Publishers Seek New Revenue Streams as AI Content Usage Surges
The relationship between news organizations and Artificial Intelligence firms is undergoing a important shift, as publishers grapple with how to benefit financially from the increasing use of their content by AI systems. Currently, many publishers receive limited direct revenue when AI “answer engines” leverage their reporting and articles.
The rise of Branded AI Answer Engines
Initial discussions centered on compensation models, but a more intriguing approach has emerged: branded AI answer engines. The concept,initially deemed improbable by some industry analysts,involves creating AI-powered chatbots specifically tied to a publisher’s content. These systems would limit their details sources to the host publisher’s archives, offering a curated experience distinct from broad internet searches.
The logic behind this strategy initially appeared counterintuitive. Why would users deliberately restrict their searches to a single publication when a wider web search would naturally include that publication alongside countless others? However, recent developments suggest this approach is gaining traction.
Taboola’s ‘DeeperDive’ and the Focus on Engagement
Adam Singolda, CEO of Taboola, a prominent native advertising company, recently unveiled “DeeperDive,” a product designed to address this challenge. DeeperDive operates as an answer engine embedded on publisher websites. It exclusively utilizes the publisher’s own data to generate responses and, crucially, directs users to other relevant content within that same site. Essentially, it functions as a dynamic recirculation tool optimized for the chatbot era.
USA Today, owned by Gannett, is currently piloting DeeperDive, with plans for wider implementation underway. Singolda argues that lost traffic to general AI answer engines is unavoidable, and that tools like DeeperDive are not about recapturing that traffic, but rather about maximizing engagement within a publisher’s existing audience. This deeper engagement, he believes, leads to longer time on site and a wealth of valuable first-party data.
A separate, stealth-mode startup is pursuing a similar strategy, currently testing its widget on two websites but requesting confidentiality until October 1st. Their core thesis aligns with Taboola’s: deepen engagement with existing users rather than attempting to reclaim lost traffic.
The Two-tiered Approach: Free vs. Subscription Models
Gabriel Dorosz, a former audience strategy leader at The New York Times, frames publisher answer engines within a two-tiered structure. The first tier consists of free tools like DeeperDive and the aforementioned startup’s offering. The second comprises engines integrated into paywalled, subscription-based sites, effectively leveraging exclusive, protected content.
INMA, the International News Media Association, and The Information are cited as examples of the latter approach. The Information’s “Deep Research” chatbot,as a notable example,provides subscribers with access to a powerful research tool built upon its proprietary archive. Politico similarly launched an AI tool for its Pro subscribers, designed to streamline the creation of policy reports – even though initial reports indicated some inaccuracies in the generated content.
Dorosz emphasizes that the success of these tools hinges on the quality of the underlying information.If a publisher’s content is readily available elsewhere, an AI engine simply recirculating that content offers little advantage over a general search. However, if the engine can synthesize and present exclusive data, expert analysis, or in-depth case studies, it adds tangible value to a subscription and encourages continued readership.
The Cost Factor and Third-party Partnerships
Singolda points out that most publishers lack the resources to independently develop and maintain their own AI answer engines, nor can they realistically charge users for access. Consequently, partnering with third-party companies like Taboola – wich assumes the development costs, monetizes engagement through advertising, and shares revenue – may be the most viable path forward. While not revolutionary, this approach promises a tangible revenue stream.
This strategy echoes Taboola’s longstanding business model. Even a modest increase in site engagement-10% to 20%-can justify the investment, especially considering the tools are offered free of charge.
However, some observers caution that even a proliferation of recirculation tools won’t solve the basic problem of driving traffic to websites in an era were users increasingly access information directly through AI platforms.
| Model | Cost to Publisher | Monetization | Content Scope |
|---|---|---|---|
| Branded AI Engine (Taboola/Stealth Startup) | Low/Shared | Advertising,Data | Publisher’s Archive |
| Subscription-Based AI Engine | High (Development & maintenance) | Subscription Fees | Exclusive,Paywalled Content |
Understanding the AI-Publisher Dynamic
The current landscape reflects a fundamental power shift in the digital media ecosystem. AI’s ability to aggregate and present information challenges the conventional role of publishers as gatekeepers. The future success of news organizations will likely depend on their ability to adapt and leverage AI tools to enhance user engagement and unlock new revenue streams. According to a recent report by the Reuters Institute for the Study of Journalism,68% of news leaders identify developing new revenue streams as a top priority for the next year.
the use of AI in news gathering and distribution has increased by 300% in the last two years, according to a study by the Tow center for Digital Journalism.
Focus on building a strong first-party data strategy to maximize the value of user engagement, regardless of the AI tools employed.
Frequently Asked Questions
- What is an AI answer engine? An AI answer engine is a tool that uses artificial intelligence to provide direct answers to user queries, often by synthesizing information from multiple sources.
- how are publishers benefiting from AI? Publishers are exploring strategies like branded AI engines to increase user engagement and potentially monetize their content through advertising or subscriptions.
- Is Taboola’s DeeperDive a direct competitor to Google search? No, DeeperDive focuses on deepening engagement within a publisher’s existing audience, rather than attempting to replace general web search.
- What role does exclusive content play in AI monetization? Exclusive, paywalled content is particularly valuable for AI-powered tools, as it offers unique information not readily available elsewhere.
- what are the primary challenges for publishers in the age of AI? The primary challenges include securing fair compensation for content usage and adapting to a shifting media landscape where users increasingly access information through AI platforms.
- What is first-party data and why is it vital? First-party data is information that publishers collect directly from their users, and it is crucial for personalizing content and maximizing advertising revenue.
- Are there risks associated with using AI-generated content? Yes,as demonstrated by the Politico Pro example,AI can sometimes generate inaccurate or misleading information,requiring careful fact-checking and oversight.
What strategies do you think publishers should prioritize to thrive in the age of AI? Share your thoughts in the comments below!
