Data Tracking, Online Ads and the Creation of Editorial Content: Part of the Behavioral Targeting Debate

The relationship between the pervasive online marketing consumer tracking system and its impact on the funding and creation of editorial content is one of the most important policy issues confronting policymakers–as well as journalism professionals.  Producing content that sells is very important; but how do new capabilities that instantly assess what we are interested in affect the overall editorial mix?  Will we see even less investigative reporting, foreign news coverage, etc. as data collecting bots scour our online activities in order to help marketers and advertisers take better advantage.  It’s an issue we have long raised, and will be focused on as part of the privacy debate.  For now, here’s an excerpt from a new IPO just filed at the SEC by Demand Media [our emphasis]:

Content.  We create highly relevant and specific online text and video content that we believe will have commercial value over a long useful life. During the quarter ended June 30, 2010, we generated an average of over 5,700 wholly-owned text articles and videos per day. The process to select the subject matter of our content, or our title selection process, combines automated algorithms with third-party and proprietary data along with several levels of editorial input to determine what content consumers are seeking, if it is likely to be valuable to advertisers and whether it can be cost effectively produced. To produce original content for these titles at scale, we engage our robust community of highly-qualified freelance content creators. As of June 30, 2010, our content studio had over 10,000 freelance content creators, a significant number of which have prior experience in newspapers, magazines or broadcast television. Our content creation process is scaled through a variety of online management tools and overseen by an in-house editorial team, resulting in high-quality, commercially valuable content. Our technology and innovative processes allow us to produce articles and videos in a cost effective manner while ensuring high quality output. …Monetization.  Our goal is to deliver targeted placements to advertisers who seek to reach consumers based on the content these consumers are seeking and discovering. Our platform generates revenue primarily through the sale of online advertisements, sourced through advertising networks and to a lesser degree through our direct advertising sales force. The system of monetization tools in our platform includes contextual matching algorithms that place advertisements based on website content, yield optimization systems that continuously evaluate performance of advertisements on websites to maximize revenue and ad management infrastructures to manage multiple ad formats and control ad inventory. In addition, our platform is well-positioned to benefit from the continued growth of advertising networks by giving us access to a broader set of advertisements we can more precisely match with our content, thereby increasing advertising yields.

Author: jeff

Jeff Chester is executive director of the Center for Digital Democracy. A former journalist and filmmaker, Jeff's book on U.S. electronic media politics, entitled "Digital Destiny: New Media and the Future of Democracy" was published by The New Press in January 2007. He is now working on a new book about interactive advertising and the public interest.