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The ProJo will shut its printing plant; plus, Google News exec quits, and healthier news habits

Illustration c. 1902 via the Internet Archive Book Images

The Providence Journal is shutting down its printing plant next March because its previous owner bet on a technology that is no longer supported. As a friend who’s now retired from the Journal put it on Facebook, “I didn’t realize we had the Betamax of printing presses.”

The closure could have serious consequences. The Journal, which is owned by the Gannett chain, is where a number of other Gannett papers are printed, including the regional edition of USA Today, the Telegram & Gazette of Worcester, The Patriot Ledger of Quincy, the Cape Cod Times and others. The plant also earns money by printing non-Gannett papers such as the Daily News of New York, the Boston Herald and the Hartford Courant, all owned by the hedge fund Alden Global Capital.

According to Journal reporter Jack Perry, the closure will result in the loss of 136 jobs. He reports that some of the printing will move to Gannett’s facility in Auburn, Massachusetts, which, he writes, should result in no significant effect on delivery — but that some will move to a plant that the company owns in New Jersey. Perry explains what happened:

In 1987, The Providence Journal opened its $60 million production plant and began printing with a technology, flexography, that was new to newspapers, although the packaging industry had used it for about six decades. In relying on water-based, rather than oil-based ink, flexography was considered better for the environment, and cleaner for readers in that it wouldn’t leave ink smudges on their fingers.

Despite those and other perceived advantages, flexography didn’t catch on in the newspaper industry and replace offset printing as some expected. The English company that makes the printing plates for Providence’s flexo presses decided to stop making the plates because it wasn’t cost effective, since the Providence facility is its only remaining customer, according to Mike Niland, senior director of manufacturing, Gannett Publishing Services New England. It is the only company that makes the plates, he said.

A news industry source told me Tuesday via email that the printing quality should actually improve after the papers move from flexo to offset, though that would seem like small consolation given the early deadlines that will no doubt be imposed in order to truck papers north from New Jersey.

This is not the first time that Gannett has closed a New England printing plant. In January 2023, the company announced that it would shut down its facility in Portsmouth, New Hampshire. That closure affected two New Hampshire papers, the Portsmouth Herald and Foster’s Daily Democrat of Dover, as well as the Burlington Free Press of Vermont, located not far from the Canadian border. The printing at that time was parceled out between Gannett’s plants in Providence and Auburn, Massachusetts. Now only Auburn remains.

Digital giant quits Google

One of the giants of digital news has quit Google. Shailesh Prakash, a vice president and general manager of Google News, has quit after just two years, reports Alexandra Bruell (gift link) in The Wall Street Journal, writing: “The high-profile departure comes amid a continuing rift between Google and news outlets over how the search engine drives traffic and uses their content.”

Prakash came to Google from The Washington Post, and I interviewed him for my 2018 book, “The Return of the Moguls.” Like then-executive editor Marty Baron, Prakash was a holdover from the Graham family regime, though Jeff Bezos had the good sense to hold on to both of them when he bought the paper in 2013.

Though the Journal story provides little insight into why Prakash decided to leave Google, it does describe the increasingly challenging environment in which he found himself:

At Google, he brought an understanding of publishers’ frustrations as they have grappled with traffic declines and seek compensation for the Alphabet unit’s [i.e., Google’s] use of their content. While he oversaw product and engineering for the News group, he also communicated with leaders at news publishers regarding changes related to search and generative AI.

Solving those news blues

The election of Donald Trump to a second term in the White House has led a lot of us to wonder how we might change our news-consumption habits. I’m thinking about less news of the day, more deep dives into topics that may not be directly related to national politics.

Nieman Lab editor Laura Hazard Owen has some good ideas as well: print newspapers, which are better than digital at packing their journalism into a finite space; cutting back on social media, including getting rid of Twitter; recommitting to RSS; and not reading news after hours.

“I’m still a working journalist and a huge part of my job is to read and follow the news,” she writes. “I’ll still do both those things because I love them. But sometimes it’s healthy to do something you love a little less, and differently.”

California’s proposed deal with Google to support local news comes under criticism

The California state capitol in Sacramento. Photo (cc) 2006 by David Monniaux.

