Stay on Top of Enterprise Technology Trends
Get updates impacting your industry from our GigaOm Research Community
It’s great that your magazine or newspaper website has millions of page views or unique visitors a month, but those kinds of statistics mean less and less when traditional banner ads bring in virtual pennies for the media companies running them. Some see iPad (s aapl) apps and paywalls as the solution, but several major media outlets such as Hearst and AOL (s aol) have started experimenting with other ways of monetizing their content — and even Google (s goog) says it wants to help by making traditional online advertising more efficient for publishers.
Google’s contribution comes in the form of an acquisition. The search giant confirmed on Monday that it’s buying AdMeld, which provides tools that allow online publishers to make their ad buying and placement more efficient. According to several reports, Google is paying $400 million for the company, which makes it one of Google’s largest acquisitions. The web giant says it’s buying AdMeld because “we often hear from major website publishers that ad management today is still mind-numbingly complicated and inefficient.”
Meanwhile, both AOL’s Patch and Hearst are experimenting with different forms of advertising that they hope will convert browsers and readers into shoppers: AOL, for example, has partnered with a service that American Express runs called Serve to launch a Groupon-style “daily deals” offering. As part of the deal, customers can get a co-branded AmEx (s axp) card that lets them redeem offers at the point of sale without having to print out coupons (something Groupon users apparently complain about).
The AOL unit has more than 800 Patch sites across the U.S., a hyper-local project it has spent more than $100 million on since it launched last year. But while traffic to Patch sites has been climbing — according to some recent estimates — the revenue being generated by the operation is still minuscule. Will local readers be attracted by daily deals from merchants in their area? That’s the bet AOL is making, and some traditional publishers such as the Toronto Star (which acquired a Groupon clone called WagJag last year) say they have been using a similar strategy with some success.
Hearst Magazines, meanwhile, has formed a partnership with a company called Pixazza that allows readers to click on images, find out more about products in the image, then click through and buy them if they wish. This kind of interactive ad has been the dream of advertisers since the commercial web was first invented, but it has never really paid off in the way most had hoped. Hearst is also partnering with Buddy Media to develop Facebook-based apps that allow more interactivity with the magazines’ content.
Whether any of these monetization attempts will ultimately be successful is anyone’s guess. Patch is a gigantic bet by AOL that locally relevant content will draw enough readers to make an advertising-based revenue model work, and the Serve deal is just another twist on that — if not enough readers come to Patch sites, it won’t really matter what kind of advertising the site has. Likewise, Hearst could be trying to squeeze revenue out of a smaller and smaller group of traditional magazine readers.
That said, however, at least there is some experimentation going on, rather than just the same old creatively bankrupt banner advertising campaigns that media sites have been relying on forever. No one has found the formula for generating revenue from online publishing, so the more experimentation that occurs the better.