Anyone who reads this column knows most online advertising models of yesteryear failed to live up to their hype. Furthermore, most sites’ expectations that online advertising dollars would keep them alive were frustrated as many quietly went belly up.
For Salon.com the reality of providing free content in exchange for running banner ads on its site ended up as a battle of life and death. The site chose life.
Salon faced a problem. For years it had offered news and information content to a wide range of users. It went public and had hundreds of thousands of visitors to its site daily. In many ways, this was a dream business. The only thing missing was a viable revenue model.
For Patrick Hurley, Salon’s senior VP of business operations, the reality became clear as ads sales fell off. As Hurley put it, “It started to look like the definition of insanity… doing the same thing over and over and expecting different results.” The reality for Salon was ad sales were drying up across the market. It was time to either make a change to the business model or go home.
On April 25, 2001, Salon launched its Salon Premium service. Some content previously accessible to all site visitors would now be available only to subscribers.
A hue and cry issued forth. Some patrons penned letters criticizing the action as “going against the very principle of a free press!” (Perhaps they were unclear as to what our Founding Fathers had in mind.) And plenty of industry critics said the subscriber number would never be large enough to make alienating the entire visitor base worthwhile.
For some visitors, the value of a subscription wasn’t in line with the amount of time they spent at the site. They opted out, claiming they could find the same information for free at other sites. Others cried foul that what they had grown to rely on now came with a price tag, but they stuck around anyway.
For Salon, it was a gamble that paid off big time. In fact, the number of visitors who subscribed to the news service in the first day totally turned the company around. It seemed then, as it does now, Salon was providing a service that was worth supporting.
Fast-forward two years. Salon now boasts a subscriber base of just under 70,000 members. It has created an advertising model that appeals to both visitors and advertisers. This hasn’t happened without a lot of work over the last two years.
At the end of 2002, Salon unveiled its Day Pass program. This allows any visitor who wants access to the entire site to first watch an online ad. Doing so gives a viewer 18 hours of access following the ad view. The viewer can go through the same process any day he wants access.
According to Hurley, the response from visitors has been positive and hasn’t generated the vitriol accompanying many current online ad campaigns. As with traditional television advertising, most viewers seem to understand the model of getting something of value in exchange for a small portion of their time and attention.
Advertisers also have shown support for the approach by coming back for more. According to Hurley, early results from some of the campaigns have included double-digit CTRs and a 2 to 3 percent response rate. Not bad for a campaign that collected email addresses.
Hurley says Salon owes much of its recent success in the new advertising model to Dana Jones of Ultramercial, who helped the company develop an ad format that met the needs of advertisers without “assaulting” users.
According to Jones, the “station break” advertising approach just makes sense. Unlike pop-up ad purveyors, Jones said Ultramercial is continuously getting “love letters” from viewers who appreciate the respectful way the advertising is designed. Couple that with the results advertisers are getting, and you have the start of a success story.
Jones said the composite average time the ads are being viewed (with no ad designed to last more than 30 seconds) is 52 seconds. This model, which provides viewers with engaging messages, would seem to work far better than those that use forced messages or can be easily circumvented.
Ultramercial, which 10 months ago had Salon as its only client, has recently signed IGN Entertainment, Emode.com, TheStreet.com, and iVillage. All are now using Ultramercials on their sites.
Time will tell if this advertising approach is what the online advertising market needs. For Salon and Ultramercial it has already made a difference in how they operate. As pop-ups and other invasive ad types are phased out, the new gatekeeper ads may just be the next successful format in online advertising.
Programmatic is taking over the digital advertising world, and at an even faster rate than expected, according to eMarketer, which raised its forecast for programmatic ad spending in the U.S. on the back of growth in mobile and video programmatic buys.
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