In a revolutionary move for digital native publishers, the Associated Press recently announced it is creating its own native advertising suite. Just as AP members now pay for access to local and national wires, they can now pay for the AP to create native ads for their publications.
On one hand, adding native advertising services to its suite diversifies AP’s profit model. But even more importantly, it creates a cycle of profit by helping members use ads to monetize their publications, thus bringing in more revenue that can be used on the AP’s primary focus: wire services. And most importantly, for the first time, native advertising will be affordable for small and local publications.
AP is far from the first media organization to invest its interest away from traditional forms of advertising for the benefit of its audience and its profits. Companies like Deseret Digital Media have already begun focusing on local publications as untapped players in the native advertising game. As monetization becomes the most pressing concern for many online publications, many are at the same time crippled by ad-blocking software, losing an estimated $24 billion in global revenue last year due to ad blockers. With pop-up and banner ads losing viability by the minute, publishers have to start getting creative.
Below are some of the other solutions currently being explored.
The Subscription Model
The Wall Street Journal, The New York Times, and The New Yorker
Publications like The Wall Street Journal and The New York Times were at the forefront of the subscription model, adopting a paywall earlier than most. By imposing a meter on their sites, publications are able to limit readers to a certain number of articles before asking them to purchase a subscription to the publication. The option comes with its own share of struggles;while The New York Times has chosen to step back from its paywall, offering its flagship NYT Now app for free, The Wall Street Journal has gone in the opposite direction, strengthening its paywall technology and closing loopholes that allow readers to circumvent the system.
Despite suggestions that the trade-offs of a paywall may be greater than the pay-offs, The New Yorker can be added to the list of New York City-based publications seeking subscribers with this technique. The paywall brings in revenue and enhances user experience, and for publications whose audiences fall into a certain demographic, it’s a price readers are more than willing to pay. But increasing the exclusivity of content comes at the cost of audience size and pageviews, two important metrics in judging the success of online publications.
Access to Exclusive Content
Slate, SKIFT, VentureBeat, and GigaOM
In a similar (and less risky) vein of exclusivity, many sites have incorporated e-commerce into their content in the form of upgrades. While Slate has a lineup of excellent free articles on its website, Slate Plus is a relatively inexpensive monthly membership program that guarantees “a richer Slate experience.” Members are granted early and/or exclusive access to certain key posts and bonus articles. In addition, Slate moves its brand and reader loyalty beyond the screen — offering discounts on events, ad-free listening and app experiences, and even a complimentary one-year subscription to New York Magazine.
Though SKIFT is not the traditional online publisher, it’s well-researched, in-depth industry reports are available as either one-time purchases or as insider subscriptions. Keeping content production infrequent (only twice a month) means SKIFT can dig deep into industry trends and provide content that will be relevant to customers in the long term. Right now, this model is mostly for expertise reports and data research sites like SKIFT, VentureBeat, and GigaOM. But this kind of investment approach to information access might soon make the move to content that follows the traditionally speedy cycle of online news. The logic follows for non-authoritative media, as well: the more evergreen a piece of content is, the more likely a customer will be willing to invest in access to it.
Though unpaid Hulu members are still subjected to ads, Hulu’s ad selector options give accountability back to the viewer. At the beginning of a program, visitors are asked to select their ad experience. Two brands, for example, may appear on the screen; when you choose one, your commercial-esque ads will center around this brand or category of ads. The real lesson we can learn from Hulu, though, lies in providing consumers with up-front options so that they feel they have control over their own advertising consumption. This is useful for non-video publishers because the advertisements are presented all at once, either as a sequence of short videos or one longer spot for an advertiser hoping to hold the attention of an audience for longer
than the customary 15 seconds.
Aside from understanding their role in funding online media, neither readers nor publishers have been the biggest fan of advertisements. Even the creator of pop-up ads, “the original sin of the internet,” wants you to know he’s really, really sorry. For some, native and targeted ads infringe on privacy and threaten church and state. Others are just sick of ads altogether. Enter Google Contributor.
By paying a small up-front cost every month, readers can essentially crowd-fund their favorit online publications in exchange for ad-free cruising.
The approach has plenty of upsides: it allows the audience to show some love (read: financial investment) to the sites they’re most faithful to, while disassociating publishers with the necessary annoyance of advertisements. But the high price point has some consumers questioning: are ads really that much of a pain?
And if the future of the internet looks anything like Contributor, where will brands go to get the word out about their products?