Publishers with unique, must-read material and a well-heeled audience can charge readers. They sell subscriptions and build paywalls showing hints of tempting stories that non-customers canít read.
Everyone else has to rely on advertising revenue or deliberately run online publishing at a loss.
Thatís where the problems start: online advertising doesnít work well for most publishers.
No money in online ads
The money earned per ad impression is tiny. So tiny that, in the normal run, only publishers with huge reader numbers†or those offering reliable, lucrative specialist audiences are profitable.
Online advertising is often ineffective. Readers are either blind to online ads or they make a conscious choose to ignore them. It doesnít matter which, the net effect is the same.
To get around reader blindness publishers resort to ever shriller, in-your-face techniques. Ads with loud blaring sound tracks, ideas borrowed from commercial radio. TV-style ads.
The evils of pop-up advertising
And then there are the hated pop-up ads. The worst are borderline malware where you canít read a story until youíve clicked the rubbish away. Weíve all seen those more disreputable ads that look like system messages telling us there is a security problem on our computer.
Publishers argue they have no choice about using pop-ups.
Remember, their customers are not their readers but their advertisers. If thatís what the market demands, then given the choice between annoying or abusing readers or bankruptcy you know which way they are going to jump.
Modern browsers often block pop-ups. Which leads publishers and advertisers to other annoying practices.
Another kind of big data
A media company web page might download as much as 10 MB of data to deliver, perhaps, 500 kB of editorial content.
Thatís not a problem if youíre reading the page using an unmetered Internet account. If youíre paying for mobile data, then the data cost of getting the page will be far higher than the revenue the publisher earns from serving you the advertising.
Thatís economic madness.
A lot of these large downloads are not advertising content as such, but code scripts. Again, itís often not far removed from malware.
Online advertising at a tipping point
Pop-ups and other nasty obtrusive forms of advertising have brought us to a tipping point.
Five years ago in Ad-blocking hurts I argued against ad-blocking on the grounds that it was taking money out of the pockets of publishers and writers like myself.
Thatís still true.
You are the product
On the other hand some online advertising is abusive. Advertisers track your activity, they can know far more about you than you may be aware. They swap or sell data about you, they use this to feed analytics projects. They snoop and pry. They are often worse than the most abusive government agencies.
They do all this without your consent. Itís just about cold, hard data using inhuman algorithms. Moreover itís about money. You canít negotiate, explain or mitigate any inadvertent damage to your reputation.
Itís tough being a publisher in 2015. Tough but not impossible.
Sadly we donít have the take-the-band-on-the-road option that musicians have to bypass unhelpful online economics.
Yet there are proven, ethical ways of making online publications pay without resorting to evil practices.
If I was to return to commercial publishing – thatís still an option – Iíd bet on running clearly marked advertiser sponsored comment in my news feed. The practice is sometimes called native advertising.
Native advertising is doubly profitable if the publisher originates the copy as well as distributes it. You charge for the creative and the access to an audience.
Iíd also explore paywall publishing and micro-payment technologies. They are now ways to get small per-story payments. Although only a tiny fraction of visitors will pay even a pittance because many just expect material to be free and would never pay.
Other online publishing business models
Meanwhile thereís my experience with my own free site. For a while I toyed with advertising. It annoyed readers and paid pennies making just NZ$40 to $50 a month ó barely enough to pay the overheads of running a website let alone making an income.
Perhaps the most important lesson was my reader numbers rocketed after I killed the ads.
In effect my site is a shop window. It sells my main business which is writing about business and technology. I get one or two enquiries a month from potential clients who see my work here. That means a steady flow of new commissions. I also get paid speaking engagements this way.
Itís taken years but this has gathered momentum to the point where Iím now often too busy to write fresh content. You can tell when Iím busy with paying work, I post less here.
Ad-blocking; coming if youíre ready or not
Where does this leave ad-blocking? Like it or not. Itís now inevitable and unavoidable.
While ethical publishers will pay the price of the abusive behaviour of unethical publishers, widespread ad-blocking will give the industry a chance to reboot. To find a new business model.
It may mean still fewer opportunities for paid journalism, but it could lead to better paid work writing native advertising – something that needs journalism skills to do well.