Product Placement and Paywalls, beating the AdBlockers.

Ad-blocking has by far become one of the most talked about things for online publishers in recent months. Apple now allowing adblocking, combined with a host of services and add-ons for browsers which supported this previously have led to an explosion in the number of people using the service to view content without distraction.

Statistics vary, but a recent poll by the YouTube star PewDiePie has shown that at least 40% of his audience have admitted to using some kind of ad-blocking tool when browsing the web. Figures for other sites could be much higher. The problem lies, primarily in a lack of understanding many average internet users have of website revenue.  Free services need to generate income from somewhere, to deliver quality reporting, quality content. Something reliable which can’t be gotten from social, or blogs.

This is particularly harmful to newspaper outlets, who have seen a sharp decline in offline sales, combined with a drop in revenue from online ad impressions. As an industry newspapers have had to be increasingly resourceful in their efforts to hold onto online revenue, from sponsored articles, to product placement and even the much maligned paywall, a route The Sun have recently scrapped.

However, adblocking doesn’t just affect large companies, who may, or may not be able to afford the hit (generally speaking, they can’t). It also affects smaller organisations and individuals who are now becoming the new age celebrity. Small news sites now find it increasingly difficult to start out. Separately, YouTube celebrities now have to rely increasingly on product endorsement.

While the YouTube celebrity could be easily dismissed as a fad, their figures say otherwise. Many YouTube stars have video reach both greater, and more qualified than most traditional TV channels could ever dream of. Many have made this a career choice, with YouTube matching this by establishing their own studios. However, all of these millions of views boil down to very little when ads can’t be served to viewers, the content can’t be produced and the service that supplies them can’t exist.

This is where Subscription services, such as the new YouTube Red enter. Red attempts to answer the fundamental issue of declining ad revenue with a subscription based model, not unlike Netflix; monthly charges for your favourite content produced to a high degree of quality.

For any subscription service, the question is always asked just how it can survive. The world we live in, consumers expect to be able to consume high quality content without having to pay and without having to see ads, but seeing no correlation between this and declining quality. Most would dismiss subscriptions as pointless for most content, given the Internet’s open nature.

A separate argument exists, however. The Washington Post paywall has seen growing success for the newspaper, recently taken over by Jeff Bezos. While all content is designed for consumption across multiple devices; the strategic view from the Post is that if content is of good enough quality, with supporting content being tailored as you consume more information then it is something worth paying for.

Speaking at the Dublin Web Summit, Steven Hill of The Post took the example of a person in a specific location, who enjoys viewing video. The site will tailor content served to be more relevant to both the persons locations and their taste, so they’ll get more video. High quality reporting also engenders a strong element of trust, which can’t be gotten elsewhere.

The Washington Post certainly have the numbers to back it up. Year-on-year, desktop and mobile traffic has increased, with 78 million unique visitors and growing with mobile and desktop traffic both increasing. Interestingly, paid subscriptions, while lower than unique visitors, has been growing strongly.

Other companies, such as Spotify may use more straight-forward means to get you to jump onto subscription services, but The Washington Post to some degree have shown that content can very much, still be king.

How this will pay off in the long term, remains to be seen, and whether this will be more effective than product placement or sponsored posts is anyone’s guess. It is interesting however, to see how clever use of content, combined with a level of consumer understanding and quality content still appear to work.
Best guess would have to be that in the end, a mix of both will work. Consumers won’t want to be educated about why they need to see ads, but ads can be smarter to not be as annoying.

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