A proposal that would have required Google to pay California news outlets for the journalism that it repurposes has instead been replaced with a proposed deal that is already coming under criticism. Jeanne Kuang of CalMatters writes:

California lawmakers are abandoning an ambitious proposal to force Google to pay news companies for using their content, opting instead for a deal in which the tech giant has agreed to pay $172 million to support local media outlets and start an artificial intelligence program.

The money would be spread over five years and would be supplemented with $70 million from the state over that same time period. Google would continue paying $10 million a year to newsrooms under existing programs.

The deal apparently does not require legislative approval, though the annual appropriations that it specifies would be subject to a vote.

Gov. Gavin Newsom voiced his approval in a statement, saying: “This agreement represents a major breakthrough in ensuring the survival of newsrooms and bolstering local journalism across California — leveraging substantial tech industry resources without imposing new taxes on Californians.”

But Kuang continued:

The Media Guild of the West, which represents reporters in Southern California, slammed the agreement and accused publishers and lawmakers of folding to Google’s threats.

“Google won, a monopoly won,” said Matt Pearce, the group’s president. “This is dramatically worse than what Australia and Canada got … I don’t know of any journalist that asked for this.”

According to Los Angeles Times reporter Lauren Rosenhall’s account of the deal, agreement was struck after a drawn-out battle over a bill, AB 886, that would have extracted much more money from the tech giant:

Google threatened to remove California news content from its platform if the bill passed, and then ran ads saying the legislation would reduce Californians’ access to news.

Lobbying over the bill grew intense, with a trade association Google belongs to launching an ad campaign aimed at lawmakers that cast the legislation as a giveaway to large media corporations. Records show the Computer and Communications Industry Assn. spent $5 million on ads against AB 886 over the last two years as the bill made its way through the Legislature.

The role of government in boosting journalism through measures such as tax credits and mandates that would force Google and Facebook to hand over some of their advertising revenues has moved to the center of the ongoing discussion of what to do about the ailing local news business.

Though federal legislation has stalled repeatedly, proposals in New York and Illinois to provide tax credits to news publishers that create or retain newsroom jobs have become law.

And in Massachusetts, a proposal to revive a state commission that would study the problem and make some recommendations was the subject of a legislative hearing earlier this summer (I was among those who testified) appears to be on track.

Newsletters move to the fore as tech platforms spurn community journalism

If we’ve learned anything about news publishing in recent years, it’s that the giant tech platforms are not our friends. Google is embracing artificial intelligence, which means that searching for something will soon provide you with robot-generated answers (right or wrong!), thus reducing the need to click through. Facebook is moving away from news. Twitter/X has deteriorated badly under the chaotic leadership of Elon Musk, although it still has enough clout that President Biden used it to announce he was ending his re-election campaign.

So what should publishers do instead? It’s no secret — they’re already doing it. They are using email newsletters to drive their audience to their journalism. A recent post by Andrew Rockway and Dylan Sanchez for LION (Local Independent Online News) Publishers reports that 95% of member publishers are offering newsletters, up from 81% in 2022. “The decline in referral traffic,” they write, “will likely lead to more direct engagement by publishers with their audiences.”

Some observers worry about newsletter overload as our inboxes fill up with email we may never get around to reading. That’s potentially a problem, but I think it’s a more serious problem for larger outlets, many of which send out multiple newsletters throughout the day and risk reaching a point of diminishing returns. By contrast, users will value one daily newsletter from their hyperlocal news project with links to the latest stories.

Newsletters are crucial to the success that Ellen Clegg and I have seen both in the projects we write about in our book, “What Works in Community News,” and on our podcast, “What Works: The Future of Local News.” Essentially, we’ve seen three newsletter strategies.

By far the most common approach publishers use is to offer a free newsletter aimed at driving users to their website, which may be free or subscription-based. The Massachusetts-based Bedford Citizen, for instance, sends out a daily newsletter generated by its RSS feed and a weekly human-curated newsletter. The Citizen is a free nonprofit, but once they’ve enticed you with their top-of-the-funnel newsletter, they hope they can lure you into becoming a paying member. Ellen and I interviewed executive director Teri Morrow and editor Wayne Braverman on our podcast last February.
The Colorado Sun, a statewide nonprofit, offers a series of free and paid newsletters, while the website itself is free. The paid newsletters represent an unusual twist: Some of them feature deeper reporting than you can get from the website on topics such as politics, climate change and outdoor recreation. At $22 a month for a premium membership, users pay no more than they would for a digital subscription to a daily newspaper. Editor Larry Ryckman talked about that in our most recent podcast.
In some places, the newsletter is the publication. An example of that is Burlington Buzz, a daily newsletter that covers Burlington, Massachusetts. Founder, publisher and editor Nicci Kadilak recently switched her newsletter platform from Substack to Indiegraf, and her homepage looks a lot like a standard community website — which shows that it’s a mistake to get too caught up on categories when newsletters have websites and websites have newsletters. Ellen and I talked with Nicci last year.

