The Link Fetish

Terry Heaton is a brilliant online philosopher. He thinks very deeply about vexing digital media issues. But in his latest post, Online Advertising’s Missing Link, he gets off on the wrong foot with me.

Links are the currency of the Web, the real value of any form of content in a hyperconnected universe. Madison Avenue wants nothing to do with this, and this is increasingly problematic for those who count on advertising to make a living.

Jeff Jarvis has been writing about the value of links for years, like this little gem from 2005:

In this new world, links are currency. Links grant authority. Links build branding. Links equal value.

Heaton goes on to talk of the value of links giving great examples of how links can create attention, but I’m not clear on how links generate revenue.

In one of his examples, he notes how another one of my online heroes, John Hegel, tweeted a link to a YouTube video that had five million views.

As impressive as that might be, YouTube is still losing money (what revenue it does get is off of passive or intrusive advertising), and there’s no evidence I know that the musical artists in that video realized any economic benefit from those five million views (conversely, they very well may sell some records and/or concert tickets from those views, but we really don’t know how much actual economic value has been created by those views).

For a link to be of real value in commercial terms, it needs to lead to profit — not just revenue.

When I see pundits talk of links replacing advertising, or how advertising and publishing are being displaced, I simply don’t see a lot of factual information to suggest the disruption taking place is generating profitable replacements.

My business, The Batavian, is profitable, but we make our money off of what I consider traditional, retail display advertising. There’s nothing fancy, newfangled or particularly innovative about our approach to making money.

And I believe it’s working very well for us.

Here’s what I agree with Heaton on:

I don’t want to be "sold," but I do want to be "aware." The problem with our culture is that everywhere we look, we’re being sold. It’s what we do. We created the form, and it’s worked well in growing businesses and fueling the economy of commerce. But somewhere along the way, we crossed a line, and now we’re turning to technology to get out of the way of the relentless bombing. "Just get ’em in the tent," is a license for distortion and any form of showing off. We pay $10 for a movie at the theater and sit through a half hour of ads before the show starts. Signs block everything. Commercial breaks on TV run 5-minutes. Websites are blocked with roll-overs (conveniently located where your mouse comes in contact with the page), roadblocks, pop-overs, pop-unders and anything else that "works" to get our attention. The print industry throws out pages that resemble NASCAR race cars.

Well, except, the home page of The Batavian is something like a NASCAR race car.

But I argue that our ad model is both passive and contextual.  Our ads don’t block content or flash at you.  They are there for you to look at if you so choose, and you have a high likelihood to look at them because (at least if you live in Genesee County, New York) they are all relevant to you. They are as local as our content.

But they’re still advertising.

And most of the people who will see those ads didn’t arrive at The Batavian because somebody tweeted a link (though some did, though many of them are already regular readers of The Batavian). More than half of our audience are people that come to the site on a daily basis with the specific purpose of looking at our local content (news and advertising).

One of the important lessons I learned from John Battelle’s book. The Search, was the importance of user intention to understanding user behavior on the web.

Every user goes to a web page with an intention — be it to search, to read an article or to skim headlines, etc.  Whatever that intention is, publishers are on dangerous ground once they expect to subvert that intention.

Publishers also train users to come to pages with intentions that are contrary to the publisher’s best interest — the way most news sites are designed, for example, with nothing but headlines and links, train users to skim rather than engage with content.

As I’ve written before, not all links are created equal. We make a mistake when we make a fetish of the link, which is where Heaton sort of lost me with his post.

The fact of the matter is, links rarely get clicked.  If even 10 percent of the readers of this particular post clicked on even one of the three links above, I would be surprised.  Why? Because the people who are reading this post came with the specific intention to read this post.  They’re not interested in having their intention interrupted.  When that intention is met (if they haven’t already fallen asleep or clicked their browser’s back button deciding this is all BS) they will go back to what they were doing before they came to this article, without clicking a single link of any type on this page).

