Next month, the London-based paper will roll out ad rates based on time rather than impressions, charging some advertisers by the number of hours their ads appear in front of targeted groups of readers. The measurement -- cost per hour, or CPH -- shatters a decades-old media pricing model that values volume above all else.

1. A new digital advertising
model might
SAVE
premium content on the
web

2. The US advertising market
is huge
250.0
200.0
150.0
100.0
50.0
0.0
2012 2013 2014 2015 2016 2017 2018
Billions of Dollars
TV Spend Digital Spend Print Spend Other Spend
Source: eMarketer

3. Advertising on all of those
mediums is sold based on
impressions or actions
Why?

4. It’s really easy to measure
There are 2 impressions in this view*
*AOL sells this rich media ad as one unit and gives the advertiser 100% share of voice at a premium price.

5. Since it’s easy to measure,
it’s easy to price
Total cost x 1000
Number of impressions
CPM =

6. Ad agencies and media companies
are used to pricing this way
New York Times Pages 3 – 5, June 11, 1974
8 impressions
1 impression
5 impressions

7. But there is a huge PROBLEM
with this model on the
web…
What?

8. In 2013, there were 5 TRILLION
impressions served!
$17.6 billion x 1000
5 trillion impressions
$3.52 eCPM =
1
2
1. eMarketer estimate of display ad revenue in the US
2. comScore estimate of US impressions served in 2013

9. $3.52 eCPM
CANNOT
support the traditional
media business model

10. 3,000
2,500
2,000
1,500
1,000
500
0
Newspaper ad revenue drop-off
has been dramatic
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
-
1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 2003 2008
New York Times Ad Revenue (Millions of Dollars)
Total Newspaper Industry Ad Revenue (Billions of Dollars)
Total Newspaper Industry Ad Revenue NYTimes Ad Revenue

11. No large paper has been spared
6,000
5,000
4,000
3,000
2,000
1,000
-
Ad Revenue (Millions of Dollars)
NYT Ad Revenue McClatchy Ad Revenue Graham Holdings Ad Revenue Gannett Ad Revenue

12. -
500
1,000
1,500
2,000
2,500
3,000
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
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1973
1974
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1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Revenue (Millions of Dollars)
Ad Revenue Circulation Revenue
For the first time since 1953, the New York Times
subscription revenue is greater than its advertising
revenue

13. THE SUPPLY
of impressions
is unsustainable

14. Before the internet
impressions were
constrained and
SCARCE

15. CIRCULATION
PAPER
PRINTING
constrained the supply of
impressions

16. Now, an advertiser can
buy any audience
CHEAPLY and
AUTOMATICALLY via
programmatic buying
technology

17. WE’RE IN TROUBLE IF
SOMETHING DOESN’T
CHANGE!
“our print and digital products face increasing
competition for audience and advertising from…
digital advertising networks and exchanges, real-time
bidding and other programmatic buying
channels and other new forms of media.”

18. Advertisers are LOSING
too
Why?

19. When was the last time YOU
looked at a digital ad?

20. The average interaction rate with a
display ad is 2.94% 1
5.00%
4.50%
4.00%
3.50%
3.00%
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
Interaction Rate Percentage
1. This is the percentage of ads served on the Double Click network that a viewer interacted with

21. A lot of money is spent on digital
ads that DO NOT work
2012 2013 2014E
$45.0
$40.0
$35.0
$30.0
$25.0
$20.0
$15.0
$10.0
$5.0
$-
Display $14.8 $17.6 $20.6
Search $17.3 $19.6 $21.6
USD (Billions)
US Digital Advertising Spend
Source: eMarketer

22. What’s going to
SAVE
premium content?

23. A NEW
ADVERTISING
MODEL

24. TIME
is the only
SCARCE
asset on the web

25. In 2014, Americans had a shorter
attention span than GOLDFISH
1
1. Nancy Kane, Harvard Business School

26. Technology has improved –
we can measure EVERYTHING

27. Rising content engagement
increases the percentage of ads
seen
Percent of Ads Seen
Engaged Time on Page
Source: Chartbeat

28. As an audience
spend MORE
TIME reading
content with
an ad in view,
ad RECALL
INCREASES

29. The best content DEMANDS
our attention, and
advertisers will pay for it

30. Rather than being
forced to play tricks,
media companies can
focus on grabbing
OUR ATTENTION

31. User experience benefits
Focus on great, attention
grabbing content
No need for annoying slideshows
One ad that scrolls with content
1
2
3
4
Eliminate pagination

32. The Media Ratings Council
APPROVED and 2 publishers are
now selling time-based ads

33. Soon, all premium digital
ads will be sold based on
ATTENTION

34. THE WINNERS
1 Premium publishers
2 Advertisers
3 The display ad

35. THE LOSERS
1 Digital ad trading desks
2 Real-Time Bidders
3 Programmatic buyers
4 Long-tail publishers