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BizReport : Ecommerce : July 14, 2017

Expert: Resistance to paywalls lessening

Digital content has always been a balancing act for publishers, and that is unlikely to ever change. But, some consumer sentiments toward paywalls are changing. One expert explains.

by Kristina Knight

Kristina: We've heard for several years now about the reticence of consumers to pay for digital content - is there still a resistance?

Keith Sibson, VP of Product & Marketing, PostUp: There's definitely a general sense that content on the Internet "should" be free, and publishers largely have themselves to blame for this because they ported their paper business models onto the Internet as ad-only. Readers expectations were set at that time, and can be hard to change. However, people are willing to pay for quality - the Economist has always had a subscription fee online - and the difference between high and low quality on the Internet is becoming starker. Surveys show that around 30-40% of US consumers are willing to pay for quality content online.

Kristina: How important is this diversification?

Keith: Programmatic advertising revenues per impression is declining steadily. This is due to the massive oversupply of advertising inventory (space availale on websites for ads to be placed). The oversupply comes from the emergence of literally millions of new digital publishers, e.g. bloggers, all competing for the same reader attention, and crucially the fact that advertisers and agencies are moving their ad spend towards the "platforms": Google, Facebook, Snap, etc.

Diversification of revenue is extremely important for quality content producers, because have high cost structures associated with producing content. However, a programmatic ad placed next to a heavily researched article on Middle Eastern politics pays exactly the same as an ad next to a cat video copied from Reddit. As advertising revenues go down and down, only the cat video reposters can survive.

Kristina: How can publishers begin now to diversify their revenue model?

Keith: For quality content producers, the answer is simple, ask people to pay for it. If the content is in demand, and not freely available elsewhere, then people will pay. Done well, introducing a paywall doesn't have to cut off advertising revenue, it's possible to get the best of both works by using what we call "Personalized Business Models".

Kristina: What are your top three tips, for publishers, to improve the customer experience on their sites?

Keith: 1. Suppress aggressive ads and paywalls for first time site visitors, to give a good first impression
2. Try to nurture your audience into a newsletter program, with an invitation to the inbox you can bring them back over and over
3. Look very carefully at your mobile experience, it's the majority of users now, consider using Google AMP if you don't already

Tags: advertising, content trends, digital content, ecommerce, paywall trends, PostUp

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