What’s crucial is that news publishers have direct control of the tools that they use to connect with their audience. Gone are the days when we could rely on Facebook and Twitter to reliably deliver readers to us. We have to go find them — and give them a reason to keep coming back.

Correction: Burlington Buzz has moved to Indiegraf, not Ghost.

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Illinois nears enactment of tax credits and other measures to boost local news

Illinois Gov. J.B. Pritzker. Photo (cc) 2018 by SecretName101.

The state of Illinois has taken a major step forward in trying to ease the local news crisis, with the legislature approving tax credits for publishers to hire and retain journalists; creating a 120-day cooling-off period to slow the sale of independent local news outlets to out-of-state chains; and funding scholarships for students who work at an Illinois news organization for at least two years after graduation.

Mark Caro reports for Northwestern University’s Local News Initiative that the tax credits amount to a modest $25 million over five years, but he quotes state Sen. Steve Stadelman as saying that the measure nevertheless represents a good start. “It was a tight budget year for Illinois, which always makes it difficult to pass legislation,” Stadelman, a Democrat, told Caro. “Was it as much as I wanted? No. But it showed that there’s a commitment by the state of Illinois to local journalism, and that’s significant.”

Gov. J.B. Pritzker is expected to sign the bill.

A couple of points I want to raise.

• The legislation grew out of the state’s Local Journalism Task Force, which was created by Gov. Pritzker in August 2021. Stadelman chaired that bipartisan group. Illinois was the second state to create a commission to study the local news crisis and make some recommendations. The first, you may recall, was Massachusetts; I had a hand in drafting the legislation that created it and would have been a member. But the Massachusetts commission, signed into law by then-Gov. Charlie Baker in January 2021, never got off the ground. There are some favorable rumblings coming out of Beacon Hill, though, and I hope to have better news to report at some point later this year.

• The Illinois tax credits avoid some pitfalls that developed almost immediately after New York State approved $90 million over three years. The New York credits are currently being implemented through an administrative process, and Gothamist reported recently that it’s not clear whether nonprofits and digital-only media outlets would be included, even though some prominent proponents understood that that they would be. The language is also contradictory as to whether out-of-state chains would be able to take advantage of the credits.

By contrast, the language of the Illinois legislation makes it clear that nonprofits and digital-only projects are included and that out-of-state chains are excluded.

The Illinois bill represents just part of a comprehensive package that was unveiled last February. As Caro reports, the Stadelman bill originally called for state agencies to spend half or more of their ad budget on local news outlets, but that provision was dropped.

In addition, a separate bill that would have required Google and Facebook to pay for the news that they repurpose has been put on hold depending on how things go with a similar measure in California. Forcing Big Tech to hand over some of their profits sounds appealing, but it hasn’t been working out very well elsewhere, as Facebook is getting rid of much of its news content and Google is threatening to walk away from the modest assistance it provides to journalism, such as the Google News Initiative.

Any form of government assistance for journalism has to be evaluated for whether it compromises the independence that news outlets need in order to hold public officials to account. Still, the modest action being taken in Illinois seems worth trying, at least on an experimental basis.

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Apple News Plus: Promising, or just another example of promises, promises?

There was a time in the not-too-distant past when news organizations were all-in on social media as a way to distribute their journalism. But that was then. In recent years, Facebook has fiddled with its algorithm repeatedly in order to play down the amount of news that will show up in users’ feeds. Actual partnerships with the likes of The Washington Post are a thing of the past. Google is unreliable. And let’s not get started with what has happened to Twitter/X, the other main source of click-throughs to news stories.

