Pinterest Stumbleupon Whatsapp
Ads by Google

The traditional print media has seen their influence and readership recede recently. The Guardian, often regarded to be the conscience of Liberal Britain and one of the more quality newspapers in the United Kingdom, has seen its circulation dwindle from 400,000 in 2000 to just over 200,000 in 2012. Things aren’t much better at the other end of the political spectrum, with conservative daily The Telegraph having shed half its readership in the same time period.

The switch from the expensive printing presses of yesteryear to the Internet hasn’t been the saving grace for the traditional news media had hoped for. Journalism is expensive, and banner adverts haven’t been paying the bills. Indeed, only The Daily Mail has been doing well in the digital age, partially as a result of combining salacious (and questionable) stories about B-List celebrities, chest-thumping conservative rhetoric and sensationalist headlines.

Getting traffic isn’t an issue. The Guardian has an Alexa ranking of 164 and is the 17th most visited website in the United Kingdom. The Telegraph likewise has an Alexa ranking of 237 and is the 23rd most visited website in the UK.

So, what’s causing these newspapers to be in such dire financial states? Part of it is a result of not being able to monetize the huge amount of traffic they receive, leading to The Guardian having to diversify – they now run open days, an online dating site, and educational seminars.

Another significant part of why newspapers are failing lies in their inability to reduce costs. Journalists are expensive. Large offices in London and New York are expensive. In comparison, most digital periodicals have journalists working from co-working spaces or their homes.

In recent years, another threat to the digital publishing business model has came from Ad Blockers, making it easy for netizens to consume as much digital content as they want without the site owners ever seeing a penny.

Ads by Google

Ad Blockers

AdBlockPlus is one of the more popular ad-blockers AdBlock, NoScript & Ghostery - The Trifecta Of Evil AdBlock, NoScript & Ghostery - The Trifecta Of Evil Over the past few months, I've been contacted by a good number of readers who have had problems downloading our guides, or why they can't see the login buttons or comments not loading; and in... Read More . Supporting IE, Chrome, Firefox and Safari, it has been downloaded by over 50 million people, all eager to avoid the adverts used by most websites to monetize content.

They work by intercepting network traffic and comparing the origins against a blacklist of known websites serving adverts. Adverts are blocked, never to be seen by the user, with the rest of the content being rendered as normal.

banner-chrome-adblock

The rise of these Ad Blockers Please Whitelist MakeUseOf In Adblock: A Plea From a Former Adblock Filter Developer Please Whitelist MakeUseOf In Adblock: A Plea From a Former Adblock Filter Developer It’s no secret that we’re not huge fans of Adblock here at MakeUseOf. But we know that some of you won’t let go of Adblock until it’s pried out of your cold, dead hands. If... Read More has caused a major crisis for websites who depend on advertising for their survival. The Times, The Daily Telegraph, The Sun, and the New York Times have responded by savagely curtailing free access to their content and erecting paywalls. This has reduced the number of readers significantly. At the same time, it has boosted the coffers of these organizations by translating readers into cold, hard cash. Something which the previous advert-based model failed to do.

But is there another way? For smaller publications who lack the reader numbers to institute these drastic measures, they’ve had to work out how to survive in a post-banner-advert world. Here’s how three popular websites have managed it.

Penny Arcade

People don’t like advertising almost as a general rule; Advertising is simply The Way It Is. People who make content learn to like it, because they want to make content, and they also want to eat food and sleep under a roof, and the opportunity to do both at the same time seems like a pretty good idea.

Thus began the opening paragraph to a brutally-honest Kickstarter project introduction, and one of the most fascinating experiments in running a site without depending on banner adverts.

banners-penny-kickstarter

Penny Arcade survived the Dot Com bust. They came out on top when notoriously litigious video games critic Jack Thompson took aim at Penny Arcade for selling an ‘I Hate Jack Thompson’ shirt and allegedly harassing him. They founded the Childs Play charity, which has raised almost 25 million dollars to provide sick children in hospital with toys and video games. They run PAX. They even have their own video game; Penny Arcade Adventures: On the Rain-Slick Precipice of Darkness.

