Pay-per-click is the new online paradigm | Paywalls

One of the major shifts in the consumption of media over the past decade is the transfer of control from publishers and advertisers to the consumer. TV viewers screen commercials using DVR systems; radio listeners customise their programming using internet or satellite radio; and internet users use ad-blocking software or just train their eye to ignore display ads all together. The result is that the old paradigm, where ads are imposed on the audience, is losing its effectiveness.

Instead, a new paradigm is emerging. Since the consumer is no longer passive, advertising models are learning to take into account the interests of all stakeholders: the advertiser, the publisher and the consumer.Search advertising and its adjacent ads model fully incorporate this new thinking. From the advertiser’s point of view, this pay-per-click (PPC) model shifts some of the risk to the publisher, who only gets paid if the user took action and clicked on the advertisement.

In an article published in this newspaper a few weeks ago we proposed a new online monetisation model for newspapers. The idea is that papers will learn how to use their unique advantage online – credibility – by presenting relevant advertisers next to the products, services and activities they review. Some of the reactions voiced ethical concerns. “I can see why the shift you argue for would make sense from a publishing perspective,” said Jill Drew, a former business editor for the Washington Post, “but for me it crosses a line between commerce and journalism that I’m uncomfortable with.”

One possible solution for these concerns is that in this model the newspapers often don’t or shouldn’t work directly with the vendors but rather with aggregators who represent multiple retailers. The New York Times, for instance, linked the 10 best books of 2009 it recommended on its “Holiday Gift Guide” to three possible buying venues: Amazon, Barnes & Noble and local booksellers. Another solution is using automatically generated contextual ads. Google’s Adsense algorithm, for instance, knows how to fit relevant ads to such content and it works as a firewall between the newspaper and the vendors. When consumers click, the ad aggregators share the revenue with the newspaper.

Moreover, newspapers always had to handle commercial pressures that threatened to compromise their integrity. Whether it is a newspaper that publishes a negative story about a bank that is also one of its biggest advertisers, or a television network that exposes a safety issue with a car manufacturer, the ethical threat has always been there.

Other naysayers suggested that such a model will result in consumer sections being all that’s left of journalism. But this won’t make much sense for newspapers, as a big part of their authority is a result of their non-consumer-oriented coverage. If you search on Google for “British government”, no ad appears, yet the search engine chooses to include such data in its index as part of creating its authority. The revenue is generated when searching for “London hotels”. That doesn’t mean that the first search is less important.

Another reaction wondered whether an article criticising a political party will click through to a page where one could contribute to a choice of rival parties. Well … why not? The Huffington Post is running a similar concept these days in its Impact section in what can be called “inter-activism”: sponsored links enable interested readers to take action. In this model, readers can be presented with a range of sponsored actionable articles, implicating different levels of involvement, such as signing a petition or donating money.

The print publishing industry can no longer afford to make only minor adjustments for the new media. The basic rules of the game are changing, calling for collaboration between advertisers, consumers and publishers. Whether the leveraging trust model is a valid solution or not, any solution to newspapers’ financial crisis must consider this new stakeholder paradigm. If the consumer and the advertiser have nothing to gain, the publisher will gain nothing as well.

What do you think? Are sponsored ads a better solution for the newspaper industry than paywalls? Have your say below

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