Pay Wall Ad System: The Future of Online Advertising? http://tier10lab.com/2013/07/15/pay-wall-ad-system-future-online-advertising/ By Eric Huebner July 15, 2013

The Internet, with its limitless possibilities and innovation opportunities, has unsurprisingly risen to the top of the business world over the past decade. Gone are the days of waiting in line to purchase a new product or having to make an inconvenient trip to the store. These old shopping standbys have been rendered obsolete by the rise of the web as an economic juggernaut. As business grew on the web, so did its constant companion, advertising.

For much of the Internet’s life, the most common online advertisements were banner ads: symmetric “billboard”-style visual advertisements that typically paired a flashy or evocative image with a short line or two of ad copy.

Recently, however, advertisers have shifted from an emphasis on these banner ads to an almost exclusive emphasis on pre-roll advertisements. By all accounts, this has been a brilliant and enormously profitable choice. A wide range of surveys has conclusively demonstrated that pre-roll online video ads have become more effective than traditional print or TV ads. Consumers that view digital video advertising have a roughly 20% better recall rate than those viewing traditional ads.

However, this type of advertising does have one major pitfall. They can be easily ignored. From popular pop-up blocking clients to a simple “skip this ad” command, Internet users have no shortage of ways to insulate themselves from the digital marketing swarm being directed at them. According to a 2012 Poll Position study, the average American will only devote 15 seconds of their time to a given video and a scant 12% will watch even 30 seconds of a video.

These time figures are especially critical. Barring several high-profile exceptions, the Internet tends to favor short-form content over long-form. This presents the very real possibility that a video ad could be longer than the content that it precedes.

With this in mind, several major publishers such as Maxim, USA Today Sports Media and Guitar World have begun to experiment with the implementation of a new type of online ad based on a pay wall model.

In this model, a viewer is forced to watch an ad in order to unlock viewable content. While the type of content unlocked relies on the discretion of the provider, typical examples include high profile photo galleries or heavily searched news items.

Not only does this model prevent users from skipping over advertisements, but it can also generate large amounts of revenue for host sites and content providers. In this model, brands subsidize and, in essence, sponsor the consumption of this content, a practice that can include large payments to content providers.

This presents a “best of both worlds” scenario. Content providers can continue to do brisk business and marketers don’t need to worry about their advertisements being skipped over by impatient viewers. As the Internet continues to evolve as a dynamic, commercial market, this represents the latest evolution of an advertising market that has grown in sync with the web. In the future, this may be the most viable option for those looking to advertise products online.

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