The huge amount of traffic some aggregators can generate for some web sites has blinded some people to the true value of a link.  They ignore the fact that it takes a tremendous amount of traffic to generate an impressive number of click-throughs.  I call this the Drudge Effect, because most of us learned about how aggregators could drive traffic when the Drudge Report first became popular.  But the traffic Drudge would drive to your news site was only a fraction of the total audience hitting Drudge’s home page.

It’s not like one million people hit Drudge’s home page and clicked on every link on that page. It’s more like one million people hit Drudge’s home page and at best clicked on only one link.  If one percent of those one million people happened to click on the link to your news story, that seemed like a big spike in your traffic, but it was only a drop in the bucket of the overall traffic going to Drudge.

Here’s an unexamined truth of the web: A click has value. A link has no value (it might have some SEO value, but that’s not what we’re talking about here).

Fact: Until a link is clicked, it’s only just a few characters of HTML.

And most people don’t click on links, at least not in any meaningful proportion to the number of links created every day.

And this is why it is so hard to make money from publishing online.  The link rarely leads to actual revenue.

Until we can say with certainty that a link in and of itself creates profits, it’s a misnomer to say it has any sort of intrinsic value.

What publishers need to concentrate on, then, is not links, but content.  It’s the job of publishers to meet the needs of user intentions, or fashion content and advertising models that generate user intention compatible with the goal of making money. 

Information may want to be free, but it’s still the most valuable commodity on the web. I mean, without information, what would we link to?

Yes, intrusive advertising diminishes the value of content, but that doesn’t mean advertising is dead.

Commerce is still part of life, and so long as it is, there will be users with the intention of finding out what their is to buy in relation to their other interests.  For the local publisher, that means local ads, for the niche/special interest publisher, that means ads that fit those interests.  The ads may be delivered in mundane ways or in creative ways, but they will still be ads that match user intention.  Link or no link.

Howard’s Five Rules of Hyperlocal Advertising

You can read about hyperlocal content strategies on dozens of web sites, but nobody ever talks about hyperlocal advertising strategies.

Content is cool. Revenue is an after thought.

Many people seem to assume that if you build a local web site that attracts readers, any old advertising you happen to throw on a couple of ad slots will some how magically generate enough revenue to pay for the enterprise.

Truth is, if your advertising strategy isn’t as well conceived as your content strategy, your hyperlocal dreams will never become reality.

Here are my five rules of hyperlocal advertising:

Rule #1 of hyperlocal advertising: Local is relevant. In general, it’s all the relevant you need. Google has taught us that contextual, relevant advertising works best on the web, but if you run a local news site, your target audience is very well defined: You appeal to people who are interested in information related to your community.  When you display ads for local dry cleaners and neighborhood eatries, you are providing contextual advertising. You don’t need articles about spot removal for your dry cleaner display ad to display. It’s automatically related to any local story you run. The fact that both your articles and your ads are local is all of the relevance you need. You don’t need fancy algorithms and cookie tracking to serve highly targeted ads to your core audience.

Rule #2 of hyperlocal advertising: Advertising is content. Local readers read local ads. They are very interested in what the local sales and specials are, what events are taking place at what restaurants and what new businesses are about to open around the corner.  The more informational your ads, the more they will engage local readers.  If you’re able to provide a smorgasbord of local, relevant ads, people will visit your site just to look for local businesses to patronize.

Rule #3 of hyperlocal advertising: The more local content (the more local ads) the better. It’s important that your display ads act like a directory of the best local businesses in your coverage area. In order to achieve the goal of becoming a destination point for people to find out what local businesses are offering, you need to serve up a ton of local ads.  Further, you diminish your local focus by placing ad network ads on your site.  It should be your goal to keep all non-local ads off your site, including national chains.  Your advertisers, all small, local business owners like yourself, will appreciate your efforts to put local businesses first in your revenue strategy.  You can generate a lot more money with a local-only strategy than you ever could hope for from ad networks.

