Internet monetisation – The slow dawn.

Reply to this post

The realisation that free internet is a myth is slowly dawning.

• Wired is the latest publication to insist that users either turn-off ad blocking software or pay a subscription to access its website.
• Wired will charge $3.99 per month to users who block its ads which is very similar to the move taken by Axel Springer in October 2015.
• Ad blocking occurs in about 1 out of 5 of Wired’s visitors, of which the vast majority are from desktops and not mobile.
• Furthermore, research from Media Radar suggests that only 4% of large online publishers have moved to address ad. blocking as many are more worried about losing users rather than a portion of their revenues.
• I have long believed that there has never been any such thing as free internet as users either pay with cash or with personal data / advertising.
• The problem is that virtually all users who are paying with personal data do not realise that they are actually paying for the services that they consume.
• Consequently, when they are then expected to pay cash for the same service it is seen as a huge price increase rather than paying for the service in a different way.
• Because paying with personal data has been almost invisible to many users for many years, it has perpetuated the myth that the internet is free.
• There are many legitimate and well respected businesses that depend on advertising to make a living, and the threat of having it cut off could put them out of business.
• RFM’s ecosystem monetisation model sees three methods of monetisation for any digital ecosystem:
  • First: Own the hardware and keep the ecosystem or the service exclusive to that hardware and charge a premium for it.
  • This is what Apple does so effectively and where the Android makers are really struggling.
  • Second: Make the ecosystem or service available on as many devices as possible.
  • The experience is “free” but a return is earned by using users’ personal data to generate advertising or relevant marketing.
  • This is Google, Facebook, Twitter and so on.
  • Third: Charge the user a per month fee to get access to the service and keep it free of annoying advertising.
  • This is just beginning to emerge for ecosystems but individual services like Netflix, Spotify, Amazon Prime and Xbox Live are already well established.
• The good news is that the combination of Apple’s move to allow ad blockers and the resulting publicity is resulting in increasing awareness of this issue.
• All these companies are really saying is that users that don’t like method number 2 can choose to pay via method 3 instead.
• This is why I remain comfortable that companies that use advertising will continue to earn their revenues one way or another.
• In fact, I suspect that users faced with the choice of paying a few dollars a month for something that they thought that they previously got for free, will opt to turn off their ad blockers and the storm will be over.
• I continue to see no threat to the revenues of Google, Facebook, Twitter and so on but continue to prefer Facebook over Google and Google over Twitter.