And yet, the rise of the Ad Blocker presented a very serious problem for Penny Arcade. In a since deleted blog post, staff writer Ben Kuchera stated frankly how bad things were. Really bad.

‘… it takes me 1,000 viewers to get $5. Except that number is misleading, because blocking ads from your favorite sites is a very easy thing. Trivial. And a whole lot of people are doing it. …

So now it turns out I need around 1,500 readers to get that $5 for my hypothetical site. Say I want to pay myself $500 for the month. It’s not a ton of money. I need 150,000 page views. That jumped right up there, didn’t it? Now look at sites that employ a number of highly skilled, professional writers that are full time and making a livable wage. You’re suddenly looking at millions and millions of page views required to keep everything afloat, much less expand. Tens of millions of page views. Hundreds of thousands, if not millions, of unique readers.’

It’s not just the economics of running a website which were being fundamentally disrupted by AdBlock. It was also the quality of content.

‘But let’s get back to the general ecosystem out there: How do sites justify running longer, in-depth stories that won’t bring in the huge page views? I have bad news. They write shit. Popular shit.

I stopped getting mad at the “Top Ten Japanese Panties I Jerked Off To Last Night” stories on certain sites when I realized that the hundreds of thousands of page views those articles received helped pay for a writer to spend a week gathering sources and do original reporting for a feature.’

This article caused a major fire-storm in the gaming community. Reactions varied from fierce disagreement, to muted nods of concurrence. Regardless, the consensus was that ad blockers are bad for consumers, and bad for content creators.

How did Penny Arcade respond to the dwindling return from adverts? They did the unthinkable. They ditched the banner adverts which had kept them afloat all these years and placed the fate of the site in the hands of their readers.

Did it work?

Their Kickstarter campaign had a relatively modest goal. If the readers pledged $250,000 of their own money, Penny Arcade would scale back the adverts used on the website for a year. The more the readers would pledge, the more they would get in return. $450,000 would pay for the popular Strip Search Web TV series to run for a fourth season. $525,000 would excise all adverts from the homepage. $950,000 would see Penny Arcade license their content as Creative Commons, in the same vein as XKCD.

Whilst crowd funding Forget Kickstarter: How To Crowdfund From Your Own Website Forget Kickstarter: How To Crowdfund From Your Own Website Crowdfunding has taken off in a big way in the past few years. But you don't need to use a service like Kickstarter if you're already running your own popular website. Read More has proven itself to be a valuable vehicle for funding products whilst circumventing banks and venture capitalists, it has never really been used to fund the operations of a side the size of Penny Arcade. This was a truly risky venture.

And yet, they pulled it off. They broke through their $250,000 goal with ease. Just before the cut-off date, they pulled in $528,144. Adverts were officially banished from their homepage.

The Dish

Like most people, I found the merger of the Daily Beast and Newsweek to be nothing short of perplexing.

The Daily Beast started life as a spiritual ancestor to Upworthy, aggregating content found on other sites as part of its ‘Cheat Sheet’, and later found itself providing liberal commentary and investigative reporting from some of the best journalists in the US.

Meanwhile, Newsweek was launched in 1933, during a time of global turmoil as the world was still reeling from the effects of the Great Depression and the rise of Adolf Hitler in Germany. In its long life, it has found itself scooping major stories, including detailed allegations of severe mistreatment of suspects in the controversial Guantanamo Bay prison, and were among the first to uncover sexual misconduct between Bill Clinton and Monica Lewinsky, although were beaten to the chase by The Drudge Report.

After three years, Newsweek and The Daily Beast divorced, resulting in Newsweek returning to print and the future of its journalistic staff looking incredibly uncertain.

