified. Ads are being displayed alongside related news, so as not to offend visitors with ads that are too obtrusive.

Investors appear confident in companies that are adopting best practices for intelligent content. Digital revenues and share prices are up for news content creators such as McClatchy, while investors pile aboard content-licensing ventures such as NewsCred.

How valuable is relevant content and useful advertising to you? How do you calculate the cost versus benefit of linking the two? And what methods make it easiest for you to connect news stories with related ads — and precise news topics with specific readers’ interests? We are eager for your thoughts.

About Michael Airhart

Senior editor with 20 years of experience in content syndication and the business of journalism.

Posted on January 3, 2014, in The Revenue and tagged . Bookmark the permalink. Leave a comment.

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