Tuesday, June 20, 2006

Economist utilizes new online advertising model

Joesph Jaffe would be proud of The Economist. Not only do they have great advertising, they also understand the changing online advertising game.

To access any online articles from The Economist, readers must subscribe for the premium content or watch an ad to view it without paying. The brilliance of this new business model is the pay-to-play aspect. Normally, readers would revolt at the thought of viewing an ad before accessing content. But when faced with the alternative of shelling out money to read the article, watching the ad seems like a wonderful alternative.

Just because a reader chooses to view the ad does not mean that they actually pay attention. However, it seems reasonable that you would pay more attention to an ad you chose to view rather than an ad mixed in somewhere else.

This new model is becoming the standard online. ABC established the same policy for viewing complete episodes of their TV shows online. Viewers can pay to download commercial-free episodes on iTunes, or stream the commercial-filled shows for free. In the last month, ABC sold 6 million downloads on
iTunes, but viewers streamed the advertising-filled commercials more than 11 million times.

The best part this new model is that the content provider wins no matter what option viewers choose. If viewers pay for the content, it's money in the company's pocket. If they choose to view the ads, the company still gets paid and the advertiser gets a platform to deliver their message. So in true Joseph Jaffe fashion, I'll go ahead and declare The Economist and ABC my winners of the week.


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