Ad Technology

Mr. Bezos, Tear Down This Paywall!

Image result for romain job smart adserverBy Romain Job

At some point, most of us have reached the maximum number of articles a site will let us read for free. We then have a few options: Buy a subscription, click away to other sites, clear our cookies and try again, or access the site from a different browser.

Only the first approach helps the publisher. Many newspapers, including The New York Times and Jeff Bezos’ Washington Post, regularly make use of metered paywalls, but they haven’t prevented a loss of around $30 billion in ad spending between 2005 and 2014, according to The Economist. As the publication noted, “people tend to read the freebies, then leave.” No wonder newsrooms are shedding so many positions, leading to lower-quality content and less coverage.

It could help a great deal if publishers were to look at what works elsewhere, specifically in gaming.

Angry birds, happy publishers

Regular gamers take it for granted that if they need more lives, or more birds, they can get them by watching a video ad. “Rewarded video ads” offer publishers a number of benefits.

One is that apps that use rewarded video have been shown to retain users longer than ones that don’t. That’s especially true when viewers are rewarded with extra points or other in-game benefits.

Rewarded video is also a good alternative to interstitials, which users find annoying. Google is also taking steps to prevent publishers from using interstitials. Those who continue to use them will find themselves lower on Google’s important search rankings. Many publishers that don’t use interstitials are already testing the limits of reader tolerance with auto-play video ads and screen takeovers that can make it seem as though a publisher is going out of its way to annoy its audience.

A traditional media model

The web has now been around more than 20 years. It was within a comparable period of time that the TV industry settled on the 30-second TV spot as its mainstay. When TV first launched in the late 1940s and early 1950s, advertising agencies created shows to highlight a product or their overall brand. Soon, though, the costs became prohibitive. The industry then gravitated to a format, modeled after magazines, in which sponsors bought blocks of time during a show. This model, introduced in the early 1960s, continues today.

Rewarded video ads are similar. As with TV ads, viewers understand the implicit deal: free programming in exchange for time spent watching a sponsor’s message.

Online media is not TV though. In many ways — particularly the ability to target and track — it is, for advertisers, much better. That’s why publishers who are frustrated with a lack of success with metered paywalls may opt for a different approach. Especially as they start to better leverage their audience data to deliver this high-impact advertising unit appropriately — for instance, by distinguishing between less-faithful and more-faithful audiences. Rather than drive readers to use another browser, charge readers time with a powerful video ad in order to monetize the content that cost so much to create.

Romain Job is the U.S. GM for Smart AdServer.