Despite the fact that many publishers have struggled to transform
ad-supported content into profit, many publishers have opted to keep
the ad-supported content, and forgo a paywall.
And there’s a good reason why: it’s entirely unclear to many publishers
whether a paywall will be profitable or not, and once a paywall goes
up, a publisher’s audience will almost certainly drop. For many
publishers, ad-supported content and a large audience is still more
attractive than paid content and a smaller audience.
Perhaps this is a good thing, but publishers shouldn’t be under any illusions when it comes to the cost of ad-supported content. According to a study by the IABUK, “More than 80% of internet users enjoy significantly more value from using the web than they would be willing to pay to eliminate disturbances from advertising and privacy concerns. In practical terms, each euro an internet user is willing to spend to limit advertising disturbance equates to six Euros worth of value from current ad-supported web services.“
That’s not entirely surprising. While ads may be annoying, consumers have largely learned to tune them out as necessary or desired. Why pay for an ad-free experience when you can just blind yourself to the ads at no cost, or if you’re slightly more sophisticated, install an ad blocker?
Clearly, there aren’t any easy solutions for publishers. Despite the fact that consumers typically get far more from publishers than they give, most publishers will have a hard time closing the gap.
According to the IABUK’s study, “if those services that are currently provided for free were to be charged for (at a level that generates the same amount of revenue as ad-supported services), 40% of current users could stop using the internet.“
From this perspective, it’s worth considering that ‘it is what it is‘ Online publishers might get the short end of the stick, but this is the business they’ve chosen to be in. The most successful publishers, of course, have proven that you can build a viable paid content business online, but paid content is a smaller market than ad-supported content, and there are businesses that do just fine with ad-supported content too.
So what’s the answer for publishers looking for a more equitable exchange with consumers? In my opinion, a good number of publishers, particularly newspapers, would be far better off worrying about their cost structures than how much value they’re theoretically not getting paid for. After all, ad-supported versus paid is a pointless argument if you’re spending more than you can make with either model.