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FTC workshop: Afternoon speakers: Yahoo, Google, Journalism Online

This is page for rough, contemporaneous notes of today's U.S. Federal Trade Commission workshop: "From Town Crier to Blogggers: How Will journalism Survive the Internet Age," held Dec. 1-2, 2009, in Washington, D.C., at the FTC's 601 New Jersey Avenue offices. Your scribe is Bill Densmore, a fellow at the Donald W. Reynolds Journalism Institute at the Missouri School of Journalism. Of course we've tried to provide accurate quotes and summaries. But the FTC has stenographers recording all of the testimony and that should be your definitive source. The home page for this coverage is http://www.newshare.com/wiki/index.php/ftc

The afternoon session has begin with a series of short presentations. We'll incorporate teh remarks of Ken Doctor, media analyst, and Len Downie, VP at large of the Washington Post later (your scribe had to attend other business but taped those sessions).

We come back to the floor with the two major search engines' presentations.

Lem Lloyd: Yahoo!

His talk is about The Newspaper Consortium, a partnership among Yahoo and 45 companies which own 821 newspapers, a total of 52% of U.S. Sunday circulation. Half of all paid subscribers in the United States.

He's spent a lot of time working with local newspaper sales organizations. He says there's not enough training for those departments going on. The average user spends 4.5 hours on Yahoo each month. "Like a muscle, America's newspaper sales forces have been left to atrophy." There are 7,500 local salesreps at Newspaper Consortium newspapers.

"This deal, this partnership, has taken a tremendous amount of resources for Yahoo! ... but we think it has been very well worth it." Newspapers bring high-quality content, brand, offline distribution, local community and a local sales force. He says the local says force is the most difficult thing to replicate.

Yahoo brings technology, brand, reach/audience, training and Internet expertise. The goal was to reposition ad spend in the local ad market which is estimated at $14 billion in 2009.

It starts with local classifieds being upsold to the national Hot Jobs site. There is search component -- Yahoo is the exclusive search. There's a content piece also -- local headlines by zipcode are now on the Yahoo home page. This sends more than 50,000 referral links a month to local papers.

And local papers can resell Yahoo inventory in the local market.

"As part of the deal Yahoo created a next generation ad platform," says Lloyd. They were going to create a new platform anyway, they worked with newspapers to define and build it. Now 250 papers are on it and they all agree on taxonomy -- so that you can ads by section all across the United States. Now those newspapers don't have to be "out of the game on national advertising, they can create their own networks."

He provides testimonials from McClatchy, Scripps and the Milwaukee Journal among other.

Have sold 18,000 campaigns onto Yahoo representing six billion ad impressions, fueled by behavioral targetting. The CPM rates on behavioral targetting are very good, Lloyd says.

Yahoo analyzes patters of purchasing behavior, score each Yahoo user with the category "so you can deliver the right kind of ad with the right kind of person at the right time." They have 400 or 500 interest categories.

Example: San Francisco Giants fans looking for SUV hybrids.

Training is a big key

Yahoo's Lloyd says training of local newspaper sales forces has been neglected. He talks about a newspaper sales person who had been selling the paper for 40 years and had huge success in a couple of weeks selling Yahoo "audience" instead of "space" (print ads). A Dallas car dealer sold six Cadillac CTS' in a week via the Yahoo-Dallas Morning News partnerships.

Local advertisers are confused and audience-based selling allows them the ROI that they are looking for. Benefits for consumers include a less cluttered ad environment, high-quality web pages, free services from Yahoo! and access to goods and servies they want. Yahoo has just removed teeth-whitening ads with questionable claims.

Concerning privacy

He works with newspapers to put specific links on their website to allow users to opt out of behavioral targetting. All Yahoo ads served are labeled. If you click on the privacy policy link in their ads, you can go to a Yahoo privacy page and immediately opt out. If you don't want to have an airline ad follow you, for example, you can opt out of that.

There are also links on the site that allow you, through the Network Advertising Initiative, to opt out of a wide array of things across the internet.

Lloyd says the partnership has been three years now. "It's very much a marriage, we have learned a lot," he says. Newspapers can beat the advertising competition in the local market -- but only if their reps are trained.

Google's Josh Cohen -- looking to work more with publishers

Josh Cohen is senior business product manager at Google News. Earlier, he worked for Reuters, the wire service. He says Google is at the FTC sessions because high-quality news is important not just to Google but to society at large.

The Internet is now a top source where people get their news. Consumption has gone up. Only about 50% of news users come into a newspaper website via the front page. "Increasingly, every single page on a publisher's website is a front page." They are coming in from all kinds of places -- all driving traffic to an individual publisher's site.


