Research: Newspaper, magazine, broadcaster sites missing out on digital advertising boom

If you think you could be doing more to make money from advertising in an intelligent way, consider this a wake-up call. Some of the biggest news sites in the United States are failing to capitalise on the influx of advertising spend, according to new research from the Pew Research Center for Excellence in Journalism (PEJ).

PEJ’s study argues that in general, “the digital advertising they do get appears to be standard ads that are available across many websites.” Even worse, the kind of personalisation that can really increase yields across sites, through real-time bidding and other technologies, is sorely lacking: of the 22 sites and 5,300 ads studied by Pew, only three used significant levels kind of targeting.

“With only a handful of exceptions, the ads on news sites tend not to be targeted based on the interests of users,” the report says, in stark contrast to the kind of targeting being pioneered by Google Loading... companies google and Facebook Loading... companies facebook .

The study looked at 11 newspapers, four magazines, online news providers such as Huffington Post and Yahoo Loading... companies yahoo , as well as broadcasters’ sites such as CNN.com.

And as Pew points out, analysts such as Forrester expect online ads will reach $77 billion by 2015 - making up 35 percent of all ad spend - while ZenithOptimedia expects just display and video to be worth $40 billion by 2014

Other nuggets from the report (all charts from Pew):

– House ads are everywhere: Ads selling media orgs’ own products are the most common ad type filling 21 percent of inventory in the study. In fairness to the Economist, Time and Newsweek Loading... companies newsweek – who were studied for this – increasing subscriptions is the main aim of those businesses, so you can’t really blame them for shouting about their deals.

– Financial services are critical: Despite the supposed on-going collapse of capitalism, ads selling financial services are three times more prevalent than the next category, toiletries and cosmetics.

– Interactive ads are rare: It’s mostly banners, banners and more banners according to Pew – disruptive rich media ads like pop-ups, overlays and videos are all rare. Google AdSense Loading... companies adsense is still a big inventory filler, despite general concerns that it offers little return compared to other ad formats.

Pew's research appears to be a little unscientific - it's more of an anecdotal snapshot than a rigourous statistical analysis. Also, it may have been given more validity by examining sites over time - some sites were judged on just one day's publishing.

Also, this study is just looking at US publishers. I would like to see something investigating the ad success or otherwise of UK and European sites.

A companion report by Dr Joseph Turow goes into the nuts and bolts of ad networks and ad exchanges, explaining the importance of cookies and tracking people's interests -- the kinds of things we discussed in our recent half-day event on display advertising (roundup here).

What is premium?

Something else to ponder in this debate: "legacy" publishers, the ones with newspaper or magazine brands, like to think they have a strong brand that they're firmly in the premium category of online ad inventory. That may be so, but it's becoming a level playing field in which non-traditional publishers are receiving a lot of the new influx of digital display spend.

In short, investing in quality content and journalism is important but it isn't a guarantee of increasing advertising yields or revenue overall - that correlation has been broken. Relevance and targeting specific users and communities is crucial.