Have you ever noted that your Cable Bill keeps going up, with less-and-less increase in quality? It used to be Cable TV was advertising free, and that’s what Americans were told as our FCC made it possible for them to literally have a monopoly or duopoly and ditch all those frequencies of free TV we used to get. Today, we get more ads, and have to pay for expensive Premium Packages to get all the channels, but for the most part, it’s the advertisers who lose, well along with the consumer. Of course, this isn’t just happening with Cable TV, it is happening elsewhere too; magazines and newspapers and other online news. Let’s talk.
There is an interesting research paper I’d like you to read, it has to do with OPA – Online Publishers Association’s view that “pay walls” are a good business model for newspapers and magazines. The article; “Pay Walls Working; Digital Subscriptions Driving Publisher Growth,” by Net Features (affiliate), and published on 12/13/2013. The research states in its abstract that free content models may be coming to an end, and that:
“Publishers are using data acquired from digital subscriptions to drive engagement, reduce churn and enhance ad sales. The OPA reported that 95% of digital content publishers have a paid subscription strategy, and are leveraging these paid models as part of their overall growth strategies. Publishers such as Conde Nast, Consumer Reports, Financial Times, and Gannett Community Newspapers, to name but a few have pay wall models; the success they have seen illustrates the deep engagement consumers have with the content they love and, ultimately, their willingness to pay for it.”
Wrong – these publishers are becoming less relevant and losing the next generation of viewers for a dwindling baby-boomer generation. It’s a bad model and this may end most mainstream media that attempts it. Of course, it’s easy for me to say that now right? I mean it’s January 2017 now, and in hindsight it shows that only a few publishers have done well with pay walls; the WSJ (Wall Street Journal), NYT (New York Times), HBR (Harvard Business Review) and a few others. But have they done as well as they may have without the pay walls?
Here is why I say; NO. And, why our Think Tank, which operates online, sees this as a net overall loser in the end.
On the positive side the publisher has valuable user IPTV information for targeting advertising, but balance that with the negative side of all those now, non-users reading ZERO ads, hurts the brand recognition of the advertisers and their overall “number of impressions” which is always important to companies and corporations, according to Advertising Age – listen to their podcasts, quite good.
Indeed, I can also recommend an article in Forbes published on January 19, 2017 titled; “How Visual Advertising Will Change Marketing In 2017,” by AJ Agrawal who noted that; “The average click through rate of display ads across all formats and placements is a minuscule fraction of a percent: 0.06%. Even of this small amount, over 1/2 of mobile ad clicks are reportedly accidental,” and lets’ not even get into the dismal conversion rates.”
Still, for a Corporate Brand Name – it makes sense, someone like Ford, IBM, Wells Fargo, Boeing, United Airlines, or on the actual product side something like; Kellogg’s Pop Tarts.
What is my suggestion? Publishers should dump the Pay Walls and trade make the content free in trade for the User Data, that’s what they’ll really need to please their advertisers – targeted ads, not junk the user doesn’t want – then everyone wins. Of course, users need to be able to trust the medium and the publisher or cable company – right now – most don’t and mobile users are using more Ad Blockers than ever before – currently at 41%. Okay, so that’s my take on this, what’s yours.