21 Percent Of Ads On News Sites Are House Ads: Pew Study

online-newsOnline news sites are struggling to get advertisers to move from their traditional platforms to online outlets. One of the effects of that, according to a new report from Pew’s Project for Excellence in Journalism, is that more than one in five ads on news websites are house ads.

The implications are obvious to an industry that’s struggling with declining offline subscriptions and interest: News organizations need their advertisers to shift online just as viewers/readers have been doing in recent years.

Pew studied 22 U.S. news organizations last summer and analyzed almost 5,400 ads across their online and “legacy” (offline) outlets, such as TV networks and print magazines. (Here’s the full list of news outlets studied.)

One of the key takeaways from the study shows how much trouble the news industry is having in moving advertisers from offline to the web. The most common type of ad found on the news websites was ads promoting the news organization itself — “house ads,” as they’re commonly called.

pew-online-news-ads

House ads accounted for 21 percent of all the ads studied, a few percentage points higher than financial ads. Magazine websites had the most house ads, Pew found, some with more than half of their ads promoting the magazine itself or its parent company.

Website
Print edition
Magazines overall
50%
10%
TIME
56%
11%
The Economist
40.1%
13%
Newsweek
not reported
4%
The Atlantic
not reported
0%

Pew says newspaper websites had the second-highest amount of house ads at 21 percent, compared to just nine percent in their print versions. Television news websites had far fewer house ads than newspapers and magazines. Foxnews.com was the only site studied that had more than 10 percent house ads (it had 12 percent); all of the other TV news sites studied carried 3-7 percent house ads.

Online Ad Targeting

One other interesting nugget from the Pew PEJ study: Most of the sites studied showed no signs of targeting online to individual users. Only three of the 22 sites showed “high” targeting, meaning that at least 45 percent of the ads were different from one visitor to the next. Three other sites showed “medium” targeting (between 20 and 40 percent of the ads) and the other 15 sites showed little or no targeting at all.

The three “high” targeting sites were Yahoo News (67 percent of ads were targeted to individual users), NYTimes.com (47 percent targeted ads) and CNN.com (45 percent targeted ads).

The full report is available online.

(Stock image via Shutterstock. Used under license.)

Related Topics: Channel: Display Advertising | Display Advertising | Statistics: Online Advertising | Top News | Yahoo: News

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About The Author: is Editor-In-Chief of Marketing Land. His news career includes time spent in TV, radio, and print journalism. His web career continues to include a small number of SEO and social media consulting clients, as well as regular speaking engagements at marketing events around the U.S. He recently launched a site dedicated to Google Glass called Glass Almanac and also blogs at Small Business Search Marketing. Matt can be found on Twitter at @MattMcGee and/or on Google Plus. You can read Matt's disclosures on his personal blog.

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  • http://sachinkamdar.com/ Sachin Kamdar

    You should look at all publisher sites, not just magazine/newspaper sites.  It makes financial sense to for sites like The Economist and other magazines to have a high percentage of house ads.  Those convert into subscriptions, which actually make them a lot of money.  Same thing goes for newspapers, but maybe to a lesser extent.  

    This commentary would be meaningful if you looked at all content sites and then looked at the percentage of house ads, not just those sites where converting users to a subscription is a good strategy. 

  • http://www.btbsunglasses.com BTB Sunglasses

    I don’t doubt this one bit. I’m actually a little surprised its not higher nowadays. I guess they do have to find a good balance and keep the user experience in mind. 

  • http://www.facebook.com/nic.fulton Nic Fulton

    House ads are free. They are used to fill spaces in inventory that are not filled with paid adverts. The theory of supply and demand would generally indicate there is a ‘best price’ for adverts where you make the most money our of your supply. This best price happens at about 80% sell-out. If you lower your prices you’ll maybe sell another 10% but you drop the price by more than 10%. If you increase the price by 10% you drop to closer to 70% sold-out. So the magic balance point is 80% (approx). The better the advertising sales team and their analytics the better they can do, but the rule of thumb stays approximately true. For what it left, i.e. the 20%, you run house ads. They don’t cannibalize revenue and they enable you to create more page views and hence increase the supply. Which you then sell until it’s about 80%… So Pew has just confirmed what we all knew in the industry. Economics will find a way…

  • Allison Edrington

    I’d be interested to see a wider study on how online-only publications fair in this regard. I agree with Sachin Kamadar that subscriptions are probably a big money maker for them and some level of house ads would be justified.

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