MARK THOMPSON: It’s a mess. And I don’t know anyone in the industry who doesn’t think it’s a mess. No one says, “It’s working very well. It’s very simple and straightforward.”
Yet no large brand has dropped ad tech wholesale.
And by the way, neither have we. You have no choice in the matter, if you want to continue to grow digital revenue. It’s an industrywide issue that’s going to have to be solved on an industrywide basis.
What’s the specific problem?
We’ve produced an environment which is very good at rapidly matching ads with people. It’s not very good at any kind of discrimination of how that happens, and what the actual effect is on the end user. It’s based on a very impoverished view about how advertising works: Literally, the assumption is if you can hit a consumer with a message the job’s done.
It should be fairly obvious that the actual human reaction to an ad is about more than just being correctly targeted. The mood state, the environment, the context and the straightforward reputational concerns [should matter more]. Having an ad for a quality product appearing on an awful, skeefo, socially damaging, repellant site doesn’t do that brand any good.
What’s the upside of ad tech?
Efficient transactions. It’s not just cheaper than using human beings but also simply more effective, and the fact that you can get a good sense of the audience you’re trying to reach.
Although I have to say, close examination of some of the segmentation that’s been claimed in digital advertising might be lifting a few more logs.
You mean data accuracy?
Yeah. When we say someone is a member of the audience is a female fashionista aged 20-30, what’s the probability that that’s actually true?
The random scattering of advertising on our site and the random scattering of our outgoing advertising on god knows what other sites – it’s in need of reform. And by the way, reform will improve the business. It will put upward pressure on CPMs, which is good for advertising.
Do you think brands will prove willing to pay the higher CPMs required in a reformed environment?
Yes. My sense is they’ll welcome a chance to spend the same money on slightly fewer sites to get a better result. I don’t think it means they have to spend more. This will in theory improve the effectiveness. Digital advertising claims to be an efficient market. And in an efficient market, you can’t expect top quality for the cheapest price.
Where does video fit into your plans?
At the most basic level, video should be an integral part of our coverage of many news stories. Donald Trump is one rather obvious example. To a significant extent, that story is often happening in televised environments. It’s completely, obviously necessary that we should have a comprehensive video capability.
But I’m skeptical about the idea that it was ever going to be an entirely separate and massive revenue stream. A lot of the Times video we do is not really suitable for pre-roll. It’s based on a false premise that the right way to monetize video is imagining it’s a network TV show.
How is the revenue mix changing between subs and ad revenue?
We’re odd amongst publishers in that the print product is 66/33. And that’s where we’re headed in digital.
In the debate inside the organization, we came up with the “subscription first” idea about 18 months ago. There were people inside the organization who asked, “Isn’t that going to put advertisers off?” Actually, I think it’s helped focus what we’re trying to do. The way in which a subscription-first strategy emphasizes engagement, emphasizes the quality of the audience and targets those most willing to pay, is very good at qualifying audiences for key brands.
The advertising business is evolving into a marketing solution business, rather than simple advertising sales. Much of the media is sold as part of a bigger partnership with the brand involved. And some of it’s not conventional at all.
An example is “The Daily 360,” created with Samsung. Every day there’s a film shot in a 360-degree format – i.e., virtual reality on your smartphone. There’s a media sale involved in that, but the heart of it is a shared ambition with very heavy newsroom involvement.
You bought affiliate publisher Wirecutter last year. Is affiliate growing more important?
Wirecutter is a great fit with The Times’ journalism. It’s naturally extensible. There are many categories Wirecutter is not in yet.
I think affiliate is part of the mix. When I think about the likely digital revenue for the company in 3-5 years, I don’t see it being dramatically higher. The core of our digital revenue story is going to be digital subscription for multiple products, but biggest is the news product by far.
What’s your personal reading routine with The Times?
It’s 90% smartphone now. My morning drill is I’ll wake up and spend 20 minutes on my phone, looking at the morning briefing and what’s happened overnight. Then I come get the physical paper and bring it to my wife. She loves the morning ritual.
The printed product is at least as good as it’s always been, if not better. In business terms, it remains supremely profitable. Our print product would throw off cash, even if there wasn’t a dollar of print advertising.