In a world of ad blockers, we need micropayments
Ad blockers have been gaining ground steadily for years, but a heated debate like we’ve been seeing these past few weeks is unprecedented. Apple dealt the final blow yesterday.
Last week, we had 120 students visiting our headquarters. “Everyone with an ad blocker installed on their computers, raise your hands”, I said. All but three people raised their hands.
I have to admit they weren’t your average youngsters. They all had a keen interest in technology. But still, these are the people who tell their friends about that “nifty plug-in that speeds up every website by 400 percent”, so you no longer “have to watch those annoying YouTube commercials”, and can start reading stuff right away instead of “finding your way past loads of ads”.
Once you’ve experienced an ad-free Internet, there’s no going back. Little software has gone viral at the speed of the ad blocker. We’re talking 10 to 40 percent of Internet users today, and that percentage is ever-increasing everywhere.
It’s no wonder it has come to this, really: online advertising has become ridiculous. Not only are ads distracting, but they slow down the average news site enormously, especially on mobile devices: up to six times. Also, ads are plain creepy. Advertising companies have turned into surveillance machines over the years. In fact, their omnipresence on the web enables them to follow you everywhere, across websites. We can only guess what these companies are able to deduce from what we click today.
And it’s too easy to not install an ad blocker. Now, even on iPhones. A single app switches it on. And that’s a major problem for publishers, which are faced with declining subscriptions as it is.
Legacy publishers have several ways to make money. Apart from display ads, they do so through subscriptions (The New York Times has more than a million paying users), native advertising, e-commerce, and events. But in a time of ad blockers, extra revenue sources are indispensable. For the past eighteen months, the Netherlands have been experimenting with micropayments.
Dutch people have to register at Blendle once, after which they’re free to read all paid articles from newspapers and magazines. No paywalls. They only pay for the articles they actually read, and are refunded if a story didn’t appeal to them after all.
Today, we’re selling articles with prices ranging from €0.10 to €0.99 per article. The number of articles sold as well as the number of users is increasing rapidly. And this week, our experiment expanded to Germany, where we launched micropayments for *all* major newspapers and magazines.
In Holland, we started a year and a half ago. And right now, we have over 450.000 users. That’s kind of great for a country that’s quite small. Even better: a massive one in five users actually top up their Blendle wallets with real money to spend on journalism by the article. What we also know: more than half of the users is under the age of 35. Unprecedented stuff. Hopeful, even.
But still. It remains to be seen how much micropayments can compensate for the shrinking ad revenue. And I’m worried about the consequences of ad blockers. Some publishers are turning to native advertising, but even those are blocked ever more often. German TV stations sued the number-one ad blocker, and lost. Tricks to fool ad blockers might work for a day or two, but it’s a cat-and-mouse game the ad blocker always wins. All the more reason to find alternative revenue models. Fast.
