How micropayment can save publishers from ad-blocking
A new startup from Europe wants to change the way we pay for written content online, and they’re headed to the U.S.
Blendle, a Dutch micropayment company, enables web users to pay their favorite website per individual article in lieu of all-access monthly subscriptions. The announcement of their U.S. launch early in 2016 comes at a time of increased uncertainty for digital publishers, as the rise of ad-blocking apps and software threaten to radically diminish websites’ revenue.
There are good reasons to be skeptical of Blendle’s approach. Direct user payment has never before been considered viable to sustain web publishing at scale. But new developments in technology and mobile user behavior have made direct transactions between user, publisher and content creator easier than ever before.
The broader situation
Since the release of Apple’s iOS 9 in October allowed users to download ad-blocking apps, their adoption has risen sharply. Over half of U.S. internet users have an ad-blocker on one or more device, according to a recent Reuters Institute report. This understandably makes publishers jittery: display ads are the primary digital revenue source for just about every major web publisher.
While it’s only recently boiled over, the tension has been building for years. Display ads have grown more intrusive in a never-ending quest for clicks. HD video and rich animations have come to wreak havoc on data plans and battery life. The rise in ad-blockers signals a culmination of what the Reuters Institute report aptly calls “significant consumer dissatisfaction with online advertising.”
But if already-struggling publishers are squeezed any further on revenue, conventional wisdom goes, it could all collapse, leaving quality content to go the way of the telegram.
These rapid, dramatic changes require a step back to consider the fundamental implications of the ad-based model. Any economic exchange is a two-way exchange of value. In our current situation, there’s a third party: advertisers handing publishers cash in exchange for a presumed slice of our attention. Until now, internet users have consented. However, that third party seems to have crept up, taking a bigger and bigger slice of the attention pie until things finally got “significant.”
Rather than succumb to “sky is falling” panic, publishers should be seizing the opportunity and adapting. As long as we still value their content, there’s still a value equation that adds up. If publishers coordinate and take advantage of newly adopted mobile behaviors to react in concert, they may just be able to turn publishing on its head and bring equilibrium back to the value-exchange.
What’s the value of a page view? The math
Consider that the average cost per thousand display ad impressions is $2.80. That puts the value of one individual page-view between publisher and advertiser, on average, at 0.28 cents. A fraction of a single cent. Even with multiple banners per page, and the premium price of more intrusive “high-impact” ads, the value of a single page view is still calculated in pennies. If that’s what a page view is worth to an advertiser, what’s it worth to a reader?
The answer, of course, depends. But at least one local newspaper in Canada is placing a bet.
New models to experiment with
The Winnipeg Free Press in Canada is already experimenting with their own micropayment model, to encouraging results.
Visitors to the Free Press’ site can bypass a two-article paywall while a site widget tallies a bill based on the number of articles read (at a rate of 27 cents Canadian per). Of note, there’s a ‘refund’ option users can select after reading, at the point of payment. So far, according to the Free Press only 1% of adopters have used this option — further demonstrating that where barriers are presented in the user journey can make the difference.
Blendle, alongside a coterie of other start-ups eager to disrupt the status quo, are betting that the feasibility of experiments like this can be scaled.
“[P]ublishers are struggling to find out how to monetize their content,” Blendle founder Alexander Klöpping is quoted on WSJ.com. “In The Netherlands and Germany we’ve proven that we can get young people to pay for high quality journalism — as long as they don’t bump into paywalls or ads all the time, don’t have to register for every website and only have to pay for the articles they actually read.”
Where we can go from here
The new norm of mobile payment has broken down old barriers, making it easy and acceptable for readers to adopt this method on two conditions. First, if enough publishers adopt a universal system to make the one-time barrier of downloading and handing over personal data worthwhile. Second, if this coordinated effort is offered as a user-centric alternative to ads and subscriptions.
It’s a prospect ripe with benefits for readers, publishers and creators. New payment models based on the quality, rather than quantity of views could be arranged for content creators. Non-profit platforms could set up, Kickstarter-fashion, passing on profits directly to the content creators themselves. These new models could even be extended to digital audio and video. With such open-ended possibilities, it begs the question of who’d lose in this equation. The answer, of course, is the advertisers.
Since the golden age of advertising, we in the U.S. have explained away our tolerance for interruptive ads as a necessary evil. But the early successes of Blendle and the Winnipeg Free press suggest that old adage may no longer hold. In which case, advertisers and their agencies would have to come up with more tactful, less interruptive methods to win our attention. Maybe that means creating content of their own, of a high enough caliber to be sought out and shared. Or better yet, redirecting marketing budgets back into developing products or services great enough to sell themselves. Most inconceivable of all, could it mean trimmer marketing budgets, with the savings passed on to the consumer?
But what about the jobs of all those creative marketing minds? If nothing else, aren’t these worth defending? Perhaps, if not for the likelihood that most of them would rather be working on their own creative projects. If only they could find a way to make that pay.