Paid content: the end of free websites

23 October 2009

Cost cutting and creativity do not have to be mutually exclusive: you can reduce costs creatively whilst increasing efficiency. The first rule is to go where the money is – and the money has moved from traditional media: advertising pages are dropping by up to 40% year on year.

This isn’t just because of the recession – it’s a future trend. That is clear when you find out the money is going to the Internet.

In the first six months of 2009, Internet advertising spend was £1.7 billion in the UK and rising. On TV it was £1.6 billion and dropping. Most of the Internet spend was on search engine ads and classified ads account for 22% of the total.

What do we learn from the above figures? First, it’s that companies are advertising on the Internet because people are spending their money there. And the media pundits simply haven’t worked out these four things:

1. Money is moving from display to classified advertising

2. Money is moving into direct marketing

3. No major publishing MD has worked in classified

4. No major publishing MD has worked in direct marketing

Paid content
That is why the publishing industry is in trouble and why everyone is looking to convert to paid content websites. In the next issue of the Subscriptions Strategy newsletter we explain how some clever publishers are leading the pack.

We give examples of paid content websites and show how the various business models work.

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