E-Media Tidbits

In marketing, executives talk of spending "above the line" and "below the line." Above the line is traditional advertising -- ads placed in publications and on TV, radio, Web sites and the like. Below the line relates to other ways that a product, brand or company message might reach a consumer, such as through public relations and corporate communications.

Traditionally, the budget to place ads on news Web sites, as for news publications and shows, has come from the above-the-line budget, which tended to remain roughly at a constant percentage relative to sales. Inasmuch as a news organization had to compete for ads, it was competing against others who were also selling similar ad space.

Recently, though, an accelerating trend has led to new challenges for those looking to support their digital media through advertising: Marketers are increasingly taking what used to be above-the-line dollars and placing them into the media they're producing themselves. They are using marketing funds to attract their own audiences, rather than advertising to others'.

Demand Media has advertising-driven content down to a science. Instead of creating content for the Web and hoping that it generates revenue, the company works backwards by determining how much revenue each piece will generate before anything is produced.

The company uses a series of algorithms to pick through keywords that people are searching for on the Web and aims to create content unique enough to rank highly in those search results. It also determines how much advertisers would pay to be next to that content.

This is much different than simply using analytics to shift stories around on a home page or testing which headline will draw more readers. Demand is all about the dollars.

News organizations looking to create profitable content on the Web can see that Demand Media's model does make money -- although it forgoes editorial judgment and a journalism process. Yet news organizations could apply lessons from Demand's approach to their own companies, not for standard news operations, but for niche sites that are focused on reader demand and generating revenue.

Amid the rhetoric over how to support the business of journalism, the City University of New York's Graduate School of Journalism has taken a plunge by creating models of what a news network on the Web might look like with hard, if optimistic, numbers.

Broad and multi-tiered spreadsheets filled with detail build upon each other until at the bottom, they predict handsome profit margins for small, medium and large blogs, as well as a larger network that might aggregate them and have its own editorial and business staff. In the main cases, the sites are supported by advertising supplemented with other income streams.

The models, presented first this summer at the Aspen Institute and again last week at the "New Business Models for News" conference at CUNY, are a fine start, and the spreadsheets are provided openly. At both conferences, project leader Jeff Jarvis of the CUNY J-school said he was hoping people would test the models to strengthen their viability. "The aim," he said last week, "is to question, poke, probe, improve the business models."

My poking and probing shows that when the assumptions are changed to less optimistic but still reasonable scenarios, the models can swing to much lower profit levels or even losses.

Poor video. For a while, he was the hot boyfriend of the online world. His buddy, pre-roll advertising, was touted as the way to save the industry. Now, like a guy who dumped us, people are trashing-talking video content on news sites and telling all their girlfriends that video on the Web fails to perform.

I think it's time for some relationship counseling.

While clearly there are video efforts that have failed or been abandoned, declaring it all a failure doesn't accurately reflect what's going on in the industry. CNN.com is dropping its live online-only newscasts, but has also said that online video advertising has grown. I've got my own thoughts about why 702.tv didn't succeed, but since nobody asked, and this is about what is working, I'll move right along.

When I posted a question to the newspaper video listserv asking what kinds of video are working, I got an earful (eyeful?).

What does work: news shows. What doesn't work: news shows. What works: spot news. What doesn't work: spot news. What does work: feature pieces. What doesn't work -- you get the idea.

Of course, defining success is very slippery. A lot of traffic on one site may not be enough for another. Some places have very reliable numbers, others not so much. So for the purposes of this article, I'm not trying to define success, I'm letting each organization set their own definition of what makes video worthwhile.

All those who responded said, yes, absolutely, video works on their Web sites and is worth producing. The responses were passionate...