The Future of Paywalls, Memberships and Advertising – Writing on the Wall is Starting to Appear

This came across my social media feed this morning: “Google Unveils New Revenue Option for Web Publishers.”

In short: It’s a simple technology where readers who come across a paywall can opt into taking a survey instead of having to reach for their wallet. The survey then creates some funds for the publisher and gives the reader access to content.

Why does this sound familiar? Because it is.

I hate to sound like that guy at the bar who says “that was my idea,” as I cry into my whiskey because it’s not just about the idea/concept. It’s execution. And certainly anything Spot.Us (or really any startup) does can be executed at a grander scale by the big three (Twitter/Facebook/Google).

When I first expounded on this concept it received a lot of praise. Dan Gillmor called it the most innovative thing in news advertising in years. I obviously can’t/won’t take credit for giving the idea to Google. Often these kinds of ideas are out there in the ether for various people to reach out for. The same could be said for crowdfunding in general when I first proposed Spot.Us. I certainly didn’t invent the concept – I could just tell its time was coming.

I hope upon hopes that this is a concept whose time has come. Especially in light of the real “year of the paywall.”

What IS a paywall? In essence it makes content valuable by creating scarcity. While good for the bottom line – this is bad for essence of journalism. It says “this information is valuable and if you pay you’ll know something that other people won’t.” The higher purpose of journalism is to create an informed democratic society. Not to create a  subset of society who can afford to be informed.

The idea behind Community Focused Sponsorships (Spot.Us’ version of surveys) was that we entered the advertising game but instead of the funds coming to me (the publisher) I’d let the public decide which stories would be funded. In order to get their vote counted, however, they had to engage with the ads – thus creating the value to begin with.

Some people value money greatly and won’t spend it on journalism. For this large subset of society – the surveys are ideal. What we found on Spot.Us was that the number of folks who valued time over money (preferred to donate rather than take a survey) was below 1% whereas when we offered a survey the number of people who engaged rose to be closer to 10%. Moreover, these people were more than willing to take new surveys as they came about. There are some members of Spot.Us that have taken EVERY SINGLE survey we’ve ever offered (with a sales force of one – this is not exorbitantly high – but still a positive indicator).

For anyone considering a metered paywall. Take some time to think about this process. I strongly believe that metered paywalls is the dipping of our toes into membership programs. Which begs the question – how do you become a member? Can you become a member by taking actions instead of just donating?

4 thoughts on “The Future of Paywalls, Memberships and Advertising – Writing on the Wall is Starting to Appear

  1. This survey stuff will be like banner ads. Ok…great $15CPMs. Wait until every website does it, and supply is unlimited…now we are back to the current $0.25 remnant rate CPMs. Buy the time this scales to 10,000 websites, the gravy train will have crashed to a halt.
    “The higher purpose of journalism is to create an informed democratic society”
    NO IT IS NOT. Theorists in universities believe this garbage, but no one in the actual industry does. High quality news from Public Radio, Newspapers, High-End Magazines has never been consumed by a majority of the population. Not even close, in fact. The vast majority of people are staid Fox News, CNN, Entertainment Tonight people. Read even a shred of data on this and you will see. The highest market penetration of newspapers was NEVER more than about 25% in the last 50 years. The New York penetration of the New York Times has always been in the mid-high single digits….in their home market.
    Newspapers are for a very select minority of people. It is only in the last 20 years and the internet that the average joe has started reading a quality daily newspaper, metro or otherwise. Newspapers just have to be ready to once again lose these readers and get their real subscribers to pay again. Subscribers…donators…customers. Sure, whatever- people who hand me their cash can call themselves whatever they want. I’ll tell the boys in circulation to gussy up their language.

  2. @stephen
    All excellent points. But I would still push that the higher purpose of journalism is to create an informed society. I agree it may not accomplish that goal (certainly no single news organization can/has achieved it) but the reality on the ground doesn’t necc. change the PURPOSE of something. By your description the only purpose of journalism is to be a business. Fair enough and I’m sure some people are in it just for the business aspect. But I would recommend they become hedge fund bankers (the money is better).

    As for the future of these surveys. I think its a little too early to predict they’ll end up weakened the same way banner ads are. Don’t forget it’s not just eyeballs that are being accessed here – there is information. Read the section here on “reinventing our relationship to advertising” http://blog.digidave.org/2010/04/spot-us-version-of-advertising-what-are-your-thoughts

    In the age of information – surveys are like mining for data. And data is digital gold.

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