Basing Your Business Model on Subscriptions Is Leaving Money on The Table…
Why subscription plans alone won’t save publishing and streaming platforms, only ads can…
We are at a point in history, where we are seeing a rise in ad blockers. Advertisers are scared. Ads have been around since the cable TV days, since radio days, since even the newspaper days. Some extremists like to say that ads are dead (mainly, because it’s a great clickbaity title), but as an AdTech technologist who spends most of their time around Gen Z, ads are far from dead.
Yes, users complain about ads. Yes, some users are leaving your publishing or streaming platform due to your ads. However, it’s mainly due to the fact that your ads suck. Google and Facebook make billions of dollars off of ads — and even better, their ads are so good that they make their advertisers rich as well. They are living proof that ads work.
Gen Z doesn’t hate ads. They hate being forced to consume shitty ads.
Ask yourself these questions:
- Does your content platform utilize Machine Learning to personalize your ads like Google or Facebook?
- Does your company care more about giving your advertisers brand awareness rather than a high ROI and CTR?
- Do you simply force your users to consume a high number of ads or do you make each ad more relevant to each user due to the fact that the average user is only okay consuming X number of ads?
Simply switching your business model to a paywall + subscription is a cop-out
If you’ve ever spoken to a knowledgeable AdTech consultancy, you’ll know that your platform can still show ads, even when the user is using an ad blocker. Instead, you choose to simply switch business models, rather than make your ads system better. Any company that has experimented with ads+ subscriptions (e.g. Hulu) will tell you that they make 10x more revenue from ads.
Additionally, users are learning how to get around paywalls via various methods (e.g. chrome extensions, new email + free trial, etc). You may not realize it, but normal individuals do not want to subscribe to 50 different platforms (including yours) with each platform charging them $5 to $15 per month — it’s economically not feasible.
Now my question is, after reading this article, what is your company’s excuse for leaving money on the table?
If you would like to discuss more on this, feel free to contact me on LinkedIn: https://www.linkedin.com/in/shaneaustrie
