Future of monetizing content & why #Adblocker is depending on consumers not b2b

This week was hot in terms of #Adblocker. The hashtag got trendy on Twitter after the genius people at Germany’s largest tabloid Bild Zeitung put a blocker on their mobile website: deactivate your content blocker, pay our premium app or go to hell — and surprisingly readers were happily running to hell. Every ordinary man — or normal guy like Mr. Klopp in Liverpool — could have foreseen this reaction. But let’s ‘Kai and the gang’ find their way within ‘Neuland’.

What is more interesting from this week is the understanding where will the monetization of content lead in the future. A future where 20% of all content will be created by machines in the future — automation of content creation is already happening. So lets have look of today’s situation and have an expert guess where this will lead us to:

Banners in all of its forms will vanish from publishers sites

This is obvious for the most of us — Axel Springer begs to differ which is their opinion. They already calling for regulators to step in to keep this from happening. Banners will vanish because users don’t like them. Why do I know that? The number of people who installed content blockers on iOS9 are telling me. Thanks to Apple — which wants to harm Google with this feature — is leading the way. Google on Android may try to keep content (Ad-) blocker from the Appstore but it won’t last for long. When users want something they will get it. Deal with it dear players in the industry. Content blockers are also liked even more for faster download of websites, less tracking technologies (NSA troubles in certain countries as a supporter) and usability on a small screen on my mobile phone. Put in blunt, simple words: People don’t like Adblockers — they just hate Ads and Banners.

Sponsoring and crowdfunding

Sascha from mobilegeeks did reveal this trend as one of the first in the industry last year and started to adapt to this new market. He introduced a sponsoring model for certain segments on his website. Asus and Microsoft became sponsors for special areas of his content portal and this was a successful model as far as we can see it from the outside. When corporations believe in this kind of sponsoring and they can see their benefit from such marketing activities please keep on going. This however will only work for some companies — others have adapted a “make instead of sponsor” model. Mobile operators and e-commerce companies started their own branded portal model. They used their marketing spendings to create their own portals and drive traffic to their own shops. Both models are the same in terms of sponsored content. Both are equally independent. A mobile operator or a e-commerce company is happy to promote or formulate a critical article on hardware: consumers will be informed and as long as this customer buys a phone in his shop and uses his on his network the sponsor will be happy. Same is true in a channel sponsoring model on mobile geeks an other websites.

Crowdfunding is another trend in journalism. It is named flatter or just paypal donate button. All those models will ask readers to contribute financially to the publisher of the content he is reading and finds interesting. Krautreporter in Germany is one of those models with huge success. Wikipedia is the most known initiative to be paid by its readers in a non mandatory business model. But especially Wikipedia is the example for the limits of a user donation model for content. Nobody will question the quality content and its contribution to society — and still it struggles the capability of drawing enough funding to keep wikipedia up and running. If a global brand is not able to keep up with this model — how can smaller publishers overcome this problem? I personally have my doubts although I think it is a very democratic and open model to create independent content with very good quality. It is not the publishers failing in this model — their communities will let them down because at the end of the day paying on a voluntary base is just not working in the long run.

Innovation in Publishing — Route 66

So taking the conclusion from above — what will not work — my thoughts are about what will work. As in all of publishing there are two ways of monetizing: Consumers pay (subscription, paid content) or businesses pay (Sponsoring). Hence not more parties are involved all future models will play along those options:

  • The Big X: A new monetization model which hasn’t been invented yet. Take it as a placeholder for the next unicorn out there.
  • Paid content and pay walls: FT, WSJ and a lot of other quality newspapers and magazines are working on a paid model. I still believe this is a way of monetizing content. Very conservative but also very effective. There are twists to the model — paying after you read 10 articles for free or pay for editorials or archives.
  • Next Generation Sponsoring: There will be a new way were business will pay for the content a user will read. The thread in this model is the influences of those sponsoring parties on the content and editors. It will imply a filter on content and the intention the publisher will have for its readers.

Publishing content is a simple model — and because of its simplicity monetization is so complicated. Making readers and viewers pay for content is a tough business. You can frame it like Sascha and hope your community will feel guilty by not donating for your content — ultimately it will lead to a subscription model. It is in human nature, so we need to accept it. Finding a way to make it easy, fast and automated is key in this kind of models. A website could try to deduct payment from a users account based on the frequency or length a user is reading content. Paypal, Amazon and iTunes have given us tools to pay for content with a one-click-of-a-button model. So using those payment options on a micro-payment level is a valid option for journalists.

With the introduction of Apple’s News App and Apps like flipboard, Pocket there will be a bundling to hardware. With Apple and Microsoft leading the direction where hardware will be used in the future, content will a decisive part of the business. The delay of Apple TV was mainly caused by content owners and their payment models. While Apple has the community and the hardware still it was not able to bring a convincing product to the market with missing content. Same is true for Fire-TV by Amazon and Chromecast from Google. Additionally facebook is introducing news streams and a new video platform. Similar activities can be seen in Asia and their big Internet companies. For all of this big players content will be key to keep their user numbers and usage up to drive growth. When the current advertising models will vanish from the market those players will need to find a new way to support payment to journalists. With no content the use of iPhone's will be limited to make a call — what a scary world.

#Adblockers are depending from consumers not from businesses

The future of adblockers in their current singular business model are in danger as well following this outlook. When there are no ads there is no need for an adblocker. But predicting the death of adblockers is wrong as well. The technology used by adblockers are similar to VPNs and cloud based virus scanner as well well as anti tracking tools- such as Zenmate and others. While adblocking is part of an overall privacy and cyber security industry segment, those companies in the area of adblocking need to define their business models accordingly. It is easy to generate downloads and traction with an end user focused proposition “adblocking”. Growing this user base and expanding the product usage and revenues in the other security areas will be key to build a successful business model in the long term. What all of this business metrics have in common is the focus on consumers. Adblocker companies will drive growth out of consumers behavior. Monetization will be as difficult as for publishers. Again both sides can pay: end users or business. However there are more players involved in paying for those business models additionally as those mentions above there are carriers, security companies and content creation tools provider.