How publishers can make web content pay
If publishers are blocked for the most part from charging for content in the inherently open and unruly interactive marketplace, then what can they do? Go with the flow.
And the flow on the web is to provide consumers with unencumbered access to content in exchange for information that will enable publishers to effectively target premium advertising to them. That’s the ViewPass idea, an idea in which I have a commercial interest.
As summarized more fully here, ViewPass would consist of a simple, one-time registration system that would remember users as they moved among participating websites.
Though the system could handle payments for individual articles or subscriptions, its primary job would be to profile individual users from demographic information supplied by them and by tracking the content they viewed as they moved from site to site.
The customer profiles would enable superior ad targeting, thereby improving consumer response. Improved response would generate higher CPMs, boosting revenues as advertisers competed for access to available page views. It is important to note that the information offered to ad networks would not identify individuals, thus protecting their privacy.
Significantly, a number of publishers have proven for themselves the prodigious value of having enhanced information about their web visitors.
Some of the leading members of the Newspaper Consortium say they are fetching rates of up to $15 per thousand by selling advertising through a targeting system developed by Yahoo that, while valuable, falls short of delivering the level of detailed demographic and contextual information that could be provided by ViewPass. (A partnership similar to the Yahoo deal is being planned by Advance Publications and Microsoft.)
The $15 CPMs that publishers obtain when they sell ads using the Yahoo system spectacularly overshadow the average rates of less than $1 per thousand that newspapers net when they use generic banner ads to fill otherwise unsold inventory. The unsold inventory at many papers, by the way, amounts to half or more of their page views.
A system like ViewPass would help the industry sell more targeted advertising. It also would drive higher CPMs by delivering such prized, but previously unavailable, data as a specific customer’s authenticated Zip Code. The closest the Yahoo system can get, by contrast, is to place a reader within a cluster of five neighboring Zip Codes. To be clear, however, the Yahoo system and ViewPass would be complementary, not competitive.
In short, ViewPass would compensate publishers handsomely for embracing, rather than battling, the culture of the web.
The need for an initiative like ViewPass is urgent, given the massive systemic changes confronting the industry. Here is why:
The strength of traditional media companies historically arose from their control of the means to create and disseminate information in their respective markets and then to sell advertising directed at the large audiences that coalesced around their products.
But interactive technologies have blown up this classic business model by fragmenting audiences as consumers gained the ability to gather information from multiple sources and to view it at the time, at the place and on the platform of their choosing.
Given the growing number of competing interactive sites and the generally declining loyalty of consumers to even the strongest of the media brands, it is highly unlikely that traditional publishers and broadcasters will be able to reverse the disintermediation steadily eroding their respective audiences and advertising bases.
With granular information about individuals bound to replace geography as the most valuable asset a publisher can have, ViewPass would give publishers the unsurpassed strategic advantage of being the sole owner of the definitive database of authoritative information about the demographics, preferences, desires and behavior of each and every registered consumer.
If publishers fail to seize this opportunity as a group, they are likely to fail individually as readers and advertisers over time forsake their one-size-fits-all media products.
It is gratifying to report that several publishers support the ViewPass idea, not the least because it would be owned and governed by the industry instead of third parties like Yahoo and Microsoft, which, of course, have business motives and profit objectives of their own.
“We're excited and appreciative of the work you are undertaking,” the president of one company wrote in an email after hearing a presentation about ViewPass. “Noble work, I might add.”
But the work on ViewPass won’t go forward without a bold commitment from a broad array of publishers to build it. So far, no collective resolve has materialized for ViewPass or any other idea.
Meantime, the year when publishers finally were going to start charging for interactive content is steadily ticking away.