Mutter’s Cure for Newspapers: Online Ad Co-op

Amid all the hand wringing over the future of newspapers, industry executives held a semi-secret meeting last week in Chicago to discuss how to better monetize their content on the Web.

A tricky question, to be sure. One of the favorite taglines of the escalating debate is that the Internet has turned newspapers’ print ad dollars into digital dimes.

Veteran newspaper editor and serial tech entrepreneur Alan Mutter has an answer: an industry-owned cooperative that would drive up the rates that newspapers could charge advertisers through detailed behavioral targeting and the bargaining leverage of the collective industry.

Mutter, perhaps best known for his Newsosaur blog, pitched the idea of ViewPass to newspaper executives at the Chicago meeting, describing it in a blog post as a “single, ubiquitous brand to enable consumers to access valuable content on the Web sites and mobile platforms of all participating publishers.”

ViewPass would facilitate a payment system where publishers could charge for access to content, either through subscriptions, bundled content packages or micropayments — an a la carte model that would charge a small fee for access to a single article.

“It would be deployed as a widely recognized and widely accepted brand in a manner similar to the way Visa cards were established by the banking industry as a ready substitute for cash,” Mutter said.

But the real value of the system wouldn’t be in trying to start charging for the content that consumers have come to expect to be free.

Rather, as an industry-owned collective, ViewPass would allow newspapers to assemble detailed profiles about their readers, information that could then be supplied to advertisers to serve more targeted ads at steeper rates.

“ViewPass would consist of a simple, one-time registration system that would remember users as they moved among participating Web sites,” Mutter said. “It would build a profile of individual users from demographic information supplied by them, as well as by tracking the content they viewed as they moved from site to site.”

In a nod toward the inevitable privacy concerns that arise when people started talking about detailed profiles, Mutter noted that ViewPass wouldn’t pass along any personal identifiable information to advertisers.

Privacy advocates have become increasingly concerned in recent years with the personal profiles large Web companies have been amassing in their efforts to serve more relevant, targeted ads, and there a fresh effort is underway in Congress to draft a privacy bill that would set some parameters.

But advertisers are willing to pay more for better targeted ads. In the case of newspapers, Mutter believes ViewPass could enable publishers to more than double their CPM (cost per thousand impressions) rates, partially righting the dollars-to-digital-dimes imbalance.

Further, by setting it up as an industry-owned partnership, ViewPass would bypass some of the third-party vendors helping newspapers sell ads online. Mutter said that revenue consolidation, coupled with the higher CPMs and the market clout of an industry-wide consortium, could enable publishers to “rapidly triple their online margins.”

Some online firms, most successfully Yahoo, have developed advertising platforms to drive up online revenues for newspapers. But while Yahoo’s APT platform drives up ad rates with better targeting technology, Yahoo keeps half of the revenue, Mutter noted.

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