Andrew Sullivan was one of those journalists. This British based journalist was a veteran of the news industry, having previously worked for Time Magazine and The Atlantic, and around the period when the Newsweek Daily Beast company was being dissolved, he launched The Dish.

Blisteringly angry and acerbic at times, reverent and thoughtful the other time, The Dish offerers the type of cerebral, deep analysis and comment that is so sorely lacking online.

When you’re Andrew Sullivan, getting people to open their wallets to support your site isn’t difficult. And sure enough, people did open their wallets. In huge numbers.

banners-dish

34,000 people each pledged to support the site in its infancy, resulting in $875,000 of revenue in its first year. Those are some healthy numbers, and allowed The Dish to employ a team of editors, interns and journalists.

It also allowed The Dish to embrace a revenue model which wasn’t contingent upon advertising.

For a site dealing with content that is highly politicized, this is a huge advantage. Advertisers have shown themselves to willingly vote with their money and feet, when it comes to content they find objectionable.

Conservative talk radio host Rush Limbaugh lost dozens of advertisers in the wake of his comments about reproductive rights activist Sandra Fluke, and after Glenn Beck accused US president Barack Obama of being prejudiced against white people, almost 102 advertisers refused to allow their commercials associated with his program. This resulted in The Glenn Beck Show running for three days in the UK without any advertisements.

For The Dish, their unusual revenue model is just another tool to ensure editorial independence, and the integrity of their content.

NSFWCorp

The brief existence of NSFWCorp was a brilliant one. Not only did they show that journalism could exist without the polished offices and shaky ethics of the mainstream press, they also showed that fiercely independent journalism could thrive outside of the traditional advertising model.

The team behind NSFWCorp could have been plucked directly from a Hunter S Thompson novel.

They were lead by Paul Carr; a British transplant based in seedy Las Vegas. The journalistic credibility of Carr is undeniable. His Twitter feuds with Snowden journalist Glenn Greenwald, eBay founder Pierre Omidyar, and Gawker journalists are legendary. He’s written for The Guardian, The Telegraph and TechCrunch, in addition to writing Bringing Nothing To The Party and The Upgrade: A Cautionary Tale of Life Without Reservations, which details his exploits in the world of publishing and journalism, as well as his struggle with alcoholism.

Joining him was Mark Ames, Yasha Levine and Mark Dolan who each previously wrote for the notorious (and short lived) English-language Russian biweekly, the eXile.

banner-nsfwcorp-exile

The eXile stepped on quite a few toes in its time. Articles written by the Russian dissident Eduard Limonov were a staple of their pages and When they ran a Worst Journalist In Russia contest, they awarded the winner — New York Times journalist Michael Wines – with a pie to the face. The filling was made with horse semen; an act which shocked and reviled the expatriate journalistic community in Moscow.

They also did some serious, hard-hitting journalism. They uncovered corruption and brought down institutions, and shook the Russian political establishment to its core.

It didn’t take long for the eXile to catch the attention of the authorities, resulting in the newspaper being abruptly shut down and the return of the mostly American staff to the USA.

Russia’s loss was Paul Carr’s gain, as three of the best writers for the eXile soon found themselves in their employ. They were joined by former Anthony Wiener intern Olivia Nuzzi and a cast of high-profile contributing authors including UK Labor MP Tom Watson who reached notoriety in the Leveson Trial by comparing James Murdoch to a Sicilian mafioso, and comic artist Brian McFadden whose work has been seen in the New York Times.

They were ready for anything. In a few short, tumultuous months in 2012 and 2013, NSFWCorp changed everything.

They adopted a brave pricing model. Readers could pay $3 for website access, or for $7 they could get website access and a printed copy of the NSFWCorp magazine delivered to their door, anywhere in the world. Readers could also become resident of something called ‘Conflict Tower’, where for $200 they were guaranteed access to NSFWCorp print and digital publication for the foreseeable future.

