Subscription Billing Blog

Stopping ad blockers hurts business, but subscription billing saves it

Online news publications continue to struggle against the widespread use of ad blocking software. According to MyCustomer, ad blockers potentially cost businesses $22 billion in revenue each year. Yet the software isn't going away. eMarketer expects over a quarter of U.K. Internet users – 27 percent, specifically – will use ad blockers by 2017, and these consumers aren't segmented by ages. Individuals both young and old suffer from ad fatigue, and blockers are easy enough for even the least savvy user to install.

Some businesses took the rise of ad blockers as a challenge to provide better content, while others withheld access unless consumers white list their sites – that is, allow the website to bypass their ad blocker. According to The Stack, websites in the latter camp weren't faring well, indicating businesses need another method of revenue. In today's environment, a subscription billing model solves the issue of stable funding and ad blockers.

To block or not to block?
The Stack consulted Alexa, an Internet monitoring service, to observe how websites that restrict access from customers using ad blockers have performed. Some of the sites it observed – Wired and Forbes among them – began prohibiting ad block users in response to a steadily declining audience. However, these policy changes did nothing to decrease bounce rates or increase the time users spent on the site. In fact, from summer 2015 until April 2016, Wired's bounce rate rose 3 points to 70 percent. Meanwhile, its page views fell 5 percent. The website first began anti-ad block measures in February 2016, indicating the process did nothing to improve its stats.

Many online users suffer from advertising fatigue.Many online users suffer from advertising fatigue.

Forbes' initiative, enacted in December 2015, coincided with an extreme decline in readers that has yet to sufficiently improve. The site experienced a brief uptake in users during January 2016, but overall hasn't seen the high rates it received the previous fall.

Bild, a popular German website, actually enjoyed a steady increase in engagement before it chose to prevent ad block users from accessing its content. After establishing the new measures, Bild's readership sharply and consistently declined before stabilizing just before April 2016. It's page views rose from 37 percent to nearly 39 percent, while the average visitor time dropped 6 percent to slightly over seven minutes.

Still, such information doesn't mean much without any sort of comparison. Alexa also studied The Washington Post, which tested excluding ad block users in September 2015. The test appears to be over, according to The Stack, and The Washington Post has gone back to its subscription-based structure. The publication now offers 10 free articles each month, then requires users sign up for a subscription. Despite refusing to restrict access to ad block users, The Washington Post has seen a steady increase in engagement over the past several months.

Convincing users to pay for content
The current era of online business forces customers to make choices regarding what they consume, a separate MyCustomer article noted. Most content on the Internet only seems free from the user's end – it's either paid for through advertising, a temporary access fee or a subscription business model.

The best way to encourage subscriptions is to create terms your customers agree with. This includes providing content audiences can't ignore. Despite what naysayers believe, customers are willing to pay for what they want, especially if the price is right. This is what allowed Netflix, which runs completely ad free, to prevail for so many years. According to Cinema Blend, Netflix users watch approximately twice as much content per week as Hulu Plus users. The company claims more than 81 million subscribers in over 190 countries.

Ultimately, the current trend of blocking software points to an environment where online ads are no longer the revenue powerhouse they once were. Instead, adopting a recurring billing structure is key to providing the content consumers want without intrusive advertising.

About Author

Kevin Cancilla

Kevin Cancilla

Kevin Cancilla is Sr. Director of Marketing at Vindicia. He is responsible for corporate communications, outbound product marketing, demand generation, sales enablement, website and content development, and partner marketing. Kevin is an industry veteran with over 20 years experience in strategic marketing and product management for enterprise software companies such as STEALTHbits Technologies, Tripwire, Epicor, Netcentives, Calico Commerce, Baan, and Adobe Systems. He holds a BSBM degree in Marketing and Business Management from the University of Phoenix.

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