Media Forum: Will Times get ad premium?

campaignlive.co.uk, Friday, 04 June 2010 12:00AM

How valuable will pay-wall audience be to advertisers, Alasdair Reid asks.

As ever, it has been an emotional business. Last week, The Times and The Sunday Times launched their redesigned websites and News International confirmed that it is to erect a pay-wall around its online content - developments that provoked a predictable barrage of catcalls and raspberries from the radical neophile wing of the media industry.

Pay-walls, they insisted, are absolutely contrary to what the internet is "about". As if a protocol allowing computers to talk to each other is about anything other than the thing in itself.

Clearly, they added, the News Corp hierarchy, and in particular the Murdochs pere et fils, Rupert and James, just (poor sad, deluded fools) don't get "it". It, again, being some sort of happy-clappy big idea about the future of mankind.

This seemed to be supported by research from the media law firm Wiggin that found that some 91 per cent of consumers would be unwilling to pay the price of accessing Times content online. Should the remaining 9 per cent of the population choose to cough up, though, its publisher, News International, will be laughing.

The publisher has, of course, faced this sort of scepticism before - and has never been deterred from bringing stuff to the marketplace and seeing if people are willing to pay for it. Much of the media industry wishes it well.

If it fails, there's not much hope for newspapers onor offline - because many are currently haemorrhaging cash. If pay-walls don't work, then the BBC will soon be the UK's only mainstream quality news provider employing full- time, trained writer-journalists. The rest of the market would, in all probability, be a blogosphere comprised of rumour-mongers, mischief-makers, recyclers of public relations flotsam and enthusiasts able to attend plane crashes and press briefings (not that those will be around for long in a post-reporter world) in their spare time.

So, no pressure then. It's a simple proposition: the two titles now have a redesigned web presence that more faithfully replicates the design heritage of their paper-and-ink manifestations; and readers will be invited to pay £1 a day or £2 a week to access them. News International is looking to derive a greater advertising yield from this audience, mirroring an offline world where a committed, attentive, paying audience always commands a premium.

Are media agencies happy about the whole proposition? Rob Horler, the managing director of Carat, concedes that someone had to have the balls to try this sort of thing. He says: "This goes way beyond a simple debate about whether The Times can get people to pay for news because the answer to that is obviously no. The real opportunity is to monetise the comment, analysis, features and interactivity that are a key part of the Times offering and to support this with the vast amount of great content in film, entertainment and sport that News Corp worldwide has exclusive access to."

He's slightly sceptical about whether there's an advertising premium to be had - but Alan Brydon, the head of trading at MPG Media Contacts, says he's rather more open-minded about that. And he's upbeat about whether readers will be prepared to pay.

He explains: "I'd always been of the view that no-one would ever pay to read a newspaper on a computer screen. Then I saw the iPad - and I've turned 180 degrees. I believe it will have as profound an impact as the iPod and the iPhone have had on the way we listen to music or use mobiles. Rupert Murdoch has proved many times over that he is a visionary - and I think he's done it again."

And Claudine Collins, the joint head of investment at MediaCom, is also cautiously optimistic. She says: "We estimate that the audience will drop by more than 80 per cent. They're not going to be able to charge 20 times what everyone else charges. But, broadly, you get the sense that they're confident of delivering here and I would never bet against News International. If they put their mind to it, they tend to succeed - and I think everyone should applaud what they're trying to do."

But Will Smyth, OMD UK's head of digital, tends towards scepticism - though he agrees that you have to commend News International for taking the plunge. He concludes: "In the short to medium term, I suspect that not many existing users will want this - so they will be alienating a huge number of people. I just don't think that people are sufficiently committed to Times journalism to pay for it online."

NO - Rob Horler, managing director, Carat

"They must understand the fundamental dynamics of online advertising. It is unlikely that advertisers will pay a premium for ads on The Times because the ad unit is bigger, looks nicer or, indeed, is being shown to a paying subscriber."

MAYBE - Alan Brydon, head of trading, MPG Media Contacts

"We would accept that there are different values attached to different readers. But if NI gets only 10 per cent of its previous audience, it is not going to succeed in arguing that it is ten times more valuable."

MAYBE - Claudine Collins, joint head of investment, MediaCom

"It would be a more engaged audience - and very targeted. That would be relevant to advertisers. It will be a more valuable audience - but it all depends on the level of premium they try to charge."

NO - Will Smyth, head of digital, OMD UK

"If the vast majority of the audience migrates, advertisers will just follow them - and I'm sceptical about the argument that those who stay are more committed and attentive. News International would have to produce research to prove that."

- Got a view? E-mail us at campaign@haymarket.com.

This article was first published on campaignlive.co.uk

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