Digital Advertising and News: Who advertises on news sites and how much those ads are targeted
Monday, February 13, 2012 – News organizations are having only limited success persuading their key traditional advertisers to move online and few news websites demonstrate the kind of sophisticated targeting of advertising that many consider the future of digital advertising, according to a new report by the Pew Research Center’s Project for Excellence in Journalism.Â
The mix of advertisers buying space on news organizations’ websites are vastly different than those whose ads appear in the legacy platforms, the study, which examined 5,381 ads at 22 news outlets found. On CNN cable television, for instance, the top three advertising categories were motion pictures and television, insurance, and telecommunications companies; on CNN.com they were financial ads, toiletries and cosmetics, and job search.
What’s more, the ads on these news sites rarely take advantage of the technology already used by Google and Facebook to match ads with the individual interests of users.Â
These are among the findings from a two-part report that examines who places ads with news organizations, what types of ads are used and on which platforms those ads appear. Â
Between 2011 and 2015, revenue from digital advertising in the U. S. is expected to grow by 40%. A year later, in 2016, digital ad revenue is projected to overtake the dollars going to all other platforms. How much of that growth will go to underwrite news remains in doubt and throws into question the financial future of journalism. What will happen pivots in part on whether the news industry can move into the more lucrative areas of digital advertising, particularly using consumer data to target ads, persuading major legacy advertisers to also advertise online and moving into new revenue areas.Â
“News organizations are still in many ways trying to catch up with the digital ad marketplace, both in luring their core advertisers and in bringing the value of their audience into what they offer,” says Amy Mitchell, Deputy Director of the Pew Research Center’s Project for Excellence in Journalism. “Neither of which bode well for the figuring out the economic future of the industry.”Â
Among the Other findings:Â Â Â
- In-House ads, ads selling or promoting a news organizations own products, fill more space across these news websites than any other advertising category. Nearly a quarter, 21%, of all the ads captured were for the news organization’s own products. The practice occurs most among the media sectors with direct subscription sales-newspapers and magazines. At time.com, for example, ads promoting their own products accounted for 56% of the ads captured in the study. This practice was less common at sectors with no direct consumer subscription, such as those from network television and cable television.
- The finance industry is represented far more than any other on the news websites studied. Ads from the financial industry numbered nearly three-times that of the next biggest category, toiletries and cosmetics. What stood out even more was that the financial industry’s strong presence on news Web domains is matched by a fairly limited presence in the legacy platforms. Every sector except magazines experienced a greater portion of financial advertising on the website than in the legacy platform. On abcnews.com these ads made up fully 45% versus 13% in the morning and evening broadcasts studied.
- Discount or coupon advertising such as Groupon was fairly limited. Just as the long-term viability of discount companies has come into question, their prevalence on news websites is limited as well. The year 2011 saw the rise of discount/coupon companies like Groupon or Living Social, which many news organizations hoped might become a major new revenue source. The study found that such coupons were not a major presence among these 22 news sites. Discount ads, where discounters like Groupon pay the news organization to carry their ad, made up more than 10% of the ads on only five sites. Of the three that used it the most, two (the Toledo Blade and the LA Times) did so through their own discount programs. Yahoo News was the other news site to rely heavily on this type of advertising, largely through Groupon.
- Most of the news sites did not feature ads targeted to consumers based on their online behavior. Just three of the 22-CNN, the New York Times and Yahoo News-employed high levels of targeting, delivering different ads to the researchers based on that person’s recent online activity. A handful of other sites had some limited targeting, mostly in the form of smaller ads on internal news pages. A follow-up evaluation six months later found that two more sites had shown some movement in this direction, but only from virtually no targeting to a limited amount on inside pages. For sites that do target their ads, the practice of erasing one’s browser history, or “cookies,” had virtually no effect. The same level of targeting occurred.
- News organizations tend to rely most heavily on static banner ads. Rich media ads, which make use of pop ups or animated content, are rare on news sites. So too are video ads, one of the fastest growing types of ads on the web. eMarketer predicts video advertisings will increase 43% in 2012 while static banner will grow just 18% as consumers are drawn to newer more eye-catching formats.
- Even though search ads don’t appear on most news sites, Google’s advertising presence is still strong there. Accounting for 38% of all ads captured, the sponsored link box-small boxed-in ads that usually have between three and seven lines of text- proved a popular style of advertising. On most sites this box is powered by Google.
Accompanying the examination of U.S. news websites and legacy outlets is an essay by Professor Turow of the University of Pennsylvania’s Annenberg School for Communication. His essay provides a background sense of the online advertising landscape and context into where news fits in.  Â
The Project for Excellence in Journalism is a part of the Pew Research Center, a nonpartisan, nonprofit fact tank that provides information on the issues, attitudes and trends shaping America and the world. The Pew Research Center does not take positions on policy issues. It is funded by the Pew Charitable Trusts.
