One of the most important topics for publishers currently is the mining of news Web site visitors and converting them into subscribers. Since the decline of newspapers has been declared irrevocable, a lot of attention is paid to the potential of the news brands’ Web sites.
The same goes for my publishing company, Mediahuis. In the numerous epic quests for the best reading experience for paid subscribers online, “advertising free” comes to mind. Would an online news article, free of ads, truly be a unique selling proposition (USP) for the reader? Is it something that preoccupies the reader in his consideration of subscribing to our paid section?
There are beautiful article templates for long reads and animated designs that really promote the journalistic quality. Why ruin this with ads that have no relation whatsoever with the mission of the newsroom?
Is a reader really susceptible to an advertising-free reading space?
If we want an answer to that question, let’s take a look at the parties that take a stand. One of the main disruptors in the music industry is Spotify. It exploits the sales argument of ad-free music listening, but not without success it seems. In June, Spotify reported 150 million users, and one in three are paying. Of the three billion Euros it makes, only 300 million come from advertising.
But is this durable? If I represented a B2C brand, it doesn’t seem like an advertising-friendly environment in which to engage with an audience, whose platform is promoting a paid version by ex-communicating the advertisers. Pay up and get lost: That’s the way I would interpret that.
Mark Daemen, our digital sales director, looks at this more pragmatically and argues advertisers see the advantages of the reach of the platform. Users listen to Spotify at moments when radio has less reach. Plus, it offers all kinds of novel advertising formats, can use personalisation, sponsors popular playing lists, and more.
On the Web page of the agency of Spotify Belgium, we read, “Reach the right people, at the right time, wherever they are.” Nonetheless, I’m not impressed by the number of advertisements I hear on my free account. My assessment is that most of the inventory is used by Spotify for auto-promotional purposes, with ads that promote Spotify premium … without ads.
De Correspondent is a digital pure player in The Netherlands. It is also a publisher of great news-making stories from big-league journalists in templates void of ads. On the homepage, it proudly propagates “journalism before profitability.” In the De Correspondent Manifesto, it says its members are the reason for being.
And then De Correspondent gently spanks the traditional media by saying that we “misled the reader with the claim that an ad pays the wage of another journalist. On the contrary, ads go directly to the bottom line of the publishing companies instead of being invested in the newsroom.” Yeah, right.
But point taken, and De Correspondent succeeded in convincing 57,000 subscribers in three years with its ad-free articles.
The business side of ad-free reading shouldn’t be forgotten. What’s the effect on revenue if our conversion machine is working full speed and, like Spotify, one-third of our visits are paid members who don’t see any advertising?
Daemen has another pragmatic argument: Why should you restrain yourself on advertising if it’s perfectly acceptable to offer ads? We don’t ask the user beforehand if she wishes to see them or not. It’s up to the publisher to maintain a good balance and guarantee a reader-friendly environment with a communication margin for advertisers. Users wouldn’t be clicking on ads and wouldn’t be buying products if they were all against them.
Without the acceptance of the consumer, the whole ecosystem would collapse. Decisive proof probably comes from newspaper readers. They pay X times the price of a digital subscription, and for the last decade they have been reading articles between ads. I have few recollections of churn due to the volume of advertisements in newspapers.
So, is ad-free publishing futureproof? My colleague Daemen refers to YouTube and Facebook, both platforms that started out low on advertising. Look where they are now and what leverage they have. What will the elasticity of pricing be with Spotify if it wants to keep up the pace when competing with the big guys like Disney and Amazon? Not to mention a decent royalty for the artists whose work they exploit? I doubt a customer will gladly pay extra for the fact that he doesn’t hear any ads.
This said, I wish all of the INMA community great reads for the coming year, be it with or without some decent advertising!