Interestingly, NSFWCorp also used the quality of their articles and their ever growing readership as part of their marketing strategy.

Each month, subscribers could share a limited number of articles they liked via a personalized link. This link would be active for 24 hours and could be passed on to an unlimited number of people. If you liked the content and wanted more (as was often the case), you could subscribe. Genius.

It’s not just the pricing model which was brilliant. The magazine and website was reminiscent of the incredibly brave journalism that was characteristic of the eXile’s work in Russia.

The seventh print edition was dedicated to the mysterious and massively powerful Koch brothers, with them ghoulishly depicted on the front page in cartoon form; grinning, with flames and black smoke wisping in the background.

banners-nsfwcorp-paper

It wasn’t just the cover that was provocative. Mark Ames beautifully wove a 21 page exposé on the formative years of Charles Koch, whilst John Dolan obituarized (one might say unkindly) the recently departed Tom Clancy and explored the military history of Mexico. It was incredible stuff.

And yet it was a perpetual fight to keep NSFWCorp going. The foreword to the September magazine was titled simply ‘This issue almost didn’t happen”.

We tried everything; cutting non-essential costs, moving to cheaper offices, another 24 hour fundraising radio show… But what we needed was another investor. Thanks to a recent change in securities law which allowed us to publicly advertise our search for funds, we were able to find not one, but six new backers. We reached our investment target just hours before this issue’s copy deadline.

On the 25th of November, Silicon Valley tech blog Pando Daily announced that they had acquired NSFWCorp, absorbing them into the investigative reporting arm of the site.

Did the decision to not run adverts result in NSFWCorp being acquired by Pando Daily? You decide. Either way, in its short existence, NSFWCorp showed us all what could happen when readers and and a magazine share a vision of acerbic, honest journalism, and are prepared to put their money where their mouth is.

Conclusion

AdBlock is killing the free Internet, and I don’t blame the people who are running AdBlock. No, not one bit.

I blame every single ‘Click here to win an iPad’ popup. I blame every single banner which track’s your browsing activity shows you advert accordingly. I blame the advertising industry.

The lack of quality control and moderation (especially in the mid-00’s) was astounding, and resulted in people associating web advertising with malware, fake competitions and fraudulent products. It’s never quite shaken this image.

And yet it’s not the advertising companies who are suffering. It’s the creators. The writers. The bloggers. The games developers. The artists.

If we want to get quality content for free, we’re going to have to work out a model which ensures that content creators are adequately compensated for your work. NSFWCorp and Penny Arcade have made brave steps towards a model that can exist outside of the realm of adverts, but there’s still much work to be done. I’m encouraged by the likes of Flattr and GitTip, but I understand that these can never hope to fill the hole of banner advertisements.

But what do you think? What models should sites be exploring? Let me know in the comments below.

Image Credit: Glass advert from 1899 (Shaun Dunphy)

  1. Frans
    February 22, 2014 at 10:07 pm

    I think it's interesting to note that AdBlockPlus does allow what it considers to be good ads.

    • Matthew H
      February 28, 2014 at 12:45 am

      Indeed, it does. How it defines a 'good advert' is a curious art, however.

  2. Tim B
    February 21, 2014 at 5:52 am

    Very interesting stuff and a great read!

    • Matthew H
      February 28, 2014 at 12:45 am

      Much appreciated. Cheers man!

  3. Victor O
    February 20, 2014 at 8:28 pm

    This was a great read! It's interesting to see your views on ads and advertising in general. You brought up some really good points about advertisments and how THEY are the problem, no ad blockers.

    • Matthew H
      February 28, 2014 at 12:46 am

      Well, it depends. We can't have free, online content without adverts. But we can't have adverts which are offensive and deceptive in nature.

      It's a difficult balance.

  4. Patrick
    February 20, 2014 at 1:16 pm

    This is a great article.
    I'm very anti-ad and it was nice to read something outside the "Adblock is killing us, and you're an awful leech for using it" mantra.
    Thank You

    • Matthew H
      February 28, 2014 at 12:46 am

      Much appreciated. Thank you for the kind words.

