yahoo newspaper consortium makes some ad revenue

As a former journalist interested in figuring out how to "save" journalism, I've been following the development of the Yahoo Newspaper Consortium closely. Last fall, Yahoo introduced a new platform designed to deliver much more localized advertising content to newspapers - in search, classified, and graphical formats. As we've discussed in class, the drastic decline of advertising has decimated newspapers, and now they're scrambling to find ways to revive revenue.

The newspapers are eager to join this consortium because Yahoo is promising a new strategy for advertising: behavioral targeting. Newspaper partners would sell ads targeted on their own sites alone or throughout Yahoo-owned properties, based on 350 standard Yahoo audience segments, "as well as customized behavioral segments" -- basically creating a wiiide platform across Yahoo sites. The major publishers have signed on to this "consortium" - including Hearst, EW Scripps, and Cox Newspapers. The goals:

Advertising: Use Yahoo!'s technology platform to sell online advertising for the newspapers' Web sites.

Search: Use Yahoo!'s search monetization functionality on newspaper Web sites, such as Web search, downloads of the Yahoo! toolbar and sponsored search.

Local: Offer Yahoo!'s local products such as Yahoo! Local listings, Yahoo! Maps and Event Listings on the newspaper Web sites.

Content: Use Yahoo!'s extensive network to distribute the newspapers' content in areas such as Yahoo! Search results, Yahoo! News and other content verticals.

Newspapers have always tried to sell local ads, but by themselves didn't have enough advertising inventory to carve up for audiences. By banding together in this consortium, newspapers are increasing the audience slices that advertisers could be exposed to. For some newspaper companies, adding Yahoo's advertising inventory to their media mix enable the paper to expand its coverage area and attract new advertisers.

Hopes are high for this experiment: reports last week are showing that newspapers have sold $50 million in advertising so far since the launch of the consortium. 150 companies have signed up to use this system that simplifies targeting and selling ads; another 350 are slated to join this fall. EW Scripps reported a 30% gain in ad revenue over the first quarter this year.

So everyone wins, right? Yahoo wins, newspapers win... journalism wins? Not all media watchers are sanguine. The Romanesko journalism blog, in particular, thinks this is celebrating a very minor victory:

The fact is, newspaper companies used to make a high percentage of every ad dollar spent in their markets. Now they have to settle for a smaller share of an already lower cost opportunity. There is, after all, one online company on one side of the scale and hundreds of newspapers on the other side, making this a very good deal for Yahoo.