22 June 2020

Techdirt: “How Most of the Anti-Internet Crew Misread the News that the NY Times is Getting Rid of 3rd Party Advertisers”

Yet, again, the NY Times is now doing the same thing that Facebook and Google have done. It’s collecting data on its users, and then using that data to sell access to advertisers. Why is that evil “selling data” when it comes to those other companies by “good” when it’s the NY Times? Look at the segmenting the NY Times already says it’s doing: how exactly is it getting “marital status”? Or income levels? Is that the sort of info you give up to get a NY Times subscription (and if so, who is actually giving that info away?) or is the NY Times collecting that information through other means?

Now, there are some reasonable arguments to be made that in making this move the NY Times will be sending less data back to 3rd party advertisers, but even that is only narrowly true. First of all, the data that flows back to ad networks via publishing partners is already a lot less significant than you might think. It’s just not that much – and unless the NY Times is also going to pull other things like the URL tracking it includes in its “share on Facebook” links, it’s still going to be sending data back to companies like Facebook.

Mike Masnick

An interesting initiative from The New York Times, but I am unsure how this makes business sense. If I understand correctly, they plan to build proprietary first-party data platform from scratch. On one hand it should make them independent from ad tech giants Google and Facebook, but at the same time their – much smaller – competitors (expect The New York Times to be silently pushed out of Google’s top 10 search results and from the Facebook news feed).

On the other hand, this seems like a complicated and costly process; they will need data scientists, programmers and security experts, also new sales staff to sell these targeted ads to new customers. This will generate large upfront costs for, in my opinion, relatively little revenues. We can see that by looking at Spotify with its mixed revenue model: premium is consistently generating about 90% of revenue from fewer users that the ad-supported tier. Let us recall studies that showed personalized ads are only marginally more revenue efficient than classic contextual ads (4% specifically) – and The Times would be competing with Google and Facebook, so their ad margins may turn out lower. I would not consider this a good business plan, especially since this data collection will be subject to privacy legislation. The question from the first quoted paragraph above is particularly relevant: where are these data segments coming from? If this info is not requested during sign-up, The New York Times is likely collecting it from third party data sellers, in breach of GDPR.

The New York Times building
The New York Times building. Photo: Eduardo MunozAlvarez/VIEWpress/Corbis via Getty Images

I think the cleaner solution would be to establish more sensible price segmentation for people, to strike a better balance between large distribution and the company’s revenue. Offer free access to the current news section for a limited time, for the last five to seven days for example, for people who just want to browse the news in the morning, or make this the cheapest subscription. Charge more for access to news archives, opinion articles and investigative reporting, for extra features like commenting and crossword puzzles. Use simple contextual ads for the lower tiers and get rid of tracking completely. There is no reason to invest in ad tech over simply creating a better experience for subscribers.

Post a Comment