As Congress and the Federal Trade Commission seek enhanced online privacy protection, the news industry is exploring ways to use online information to turn a profit.
Looking for ways to stay afloat in the face of lagging paper sales and ad revenue, some newspapers are seeking revenue lifelines from their online sites. The Newspaper Association of America (NAA) recently asked companies to present proposals on “paid content” solutions. The NAA’s request itself indicates an interest in gaining reader information. One question asks whether proposed platforms can “provide an information barter environment with appropriate privacy and other protections (i.e. access to content in exchange for more detailed user info)” — in short, whether the platforms can collect data from readers. In response, many of the proposals received by the NAA contain some form of individualized reader experience, where targeted ads and news links are provided in response to a reader’s profile, preferences, and viewing habits.
Many proposals offer targeted ads in connection with content hidden behind a paywall of subscriptions or micropayments. Because paid content typically requires a log-in, these proposals promise to then match a user’s demographics, profile, preferences, context, interests, and/or reading habits with relevant ads and other links. This could provide a boon for advertisers and the struggling news industries. It could also provide more reading material of interest to the consumer, as targeted content and non-commercial links could be provided as well.
The system may also come under attack from privacy advocates. Many people appreciate Amazon’s “targeted” recommendations, courtesy of tracking purchases that include books, and are quite comfortable with targeted coupons and advertisements courtesy of CVS or a grocery store’s loyalty cards. But people may balk at the notion that every single news article they read is being tallied so the information can be saved and analyzed. The federal government’s right to investigate suspected terrorists’ library lists is a hotly contested issue under the Patriot Act; some may then wonder why businesses can require disclosure of a citizens’ news reading habits as a price for reading the news.
In the end, the newspaper industry’s big move into targeted advertising, if it happens, may be like a lot of other industry moves on the Internet — too late. Congress and the FTC have showed heightened interest in protecting consumers online. The FTC is holding a series of roundtable workshops later this year regarding online advertisements and consumer protection. And Rep. Rick Boucher, D-Va, chairman of the House Energy and Commerce Subcommittee on Communications, Technology and the Internet, is drafting a bill that would force Web sites and advertisers to be more upfront with consumers about the information they collect and the uses they make of it. While the bill is meant to seek a middle path between consumers’ need for privacy and business’ need for revenue and successful online advertising, one key aspect of the bill appears to be a consumer’s right to not have his or her data collected, either by opting out or by not opting in.
Some readers might be willing to give up a little privacy in order to get more useful links to other articles, videos, and even ads. Their willingness might even increase if they feel they are in control, or at least aware, of what information they are making public. (Already, some free newspaper sites, like the New York Times and the Washington Post, require logging in after a certain number of articles, so those companies might be currently tracking reader’s habits, but if they are it isn’t obvious to the casual reader.) But if the Boucher bill passes, an option to opt out, particularly if it is made easily visible and coupled with clear information about what data Web sites are collecting (both seeming goals of Boucher’s bill), could be quite appealing for many readers. And that may hurt the papers financially just as they seek to profit from targeted advertising.