Online News Paywalls – Their Impact on Advertisers

With the increase in popularity of online media, the print newspaper readership is gradually declining. According to Pew Research Center study on the change in the US news audience between 2009 and 2010, the online news audience increased by 17.1%. Other media like cable TV, magazines, audio, newspapers, network TV and local TV reported a drop of 13.7%, 8.9%, 6%, 5%, 3.4% and 1.5% respectively in news audiences.

Publishers are trying to counter the drop in traditional ad revenues with online ad revenues. Increasing number of platforms and ad networks selling inventory at a lower cost has made metered paywall seem even more attractive. The New York Times is an example of a traditional publisher trying to capture additional revenue online.

Studies indicate that the cost expectations of internet users for online news are different than traditional news.  The numbers of internet users willing to pay for online news are in minority. According to the results of a study, the percentage of users willing to pay for online news in Spain, the UK, France, the US and Germany were 36%, 23%, 21%, 19% and 17% respectively. These figures indicate that publishers hoping to supplement their revenue with metered paywalls may have to face challenges.

Advertising on metered usage sites may have some benefits for the advertisers. Rather than traditional banner advertising, marketers can provide a more engaging experience by sponsoring one-time site access on cost-per-engagement basis. Also, subscription data can help publishers provide marketers more information on users for better targeting and web traffic marketing.