Going off Google
Rupert Murdoch today said his sites “might go off Google”. Hardly anyone tried to defend it, until Ian Betteridge found a post from Mark Cuban with what looks like at first like a reasonable rationale for it.
Briefly, the idea is that the mess of traffic you get from Google is hard to make money from. If you live on advertising, you’re much better having a deep niche of people who visit time and again, with newcomers arriving thanks to links from people they trust (this means from Twitter and Facebook). So drop out of Google, build a select and committed audience, then make money from them.
There is a lot in this. If your site is clogged up with views from drive-by searchers, the rates you can charge drop sharply. You don’t know who your readers are, so instead of charging Vogue-esque prices for your select audience, you’re competing with the world and can barely command bargain-basement Ayrshire Leader rates.
However: cut off Google and while, yes, you lose the rubbish traffic, you also lose free promotion and what roughly equates to distribution. For a newspaper it’s like pulling out of newsagents and cancelling all your advertising; effectively, you’re going dark.
For that to make sense, you have to be sure that firstly you can get the readers in some other way, and secondly that you can make money from them. Murdoch can probably cross-promote enough to do the first part. He can’t do the second, for two reasons.
The first reason is the advertising revenue. The Cuban-Betteridge idea is based on advertising to niches, but in fact, News International titles are the exact opposite of niche: the money makers are mass-market papers like the Sun. It’s true that, as Betteridge points out, the papers are dealing in niches, but they’re not the narrow niches of a Gizmodo, they’re broad-brush dinosaurs. Online those carefully cultivated traditional niches are pretty much worthless.
A paper with a market niche can sell it in two ways: display advertising, and classified advertising. Classified advertising is the big money-maker offline, but online it’s dead: eBay, Rightmove and Monster have taken the market. All that’s left is display, and how attractive a proposition is a closed-garden Sun or Fox site going to present? These aren’t even ABC1s, and there won’t even be that many of them. Muck, and not enough of it.
Murdoch already knows this. He points out, rightly, that no blog or news site is making anything like serious money. There’s no advertising market there that can pay what he needs it to pay. This is why he’s still talking about charging, although he postponed it last week.
The impact on charging is the second reason opting out won’t work. Suppose the whole world is wrong and he can persuade people, after hundreds of years of ad subsidy, to pay for news not only what it costs to make but also his 20% profit margin. To have a hope of making that work, the prices need to be as low as possible. So he’s going to need a whole lot of readers paying up. Where will he get them? From the internet. Which means Google. Which he doesn’t want to be on.
This is why the idea is so incoherent. The only conceivable harm Google can do is to hurt your advertising rates. Murdoch isn’t really interested in advertising rates, he’s already written them off (and by extension, Mark Cuban’s plan). Murdoch is interested in attracting paying subscribers. But going off Google damages his sites’ ability to attract these mythical subscribers, and the only conceivable gain is protecting advertising revenue that is not now, and never will be, enough.
Ultimately, however, Murdoch is right: it’s no good for his business to be on Google. Not because of the traffic they send, but simply because it’s no good for his business to be on the internet at all. When he says he doesn’t want to be on Google, he actually means he doesn’t want to be on the internet, or have its economics apply to him.
The record companies tried that one already. So did AOL.