  5. Scott Hedrick
    February 20, 2014 at 1:02 pm

    I've occasionally used The Pirate Bay. They have a porn section, which is fine, but I am not interested in porn, so I don't go there. I finally started using an ad blocker because of the openly pornographic animated banner ads that began appearing in the parts of the site I do use. My kids will often come into my office unannounced, and they did so a few times just as such an ad appeared. Some sites are so inundated with ads that it's a challenge to find the content. So far, the only ad blocker I am using is specific to TPB. However, when I visit sites that have so many ads that I sometimes can't even find the content, that autoplay video or that have popups (or, worse, popunders) if I click anywhere, or "surveys" that float and obscure the content until I click on them to go away, I am increasingly tempted to use a more general ad blocker. Maybe the reason some of these places aren't getting the page views they need is because they have too many ads and not enough content. Don't make me hunt for what I came for, or I'll go somewhere else. I understand the need for ads, and once in a while I respond to them. The Google trackers get annoying- almost two years after I did a search for grad schools, I'm still getting ads for them

  6. Rob H
    February 20, 2014 at 12:26 pm

    Interesting article, another example of successful monetisation is thisistrue.com
    Free weekly newsletter includes ads. Paid subscription is delivered sooner, has more content and no ads. A while back I made an estimate of income generated based on his number of paid subscribers and cost of including an ad. He's doing OK! (Oh yes, he's got some merchandise too).

    I've tried a few options to monetise a website with almost zero success (well the best is about US$100 a year from adwords).
    I tried a "rely on honesty" approach, on the basis that if you provide value and ask for a donation people will respect that and play fair. Here's one result of that:
    " Hi, i emailed my web designer in the US with this diagnosis of yours & hey presto!! we are all fixed i will be making a donation for you as no-one else could solve the problem!
    please can you send me your paypal email so i can donate ( this wont be until next week though as i have every little cash until then in my paypal account) but i will 100% do this, i cant thank you enough for your help also if you want i would like to post something on either facebook or twitter recomending your excellent service & basiclly say how good you are as i had 4 other people try with no success,
    many thanks again, kind regards, Andy"
    6 months on I'm still waiting for his donation. The common mentality is that "stuff on the internet is free" and even asking for a few dollars reward for hours of work or exercising your expertise is a waste of time.
    And I do "put my money where my mouth is" and do make donations myself to guys who produce good "donation please" internet products and services - but then I know how hard it is...

    The best solution I can think of is some kind of microdonation mechanism whereby some website content is only available to people registered with the payment scheme and each item of content has a price tag, maybe as small as a fraction of a penny that's automatically deducted from your account. More costly content would flag up a message like "1$ to proceed". This is not very different from how some mobile phone app payments work and was the model used (30+ years ago) by the UK Prestel system (a kind of precursor of Internet).

  7. Joel L
    February 19, 2014 at 9:28 pm

    It's interesting how this article pretty much mirrors the gaming industry in terms of revenue generation: 1) crowdfunding, 2) microtransactions, and 3) subscriptions.

    I think microtransactions would be the best way to fund a site's operations IF it could be implemented properly. I mean, web content is just so easy to reproduce (pirate). Paywall sites (e.g., scientific journals) exist but I know lots of instances where people on Reddit just copy/pasted the contents for others to read. I guess that also mirrors the gaming industry...

    It's tough. People want stuff for free and they'll do their darndest to get it, even if the effort far exceeds the price tag.

    Nice article, Matt! Gave me a lot to think about.

    • Matthew H
      February 28, 2014 at 10:55 pm

      Much appreciated. Cheers Joel!

      Have you seen Flattr? It's an interesting concept of microdonations that works well with respect to web-publishing.

Leave a Reply

Your email address will not be published. Required fields are marked *