Revenue Challenges for News Publishers and a Pure Sponsorship Solution

Factors driving these challenges include:

1. Consolidation and loss of independence due to the purchase of news publications by new owners with other business and/or political interests, which has sidelined the historic role of the free press.
2. The laying off of journalists to maintain profits. Running articles written elsewhere without the attention to local government, news, politics, and even sports is often a way to replace reporter-created content. The smaller the market, the more common this is.
3. Fragmented streams of low eCPM ad revenue driven by automated ad buying have compromised a once-thriving dual revenue stream.
4. Subscriptions are important, but90 to 95% of visitors to subscription sites do not subscribeaccording to 2024 data extrapolated from Statista and self-reported data from The New York Times, Wall Street Journal, and the Washington Post.
5. Advertisers are avoiding news environments due to “brand safety” concerns. A recent Prohaska Consulting study “The Rebranding of News” identified that one in three US advertisers have been told at some point to block the news category.
6. Discontent with current subscription marketing efforts is high. A recent Turnstil Twitter/X poll showed that when asked "What would you do when you hit an internet paywall that asks you to subscribe?” 93.4% of respondents said they would rather have an advertiser pay their way in.

Current approaches where the offer to “subscribe”, often with a free week, by providing payment card information, with assurances that “you can cancel at any time” ends up costing consumers due to forgotten cancellation dates. It is a marketing game consumers would rather not play.

Some innovative solutions to address these problems, including not-for-profit news publishing, donation-based marketing, and curated collectives of news publishers assuring brand safety have emerged with some positive results, but not yet at the scale needed.

So what can be done to address these challenges?

I was shown an innovative revenue model, Turnstil, for tapping the 90-95% of visitors to subscription paywall sites who do not subscribe. It employs an interactive ad instead of banner ads, pop-ups or pre-rolls to explicitly have advertisers pay the viewer’s way in. It offers a new way of thinking about the paywall, and ad messaging, in 3 ways:

• Advertisers pay a higher CPM because the ad can’t be blocked or run by bots, and interactive completion is guaranteed. The advertiser facilitates, rather than interrupts the content the consumer wants, enjoying the “hero” role with full audience engagement and attention. The interactive element also allows the viewer to drive their own ad experience, providing valuable aggregated data for advertisers on messaging.
• Consumers get an easy way to view the content they have arrived at the paywall for, willingly exchanging a reasonable amount of attention to an interactive ad in exchange for the advertiser “paying” their way in. Instant gratification via “rewarded advertising” without playing marketing games is a win for the viewer.
• Publishers receive a higher eCPM, and no longer frustrate visitors who have come to their site and are only offered two options: “give us your payment card information or go away”. The 90-95% of visitors who remain non-subscribers offer new revenue and consumer satisfaction at scale.

All this happensinteractively at the paywall, while also increasing the traffic and ad views inside.

The Turnstil model operated successfully as Ultramercial before the 2008 financial crisis with over 700 campaigns, 170 advertisers on 44 sites including premium publishers.

This model strikes me as “True Sponsorship”, an approach I wrote about in a 2006 article in the Journal of Advertising Research entitled “Measuring The Effect of True Sponsorship”. My colleagues and I attempted to quantify the value of sponsorship by analyzing twenty-eight random control trial studies conducted for leading advertisers to measure the persuasion of sponsorship on the internet. We found that average lift in purchase intent/brand consideration was 29 percent, which compares to an average lift of 4 percent across all ARS Persuasion Tests (TV commercials).

The study showed that advertising appears to work by causing improvements directly in brand perception, whereas sponsorship appears to work by causing improvement directly in the perception of the sponsoring company and often indirectly by a halo effect in the brand perception. And even when brand perception is not affected, sponsorship can increase purchase intent, apparently as a result of gratitude toward the sponsor. In the summary of results, I wrote that “we might characterize this as Gratitude or Appreciation scales such as Trust, Liking, and Respect.”

We have a way of disregarding previously introduced methods and even new ideas as being outdated or too difficult to consider if they go outside current models and infrastructure. Yet innovation often comes in the form of successful ideas such as True Sponsorship being applied in new ways to solve new business problems. Re-establishing the value of True Sponsorship through Turnstil (in trial now) and other methods provides a real opportunity for responsible news publishers to increase revenue at the paywall and ultimately reverse the forces challenging the sector today. In my view, the importance of this on a societal level cannot be overstated.

Posted at MediaVillage through the Thought Leadership self-publishing platform.

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The opinions expressed here are the author's views and do not necessarily represent the views of MediaVillage.org/MyersBizNet.