At Newser, an aggregator with about 2.5 million unique visitors a month, the audience breaks down in ways similar to mainstream news organizations. Executive Chairman Patrick Spain says about 12,000 users are “addicted” and come to the site many times a day; 225,000 are “avid” users who visit Newser many times a week; and more than two million people pass by, with just a click or two. But Spain argues that the passers-by are useful, because they are more likely than addicted users to click on ads, though whether clicks on ads are a good indicator of engagement is an open question.

For decades, many news organizations enjoyed higher profits dependent largely on bigger audiences. Magazines and newspapers priced their wares artificially low to boost circulation, even though that brought a group of lightly affiliated readers who had to be lured again and again with cheap come-ons and giveaways. When this worked economically, it was because advertisers could be persuaded to buy access to a big audience they didn’t know much about. Today, advertisers have far more choices and far more information. Moreover, many of the firms competing for ad dollars never would have been defined as “media companies” years ago. Facebook now delivers almost a quarter of all digital advertising views in the U.S. Search advertising, dominated by Google, soaks up almost half the dollars spent on online ads.

So it is much harder for media companies, new or old, to compete purely on audience size. They will never grow fast enough, or increase ad rates high enough, to counter the massive numbers accumulated by giants like Google and Facebook. News organizations have to offer something more.

When The New York Times announced details of its digital subscription plan in March 2011, Andrew Swinand, president of global operations for the Starcom MediaVest Group, a media-buying agency, said it wouldn’t hurt—and might help—the site’s advertising revenue. “I’m paying for an engaged audience, and if that audience is willing to pay, that demonstrates just how engaged they are,” he said. In a later interview, he added that editors need to start thinking about engagement in broader terms, not just the amount of time people spend on a site or the number of pages they click. “I want to be able to look and say, ‘Who are these people [using a site], and what are they spending their time doing on it?’” By doing that, Swinand says, news organizations can help companies feel more confident that their ad dollars are being spent wisely. The Times’s Golden adds that “if we all go the way of outdoor advertising [e.g., billboards] where it depends on who passes by, it’ll be hard to build value. Engagement is the proxy by which people value content.”

Audience size is still vitally important. A site with 10 million unique users will get more attention from advertisers and agencies than one with a fifth that many. Large companies want to make mass purchases of ads; they won’t deal individually with a host of small sites. But the chase for traffic has put news organizations on a sugar high of fat audiences and thin revenue. It has also devalued their journalism, as they have resorted to such tactics as celebrity photo slideshows to boost search-driven traffic. In diminishing their brands and commoditizing their content, they have fallen short in the crucial goal of attracting engaged, loyal users. This needs to change. By producing relevant journalism, deploying data intelligently, and relying on social media—not just search engines—to drive traffic, they can gather a more devoted and involved readership, one that advertisers will also prefer.

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Bill Grueskin, Ava Seave, and Lucas Graves are the co-authors of "The Story so Far: What We Know About the Business of Digital Journalism." Grueskin is dean of academic affairs at the Columbia University Graduate School of Journalism. Seave is a principal of Quantum Media, a NYC-based consulting firm. Graves is a PhD candidate in communications at Columbia University. For further biographical details, click here.