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Mobile paid content is coming – can we stop it?

March 25, 2011

Elizabeth Joy Zalman

Elizabeth Joy Zalman

By Elizabeth Joy Zalman

In early 2009, Rupert Murdoch, CEO of News Corp., announced that the company would begin phasing in paid content. Any consumer who wished to access a News Corp. Web site – starting with The Times and The Sunday Times in London – would be charged for accessing articles online.

When the proclamation was made, the online space both shuddered and held their breath in hope. Why?

On the down side, paid content means that the spirit of equality inherent in the Internet would disappear, as access to information would no longer be free.

And if Mr. Murdoch succeeds, the publishing industry, ever-searching for a revenue generation model to replace traditional print content and single-handedly save its future, might have just found salvation.

Moreover, the track record of utopian parity versus capitalism is a poor one.

Now let us be clear: the News Corp. initiative seems to be failing online.

Praying for content
One estimate released has the number of paid subscribers since the announcement at 19,000 for The Times, and monthly unique site traffic is reported to have declined by 90 percent since the paid content initiative was implemented.

The announcement released by The New York Times, instituting a paid service for more than 20 articles per month beginning March 28, is another gamble. Heavy users of the New York Times online and on mobile could end up paying $35 per month.

But the true threat is that a subscription-based model does represent a cataclysmic shift for the industry.

If it ultimately succeeds online, it will soon come to mobile.

So the question remains, is there another way to create a significant revenue stream so as to avoid mandatory paid content?

Yes, there is another way.

In fact, it is already in place.

Display advertising is how Web sites currently monetize their offering. You say, “But CPMs are at an all-time low, particularly online. Given that, how can display possibly fix the problem?”

The answer is measurement.

Coy on ROI
Let us explore why CPMs have bottomed out.

It is simple because publishers and resulting networks and yield optimizers are not effectively valuing their inventory. They are unable to justify a $20 CPM because they do not actually know if, when a marketer advertises on the site, the display will ultimately influence consumer behavior.

Now, certain strides are being made.

Publishers have begun working with data providers to append modeled insights to each impression, resulting in a slightly higher bid price.

Others are experimenting with categorization or historical purchase trends, also with a minor improvement.

The fact of the matter remains that the easiest and most effective way to dramatically increase pricing is to prove out ROI.

If an inventory provider can come to a marketer and state, “By purchasing display on my site, I can prove out an eCPM 25 percent higher than what you’re paying,” it will have not only justified a significant price increase, but also have created a long-term partnership.

Creative with clients
Whenever I begin working with new clients, their desires are always the same. They want to begin testing creative initiatives right away. Does the red ad work better than the blue one? Should the call-to-action say “Click here” or “Shop now”? Let us experiment with some rich media!

I always gently guide them back to basics, and recommend that before testing anything, they should figure out if their media buys actually work.

Does buying display on Site A generate a return above a control? Only after creating that very important baseline should testing begin.

That recommendation should be the same with inventory suppliers.

If publishers could justify pricing by definitively identifying that their display works, marketers will pay more. Period.

Measurement begets validation and validation begets comfort with pricing.

Marketers will pay more for media if it is truly worth it and, as a result, publishers can begin to monetize their offering more effectively. And perhaps, just perhaps, mobile can stave off the advent of paid content and succeed where online has not.

Elizabeth Joy Zalman is co-founder, chief operating officer and chief marketing officer of Media Armor, a Boston-based cross-platform analytics company. Reach her at

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