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May 15, 2009, 9:56 a.m.

In the Times R&D Lab, the future of news is the future of advertising

Our tour of The New York Times Co.’s research and development lab, which concludes with today’s video, represents the first time many of their projects have been seen in the wild. But before we got in there, similar tours had been given to more than 150 advertisers. The company, of course, has a huge stake in the next generation of marketing, which appears as uncertain as the future of news.

Some of the R&D group’s advertising innovations include: RFID chips that connect print ads to more dynamic content on the web, ads that can shift from one screen to another, ads that are linked to what friends are chatting about online, and targeted advertising of all sorts. They also developed the new, more-prominent, advertising units that have been adopted by members of the Online Publishers Association. Those ads are scheduled to roll out in June on major sites like the Times, ESPN, and CBS.

If the news industry’s paradox is declining revenues amid unprecedented popularity of its content, advertisers face the opposite problem: in the midst of record spending, there’s increasing evidence that their work is largely ignored. And while the fate of advertising is not necessarily tied up with the fate of news, the opposite is certainly true, so it’s no surprise that much of the R&D group’s work is focused on this area.

Loyal viewers of our first four videos from the R&D lab will notice that I’ve repurposed some footage for today’s installment, but most of it is new. And as always, a full transcript of the video is after the jump.

Nick Bilton: This is just a tikitag RFID chip, and so here is an ad for Chanel. So if I could put this on my computer, it will go off and get the appropriate ad that goes along with that. So it automatically knows because it’s RFID, it’s connected, that it’s Chanel ad that goes along with this experience. […]

Alexis Lloyd: It used to be that you had a newspaper, and that was your sole conduit to the general public, and advertisers were buying a piece of that ability to talk to the mass audience, and that’s no longer really the case. And you see advertisers trying to create content — and sometimes successful, usually not very successful — and we’re looking at, are there new kinds of partnerships that can be formed that are beneficial for the advertiser, beneficial for the end user, hopefully, and that don’t compromise our journalistic ethics and mission. So as, so we’re exploring some of those models, whether it’s ways of helping advertisers to create content because that’s our expertise and that’s not really their expertise. Whether it’s ways of integrating advertising into some of these experiences that we’re showing you. We’ve also helped to develop some of the new online ad units that all the OPA sites are going to be launching with in June. So those are some of the areas we’re looking at in terms of advertising innovation. […]

Michael Young: Right here I have one of our new ad units for the website that are actually going to go live this summer. It’s just one of the new OPA units. It’s just an expandable ad. So we wanted to look at this to say, what parts of advertising, you know, could we send to a TV if we wanted to, for example? So in this case, it’s a Ralph Lauren ad that we mocked up. Any component of the ad I can actually take to look on the TV on a larger screen. So if it was, in this case it’s shots from the runway. So if I saw this and wanted to have a better look at some of these clothes, again I could just take this and drag it up to the TV and see the high-res image of this on the television. […]

Bilton: I think the question is not, it’s not finding the place [to put advertising], it’s culling it, right? It’s finding where not to put it. Because you could put it anywhere in these interfaces. You could, you know, there could be ads on the side and bluh bluh bluh, all over the place, but I think that the real challenge is, as we look to aggregate content better based on the device and look at the challenges between content and context, advertising becomes equally as important as far as where it goes. So it’s not necessarily, you know, it’s more about limiting it and figuring out the best possible solution for where you see it. And the CustomTimes experience, you know, if I watch Mark Bittman, you know what I’m watching, you know what device I’m on. You can give me a really, really great advertising experience that actually makes sense.  It’s not just a random, you know, car ad or whatever, you know?

Lloyd: And I think that one of the things that we’re seeing is that advertising doesn’t always have to be a bad experience. I never thought I’d hear myself say that. But it doesn’t always have to be a bad experience for the user. […]

Ted Roden: Nick just tweeted. He’s a big clotheshorse, and the new Ralph Lauren line is out, he says. It looks awesome. Now we can just look at that and say, this is the new line from Ralph Lauren, and we can parse that out and figure out what’s going on and figure out if we have an ad based on that. So we fling that over and see what he’s talking about there, and the ad comes up. [..]

Lloyd: And in that case, advertising can be a value-added proposition for both the advertiser and the user, in that it’s more particularly targeted to what you’re doing, what you’re talking about. And therefore you’re more likely to actually respond to an ad and find it useful rather than intrusive.

Josh Benton: As people who look at what’s going on in online advertising, are there any sites or any advertisers who you think are doing a particularly effective job in breaking through the sort of way that the web experience, at least, teaches you to ignore the ads? Have you seen anyone who’s really doing something interesting that you think is effective?

Lloyd: Yeah, I mean, I think that the new Honda ad on Vimeo —

Bilton: Yeah, that’s fantastic.

Lloyd: I thought was a really, really fantastic use of the page.

Benton: Made me watch it.

Lloyd: It did. It made me watch it. I would never watch a car ad, I don’t, you know, really drive much. [Laughter] But —

Bilton: I think Gawker’s actually done some really innovative advertising work. They did a piece a while ago where the content looked like it was sitting on like these cartoon bookshelves. And I really like the fact that they take over the whole page, and the whole page becomes this big storytelling mechanism. Who else?

Roden: There was a great Wario Land or Wario Wii game that took over the whole YouTube, which is probably a pricey ad buy. And it was the whole page and it was kind like the Vimeo one: You pressed play, but then the whole page fell apart ’cause it was so violent or whatever. It was really good, though, ’cause it was so subtle for a very long time.

Lloyd: And I think one example of where people are using technology to target people is on Facebook, but I don’t actually think it’s — it’s an example of how targeting isn’t the whole story, that it has to be interesting or useful advertising as well. It’s almost creepy how well targeted the ads are.

Bilton: I saw an ad for a dentist that said, “New York Times employees get 20 percent off with this dentist.” And I was like, “Whoa, cool,” and I clicked on it, and then I realized that it probably just changed it for — it doesn’t matter what network you’re in, and that’s it.

Benton: Just search for your employer.

Bilton: A lot of the advertisers, you know, with the recession, they’re having a tough time trying to figure out what’s working, and the ability to experiment is not there where it used to be. The mobile space is a clear example of that. There’s not a lot of innovation in mobile advertising. You know, even on iPhones, there’s still little banner ads that click off to a regular mobile site. There’s a few that have worked, and they’ve actually created iPhone-specific ads, but there’s not that many, and I think that what we’re trying to do is say, hey, look, these are the things you can do. Maybe, you know, it’s what we call a duvet ad that covers the whole thing. You could blow on it to make it disappear or all these different things that you could do along those lines to take advantage of the experiences, the applications they’re using.

POSTED     May 15, 2009, 9:56 a.m.
PART OF A SERIES     The New York Times R&D Lab
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