Local News Online: Aggregators, Geo-Targeting and the Market for Local News
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1 Local News Online: Aggregators, Geo-Targeting and the Market for Local News Lisa George Hunter College and the Graduate Center, CUNY Christiaan Hogendorn Wesleyan University and Fletcher School, Tufts University April 3, 2014
2 Intermediation Trends News Site Visits Median Share of Site Visits in User Top 5 Share of Visits Via Intermediaries (Search, Portals, Aggregators) Source: Lisa George and Christiaan Hogendorn (2012). Aggregators, Search and the Economics of New Media Institutions. Information Economics and Policy, 22(1) pp
3 Top US News Websites Source: Experian Hitwise, 2012, from Pew State of the News Media, 2013.
4 Intermediaries: Theory Supply Side: Aggregators as Pirates? Diminish incentives for content production Complements vs Substitutes? Content costly, bundling cheap Esfahani-Jeon (2012), Rutt (2012) Demand Side: Aggregators as Bundlers Reduce cost of locating content, improve matches Content cheap, bundling & matching costly George-Hogendorn (2012) Today: Role of relative prices / transaction costs
5 Intermediaries: Empirical Evidence Intermediaries affect outlets Chiou & Tucker (2011): Google-AP contractual dispute reduced visits to AP. Note: AP is an unbundled content source. Intermediaries affect consumers Athey & Mobius (2012): Opt-in local toolbar on Google News (France) increases Google News usage, short-term local news consumption. Otherwise we know very little
6 Localism Policy concern about under-provision and under-consumption of local news Antitrust rules, Ownership Rules, Cross-ownership Externalities Political participation and engagement Market imperfections High fixed costs; indivisibilities High search costs
7 Experiement: June 28, 2010 Format since February 2008, Opt-in Local Content
8 Experiment: July 2, 2010 July 1, 2010, Geo-targeted Content
9 Data: Households and Domains Household Site Visits Comscore MediaMetrics from WRDS Complete Browsing History Zipcode (MSA), Demographics Sample: 24,859 hh (in MSA, 10+ News Visits) Google News page Scrape from Wayback Machine 628 days, 3,750 domains New Domains Burrelle s, Bulldog, NAA, Technorati, Google News Inclusive sample, top-level domains
10 Data: Google News Referrals Google News referrals identified from referral field plus Google News scrapes Referral field or visit lag identifies Google (news and search) referrals Scraped archived Google News pages identify linked domains Google News referrals are visits referred by Google to domains appearing on Google News Limitations Click through (-), updating (+/-), domain-level (+)
11 Data: Defining Local Media Identify home MSA for domains Calculate share of visits to each domain from each MSA Identify MSA with highest share for each domain If MSA Share>15%, classify as local to that MSA (90%) Identify local news visits A visit is local if household MSA = Domain MSA Notes and caveats Revealed preference measure of localism National media, wire services
12 Local Visit Shares Total Local Local Outlet Market Visits Visits Share NY Daily News New York, NY 23,474 5, LA Times Los Angeles, CA 23,471 5, Washington Post Washington, DC 21,963 5, NJ.com Newark, NJ 15,510 3, Boston Globe Boston, MA 14,448 5, Atlanta Jour. Const. Atlanta, GA 12,088 8, KSL Salt Lake City, UT 10,845 7, Arizona Central Phoenix, AZ 9,052 5, Chicago Tribune Chicago, IL 8,680 3, Houston Chronicle Houston, TX 8,247 5, Cleveland Plain Dlr. Cleveland, OH 7,389 3,
13 Data: Intermediation Two identification strategies Treatment (Google News) & Control (Yahoo) households Google News Intensity (all households) Google News referrals identified from referral field plus Google News scrapes Referral field or visit lag identifies Google (news and search) referrals Scraped archived Google News pages identify linked domains Google News referrals are visits referred by Google to domains appearing on Google News Limitations Click through (-), updating (+/-), domain-level (+)
14 Household Sample Statistics 2010 Totals N Mean SD 5% 95% News Visits 43, Local News Visits 43, Days w/ News Visit 43, Days w/ Local News Visit 43, Local Visit Share 43, Google Referral Share 43, Local Share of Google Referrals 35, Google News Referral Share* 39, Local Share of Google News Referrals* 17, *Calculated before re-design
15 Outlet Sample Statistics All Outlets N Mean SD 5% 95% News Visits 6, , ,708 Local News Visits 6, Local Visit Share 6, Prob. of Google News Link 6, Google News Referral Share* 6, Google News Outlets Google News Referral Share* Local Share of Google News Referrals* *Calculated before re-design
16 Treatment and Control Sample Google News Sample Yahoo Sample 3,593 Households 3,885 Households Mean Std. Dev. Mean Std. Dev. News Visits Local News Visits Local Visit Share News Visit Probability Local News Visit Probability
17 Estimation Y it = β 0 + β 1 Post + β 2 PostX + τ + γ i + ε it Y it = local news consumption household i day t Number of local news visits (log+1) Probability of a local news visit Share of visits to local news sites Share of Google referrals to local news sites Treatment specifications Google News and Yahoo Users (limited sample) Google News referral share pre-treatment (full sample)
18 News Visits by Yahoo and Google News Users Log Visits per Household Week Non-Local Visits (Yahoo) Local Visits (Yahoo) Non-Local Visits (Google) Local Visits (Google)
19 Results: Do Geo-Targeted News Links Increase Local Visits Among Google News Users? Local Visit Log Local Visit Prob. Local Visit Share (1) (2) (3) Post Treatment *** (0.001) (0.002) (0.008) Post *** *** x Google News (0.001) (0.001) (0.004) [0.25%] [20%] [4%] Time Trend *** *** *** (0.001) (0.001) (0.004) Constant *** *** *** (0.001) (0.001) (0.005) Households 7,635 7,635 7,478 N 1,504,095 1,504, ,440 (% effect on intense Google News users in brackets.)
20 Results: Does the Effect of Geo-Targeted News Links Increase with Google News Use? Local Visits Log Local Visit Prob. Local Visit Share (1) (2) (3) Post Treatment *** (0.001) (0.001) (0.003) Post x Google *** *** * News Share (0.003) (0.003) (0.013) [1.1%] [0.25%] Time Trend *** *** *** (0.000) (0.000) (0.002) Constant *** *** *** (0.000) (0.000) (0.002) Households 38,648 38,648 37,862 N 7,613,656 7,613,656 1,169,579 (% effect at mean Google News intensity in brackets.)
21 Do Local Links Increase Consumption Variety? Local Local Outlets/Day Outlets/Month (1) (2) (3) (4) Post Treatment (0.001) (0.001) (0.008) (0.003) Post x GNews *** (0.001) (0.007) Post *** x GNews Share (0.002) (0.016) Time Trend *** *** *** *** (0.001) (0.000) (0.005) (0.002) Constant *** *** *** *** (0.001) (0.000) (0.004) (0.002) Households 7,635 38,648 7,635 38,648 N 1,504,095 7,613,656 53, ,536 More frequent visits to familiar outlets, not introducing new outlets?
22 Conclusion and Extensions Intermediaries are important in news markets Consumption costs matter Low local news consumption by Google News users Geo-targeting affects local news consumption Effect is small Do New Aggregators favor variety? Geo-targeting has no effect on montly news variety Google News has short tail compared with organic Google News links to bigger, more serious sites
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