Rule #4 of hyperlocal advertising: Small, local business owners need to feel their ads are part of a site where lots of local people go. This is the main rule related to local editorial content — the reason most journalists start local news sites.  In order for your site to be a must-be advertising spot for local business owners, it must be the news site that generates all of the buzz and conversation in your community. You need people talking about your content so that business owners hear their customers talking about your stories. If you’re not hearing from readers, "I’m addicted to (your site)," then you’re not creating enough buzz to sell lots of ads.  You can line up all the metrics you like, but if you don’t have buzz, you won’t sell ads. Once you have buzz, metrics don’t matter.

Rule #5 of hyperlocal advertising: Keep it simple. Flat rates, no rotation, no CPM pricing. Mark Potts said it at Block by Block, but I’ve heard it before: "Small, local business owners can’t even spell ‘CPM.’" In all my years of dealing with local advertising, every time I spoke with an advertiser I found they either didn’t like or were confused by banner rotation.  Nothing pisses off an advertiser more than to visit your site, reload your homage page a dozen times and never see his ad. You need to ensure that every time your customers visit your site, they see their ads.  Next, price your ads in an easy to understand format, which usually means monthly rates with no respect to number of impressions served.

Bonus rule: Break any one of rules one thru five and you greatly diminish your chances of local advertising success.

Why home page ads may be more valuable than story page ads

All web activity is intention driven.

People visit web pages, whether arriving via search, a link or a bookmark with a specific intention.  That intention might be to read a specific story, see what’s on sale, scan headlines or connect with a friend.

How well a web page helps a user satisfy that intention determines whether a user will return to that page or recommend it to others.

The page may not efficiently satisfy a user’s intention — the web world is full of poorly designed pages that survive by providing a marginal benefit to users, sites chief among them — but so long as the user is free to focus on that intention devoid of distractions or unexpected interruptions, the user experience will be OK.

Much has been made of eye track studies that demonstrate banner blindness. What’s interesting is the only "banner blindness" eye track reports I’ve been able to find demonstrate banner blindness on story pages.

I’ve never seen such a study — and if you have, please let me know — on a home page.

The banner blindness studies support, I think, the proposition that user behavior on the web is intention driven.  When a user clicks on a link — whether from aggregator, search engine, blog or home page, the user has expressed an intention to read a particular story or post. The user is solely focused on that task, so she ignores the banners.

But what is the intention of a user visiting a home page?

I do not have available to me an eye track study to support my theory, but I do have years of experience studying heat maps of user behavior on home pages in Ventura, Bakersfield and GateHouse Media, and I believe the user intention is to scan the home page looking for something interesting.

Notice, I didn’t say "something interesting to click on." Just "something interesting."

Users visit a home page not so much because they want to dive deeper into the site, but because they want to see what is new.

We can debate whether the typical is doing well at satisfying that intention, or more importantly, whether that is the right intention to meet, but I believe that is the typical user intention.

Most such well-intentioned users are most likely looking for the latest news, or other new content, but I would contend that a scanning user is a user who is more likely to take in the full breadth of the home page — they’ll see your top nav links, your promos for your special features and, most importantly, your home page advertising.

This is why it’s probably a mistake for newspapers not to put more advertising on their home pages. The home page audience is more likely to notice a home page ad than an story page audience. (I know there are studies that contradict this theory, that more ads on the home page lead to less effective ads, but I don’t believe this proposition has been fully and fairly studied at the community news level, where local ads tend to be highly relevant to local users.)

And it’s also why newspaper publishers should think about how to get more visitors to the home page. That’s where the money is, and that’s best vehicle for generating audience growth.

Conversely, story pages need to be parred down to the essentials. Banner ads on story pages are a waste. Contextual ads might have some value, but the best move a publisher can make with story pages is use single-focus pages as a vehicle for promoting other content.

By visiting a story page, a user has expressed at least a marginal interest in the content you have available. Use the story page to present more content, be it top headlines, most e-mailed stories or "related stories."

I’ve seen page views increased by 10 percent with the introduction of a pretty low-tech "related content" widget.

Giving users more content choices on a content page works — more advertising choices, not so much.

Your goal as a publisher is to increase user loyalty. Your ideal user visits multiple times per day, ideally by constantly refreshing your home page to see what is new.  The more you can entice the occasional visitor into reading your content, the more likely that user is to become a frequent home page visitor.