Google sees this world as a partnership with publishers. Publishres and search engines are partners in a world of digital distribution. Thhe publishers create content and distribute it. Readers find it through social networks, blogs and search engines -- sending billions of visits to publisher.

He shows a slide which shows a typical portal website as focusing links to the portal. The experience and editorial voice is that of the portal (he seems to be suggesting Yahoo, here). He describes this as a focusing lense -- focused to the portal. He shows Google as a convex (or is it concave?) lens which sends traffic to multiple websites rather than focusing it to one website.

Google usually looks for a site map when it crawls a website. They other thing they look for is a robot.ext instruction file. the news crawler is know colloqually as the "GoogleBot." The robots exclusion protocol looks like this at a command-line level:

  • User-agent: * (the name of the search bot you want to respect this)
  • Disallow / (that can be directories)

You can give instructions to even exclude a page.

"These are all different layers of control that publishers have today," says Cohen. "And the reality is that the vast majority of publishers want to be discovered."

"There is no single factor that is causing the challenges for newspapers," says Cohen. He cites aging demographics in particular. So there is no single solution that fixes it all. "I think the way we see our role is as one of the partners that can work with publishers . . . you should never look to close yourself off and have a single partner."

The challenge: Get more readers, build more engaging websites and make more money from it. You can grow your online business by getting more readers, keep them longer or make more money from them either with advertising or subscriptions. What Google is working on: Increase ad revenue for publishers, help develop more user engagement (example Google FastFlip), and explore additional business models (subscriptions: First Click Free program; working to support purchase of digital content.

Idea: "use the powered by Google approach to help publishers implement subscriptions on their site."

AdSense returned more than $5 billion last year to participating websites.

Bottom line: He says they are looking to work with publishers more.

Now there's an afternoon panel starting: "Emerging Business Models in Journalism."

Steve Brill: Some content sales in January?

Steve Brill heads Journalism Online LLC, an effort to develop subscription and other pay models for American newspapers.

"I don't think the government really should be involved much in this, except possibly to make sure all the privacy data that our friend Yahoo talked about a few moments ago is really given over voluntarily."

"If all that behavioral targetting is working so well, why are we all here anyway?" Brill asks about the Yahoo Newspaper Consortium.

"The business of journalism as we know it, certainly print journalism, is going down fast," says Brill. "And I think, contrary to what some of my panelists will say, that there's a pretty simple reason for that and that is 10 or 15 years ago all the publishers in the world decided to commit suicide by giving all their content away for free."

He says he and his wife a few years ago decided to endow a journalism program at Yale. He tells a story of a Yale parent who called concerned their daughter was being "lured" into journalism. He thought about that question for awhile, and that is what caused him to start Journalism Online with former Wall Street Journal Publisher Gordon Crovitz "who is the brains of the outfit." He adds: "This is stuff that Gordon and I really care about."

"I know that Gordon and I haven't presented a business or a proposal that perfectly meets all the answers," he says, but adds they have made some real progress in helping find a way for publishers to derive value for their content. "We support all of those models." He says search engines are news producers friends. "when you use a search engine the right way, it brings them to you content and then you can ask them to pay for it."

Brill adds:

"In the history of journalism, it is really hard to find any sustainable . . . large significant news organization that has been able to sustain itself just with advertising revenue. The closests thing might be the broadcast networks way back when, but they were typically non-profit loss leaders for the networks and they got to split 95% of the nation's eyeballs into three pieces of the pie."

He doesn't know if it is micropayments, or subscriptions, or 10 or 15 free articles are the answer. "What we think we do know is that a minority of engaged readers on a website will pay something for content if that content has distinctive value."

It's been hard to find any large news organization that has been able to sustain itself through advertising alone. "So our basic proposition is very simple: That journalism needs to be professional and it needs to be paid for . . . what we're trying to do is reestablish an old business model -- not create a new one -- and that is that people pay for some of the cost of delivering the content."

Susan DiSanti of the FTC says the FTC is doing a survey/study of its approach to privacy. And there is a workshop in this room on Monday that is going to talk about behavior advertising and privacy will be one of the main topics.

DiSanti: Doctor said in his survey about 10% of people said they would be willing to pay for news. Does Brill think that is right?

Brill: He says that's as good a number as any. He says that at 10%, the partners he is talking about would have a home run if 10% of their web users began paying for content. Because once you have revenue at that level, there is an incentive to hire reporters

DeSanti: "Are you ready to give an estimate" of when the service will start?

Brill: "We are right now as we speak about a week away from shipping our initial beta software to our initial affiliates. They are going tobe kicking the tires over the next month or so and sometime after the first of the year there should be real people buying something off the platform."

Lauren Rich Fine, a former Wall Street newspaper analyst: "There are loyalists will pay pretty much any price and that's why i think Journalism Online will be successful."