Google algorithms and newspapers

Stephen Baker

I was flipping through the Sunday Times yesterday, and I came upon an advertising section for upcoming movies. Each movie had its own full-color page. These were advertisements were like the billboards outside the theaters, and I loved looking at them. Now, despite the advances in audience measurement, I don't know how the studios can calculate the return on investment for those ads. And that's why at least some newspapers ads are still free from the Google threat.

Of course some people insist that Google's entry into the newspaper biz heralds the triumph of algorithms in this $48 billion market.

This commenter on the Battelle blog, for example:

Historically, advertisers have been too mathematically incompetent and manipulated by sales BS to make good decisions. This is all changing thanks to PPC efficiency plus superior analytical tools, both provided by Google at low cost. Newspapers should be worried, because even dense advertisers will finally start to see that most print ad campaigns have negative ROIs. The print media industry was built on overpriced ads and low paid authors, and things are going to get much, much worse.

Still, there's a real problem with algorithms: They don't work unless they count something that reflects the truth. And influence is a lot harder to put into numbers than the clickstream on Google search ads. This doesn't mean that the relentless move toward measurement will leave print media untouched. Advertisers who can calculate their return on investment for online ads will doubtless press for discounts on less measurable media. Newspapers and other print pubs are going to have to scramble like hell. But at least part of their business--the ads readers enjoy flipping through--should endure, at least for a while.

Before it's here, it's on the Bloomberg Terminal.