To compensate, media outlets doubled down on newsletters, which don’t drive as much traffic as social but which do have the advantage of being under their control. Of course, all this is playing out at a time when many if not most newspapers and magazines have put their journalism behind paywalls, which further degrades the value of relying on social. A click from Twitter doesn’t mean much if the clicker can’t read the story they’re interested in or — more to the point — see the ads.

Now we’re experiencing a bit of excitement over a newish platform: Apple News Plus. The free version comes preinstalled on everyone’s iPhones and Macs. For $12.99 a month, you get a whole lot more (though not The New York Times, which is skeptical).

Apple News Plus got a big boost earlier this week when Semafor media reporter Max Tani wrote a mostly favorable story. He begins with quite an anecdote about The Daily Beast, which had been on the ropes as its reliance on Facebook and Google was resulting in a dwindling number of clicks. Thanks to its partnership with Apple News Plus, though, the Beast is on track to earn between $3 million and $4 million this year, more than its own in-house subscription program.

Better yet, you don’t have to click through. Stories load instantly and in many cases are more attractive than the publications’ own websites. Tani writes:

The Beast is hardly alone in its increased reliance on the iOS [and Mac] news aggregator. The free version of Apple News has been a source of audience attention for news publishers since it launched in 2015. But while many publishers have come to the conclusion that traffic has less business value than they once thought, they’re still desperate for revenue. Executives at companies including Condé Nast, Penske Media, Vox, Hearst, and Time all told Semafor that Apple News+ has come to represent a substantial stream of direct revenue.

Which raises a question: Haven’t we been down this road before? Indeed, Facebook and Google both experimented with partnering with news organizations and republishing their content on its own platforms, but those arrangements ultimately came to a bad end. Needless to say, Apple News Plus also privileges national publications over local media outlets. Tani mentions partnerships with large regional newspapers such as The Philadelphia Inquirer and The Atlanta Journal-Constitution, but it’s hard to imagine that they’ll get down to the level of hyperlocals that cover small communities and neighborhoods.

Chris Krewson, the executive director of LION (Local Independent Online News) Publishers put it this way on Twitter: “Every time I watch this movie the ending is the same.”

Let me point out another problem. A few large newspapers, both national (principally the Times and The Wall Street Journal) and regional (including The Boston Globe and the Star Tribune of Minneapolis), have achieved profitability on the strength of digital subscriptions. Key to that is that they get all the revenue. The Globe’s non-discounted digital subscription rate of $30 a month is more than double what you’d pay Apple, and that money is being split among all of the media partners that are taking part, as well as with Apple itself.

Journalism is expensive, and news organizations with large reporting staffs need as much subscription revenue as they can get. What Apple is offering, essentially, is iTunes for news, an idea that the late David Carr was promoting 15 years ago. There are good reasons it’s never caught on — until now, maybe.

Long-term, no tech company is going to be a reliable partner for news organizations. Apple is attractive in ways that Facebook and Twitter never were: it’s not a social network, and charging subscriptions for users provides a more solid underpinning than anything the platforms offered. And of course journalism should take advantage of what Apple is offering. At this late date, I think every news executive knows the rug could be pulled out from under them at any moment. But they ought to take the money while it’s there.

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Publishers sound alarm over Google’s AI search plans. But let’s dial it back a bit.

What does AI say about RFK Jr.’s anti-vax activism? Photo (cc) 2023 by Gage Skidmore.

The latest freakout inspired by artificial intelligence has hit the news business. On Tuesday, Google announced that it will merge its AI tool, Gemini, with its search engine. What that means for publishers is that someone seeking information about, say, Robert F. Kennedy Jr.’s anti-vax crusade will receive an answer right in Google rather than being prompted to click to a news source. Let’s try it:

First, I entered <Robert F. Kennedy Jr. anti-vaccine activism> in Google Search. The top five results were from The Associated Press (two), Scientific American, the Annenberg Public Policy Center and the PBS “NewsHour.” In other words, good, respectable sources of independent journalism.

Next, I entered the same search at Gemini and got this: “I’m still learning how to answer this question. In the meantime, try Google Search.” OK! But then I tried the same thing at the free version of ChatGPT, which provided the following answer:

Robert F. Kennedy Jr., son of former U.S. Senator and Attorney General Robert F. Kennedy and nephew of President John F. Kennedy, has been known for his anti-vaccine activism. He has been a prominent figure in the anti-vaccine movement, particularly regarding his views on the safety of vaccines and their alleged connection to autism.