If your advertising is highly relevant to that user, he is more like to take notice and also be inclined to support the businesses that support your news operations. It becomes a virtuous circle.

When designing your web strategy, think constantly of user intention. Ask, how are people going to use this page? Then design your page strategy around that intention so that both the user’s consumer needs and your business needs are satisfied.

It doesn’t look like San Diego’s free classified strategy worked

I have yet to hear of a newspaper improving its revenue or audience growth by offering free classified ads.

The San Diego Union-Tribune tried it int 2005.

Now the U-T is further trimming staff.

“Not since the merger of the Union and Tribune over 15 years ago have we faced such wrenching changes,” he (CEO Gene Bell) wrote. “At the same time, never in our history have we faced revenue losses as dramatic as those of the last 12 months.”

Observation: The U-T offered free classifieds  and that did not stem the tide of revenue loses.

I’m not trying to draw a direct connection, just saying … it didn’t help.

The only time I’ve ever heard of an MSM newspaper offering free classifieds and using it to win market share was in Arkansas when Walter Hussman took the Democrat from second-tier player into only game in town.

There might be a very scary lesson about the inability of a market leader’s inability to use disruptive strategy to beat other disruptive players.

What worked for Hussman to beat a bigger paper, may not work for a market leader like the leading metro in town to beat Craigslist and other free-classified sites.

If that’s true, then sustaining innovations (which most newspapers have been pursuing in the recruitment ad space for a decade) may be the only way to go.

Just thinking out loud.

A good day in Lawrence

So I visited mecca today, aka, Lawrence, Kansas.

You know, the place that gave us and made Rob Curley famous.

Innovation in Lawrence hasn’t stopped just because Rob left. Dan Cox and his team in Lawrence are doing a great things.

I learned stuff today about what they’re planning and how they’re working that left me truly impressed. These are smart guys who really get it. They are also realistic and not resting on the laurels of past Digital Edgies. Expect changes.

One of the things Dan and his team have launched recently is a product called Marketplace. I think it’s just smart. Simple, elegant, functional, and built with the small market advertiser in mind.

If I wasn’t impressed before, or not impressed with what Dan shared about the product’s performance, here’s a little transaction that knocked me off my feet:

My wife and I love mid-century modern furniture, so when I noticed a mid-century modern furniture store in town, I had to make time in my day to visit it.

After looking around, a woman approached me and I asked about a web site where I might be able to order stuff, and she gave me a card with a URL, Then a gentleman approached me and we chatted a bit about my interest, and he handed me another card, saying something like, “rather than go to our web site, go here.”

On the back of the card was scribbled, “, marketplace, search for ‘furniture.'”

Can you imagine a local merchant recommending your IYP/directory product over their own web site?

To Dan and everybody in Lawrence, thanks for letting me poke around your shop today.

Google’s plan to go after local advertising

A couple of years ago, there were pundits galore spouting non-sense about how much “local” advertising Google was taking from newspapers.

But for anybody who actually did a local search on Google, it was pretty clear that all of those “local” advertisers where actually national plays trying to reach a local audience, or aggregators, or arbitrage sites. They were not newspaper advertisers, except in the real estate category.

Up until today, there seemed like plenty of opportunity for newspapers to us its superior local resources to protect and expand local advertising online. But Google has some up with a plan to answer the “feet-on-the-street” challenge. It’s kind of scary. They’re paying freelancers to take pictures of local businesses to add to Google Local, bridging the gap between impersonal self-serve and an initial human contact to make the introduction.

Also interesting is the payment scheme, It’s a $10 rate per business – but, note, it’s $2 for the content and $8 AFTER the business has verified the accuracy. Read: after we have established a real contact connection with the potential advertiser.

This currently appears to only be a US program, fyi. For those of you out there who claim to “own the channel�, think about this. Smart college kids eagerly showing your local advertisers all about the chance to get featured in a prominent spot on Google Maps, for free.

Rev up your classifieds with video

Rachel Sklar Jason Linkins has an issue with video classifieds.

