Roundup of four research papers on the news media industry
In the rapidly changing sector of news media, newsrooms grapple with many challenges, notably with how to sustain themselves after the internet has eroded their grip on advertising. The relationship between news and ads has experienced dramatic transformations in recent years, marked by shifts in media consumption and the need for viable business models.
In 2009, media tycoon Rupert Murdoch had presciently declared that the future of journalism relied on news organisations’ capability to generate revenue by providing valuable news and information for which consumers were prepared to pay. Over the years, this insight has propelled a broader realisation that for newspapers to survive, the revenue sources need to go beyond advertising. In that, there has also been a greater emphasis on attracting income from readers.
This instalment of our research roundup series delves into the complex world of news and ads, exploring the hurdles and opportunities in this fluid media ecosystem.
- Simonov, A., Valletti, T. M., & Veiga, A. (2023). Attention Spillovers from News to Ads: Evidence from an Eye-Tracking Experiment. Retrieved from SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3836531.
This discussion paper delves into the relationship between online news content and the efficacy of display advertising. Specifically, it investigates whether the levels of attention fluctuate between reading news articles and the advertisements that are displayed alongside them. And more importantly, whether this attention influences purchasing behaviour.
Selected participants read various articles embedded with randomised brand advertisements; a non-intrusive eye-tracking technology tracked their attention between articles and advertisements.
The technology collected data on gaze location, duration, and other related metrics that were analysed to understand the attention devoted to articles and ads. The study found that articles that successfully captured readers’ attention also increased their attention to ads on the same page. This heightened attention to ads led to better brand recall and elevated the likelihood of a purchase. Interestingly, the nature of the news – political, entertainment or otherwise – did not seem to have any impact on the effectiveness of the ad.
The results carry significant implications for both news producers and advertisers. For news producers, the key factor to optimise ads is to have gripping news content, irrespective of the subject. For advertisers, the overall user engagement with the webpage, rather than the content on the page, should be the guiding metric when allocating display advertising.
- Lee, C., Kim, J., & Lim, J. S. (2023). How does fact-check labeling impact the evaluations of inadvertently placed brand ads? https://doi.org/10.1080/03623319.2023.2216965
Taking another angle, this study explores the impact of fact-check labelling on the evaluation of brand ads unintentionally placed next to fake news. While fact-check labelling is an effective tool to curb the spread of misinformation, it may have unanticipated repercussions for the ads (and their brands) associated with such news.
In a series of three experiments, the study discovered that fact-check labelling negatively affected the evaluation of ads adjacent to fake news. For instance, the authors took a false news story about a bottled water product being recalled due to contamination by parasites. This story was labelled as “false” by Snopes and Associated Press. The researchers then slightly altered the story by replacing the brand name with a fictitious one and presented it to a group of 183 participants on a mock online news website.
The results revealed that ads associated with somewhat uncredible content suffered a pronounced negative impact. Fact-check labels prompted participants to scrutinise the news story thoroughly, and in turn, the advertisements.
- Matthews, R., & Hodgson, G. (Eds.). (2023). Local Journalism: Critical Perspectives on the Provincial Newspaper. Routledge.
Despite the challenges news outlets face, local news continues to captivate audiences. This interest particularly surged during the pandemic as people sought reliable local information and consequently, there was an increase in digital memberships and subscriptions.
In the book “Local Journalism”, an entire chapter is devoted to spotlighting the value of local newspapers for communities and emphasising the high degree of trust they command. The book basically examines the strategies local newspapers adopt to adapt to the fluctuating media landscape.
Interviews with 40 staff members from local and regional newspaper newsrooms revealed a concerted effort to streamline online editorial content creation. These newsrooms focus on engaging the readers via websites, social media channels and some other platforms. There is a sharp focus on what they call “information-stale” content which includes evergreen articles that resonate well with readers, are easy to digest, and also end up gathering a significant number of page views.
An emerging trend here is the creation of a central newsroom that is supported by a digital-savvy unit. This structure fosters the development of new digital tools, optimises time and resources and creates opportunities for collaborative digital projects that can resonate with the local audiences.
In terms of business models, there is a growing focus on shared platforms for selling products such as multimedia advertising and subscriptions. For instance, a UK-based publisher successfully established a network among regional advertising representatives, complemented by digital advertising experts in regional centres. This approach allowed them to effectively reach an expansive audience, generating an astounding 3.5 billion impressions per month. However, it is a constant balancing act between scaling local news and attracting dedicated niche audiences for short-term engagement.
These findings underscore the resilience of local news organisations amidst challenges. Local publishers adapt their strategies by prioritising online engagement, leveraging “information-stale” content, and promoting collaboration in the digital domain. While their struggles remain, these businesses are leaving no stone unturned to figure out their way in the new media landscape.
“Subscribe now: On the effectiveness of advertising messages in promoting newspapers’ online subscriptions”
- Wilczek, B., Schulte-Uentrop, I., & Thurman, N. (2023). Subscribe Now: On the Effectiveness of Advertising Messages in Promoting Newspapers’ Online Subscriptions. International Journal of Communication, 17, 3782–3798.
This research explains the influence of advertisements on an individual’s willingness to subscribe to online news. There have been many prior studies that have outlined the significance of news publishers advertising and promoting their online subscription plans. However, there is limited concrete evidence regarding the effectiveness of such advertisements. So far, mass audiences have generally demonstrated a lukewarm response to paywalled online news, which is why many subscription initiatives have faltered. This begs the question: how can newspaper publishers effectively advertise their online subscriptions to incentivise readers to pay for online news?
To answer this, the authors conducted an online experiment with 815 participants from the United Kingdom. They tested various subscription pitches that highlighted digital-only features of the publications, social aspects, normative influences and pricing. These pitches were designed to underscore the advantages of personalization, online-first delivery, exclusive online offers, both online and offline events, community membership, support for independent journalism, and awareness of the news industry’s critical financial situation.
So then, why are people hesitant to pay for online news? For one, readers often see no compelling reason to pay when free news sources are readily available. Moreover, the content itself might lack intrigue or can be too broad, prompting users to question its value. Other variables such as the media brand’s reputation, delivery format, ease of use and payment methods also shape consumer attitudes. As a result, when faced with a paywall, users are more inclined to exit the site.
Yet, this research revealed a fascinating insight: a subscription pitch that marries normative messaging (underscoring the importance of supporting independent journalism) with price transparency (explaining the news industry’s financial challenges) can significantly boost people’s readiness to pay for online news. By enlightening the audiences about how their subscriptions support independent, inclusive and watchdog journalism, and by explaining the financial predicament of the news industry, publishers can achieve a positive impact.
This piece was originally published in The Fix