On Wednesday morning, New York Times’ online readers started their day with a one-minute video about Iran’s nuclear program, the closing of graffiti mecca 5Pointz and hermaphroditic sea slugs that stab one another while having gender-bending sex. It was all part of the heavily publicized debut of Times Minute, the newspaper’s new minute-long video series. Times Minute focuses on three news items and will be updated three times daily.
It is also just a 60-second part of the Times’ major investment in digital video. With its advertising revenue in decline for 12 consecutive quarters, the Gray Lady is looking to reverse that trend by producing more digital video and, in turn, taking advantage of digital video advertising’s high CPMs. Whether advertisers are excited about the Times’ video strategy remains to be seen, however. While the Times asserts that its reputation as the paper of record will attract some of the nation’s largest advertisers, the market has shown they aren’t necessarily interested in “premium” video.
“There is a huge demand for high-quality journalism, and specifically video,” Andy Wright, the Times’ advertising group vp, told Digiday. “We all know that there are millions of news streams that are being produced every day, but some of it is not so good.”
To that end, the Times has placed video producers at each of its assignment desks in order to help reporters and editors find more opportunities to couple video with editorial. This is why readers have starting seeing more videos running in what would otherwise be the image field of an online story.
While the Times may say that video is a great way to enhance digital storytelling — which, when done well, it certainly is — the primary motivation here is, of course, money. The average CPM for a “premium” display ad — such as a banner, video, rich media or sponsorship ad on The New York Times’ homepage — is currently $10.40, according to Credit Suisse. Ads are slightly less valuable when served on mobile devices, with the average premium display ad going for $9.30 CPM.
Video ads, however, can be up to five times as valuable, according to executives at video ad technology firms. The Times, which declined to disclose the cost of its ad inventory, could charge anywhere between $25 and $40 CPM for pre-roll ads on its site, according to ad tech executives. One exec said that the Times might be able to command a video ad CPM at $50. The prices will vary depending on where the video player is located on the site, the kind of video the ads run against and the size of the screen (with larger screens being more expensive).
“We are able to command a premium and sell a vast majority for it,” Meredith Kopit Levien, the Times’ advertising evp, told Digiday. “Our challenge is making enough to satiate video and consumer demand for it.”
But the Times is hardly the only publisher hoping to capitalize on digital video. AOL, Hulu and Yahoo, for instance, have created Web originals featuring Hollywood talent but have had difficulty selling those shows to advertisers. New, fast-growing sites like Vice and The Verge have established reputations for creating the kind of high-quality news video the Times is doubling down on. It seems like it is a matter of time before the Times runs a trend story about the Internet reaching peak video content.
And yet, so far, the Times’ dedication to high production appears to be paying off so far. The Times has seen more than twice as many video streams this year (15 million) than last year (6 million), according to a Times spokeswoman. Taking advantage of this growing appetite will mean producing more video on its own and relying less on licensing video from third parties like Reuters.
So readers can expect to see Times reporters in front of the camera more often. Times media columnist David Carr and Times film critic A.O. Scott are, for example, reviving their recently shuttered “Sweet Spot” series during the Oscars in early 2014.
Still, there are kinks to work out. Some Times readers were served a 30-second pre-roll ad when trying to view Times Minute on Wednesday morning, hardly a user-friendly experience given the video is only a minute long. The problem was resolved later that morning, with viewers now being served an eight-second ad from launch partner Microsoft.
Times Minute, and its short-lived ad mishap, are indicative of the Times’ digital video strategy, in general: The Times wants more video, but it’s still trying to discover the balance between appeasing advertisers and pleasing viewers.
“If we wanted to just turn on a faucet and have a bunch of content on the site, we could easily do that to satisfy advertiser demand,” Rebecca Howard, the Times’ general manager of video said. “But it’s really important we stay true to our voice.”