Numerous newspapers and associations of publishers are discussing the topic of paywalls for specific content or entire sites in an attempt to ‘create value by beginning to charge for it’ in the words of the American Press Institute.
Sadly for that plan, it’s not 1998 or 1898, and I’m not sure how charging for something creates value. The value that should have been created was lost when sales teams bundled online advertising as a free or low cost ‘added value’ bonus to print advertising, at a time when online adverts were capable of getting a decent click-through rate – and then not investing in helping advertisers to utilise new opportunities to better connect with their prospective customers.
The end result is that display advertising is generally decreasing in direct effectiveness and value (although there can still be branding benefits), and attempts to offer more innovative solutions generally fail because advertisers find it too much of a leap from simply booking the biggest reach at the lowest price they can negotiate. Those advertisers that are more innovative, meanwhile, have already started learning that they can create their own content and interaction directly with customers.
And the paywall debate continues to ignore the problem.
Instead it’s simply gouging consumers instead of advertisers.
I already have a paywall around newspaper content – which is one reason why I don’t buy print content. Every day I walk past racks of printed content protected by a cover price, because I can quickly access a wealth of equivalent content online, tag it and save it, interact with it, and often interact with the authors of it – whether bloggers, or increasingly mainstream media employees.
Want an example of ways to monetise a piece of content effectively – this is probably my favourite example of making the most of it.
It means investing in the content creators in your company who can connect and leverage levels of interest – whether they’re a celebrity columnist or an editorial assistant. It’s easy to forget the passion people feel for their favourite title or writers when you’re stuck inside the bubble all day.
It means creating value worth paying for and then offering people the chance to invest in it. And people need to be able to judge and justify the value for themselves – not be forced. Think forcing people works? Bugmenot begs to differ.
And it means creating value for the businesses who are looking for new customers.
I’ve seen companies move advertising budgets because a commercial person switched companies after giving them great service and helping them learn better ways to connect and make sales. If that person was able to educate more businesses, the demand from competitors and other companies would follow.
The problem is that doing all this requires more work, which could reduce the profit margin – but I’d rather have a small profit that can grow, rather than heading for losses.
US print advertising sales
U.S print ad sales dropped 28.28% in the first quarter of 2009, losing more than $2.6 billion in ad revenue. There’s a lot more analysis on Alan Mutter’s Reflections of a Newsosaur, including breakdowns by category, but losing almost a third of the value suggests U.S. print ad sales are reaching terminal velocity, and the rest of the world isn’t going to be far behind.
Online sales also fell by a record 13.4%.
That doesn’t mean businesses don’t need to sell as many widgets and doohickies than ever.
It means they can’t see enough value in print or online newspaper advertising to use a recession-hit budget.
And those that survive the recession will have had a crash course in finding alternatives which are more cost-effective and justifiable. They won’t be rushing back.