Kennedy founded the Children’s Health Defense organization, which has been criticized for spreading misinformation about vaccines and promoting unfounded claims about their dangers. He has spoken at numerous events and rallies, advocating against vaccination and promoting alternative views on the subject.

It’s important to note that the overwhelming scientific consensus supports the safety and effectiveness of vaccines, and the alleged link between vaccines and autism has been thoroughly debunked by multiple scientific studies. Kennedy’s activism has been met with criticism from public health officials and medical professionals, who argue that his views are not supported by scientific evidence and pose a danger to public health.

I think we can agree that’s pretty good — and it includes exactly zero links to any of its sources, depriving some excellent news organizations of web traffic. I should note that, according to CNN media reporter Oliver Darcy, Google is promising to include links in Gemini, so it may end up looking something like Perplexity, an AI-powered search engine that provides plain-English answers and reliable links.

When I tried our RFK Jr. search at Perplexity, I got a very good answer — as good as ChatGPT, if not better — along with links to Wikipedia, The AP, the “NewsHour” and NBC News. But would I click on them? At the moment, I would, because of AI’s well-known proclivity for providing fake answers. At some point, though, that problem will be solved.

“This will be catastrophic to our traffic, as marketed by Google to further satisfy user queries, leaving even less incentive to click through so that we can monetize our content,” Danielle Coffey, chief executive of the News/Media Alliance, told Darcy. The alliance represents some 2,000 news publishers.

I also took a look at the internal metrics of the only news site I have access to: this one. According to Google Analytics, over the past month Media Nation received 40% of its traffic from “organic search” — that’s traffic from search engines, nearly all Google, that I didn’t boost by paying for ads on Google. And yes, that’s a lot. Next up was direct traffic (25.6%), organic social (21.2%) and referrals (12.1%), which are links from other websites.

Now, I happen to think that some of the lamentations we’re hearing from publishers are overblown. It’s fine to complain that Google is taking steps that will result in fewer clicks on your website. But how much money does that really bring in? These days, you’re likely to hit a paywall when you try to click through from a search. Programmatic ads on news sites are terrible and bring in very little money.

In the end, there is no substitute for building a relationship with your audience. For-profit publishers need to persuade their readers to become digital subscribers and local businesses to advertise. Nonprofits must convince their audience to become voluntary supporters and to raise money from underwriters, foundations, events and whatever else they can think of.

To use Media Nation as an example again: I currently have more than 2,300 subscribers who receive new posts by email. I consider those to be my most engaged readers. I don’t do much to monetize this site, although I have a modest paid supporter program, which, needless to say, you are invited to join. The future of news, though, is being built right now by serving our communities — not through Google search.

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Look out, Oregon: Ken Doctor is planning a new media outlet to challenge Gannett

Eugene, Oregon. Photo (cc) 2012 by Visitor7.

The pixels were barely dry on my post about the Pulitzer Prize awarded to Lookout Santa Cruz when I learned about plans by founder Ken Doctor to launch a second Lookout Local site in Oregon’s Eugene area. The Oregonian reported last month that Lookout Eugene-Springfield will launch in late 2024 or early 2025 with a newsroom of 20, of whom 15 will be journalists. That’s more firepower than Gannett’s Eugene Register-Guard can muster. Indeed, The Oregonian published a pretty depressing report on that paper a year ago that began:

The Eugene Register-Guard, once one of the best newspapers in the region, today has no local editor, no publisher, no physical newsroom and little love from a dismayed citizenry. The news staff that once exceeded 80 now stands at six.

As was the case in Santa Cruz, California, Doctor’s reputation in the news business is standing him in good stead. He said he has already raised $2.5 million for his Oregon project and plans to scrounge up another $1.5 million. Doctor is a graduate of the University of Oregon’s journalism school, so this is something of a homecoming for him.

Doctor also has a long post up at Nieman Lab about efforts in California to bolster local news. Like longtime media analyst Jeff Jarvis, Doctor opposes efforts to extract money from Google and Facebook, noting that Meta, Facebook’s parent company, has made it clear that it doesn’t need news, and that going after Google would harm the uneasy balance between the good and bad that the company has done for (and to) journalism.

