Fraters Libertas

The Quickening

From the April 23rd edition of The Economist:

"I BELIEVE too many of us editors and reporters are out of touch with our readers," Rupert Murdoch, the boss of News Corporation, one of the world's largest media companies, told the American Society of Newspaper Editors last week. No wonder that people, and in particular the young, are ditching their newspapers. Today's teens, twenty- and thirty-somethings "don't want to rely on a god-like figure from above to tell them what's important," Mr Murdoch said, "and they certainly don't want news presented as gospel." And yet, he went on, "as an industry, many of us have been remarkably, unaccountably, complacent."

The speech--astonishing not so much for what it said as for who said it--may go down in history as the day that the stodgy newspaper business officially woke up to the new realities of the internet age. Talking at times more like a pony-tailed, new-age technophile than a septuagenarian old-media god-like figure, Mr Murdoch said that news "providers" such as his own organisation had better get web-savvy, stop lecturing their audiences, "become places for conversation" and "destinations" where "bloggers" and "podcasters" congregate to "engage our reporters and editors in more extended discussions." He also criticised editors and reporters who often "think their readers are stupid."

Hmmm...Sounds like just the kind of thing that these guys have been talking about for some time. The economic consequences of not "migrating" where the audience has already begun to shift to is becoming increasingly obvious:

Mr Murdoch's argument begins with the fact that newspapers worldwide have been--and seem destined to keep on--losing readers, and with them advertising revenue. In 1995-2003, says the World Association of Newspapers, circulation fell by 5% in America, 3% in Europe and 2% in Japan. In the 1960s, four out of five Americans read a paper every day; today only half do so.

Older people, whom Mr Murdoch calls "digital immigrants", may not have noticed, but young "digital natives" increasingly get their news from web portals such as Yahoo! or Google, and from newer web media such as blogs. Short for "web logs", these are online journal entries of thoughts and web links that anybody can post. Whereas 56% of Americans haven't heard of blogs, and only 3% read them daily, among the young they are standard fare, with 44% of online Americans aged 18-29 reading them often, according to a poll by CNN/USA Today/Gallup.

The April 30th edition of the same fine magazine features news on changes Google is making to its AdSense service:

Google's new services extends AdSense in three ways. Instead of Google's software analysing third-party websites to determine from their content what relevant ads to place on them, advertisers will instead be able to select the specific sites where they want their ads to appear. This provides both more flexibility and control, says Patrick Keane, Google's head of sales strategy. Companies trying to raise awareness of a brand often want a high level of control over where their ads appear.

The second change involves pricing. Potential internet advertisers must bid for their ad to appear on a "cost-per-thousand" (known as CPM) basis. This is similar to TV commercials, where advertisers pay according to the number of people who are supposed to see the ad. But the Google system delivers a twist: CPM bids will also have to compete against rival bids for the same ad space from those wanting to pay on a "cost-per-click" basis, the way search terms are presently sold. Click-through marketing tends to be aimed at people who already know they want to buy something and are searching for product and price information, whereas display advertising is more often used to persuade people to buy things in the first instance.

The third change is that Google will now offer animated ads--but nothing too flashy or annoying, insists Mr Keane. Google has long been extremely conservative about the use of advertising; it still plans to use only small, text-based ads on its own search sites. But many of its AdSense partners might well be tempted by the prospect of earning a share of revenue from display and animated ads too, especially as such ads are likely to be more appealing to some of the big-brand advertisers.

The current AdSense format doesn't seem to work well for anyone. Let's hope that these changes improve that situation.