Tag Archives: online revenue

The trends of social networking advertising

ImageCompanies are beginning to see the importance of branding and advertising online. Social networking sites are their top priority, but just how much are advertisers willing to spend to promote themselves on sites like Facebook and Twitter?

According to an infographic on AllTwitter, global social network advertising revenues are expected to raise from 2012’s seven million to 14 million by 2014. Sixty-four percent of advertisers said they plan to increase their social media advertising budget by 2013. 

Facebook reigns king when it comes to raking in the most advertisers, accounting for 57 percent of all social media advertising budgets. Twitter and YouTube each hold 13 percent each. I think Twitter’s share will raise in the next couple of years because it has grown to an incredible number of 200 million users worldwide. All businesses and companies seem to have a Twitter account these days, advertisers would be foolish not to brand themselves on there.

Interestingly, 46 percent of advertisers said that their main goal for social media advertising is raising brand awareness, and not so much about direct traffic and product sales. This is likely due to the fact that currently a only a small portion of an advertisers budget is dedicated to social networking sites, so they can afford to not push too much when it comes to actual product sales. Seventy percent of advertisers devote 1-10 percent of their online advertising budget to social network sites.

It is going to be very interesting in the years to come watching advertisers compete for viewer attention online. With social networking sites becoming more and more appealing to advertisers, I wonder just how much this will potentially impact the prices and competitiveness of advertisements on social networking sites.

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The future of paywalls

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In my last post I explored different ideas as to implementing a paywall on a local or hyperlocal news site. Today I want to further my analysis on paywalls by talking about what the future may hold for larger newspapers that want to use paywalls in the years to come.

In a blog post by Felix Salmon on Reuters, he examines the current business practices of sites like The New York Times and Financial Times, and how their use of the “metered” paywall model on both sites. According to consulting agency Mather Electronics and paywall provider MediaPass, metered paywall’s are not exactly the best option for all newspaper sites.

When you think of a traditional paywall you likely think of the NYT paywall model of allowing you to view a certain amount of articles before you are locked out of viewing anymore. In the case of the NYT, after 20 article views in a month you are required to become a paying subscriber in order to view more. The problem with this lies in the fact that what if only five of the 20 articles you read were actually entertaining, and the last one you read did not convince you that you needed a subscription to the site.

A different approach would be to lift the article limit, instead using a model that will only lock out specific articles that would be highly appealing to many people, making them want to pay to read it. Ideally this works best for sports news, as Salmon points out in his article, because people are more willing to pay to read appealing sports news instead of entertainment-style news.

Mathers and MediaPass also note that news sites need to treat each reader different. Some people will never pay a cent of money to read online news, those same people should not be barred from reading content behind a paywall because that is also stopping them from seeing ads on the site. People who analytically are shown to be potential paying subscribers should be shown different subscription options to choose from.

When it comes to said subscription models an emphasis should be placed on the lower revenue options. Why? lower revenue is typically made with longer, usually annual, subscription rates. Though the newspapers will make less money monthly, they are essentially locking readers into paying for the long-term, rather than risking losing them after a month or two.

I for one think paywalls are the future for all online newspapers. Ads will still be substantial in online revenue, but if done correctly I think paywalls will be the end-all-be-all for online news. I am one to speak, since I am currently a proud paying customer of two paywall news sites The New York Times and Giant Bomb.

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