The Broken Business Model

I’ve written before about ad blocking and all of the business questions it raises.  Those questions are most directly asked about the business model in media, but they might also involve your business as well.  After all, when the basis of your revenue model involves getting consumers to do something which they really don’t want to do, maybe it’s time for some more thinking.

The media business has been built on a business model that involves a trade: the consumer gets content in return for giving up their attention.  In the digital world, they provide data along with that attention.  The flaw right out of the box with this is that publishers tell users that their content is free, or at least they do nothing to discourage that belief.  When a consumer adds ad blocking software to their browser, they do so to create a better browsing experience.  They probably don’t realize that they’re breaking the business model; they just want pages to load faster or not to be interrupted by pop-ups, screen takeovers, or any of the other ad formats that scream at them instead of talking with them.  Some publishers have tried either a subscription or “freemium” model which eliminates the ads, but consumers haven’t responded.  Instead, many sites are seeing up to 60% of the ads they serve being blocked.  This, clearly, is broken.

What to do?  I’d be lying if I said I knew.  I’d start by using something on my site that sniffs for ad blocking and maybe redirect anyone who uses it to a page where we explain why the ads are necessary.  At least it makes the value exchange explicit.  Will consumers care?  Will they make a small donation?  Will they buy a subscription?  Some will, and that’s a step in the right direction.  I don’t think the nuclear option of refusing to serve content to anyone using an ad blocker is smart.

Maybe hard code the ads (build them into the page instead of serving them via an external call).  They can’t block something that’s part of the page and appears to be content to a blocker.  Way more work on the administrative end, but effective.  I don’t know what to do about page load times, another key annoyance caused by ads.  When an ad-free page loads in under a second and the external ad and tracking calls add up to 10 seconds to the load time, there is a problem.

Any business model has to provide something of value to the customer.  In this case, the site’s customers are advertisers and the products are consumers.  Unfortunately, the consumers are not cooperating and the product is in trouble.  Any thoughts on how we fix this?

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Filed under digital media, Reality checks

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