Giving it away for free: advertising, content and the paywall debate [T4A]

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Mail & Guardian editor-in-chief Chris Roper is standing in front of a graph predicting newspaper circulation figures — and it’s not good. You may be used to the hockey-stick shaped growth curves of tech darlings like Pinterest and Instagram, but the chart forecasting the future of information provided in newsprint and ink is gradually headed towards zero. The editor of one of South Africa’s most prominent investigative titles glances at the graph behind him and summarises the prospects of newspapers bluntly: “Generally, you’re screwed.”

With more and more readers ditching paper for pixels, how to make money from a medium where consumers have little to no interest in paying for content (and revenue models are far from tried and tested) is becoming a major problem for publishers and their advertising teams. “Because content is free online, we’ve trained consumers to understand that content has no value,” explains Roper. “We’ve trained them to believe that you pay for platform,” he continues, referring to digital options like iPad editions and apps.

Attempts by major international publishers to reverse that by enclosing their content behind paywalls have been met with mixed levels of success, with early adopters like the San Francisco Chronicle backtracking in recent months. Is it really a viable option for websites looking to profit from their content, or another dead end in the quest to survive in digital publishing?

At this year’s Tech4Africa conference, Roper and Jason Norwood-Young, head of the company behind content management system 10Layer, debated the paywall trend and whether or not it’s the best option for advertisers, publishers and their readers.

The case for paywalls

While many journalists have lamented the rise of the web for reducing the value of their content, Roper argues that audiences never really paid much for newspapers in the first place. While you have to hand over cash to buy the latest edition, he says that the cover price “didn’t mean much” as the cost of producing the newspaper was largely paid for by advertising. “Content has always been given away for free,” he says, even before the internet was invented.

Still, that doesn’t change the fact that the advertising model is broken–– Roper says the Mail and Guardian’s site, which attracts a million unique visitors a month, is still only responsible for 15% of its advertising income. The rest of the money comes from its weekly print edition.

For him, the value in paywalls lies in the data they can deliver about subscribers. To pay for quality journalism is expensive — paywalls allow publishers to get some of the money they’ll need to fund it, but also allow them to understand what their readers want to consume so they can hone that type of journalism.

If publishers continue to give away all their content en mass to any casual visitor, they’re forced to compete for a slice of breaking news and search traffic, not reliable returning readers. That means you can publish as much in-depth investigation and serious news as you want, but you’re also probably going to have to stick up some stories about Miley Cyrus’ latest antics to make sure you hit your targets. “If you just knew who your audience was and that they’re willing to consume this kind of content,” says Roper, you could provide more content to an audience you know will appreciate it.

If publishers know more about their audience, they can give their advertisers more value by serving advertising that works (and which is less annoying for readers). Instead of pushing out thousands of flashy ads that 0.15% of people click on, they can offer brands advertorial-style content – a route which has already seen some early success on sites like Buzzfeed.

That doesn’t mean a one-size-fits-all paywall solution will work for every site. Roper admits that implementing one can be expensive, and publishers could potentially lose page impressions (but perhaps not that many unique visitors) in the short-term. Paywalls also need to be porous, allowing some content to be accessed by casual readers. “You don’t put a paywall in front of visitors who read one page a month,” he says, rather returning visitors who are already loyal to the site and obviously enjoy the content. It’s also not a route that any publisher can take – established brands with a significant amount of dedicated readers are the ones which are more likely to succeed.

Keeping it free: the alternatives to paywalls

Norwood-Young has a different view: paywalls are not going to save anyone. “No one goes into the newspaper business to make money unless you’re on drugs,” he says. Newspapers have been dying for decades, he explains, and it’s “and it’s not the internet that killed them”. Yes, it may have helped strike the final blows, but TV had begun the attack long before. A paywall isn’t going to help that.

The 10Layer boss believes that paywalls will hasten the demise of newspapers, and points out that publishers like the Chronicle and Dallas Morning News have taken down their walls because they failed to generate the results they needed.

Instead, Norwood-Young suggests that publishers can continue to offer content for free, if they make a few changes. His first suggestion? Cut out Google.

google-s-ad-revenue-since-2004

With Google now making more money from advertising than the US print media, he says it seems like publishers gave their ad revenue to the tech giant. While Google ads are running on almost every site you visit, Norwood-Young points out that no one knows how much of a cut Google is taking and what percentage actually goes to the publisher. Put simply, he says that in emerging markets like South Africa, “a Google ad is not going to pay for your website.”

“I personally think we have to kick Google off all of our websites and not syndicate our content on any website that runs Google ads,” he says. He also suggests publishers focus on tailored, high quality sponsored editorial content, offering brands exposure but also ensuring that the ads are not given any unnecessary prominence – the stories have to compete on their own merits. Instead of building a paywall around content people are accustomed to getting for free, Norwood-Young suggests charging for things people are actually already willing to pay for, like well-crafted tablet and Kindle editions.

Ultimately, he stresses that publishers should take advantage of the opportunities online platforms offer them to produce better journalism, rather than trying to corral their stories and make readers jump through hoops to enjoy them. The web unshackles journalists from the limitations of print, allowing them to produce in-depth multimedia packages and explore a story in a way that wouldn’t be possible in a broadsheet. Why would you want to hide that all behind a barrier?

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