You Get What You Pay For, One Way or Another

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It is a truth universally acknowledged that running a website costs money, and someone is going to pay that money or the website won’t continue.

That money comes from one of basically four sources: charity, like Blogger, paid for by Google with change from behind the couch cushions; a foundation or by some billionaire with really deep pockets, like The Atlantic; subscriptions; or ad revenue.

PJ Media, like a lot of high circulation sites, is paid for by a combination of ad revenue and subscriptions. We call our subscriptions the VIP (and VIP Gold and Platinum) program. It’s fairly simple in concept. You pay a small annual subscription price, currently $49 for the basic VIP membership, but we run promotional discounts fairly often. For this you get some privileges: you get access to our comments, which as a side effect keeps trollery down to a dull roar; you get access to our premium content, like my Sky Candy series;  with VIP Gold ($89/year) you get VIP access to all the Townhall sites, and with VIP Platinum ($159/year) you get all that plus discounts and gift certificates to the Townhall merch store. 

Yeah, that’s a pitch for VIP membership; keep reading for an explanation why we need it.

Other sites work differently. Commonly, sites like Forbes and National Review Online offer a few free articles every month, after which you need a subscription; some sites, like the New York Times and Wall Street Journal, offer no free content, or almost none.

And then of course there’s the legacy media. I think it’s a mistake to classify the legacy media as wholly separate from internet media. If you think of it, the biggest difference is that legacy media, like CNN or ESPN, is basically just media using an antiquated one-directional internet, in cable TV and — even more antique — broadcast airwaves. Even then, cable TV is moribund, and usually packaged with internet anyway. It’s better to think of it as “push media” because the whole structure of the technology is oriented to pushing the content out, take it or leave it.

But in the most important way, at least for our purposes right now, that legacy push-model media is still ad-supported. Comcast is trying to sell MSNBC because they are losing money on the ads that support the channel, because the population that they can target is getting smaller and smaller.

What this means is that very nearly all media is ad-supported, whether on the internet or on push media. So, to understand how media is supported, it’s useful to understand advertising.

The purpose of advertising is to get people to change their minds about something: to buy your product, to vote for your candidate, to vote against the other candidate, or to create a favorable or unfavorable opinion about something.

What does this is an impression: someone sees your ad, whether it’s in a web page or on the side of a bus. Every impression costs the advertiser money, and for traditional reasons impressions are measured in millions, the common notation for this is MM, like “10MM” meaning 10 million impressions. The fact that it uses these mangled Roman numerals should tell you how old it is. No, not as old as Rome, but back when every grade schooler knew Roman numerals and could learn that “MM” meant “M times M”.

So, for example, if the product is Acme Bat-man Suits — hyphenated, no doubt, to protect against a copyright takedown by DC Comics — then every time someone sees an advertisement for Acme Bat-Man Suits, that’s an impression. Of course, through product placement in Roadrunner cartoons, Acme receives millions or billions of impressions.

But the most important thing for any advertiser is how likely an impression is to create the desired result. If Acme is paying 1¢ per impression, and gets 100MM impressions from Roadrunner LLC, then they owe $0.01×100,000,000=$1 million. If they sell just one Acme Bat-Man suit at $49.95 list, that’s not a very good deal. (Of course, after litigation, Acme has other problems.)

The way advertisers manage this problem is by trying to limit the impressions to people most likely to make a purchase. This is called targeting. If Acme can limit advertising so that only one Wile E. Coyote, Genius, sees the ad 50 times before making the purchase, that’s 50¢ for the advertising. For a $49.95 product, that’s not bad. Even better if Mr. Coyote makes the purchase after the tenth impression.

Traditional push advertising has limits to how well it can target advertising. The majority of the audience for television news is people over 65, which is why TV news has so many ads for incontinence products. 