Instead, Doctor is looking to New York State, which recently created tax credits for news publishers who create and retain jobs. The key, he writes, is to ensure that those credits go to California-based publishers rather than to out-of-state conglomerates. And though he doesn’t name names, he’s presumably referring to the hedge fund Alden Global Capital, with whom he competes in Santa Cruz, and Gannett.

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Local news round-up: Disturbing revelations in NH, plus pink slime and Google’s thuggish tactics

New Hampshire Statehouse in Concord. Photo (cc) 2012 by AlexiusHoratius

The Boston Globe published a story Friday about a New Hampshire state representative named Jonathan Stone, an ex-police officer who — according to recently released records that he tried to keep secret — “spoke of killing police and raping the chief’s wife and children.”

As the Globe notes, the story was broken on April 5 by Damien Fisher of InDepthNH, a nonprofit news organization that covers politics and public policy in the Granite State. Fisher’s story begins:

Republican Rep. Jon Stone’s New Hampshire law enforcement career ended when he threatened to kill fellow police officers in a shooting spree, and murder his chief after raping the chief’s wife and children, all while he was already under scrutiny for his inappropriate relationship with a teen girl, according to the internal investigation reports finally released this week.

Yikes. Fisher writes that he first filed a right-to-know request in 2020, and that the records were ordered released last month by New Hampshire’s Supreme Court. InDepthNH executive editor and founder Nancy West was a guest on our “What Works” podcast in November 2022.

In Ohio, DIY pink slime

Jack Brewster of NewsGuard, a project that tracks the rise of pink slime news sites, has written an essay for The Wall Street Journal (free link) that is at turns harrowing and hilarious. Spending just $105, he put together a website powered by artificial intelligence that’s designed to look like a local news outlet. Per his specifications, the site, which he called the Buckeye State Press, was designed with a right-wing bias, favoring Republican Senate candidate Bernie Moreno over the Democratic incumbent, U.S. Sen. Sherrod Brown.

Brewster used an Israeli-based service called Fiverr.com to build the site, which in turn was programmed by a Pakistani freelancer named Huzafa Nawaz. Brewster writes:

From there, all I had to do was answer a few questions about what kind of site I was looking for and the topics I wanted the site’s articles to cover. The domain and site hosting added an extra $25 to the total. The entire AI content farm cost me just $105, and I literally have to do nothing to operate it. It runs itself, auto-publishing dozens of articles a day based on the instructions that I gave to it.

I’ve been following developments in pink slime off and on for the past decade, and what I’ve found is that they are pretty inept. That proved to be the case with Brewster’s experiment as well — at one point his site hallucinated Brown’s attendance at a local fig festival. At some point, though, these projects are going to evolve into effective sources of political propaganda, which we all need to be concerned about.

Google plays hardball in California

As I’ve said repeatedly, I’m skeptical of legislative attempts to force Google and Facebook to pay news organizations for the journalism that they repurpose. If anything, the notion has become more nonsensical over time, as Facebook’s parent company, Meta, has made it clear that it would just as soon eliminate news content on platforms like Facebook and Threads.

Google is a different matter, but no less complicated. News publishers want money from Google, but at the same time exactly none of them add the necessary code to their sites which would make them invisible to Google, because they’re dependent on traffic from the giant search engine, too.

Still, it’s hard not to be outraged by Google’s latest tactic. According to Jeremy B. White of Politico, Google is blocking access to some local news content in parts of California as it fights against state legislation that would force them to pay news organizations. White writes:

“We have long said that this is the wrong approach to supporting journalism,” Google’s vice president for global news partnerships, Jaffer Zaidi, said in a Friday blog post. Zaidi warned the bill could “result in significant changes to the services we can offer Californians and the traffic we can provide to California publishers.”

Well, I guess so. These are the tactics of a thug, and yet another sign that the tech giants have amassed way too much power.

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A smackdown over programmatic ads and why reader revenue is crucial

We are having a smackdown over an unlikely topic — programmatic ads, those low-quality ads fed to websites by a third party, nearly always Google.

At one time they were fairly lucrative and supported news organizations like The Huffington Post. But their value diminished over time. Indeed, it seemed anachronistic when The Messenger launched last year with a pretty substantial newsroom, offering free access in the hopes that it would attract a mass audience and thrive on programmatic. Its quick demise was as predictable as it was depressing.

