Although targeted political advertising can be lucrative, that’s where news aggregation app SmartNews draws the line.
“We don’t have political advertising in the app,” said Kevin O’Kane, who joined SmartNews as chief advertising business officer this year after more than a decade at Google.
But SmartNews did have a strategy to capitalize on interest in the US midterm elections and drive more ad dollars to news publishers: recommendations.
SmartNews is continually fine-tuning its political recommendation engine, which the company debuted in 2020. That initiative is led by Rich Jaroslovsky, VP of content and chief journalist at SmartNews, and Managing Editor Christopher Chung.
Whereas most political news recommendation feeds use behavioral data to create an echo chamber of ideas users likely already agree with, SmartNews aims to give users more control over that dynamic.
Its “Politics” tab has sliders that users can adjust to see more news from sources that favor one or the other side of an issue. These sliders are set to show news from “all sides” by default.
“We try not to say, ‘You seem to like this, so let’s drive you down a rabbit hole,” O’Kane said. “We’re trying to represent a more holistic view to hopefully help educate people in a more thoughtful way.”
Engine room
Aggregator apps like SmartNews live and die by the strength of their recommendation engines, and, to maintain their supply of publisher content, they need to serve relevant ads to keep the revenue flowing to their sell-side partners.
SmartNews uses the first-party data it gathers from its users to create more intelligent content recommendations and serve more relevant ads. It’s also investing in its own ad stack so it can activate its first-party data by creating contextual audience segments that it can sell programmatically on the open web and as part of its new direct sales offering.
Although SmartNews serves the majority of its ads through RTB, it launched a direct US sales business, which is headed up by O’Kane, in October.
Because SmartNews is free to use – it has a user base of more than 10 million monthly users and doesn’t offer any kind of paid subscription – its revenue comes almost entirely from advertising.
First-party data pivot
But like many of its publisher partners, SmartNews is honing its first-party data strategy and deprioritizing third-party-cookie-based solutions in favor of Apple and Google’s post-cookie offerings, as well as its own contextual products, O’Kane said.
For example, SmartNews is testing Apple’s Private Click Measurement and SKAdNetwork 4.0 APIs. SmartNews is also a member of Google’s partner advisory board, as well as a pilot testing partner for Google’s Privacy Sandbox.
While it’s still early, SmartNews is optimistic that these new methods for targeting and attribution will eventually prove to be more effective than third-party-cookie-based solutions, O’Kane said.
SmartNews begins gathering interest-based data from the moment a user starts using the app. Right after install, users are prompted to identify their interests by choosing from a long list of preselected topics. They can update their selected interests at any time. The app also tracks the user’s location unless they opt out.
The app keeps a history of which articles each user has read and adjusts content recommendations accordingly. Users can also flag articles and publishers that they are particularly interested in, as well as ones they’d rather not see more of.
These first-party data signals train the algorithm to create interest-based mini-feeds that surface content from the app’s more than 3,000 publisher partners. These signals also inform what ads are served to each user.
In addition, SmartNews uses the IAB’s Seller Defined Audiences content taxonomy as well as its own proprietary methods to package publisher content into contextual buckets for interest-based ad targeting.
“Contextual and behavioral targeting are obviously where things are moving,” O’Kane said. “Fortunately, we have a very capable in-house AI/ML team that is helping us understand what’s happening on the platform in a privacy safe way.”
SmartNews also offers in-house measurement and analytics capabilities, but publishers and advertisers can still use third-party measurement and analytics partners if they choose.
In-app viewer
Rather than linking users directly to publisher sites, the vast majority of articles within SmartNews are read using an in-app viewer called SmartView. Most publishers opt in to having their articles read in SmartView via the SmartView First licensing program, O’Kane said.
In addition to faster load times and a more consistent user experience, SmartView places display and video ads throughout the content. SmartNews pays publishers a licensing fee for their content, and publishers receive a share of revenue from each ad placed within their articles.
Licensing fees are negotiated on a publisher-by-publisher basis, and the terms are typically revisited annually, O’Kane said. Revenue sharing works on a tiered model: the more views a publisher’s content attracts, the higher their revenue share.
SmartNews also offers publishers some ad placements that it does not collect a revenue share on. For example, publishers can insert their own video content into an iframe in SmartView using their own video player, then monetize that video with pre-roll or mid-roll ads and keep 100% of the revenue. And 100% of the revenue earned from one 300×250 display unit is reserved for the publisher.
“From day one, we said, ‘We’re going to pay publishers because their content is valuable,’” O’Kane said. “We didn’t wait until we got bigger [to start paying our publishers]. That’s the right way to build this sort of relationship.”
