The Methods Reporter's Chicago Kwik-E-Mart story was featured today on Northwestern University's Readership Institute blog as an example of how young journalists are using online storytelling tools. I was interviewed for the piece and think it raises questions about newspapers and contextual advertising that are worth discussing further.

In his posting, Steve Duke, an associate professor at the Medill School, talks about how my article was monetized and explores my thoughts on contextual advertising. He believes newspapers are overly hesitant to employ it on their news sites. I agree. Contextual advertising gives readers more relevant options and can actually provide a useful service at times.

Duke asked me how I felt about serving highly relevant ads next to my story. I understand where he's coming from. In journalism school, it's been drilled into me that overly relevant advertising in a magazine or newspaper can compromise an audience's trust. In print, you don't want a product review on the same page as an ad for that product.

It's a false worry online though. With Google's Adsense program, there's a third party serving the text and image ads that show up. And last I checked, I couldn't talk Google into manipulating their ads for me if I wanted to. Newspapers should take advantage of this extra layer of insulation to offer their readers more relevant, useful advertising. Links to low-interest loans just won't cut it on a story about a 7-Eleven.

That said, I sometimes wonder if the "audience trust" angle is really just a socially acceptable smokescreen to cover over financial considerations. The real reason behind newspaper site's reluctance might have more to do with their ability to earn more by serving less-relevant cost-per-impression ads to local businesses.

Newspaper Web sites charge far more per thousand impressions than most sites are able to justify. Why? Because they promise to reach a local audience. If my Kwik-E-Mart story receives 4,000 impressions with a $15 CPM ad on it (yes, papers charge that much), I've just made $60, regardless of how many people actually noticed the ad or clicked on it.

If I run an Adsense skyscraper in the same spot, it receives 4,000 impressions and 3% of my readers click on it (about average for news sites), I can make anywhere from $20-50, depending on how much the specific ads pay out (A Simpsons-related story generates relatively low-paying ads).

Wouldn't you take the cost-per-impression option if you were publishing? Wouldn't you prefer the contextual option as a reader? As an advertiser?
Here are the questions Duke asked me:

• As a user, do you notice ads that seem to be related to the editorial content on a page; do you react to context-sensitive ads any differently than ads that aren't clearly related to the editorial content?
• As a publisher, do you see context-sensitive advertising as more effective? Do the reports you get indicate higher click-throughs on context-sensitive ads? (Do you look that closely?)
• As a journalist, are you comfortable, neutral, or uncomfortable having ads with related content paired with your story? Do you have any concern that readers might distrust your story or your motives in writing it when it is paired with advertising on the same subject?

Bloggers, journalists, web publishers, internet users: How would you answer these questions? Should newspaper Web sites run contextual ads? Are there legitimate reasons for them to stay away from contextual advertising? Is your local newspaper web site running contextual ads? How? Where? Show us a screen shot.