The digital advertising model is broken. And finally publishers are accepting this fact. It is not before time – the rest of the world, digital or otherwise, spends much of its time saying that we now live in a subscription economy. The irony, of course, is that while reading this message on our favorite sites, we have to block, mentally or physically, the ads that still bombard us.
Advertising as a revenue stream makes little sense. As Jack Conte, CEO of Patreon, says of current advertising rates, “It’s like a stadium full of people reading your blog, and you get $150 for the pleasure.” The only way it makes sense is if you have the scale and reach of Facebook and Google, whose audiences would fill every stadium on the planet.
Even in the reactionary world of publishing, there is a move (albeit not yet definite) towards subscription-based commercial models. The problem, as one commentator put it, is that the publishing industry is so slow to change that “it is like seeing someone having a heart attack and telling him to eat more vegetables.”
Yet the impetus is building. The combination of ad blockers, readers realizing that the only people not making money out of their data is them, and the simple annoyance of the ‘in your face’ advertising model must begin to bite.
Even Facebook is dipping its large toes into subscription-based models. It has signed up ten large publishing companies to test a model where Facebook users can get ten articles for free and then are offered subscriptions – by the publishers themselves.
There are probably multiple reasons why Facebook is trialing this. Publishers watch in impotent horror as their articles are shared for free amongst Facebook’s vast audience. Publishers do not particularly like Facebook for that reason, and others. Fake news and the sheer dominance of Facebook as a news channel do not sit well.
It is interesting, too, that some notable publishers are not joining this experiment. The Financial Times is one. The Wall Street Journal is another. Both have paywall strategies in place.
Some years ago, commentators were happy to criticize Rupert Murdoch’s paywall strategy. Why alienate your audience by forcing them to pay for content? And look, he has only converted 10% of his readers to his subscription model. Not many, until you figure out that 10% of a million readers now pay, say, $5.00 a month. Other publishers use these models as a premium product. Get customers to pay you to protect them from advertising.
How fast the industry will change – and to what extent – remains to be seen, but one thing is clear. A significant, and growing, percentage of online readers are prepared to pay for decent content.
And that must be good in a digital world where writing standards have dropped and it doesn’t seem to matter because everything is free and therefore has little or no value.