Fee or Free, Don't Be Stupid with Your Digital Content
The problem with digital content is not whether it is free or fee, perhaps, but that, in all respects, too many publishers don't leverage the audiences drawn to that content very effectively. The rationale for free content has always involved generating a mass of eyeballs advertisers will pay to reach. Yet even the biggest defenders of the free model like Keane agree that the model only works when publishers are smart about using the technology at hand to match the right ad to the right user and mindset.
If search is the new navigational method then publishers need to build content models that run on that "oxygen." With 90% of Associated Content traffic driven by search, Keane says users are landing on his pages after having entered search terms that usually involve a need. "We have captured a user modality ... they will potentially buy something. We have these well-primed users coming from search." His model was built to give brand advertisers such as Black and Decker and Proctor and Gamble the accountability of search but the landing pages that include content and display advertising.
Whether through ads or subscriptions, the real backward thinking among media is that they are trying to monetize a resource that is infinite, online content. They need to monetize the finite resource, users. "Publishers are allowing middle men to take a large slice of the value in the marketplace," says Grimshaw. By allowing ad networks to sell space at a site and depress CPMs, by letting third parties collect behavioral data on visitors, and by giving mobile carriers or e-reader partners large shares of the revenue, "publishers are effectively outsourcing in crucial areas," he argues. Those 1.7 million nonpaying but registered customers at FT are critical to the model's success. Grimshaw can laser-target against their job titles and demographic data for CPMs in the enviable $30-$40 range. By cultivating a nonmonetary value exchange with users based on their data, "It turbo-charges our ad business," he says. "The ability to know the user and to be able to hook that information into ad serving technology really brings revenue benefits," he says. The real problem isn't giving away content so much as not having any direct relationship with the people who are consuming it. Data, not just money, is the currency of the internet, if only publishers knew how to gather and use it.
Clearly, the next years of experimentation with new models will tell us more than abstract argument about whether publishers can make them pay. But free versus fee may be a moot debate, and one that actually distracts us from the larger media shift that successful examples of both ad- and subscription-supported content demonstrate. Media is a demand-driven market now. To charge either end users or advertisers successfully, publishers must understand and connect with their audiences more effectively than they have in a media economy that leveraged limited supply and control of distribution. Monetization is the real issue, whether from crafting niche packages that hobbyists, professionals, or car buyers find of immediate value or simply leveraging audience data, search engines, and targeting technology to achieve higher CPMs. Both models require identifying and serving user needs, wants, and desires at a level that still eludes many publishers in a media economy that is moving from content as a product to content as a service.