The way out of the paywall debate is for newspapers to become the online authority on what to buy and what to do
guardian.co.uk, April 12th 2010
Take a look at Google‘s homepage and compare it with any newspaper’s homepage. One difference is striking: www.google.com, the most viewed media output on the planet, contains no ads. And, unlike the newspaper industry, Google doesn’t have any financial problems.
There is a lesson to be learned here. Google understood that blindly converting its users’ eyeballs into money is not enough. The key is to develop a revenue model that makes the most of its unique advantage online. That advantage is being an online search platform, and the system it has developed integrates perfectly into that, by displaying relevant text ads for each search. Newspapers, by contrast, have tried importing the old media‘s ad revenue model to the web – and failed.
Online display ads don’t have enough impact on users to be attractive for advertisers, and therefore don’t generate enough income for publishers to sustain the newsrooms. This problem worsens as the print news industry generates less and less income, while people’s attention shifts more and more online.
In their despair, newspapers are now trying to copy another income model from old media – subscriptions. News Corp and the New York Times, for example, are at different stages of erecting paywalls around their sites. But it is not clear if users will be ready to pay for online news they are used to getting free. And this strategy will clearly reduce newspapers’ visibility on the web, both on search engines and on social media – while cutting revenues from the ad model.
The solution is that, just like Google, newspapers should invent a revenue model that utilises their unique advantage on the web: their credibility. So how can they make money from trust? From a reader’s point of view, the first step before buying a product or a service is deciding what to buy. The best agents to answer such questions online should be newspaper websites, as they have both the knowledge and the credibility.
Newspapers should be the online authority on what to buy and what to do. Not only is this their duty in our age of information overload, it can easily be converted into revenue. The first step, then, is to anticipate the user’s quest. Reviewing “best cameras under £300” is a good example. So is comparing coffee makers or reviewing the movies on release now. The second step is to create the copy and the web page that provides answers to the reader’s question. The third and last step is to link to product or service providers. The newspaper generates revenue when the reader clicks on these links (if using the pay-per-click model) or when the deal is completed (if using the pay-per-action model).
In this system every actionable article (a book review, a travel guide) should have links to enable relevant action. By clicking on them, the reader turns into a potential customer. This may be a new model for newspapers, but it isn’t one on the web. Sites such as cnet.com (technology) or tripadvisor.com (travel) have been doing it for a while with great success.
While newspapers have at most £10-£20 average RPMs (revenue per 1,000 pageviews), these sites enjoy £25-£40 RPMs or higher. And the advertisers love them. As they are heavily optimised for search engines, they are among the first results users see when searching for products. So these “vertical” sites enjoy a significant number of visitors from search. The first result when typing “best laptop” on Google, for example, is laptopreviews.org.uk – which then leads the user to retailers’ sites stocking the products they recommend.
Indeed, this model creates perfect synergy with the search engines. The roles are clear: the newspaper creates the credible research or review, the search engine sends the visitors, a contextual advertising program matches relevant providers/advertisers to the content, and all parties share the revenue. Readers are exposed to the relevant text ads as they pass through the newspaper‘s credibility filter, and are ready to make a purchase.
When searching for “best laptop” on Google, no newspaper is present in the first few results pages. Newspapers have the reviews, the writers, the credibility, the potential to rank high on search results – but they are not there. Too bad, because that’s exactly where the money is.