Why Murdoch Can Afford to Leave Google for Bing

More Traffic Doesn't Mean More Money for Online Publishers

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NEW YORK (AdAge.com) -- News Corp.'s talk about listing its sites exclusively on Microsoft's Bing sounds unpromising in several ways, but all of Rupert Murdoch's recent agitation and exploration are at least pushing one fact back to the fore: Web traffic only gets publishers so far in their quest for digital ad dollars. After a certain point, actually, traffic may not even matter.

Rupert Murdoch
Rupert Murdoch Credit: AP
More traffic means more bragging rights and helps attract advertisers who need to reach a lot of people quickly, but each new increment of visitors is something less than a new gold mine. Most sites, for one thing, already have much more inventory than they can sell.

Would giving up some search traffic mean giving up a proportionate amount of ad revenue? "Right now it would not," said Jim Spanfeller, president-CEO of The Spanfeller Group and former president-CEO of Forbes.com. "Because no one's sold out."

"In this climate, most sites are probably sold out through maybe 40%," he added.

And ad networks typically deliver pennies for every thousand more visitors that publishers attract. "Most ad networks deliver between 16 cents and $1 for a thousand," Mr. Spanfeller said. "So even if you were taking that strategy and working with ad networks, the impact of what search was driving would be minimal."

What's more, not all traffic is equal. Readers who arrive via search are predominantly "one-and-done" visitors, not the people advertisers most want.

News Corp's. Wall Street Journal Online got 17.4% of its unique visitors in October through Google and less than 1% from Bing, according to Compete.com. But there's no way pulling out of Google would mean losing anything like 17.4% of its ad revenue.

"What's the point of having someone come [to us] occasionally who likes a headline they see in Google?" Mr. Murdoch asked in his recent Sky News interview. "Sure we go out and say 'We've got so many millions of visitors, you had better advertise' and so on. The fact is, there's not enough advertising in the world to go around to make all the websites profitable."

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