Anyway, last week Josh Marshall, the founder and editor of the political news site Talking Points Memo, wrote a post explaining what had happened to programmatic ads over the years. He included a chart (above) showing that revenue from such ads had collapsed at TPM, from nearly $1.7 million in 2016 to just $75,000 in 2023. “As I think is pretty clear, if this is your business, you’re dead,” he wrote. “You don’t have a business.” He added that TPM had successfully pivoted to reader revenue, which was how his project had survived the programmatic meltdown.

Enter Ben Smith, the co-founder of Semafor. Smith called Marshall’s numbers “a dramatic oversimplification,” arguing that the reason TPM’s programmatic ad revenues had fallen so much was that Marshall had put much of his content behind a paywall — and even charged a higher rate for an ad-free experience, meaning that of course ad revenues were going to drop significantly. “The drop in ad revenue is a feature, not a bug, of that strategy,” Smith wrote. “Meanwhile programmatic ad rates, for instance, have actually increased — modestly — over the period that Marshall’s chart covers.”

Smith also quoted Foster Kamer, the editor-in-chief of Futurism, as calling Marshall’s post “sensationalist bs.”

Well, now! I’ve been waiting to write until Marshall responded, and on Tuesday he did. Essentially his counter-argument is that his programmatic revenues didn’t drop because of TPM’s paywall; rather, he implemented a paywall because programming revenues were dropping. He writes:

[W]e didn’t just decide this was money we didn’t need anymore. The changes we made that played a direct role in the decline were entirely in reaction to reductions in potential revenue which we knew we couldn’t sustain. While we were making those changes we still fought for every dollar we could get out of the rapidly diminishing programmatic advertising pie. The results are what you see in that chart, which not surprisingly got a lot of people’s attention.

Now, there’s no way of knowing exactly how much programmatic revenue TPM would be earning if Marshall had left the site wide open and had tried to get as much money as possible from such ads. But he guesstimated that it might be about a third of what TPM was getting in 2016 — in other words, maybe around $570,000, a significant decline from $1.7 million. “Needless to say,” Marshall adds, “no company can withstand a 2/3rds drop in a primary revenue stream.”

Noting that Kamer and Futurism really are making a go of it with programmatic, Marshall points out that certain categories such as tech and science are still able to generate decent revenues from Google ads. “There are no industry sectors for cultural polarization and societal decay, where we operate,” Marshall writes. “They also don’t face the negative premium that news publishers — in the sense of news about daily events and politics — face in a polarized age.”

My own take on all this is that Marshall’s initial post was only a little bit deceptive, and only for readers who weren’t paying attention. He laid out his paywall strategy quite clearly. It’s obvious that if your response to the cratering of programmatic is to start charging for your journalism, then your programmatic revenue is going to drop even more quickly than it otherwise would.

This is relevant, too, to local news. There’s a reason that some 2,900 newspapers have closed since 2005, and that reason is the ad revenues publishers were hoping for to support what were initially free websites never materialized. For-profit local news has become extraordinarily difficult. A few large regional newspapers, like The Boston Globe and the Star Tribune of Minneapolis, have achieved profitability through digital subscriptions, but that strategy has proven to be a pretty much a non-starter at smaller outlets. That’s why we’re seeing a major shift to nonprofit for local news.

As Marshall puts it, “who are we trying to kid here? Does anyone think that advertising — direct or programmatic — still sustains digital news organizations, especially independent ones? Really? I think the almost weekly lists of bankrupt and shuttered news outlets tells the story pretty clearly.”

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The end of programmatic ads

This is mind-boggling. Josh Marshall writes that his political news and commentary site, Talking Points Memo, took in nearly $1.7 million in programmatic ad revenues in 2016 — and was down to just $75,000 in 2023. Marshall says that TPM is doing OK because he made the move to paid memberships a few years before the ad-pocalypse really set in. But it shows that the symbiotic relationship between news and the tech platforms has now completely disintegrated.

Marshall’s numbers show why for-profit news outlets can’t survive without fairly strict paywalls. They also show why nonprofit is so much more robust than for-profit — it’s easier to get money from foundations, wealthy individuals, paying members and earned income such as sponsorships and events. That’s not to say local publishers can’t succeed at selling ads to businesses in their community. But it does show that relying on third-party ads served up by Google is over.

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