Uhm…okay. We are drawn to movement–and shiny things! But aren’t classified ads supposed to be simple, and cost-effective? Once you factor in the expense of the video equipment, the matte paintings, the storyboards and craft services, hasn’t the cost-to-benefit ratio been blown out of the box?

She’s reacting to a piece in the LA Times that says, “Video classifieds are new … ”

Except they’re not.

Video classifieds pre-date web 2.0 by a good couple of years. Digital Media Classifieds, now Digital Media Communications, started turning recruitment ads into video six or seven years ago, or further back.

When I first heard about DMC, I was skeptical, but then we instituted the program in Ventura and quickly learned three things — Advertisers loved it, job hunters watched the videos, and the up sell created a significant revenue stream.

Video classifieds are a no-brainer, and letting users generate their own ads get in on the fun just makes a lot of sense.

Neither page views nor time spent matter to advertisers as much as ad performance

Nielsen/NetRatings needs you to care about audited metrics. That’s how they make their money.

I’ve just never been convinced online advertisers care about audited metrics. In more than a decade of doing online publishing, I’ve never had an advertiser ask me or one of my reps for audited traffic numbers. I’ve only heard tall tales of national advertisers asking for such numbers.

Online advertising — and maybe all advertising — is about performance. Whether you’re selling CPC or CPM-based advertising, if you can’t deliver results commensurate to your characterization of your site’s performance, you won’t retain advertisers.

The trend in online advertising is more toward performance metrics every day.

That’s why Nielsen swamping out the imprecise page view measurement for the equally imprecise time-spent metric seems so very unimportant.

For Nielsen, it’s all about revenue — their revenue, not yours.

UPDATE: BTW, how meaningful is “time spent” in the age of tabbed browsing? I might leave a tab open for hours before going back to a page and re-engaging in whatever I was doing earlier.

Spin control: Craigslist stays on the “good guys” message

Over the years I’ve read various quotes from Craig Newmark and Jim Buckmaster defending craigslist’s business practices.

Every time there is a phrase pops into my head: Master politicians. They are as good at spin as any inside-the-beltway veteran.

Let’s parse this quote from Buckmaster:

“Walled garden� is a misnomer — this term arose to describe AOL’s attempts to keep their subscribers from accessing the internet at large — we do nothing of the sort, and in fact encourage users to go elsewhere

Here Buckmaster dodges the question by reframing the its intended meaning. Clearly, the intent is to use “walled garden” as a metaphor for craigslist’s unwillingness to open its site to third-party aggregators. Whether or not the original meaning of the phrase is as Buckmaster says it is matters not. He’s clearly spinning here. Instead of dealing with the criticism, he’s recasting the phrase into terms he can easily dismiss.

Of course, craiglist users can go elsewhere. That’s not the point. The real question is, are the people who supply the (mostly free) content that make craigslist what it is afforded the opportunity to benefit from wider distribution of their content? In that sense of “walled garden,” craigslist is, in fact, a walled garden. No amount of spin changes that.

I don’t mind that craigslist is a walled garden. I just think Newmark and Buckmaster should be honest about it.

Likewise, I have never before heard the term “proprietary� applied to craigslist, given our well-known near-exclusive reliance on free software.

Again, the question is being recast into a meaning that Buckmaster can wave off. Whether craigslist runs on open source software is irrelevant to the question of whether its business practices are proprietary. In fact, it’s ironic that Buckmaster would proudly wave the open source flag while defending very Microsoft-like business practices.

Newmark and Buckmaster are free to pursue whatever business practices they like, but they should stop hiding behind the spin of “we’re just here to serve the users.”

While I’ve said before that newspapers should not blame Craig for their woes, and I’ve also said Craig gets far more blame than he should, craigslist is also clearly not a friend of local newspapers. The company is far from harmless; it’s just that casting craigslist as the main villian is rather foolish.

That said, for all of Newmark’s and Buckmaster’s spin about how they’re not greedy capitalist, how they exist to serve users, how they care about communities, how they regret the decline of journalism, and value solid journalism, etc. — what have they done to help newspapers? Where are the partnerships that might benefit both a local paper and a craigslist site?

