Paying out on pay walls

Last week former Computerworld editor Andrew Birmingham wrote an opinion about News Limited’s decision to throw a pay wall in front of the online version of The Australian.

Read it at CIO online here.

Nice piece AB – who incidentally goes to great lengths to distance himself from any conflict of interest relating to his previous role at Fairfax and his new role as independent media commentator – but there’s one part of the whole pay wall saga that is worth keeping an eye on in addition to raw revenue: How slapping a pay wall in front of a B2C Web property affects the advertising dynamic for the publisher.

What I mean by that is if you’re a marketing director with a large B2C brand under your watch you want to reach as many consumers as you can with your campaigns. And the busy news portals reach people in their millions over the course of a campaign – something that is immediately jeopardised by pay walls.

Now, I won’t postulate on the motives of publishers when it comes to choking established audiences with pay walls – hey, they might even want to get rid of B2C ad campaigns – but risk is obvious. If you’re a bank, telco or (dare I say) airline, why would you bother running a campaign in front of 10,000 “qualified” eyeballs when your goal is to get your wares in front of 1,000,000?

It can easily be argued that pay walls allow for advertising on landing and “teaser” pages, but even then a lot of the engagement is lost when a prospective reader realises the article is blocked and simply surfs elsewhere.

So in summary pay walls are risky when retro-fitted to existing, open-access Web properties. They are risky not only because of the requirement to get paid subscribers, but for the dramatic change in reader numbers and the corresponding advertising audience they present to marketers.

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  1. It’s a tough question, who pays for newspapers in the high tech age. Point is, news can travel easily these days on blogs, email, you name it. If there’s plenty of supply and only limited demand then the price should fall *shrug*.

    By the way, remember I was waving the Linux flag when the Redhat share price (RHAT) sat at parity with Microsoft share price (MSFT)? Well recently it’s been drifting around double. That’s right, from a parity position to DOUBLE in a year and a bit.

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