Wolff: Putting journalism cart before advertising horse

• Much of the discussion of new news ventures has been very journalism-centric
• News has always been an advertising-led business
• Journalists are hardly the best people to solve the problem of news

The great foment in the news business involves journalists leaving established news organizations to strike out on their own into new digital enterprises — and other journalists writing about their spunky gumption and enviable prospects.

It is, in other words, a very closed loop, putting journalists and journalism, in the view of other journalists, at the center of the world.

Among the new initiatives is 29-year-old Ezra Klein's departure from The Washington Postto launch a new digital news site with Internet company Vox Media; Nate Silver leaving The New York Timesto start a digital project with ESPN and ABC; and Glenn Greenwald from The Guardianlaunching a start-up with eBay founder Pierre Omidyar, along with what The Wall Street Journal recently characterized as a "flood" of new entrants into the news market.

Even together, these new efforts and personalities represent smidgen-size audiences that would, from a business perspective, hardly be worth commenting on, except for the fact that the people doing the commenting — other journalists — believe that perhaps, in a declining profession, this could be a new life.

It's journalism-centricity to a particular myopic degree.

And it is an extreme example of cart before horse, hope before reality.

News, save for its most exclusive and specialized form, has always been an advertising-led business. That is, before there were news outlets, there were advertisers looking for venues to publicize their commercial messages. Newspapers were made for advertising more than for news; radio was an advertising medium before there was news on the hour; television was a Niagara of jingles before it had to make some public service accommodation to news; CNN's satellite model was an advertising idea before it was a journalism concept. The advertising existed first.

This approach has now been reversed. The point is the journalism. Ezra Klein, someone who on his own generates minor revenue, is the motor of a new business.

In part, this optimism about their centrality and monetizing abilities is the result not only of journalists reading their own press but writing it, too. The logic goes something like this: Journalism is important; some journalists are more important than others; some journalists even have greater individual followings than the brands and news organizations within which they have become so important; therefore, they should be on their own.

There may be nothing wrong with this logic in terms of building niche audiences. But there is nothing in this logic that at all pertains to what advertisers might want. It solves the journalists' problem — how to achieve independence and technological advantage — but not the advertisers' problem — how to sell more goods.

Indeed, as journalists appear to be building great enthusiasm for their own prospects in digital media, there is a countertrend among advertisers: The value of digital media continues to decline.

The nature of successful digital advertising is of a kind that, historically, has not been able to support content creation. Digital media lends itself to what's called "direct" selling, the kind of closely measured sales efforts most often associated with junk mail. The response might pay for the ad and a little profit, but not much more. Google has made a business out of this kind of advertising because it has turned itself into a world-wide Yellow Pages — and, like the Yellow Pages, it has no cost of content.

The other kind of advertising, brand or display, which is what content-oriented media has long profited from, is a business that has had little success in digital form. Yahoo announced a dismal quarterly performance last week, because its business depends on such display advertising, which is ever dropping.

So why are journalists smiling? In part, because they have no idea what they're talking about. Why would they? They don't sell advertising.

Ironically, many journalists are simply acting on bad or unverified information. Almost all of the native businesses in digital news are private companies which don't have to own up to their real numbers (save for the public and honest and poorly performing Yahoo), and, often, feverishly lie about them. In the case of many of the most envied businesses, the model is to make a large investment, show increasing traffic numbers, gain good press — i.e., buzz — and sell. In almost every case, the cost of traffic (generating vast amounts of link-bait content, doing traffic rev-share deals, actually buying clicks), against which you sell low-cost direct advertising, negates profits. These businesses are, with a little critical interpretation, pyramid schemes.

There is a news model: Keep costs close to the bone. But the new journalism entrepreneurs are embarking on their new businesses to pay themselves more than they were making before, and to gain new resources to expand news efforts. Pierre Omidyar put out a video last week about his start-up journalism venture called First Look Media, to which he has promised $250 million. It's a quaint, expansive and preposterous vision, which will cost far more than $250 million, with no chance whatsoever to ever make it back. Alas.

Journalists don't like advertising. It is both the corrupting influence and the hard taskmaster, to which they always dream of being free. But save for a few rare instances where information is so valuable or beloved that customers will pay for it, advertising is the only thing that has ever paid the news bill.

We don't need journalists solving the problem of news. We need people with far more cunning and inventive commercial minds. But there are few of those.