A company for which I once consulted, Advo, Inc., is a direct mail advertising company — they send those packages of flyers that appear as if by magic (“What? I didn’t ask for this!”) in your mailbox on a regular basis. Postal regulations mean that to get the cheapest rates, Advo must deliver mail to each post office that services each postal route they want to push the ads to, packaged by postal route so the postal worker just has to add the ad to each mailbox. 

The way Advo offers targeting is by changing the contents of those envelopes depending on what they believe the demographics of the postal route to be. Wile E. Would be in the route for animated desert animals — along with the Roadrunner, of course. There’s some impressions wasted.

That was the way advertising stood BI — Before Internet. 

The internet changed everything. First of all, the cost of delivering an ad on the internet is radically cheaper than any physical advertising — radically, like by a factor of 100,000 or more.

More importantly, it changed targeting. When an ad — or really anything, but we’re concerned with ads here — is delivered to your browser, the whole protocol involved is delivering the ad to you personally. Simplifying outrageously, you have an address on the internet that applied not just to you personally, but actually to every device you own individually.

This is like advertising nirvana — not the band, the cessation of desires. Now, theoretically, it can target advertising down to the individual.

Google comes into the story here. Google’s business model for search and advertising is basically Tech Bro Santa Claus: it sees you when you’re sleeping, it sees when you’re awake, it knows when you’ve been bad or good and that means it knows exactly what you’ve been searching, reading, or listening to. So when Mr. Coyote searches Google for flying suits, Google knows.

Google becomes an ad vendor — you put a spot in your web page for an ad, and Google gives you a link that supplies the ad. 

When Wile — I’ve known him for decades — goes to look at, say, Becky’s Wacky Wabbit Wecipes, Google sees it’s Wile E. Coyote’s internet address, and supplies an ad for Acme Bat-Man Suits, and the rest is an amusing animated short, and a cause for legal action.

Because Google dominates search, it has all the targeting information. Because it has all the targeting information, it can provide the best, most tasty, customized ads, and each ad served literally costs almost nothing. Google can provide a better product at a lower price, and basically mints money.

As a good libertarian anarcho-capitalist, this should make me happy, right? And, in fact, it used to. I would wonder at the fact that Google was showing me ads that perfectly matched my interests.

The only problem: Google decided it didn’t like my interests. This is where it starts to pinch us at PJ Media, and in the conservative internet media in general. Write articles on things Google doesn’t like, like the Second Amendment, or Hunter Biden’s laptop, or criticizing certain politicians, and you get a notice from Google that you’ve been de-monitized. Or maybe demon-itized. Whatever. It means that certain articles may get ads served, but you the publisher don’t get paid for them. Which Google loves, by the way — you can bet they still count the impressions, but now they get those impressions for free.

Offend our Alphabet masters enough, and they may refuse to serve you advertising _at all_. They own a really big part of the online advertising market. Really big. (Grok thinks it’s about 30 percent, DoJ thinks it’s 91 percent. Either way, it’s the dominant player.)

Getting our articles de-monitized hits us where we live, as I’m sure you understand. It’s a running problem for all the Townhall properties. But if you offend the Google Gods enough to lose all your advertising with them, you’re reduced to the more fringy ad providers. They don’t pay as much because — since they don’t have Tech Bro Santa helping them target — they can’t charge as much. So you find your pages filled with ads like cures for toe fungus.

As I mentioned above, DoJ has taken a dim view of Google’s practical monopoly, which meant Google had to modify their policies in a number of ways that reduced the effectiveness of their targeting. But have you noticed that a lot of website now ask you to sign up for a “free” account. When you do so, you’re agreeing to be tracked, restoring the advertising leverage.

As I say, this hits the Townhall properties like PJ Media pretty hard. That’s the motivation for the VIP programs. If you sign up for VIP, VIP Gold, or VIP Platinum, what you’re doing is saying “In your face Sundar Pinchar, Sergey Brin, and Larry Page! I choose the content I want to see!”

And we thank you for it.