Oh f*ck

Terry Heaton posited that the internet means advertising will never achieve equilibrium. It pointed the way for where news sites need to start looking to stay solvent (hint: not display ads).

The most sobering part of Heaton’s post was the above chart. For a while, I have been hanging my hopes on the LA Times, where online revenues are now enough to fund all of editorial. If a massive organization like the Times can fund its content-production with online ads alone, then it makes sense to drop the print edition and smaller outfits can actually make it. But if Heaton’s chart is right (a big if), then sites need to find other, more reliable avenues for ads.

Fortunately, Heaton knows the segments of advertising that he thinks will keep growing: paid search, direct e-mail, and streaming audio and video. Fortunately, news sites can get involved in all of these:

  • Streaming audio/video will be the easiest, as news sites are already producing video and podcasts. Some come with a specific newspaper flavor, and others are good enough to run on TV. The trouble here is finding a marketable topic for content and getting local advertisers used to buying online video or audio ads. The newspaper might have to create the ads themselves if they’re not working with savvy buyers.
  • Direct e-mail is exciting too, and by direct e-mail I’m assuming Heaton means something cheerier than just spam. Idea: put premium stories behind a wall, but not a pay one. Instead, require users to make free accounts and accept cookies (like the Washington Post does). Get them to agree  to periodic e-mails from advertisers, and taylor those e-mails based on the cookie results. I don’t know how many of those e-mails would be deleted unread, but there’s got to be something there if this category is booming.
  • Paid search is putting results at the top of a search , as opposed to Google Adwords search-sensitive display ads. Sites could run these on their archives, although it would be difficult to find enough advertisers to encompass even the most popular search terms, and sites would have to identify the paid links.

Whatever you think of Heaton’s predictions, there’s going to be a gold rush at the intersection between media and advertising, and I appreciate that Heaton is giving us pans. Still, wouldn’t it be so easy if display ads worked?

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