Newmark and Buckmaster owe newspapers nothing. They are under no obliation to seek partnership opportunities — opportunities that could benefit local communities on multiple levels — I’m just asking the question because I just don’t buy the craigslist spin that the company is all that White Hat.

Greed isn’t always about money. Sometimes it’s about control and attention. I suspect that Craig Newmark and Bill Gates aren’t all that different inside.

Google makes big change to AdSense

Google is making a fairly significant change to how AdSense works for advertisers.

In short, Google is dealing with what is known as the “blind network problem” – advertisers pour money into AdSense, and they get a sense of how the campaign performed in aggregate, but they have no idea which sites did great, and which sites did poorly, or often, even which sites they ended up on (unless they specified via the relatively new site specific buys on AdSense.) This new set of reporting addresses this issue, allowing advertisers to determine where their campaigns are doing best, and then they can optimize accordingly.

This is significant for publishers, too. If you care at all about how much money you make from AdSense, you will want to figure out how to ensure your site is one of the better performing sites.

I also think it will help knock down some of the made-for-AdSense sites … assuming they’re not among the better performing sites, and/or advertisers have more control to ensure their ads don’t appear on smarmy-appearing sites.

I agree with Ryan, it’s NOT Craig’s fault

New England media blogger Dan Kennedy takes issue with Ryan Sholin over this bit from Ryan’s now famous list of myths newspaper people believe:

It’s not Craig’s fault. Newspaper classifieds suck and they have for years. Either develop simple database applications with photos and maps to let your users actually find what they’re looking for, or partner with a good third-party vertical who can. Anything less is a waste of your time.

And Dan writes:

Uh, actually, it is Craig’s fault. Not in the sense that Craig Newmark did anything anything wrong or evil when he created Craigslist. Rather, I’m talking about a simple reality — he and newspapers are in two different businesses, and his business has caused serious damage to the news business.

And I’m here to say, actually, it’s not Craig’s fault. It’s our own damn fault, and I may very well be one to share the blame as much as anybody. I’ve been around long enough to remember what things were like before Craigslist, and while back then I may not have had sufficient power to make a difference, I certainly remember how much newspaper classifieds sucked.

Let’s see, pre-craigslist:

  • The only way to place a classified on a newspaper web site was to CALL the newspaper call center and talk with a live person. Forget about 7/24 online ordering.
  • If you did place an ad, it wouldn’t appear online until the next day, after the print edition was out.
  • The browse and search features initially sucked.
  • While I personally don’t quibble with charging more for the online ad, you did have to pay more, which differentiates newspaper classifieds from Craigslist enough to be a factor (but as you can see from this list, just one of many, and I don’t think the deciding factor).
  • You couldn’t add a picture, let alone expanded text.
  • You couldn’t prefer to have people contact you via e-mail or a blind web form.
  • You couldn’t place a risque ad.
  • You couldn’t put the ad online for any longer than the print ad ran.
  • If you were placing a help wanted ad, newspapers did little or nothing to help you reach qualified job candidates (that actually changed rather quickly in the newspaper game, but initially, it was pretty difficult, and then when it was possible, the additional charge was not competitive with Craigslist or even Monster)
  • You couldn’t place your related web URL in the ad.
  • Newspaper web sites were not reaching the young audience that was more interested in the kinds of things Craigslist made its name from, like rooms for rent and free stuff.
  • You couldn’t place an online-only ad, either paid or, more importantly, for free.
  • There has never been a social network associated with placing a classified ad on a newspaper web site (except for a couple of recent exceptions, such as

So there were lots and lots of mistakes newspapers made in the early days of classifieds online, and then when Craigslist began to show some disruptive power, newspapers were slow to react.

That said, Craigslist is not the sum total of the newspaper industry problems. Criagslist actually fills a market need that was not being met at all by newspapers, and only where Craigslist is really, really popular, has it cost newspapers any significant revenue (such as San Francisco). For the most part, Craigslit has expanded the classified market place, not taken a slice of pie from newspapers.

So, sorry, Dan, it’s not Craig’s fault.