Are Paywalls Quashing The Opportunity For Good Online Advertising?

Every week, several popular news sites change their subscription model and introduce paywalls.

Just this week, B&T noticed new paywalls on both Business Insider Australia and Adweek.

While this paywall strategy has been adopted as the new norm to help fund, and in some cases “save” news sites, – The New York Times for one – not everyone is in favour of this blanket approach.

CEO of New York-based digital media company The Outline, Josh Topolsky, said the issue is not finding a way to finance free content, the issue is bad advertising which so often turns users off news sites.

Speaking on the latest episode of the Recode Media podcast with Peter Kafka, Topolsky labelled internet advertising as “very aggressive and often bad”.

Adding, “For the smartest, most savvy consumers on the internet, they are blocking it or tuning it out or avoiding places that have it all together.”

Asked whether the ‘normal’ strategy online is working, Topolsky said too often the industry has a ‘follow the pack’ mentality rather than experimenting.

“I’m open to the idea of asking for money from people,” Topolsky said.

“But I think there’s an unapproached opportunity in advertising that’s been bungled for 20 years by most people in this industry.”

“Good advertising is good, and when it’s good it’s great. Also, we have to prove that we’re worth spending money on.”

Topolsky went on to talk about how his own website, with a relatively small audience, handled on-site advertising.

Put simply, Topolsky said his site makes it easy for advertisers to showcase “creative, beautiful” content, without the need for a paywall.

Replicating the ad strategy of Instagram and Snapchat, Topolsky serves ads to readers as they swipe through stories, meaning The Outline has “millions of views on a piece of custom content”.

“The TV ad works because it’s good for TV. The magazine ad works because it’s good for magazines.”

“You know what Instagram and Snapchat and Facebook, to some degree, and Pinterest figured out? There’s an internet ad that works really well. It just isn’t the box that is on every website.”

Regardless of the strategy, online advertising is growing at an unprecedented rate.

According to IAB’s Internet Advertising Revenue Report, online advertising reached US$88 billion last year, a 21 percent increase from 2016 and a new high for the industry overall.

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Online Advertising paywalls