Bold Predictions From 24/7 Real Media's Moore: Publishers Should Create 'Toll Gate' For Premium Content

David Moore

Wouldn't it be a tragedy if the Internet was the cause of the demise of excellent content? David Moore, 24/7 Real Media founder and IAB board of directors chairman, posed the question to attendees during his opening remarks at the IAB Annual Leadership Meeting 2010 on Sunday night in Carlsbad, Calif.

The digital premium content model is broken and advertising alone cannot support the cost of premium content, according to Moore, who laid out several predictions that will change online advertising forever.

The answer to charge sounds simple -- but it's not easy to implement, he says. With the mantra that totally free content is a thing of the past, Moore described a pay model that would require all premium publishers to cooperate.

Publishers are afraid to charge people for their content. No one publisher wants to become the first to charge. Moore suggests that the industry needs to collectively establish a toll gate for content -- an EZ Pass entrance that allows people to access preferred content at any site. Publishers would charge 10 cents per session or one penny per page, Moore says, citing a recent Nielsen survey that suggests that 52% of consumers would not object to a business model built on micropayments.

Publishers wouldn't charge consumers until subscriptions reached $10. "One user session at 10 cents equals $100 cost per thousands," Moore says. "Who's getting advertising rates like that today?"

This long-term strategy will enable the strong to survive because premium content needs to find a way to become profitable if everyone implements this "easy pay program" together, Moore says.

Prediction No. 3 turned to more precise audience targeting, which has been the promise of advertising for years. "In the old days when cable cost $6 per month we imagined a world where men didn't see ads for tampons, and women didn't have to watch ads for a jock itch remedy," he says.

Moore realizes that some people are "freaked out" that advertisers watch their behavior online, but once people realize their Web experience is "guided by their habits and preferences, it will seem a lot less freaky." He referred to audience targeting as one step away from the recommendation of a friend that will increase the ability for publishers to charge higher prices for content.

"Blocking our ability to target ads is bad for business and for the people who use the Internet," Moore says.

Moore also predicts that digital advertising will become the largest media market in the world within five years, with video advertising becoming the dominant format. For this to happen, the industry will need to develop better standard measurements, simplify the workflow that makes advertising easier for companies to buy, and find new ways to display ads to consumers. He also told IAB attendees the advertising industry has become much too nice, and companies need to stop being afraid to interrupt the consumers with ads. "Why are we so afraid to disrupt the user experience?" he says. "We're in advertising."

Moore says the new consumer online experience requires advertisers to become more disruptive -- but do it with targeted ads.

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8 comments about "Bold Predictions From 24/7 Real Media's Moore: Publishers Should Create 'Toll Gate' For Premium Content".
  1. Michael Mcmahon from ROI Factory / Quick Ops , February 22, 2010 at 10:46 a.m.

    For at least 15 years the industry has been theorizing about consumers "paying with attention". The current online video pre-roll formats are getting close, but the next step has to be offering consumers a choice between paying for content, or watching an ad in exchange for free content. I think the NY Times move to charge for access is a first step towards implementing this model and, if so, is an excellent move. Through the intelligent use of technology and targeting, we can finally reduce the total number of ad exposures and increase the attention paid to a limited number of highly targeted ads. Less waste, more engagement, and an explicit connection between the value of content, advertising, and of consumers' attention. I believe this is the future of advertising. (See www.nucaptcha.com for an example of a potential advertising pay-wall platform.)

  2. Allan Hoving from AH Consulting , February 22, 2010 at 11:04 a.m.

    Offering users "many ways to pay" -- including cash and non-cash alternative methods -- will ease the transition. see the model at http://www.paycheckr.com

  3. Dean Collins from Cognation Inc , February 22, 2010 at 11:33 a.m.

    The issue isn't that advertisers wont pay enough to support quality content, it's that they wont pay when being crowded out and obscured by 10 other ads.

    This is why Live Chat Concepts has a single banner ad rotating every 60 seconds.

    This along with some other revenue offers us mroe than enough to survive.

    Check out http://www.livenascarchat.com/nascar/churlchat.do?id=2871 as an example of yesterdays Fontana Auto Club 500 race.

    Deliver value and advertisers will reward you.

    Cheers,
    Dean

  4. Jonathan Mirow from BroadbandVideo, Inc. , February 22, 2010 at 12:51 p.m.

    Ok, is it just me - or are the first three commenters on this article pimping their own products? Shameless, people - I love it! Moore is clearly a blue-suited boob echoing a mantra that lends some hope to an industry drowning in red ink. "Park passes" - what nonsense, this will simply not work, anybody playing with this stuff for more than three minutes knows that. I do agree (shocking, I know) with his statement that video will become the dominent advertsing vehicle - of course, he runs a video advertising company, so what do you expect him to predict, the return of the banner ad?

  5. Dave Woodall from fiorano associates , February 22, 2010 at 8:19 p.m.

    Un-believable.

    This guy does head-up the Interactive ADVERTISING Bureau doesn't he?

    What kind of organization allows its leader to stand up and makes excuses for why it can't get the job done?

    It's like the California Milk Advisory Board chairman telling everyone that, while milk is nice, you really need to drink orange juice to build strong bones and healthy bodies eleven different ways!

    Also interesting to note was the Nielsen study referenced by Mr Moore: 52% of consumers would not object to a business model built on micropayments. Of course the flip-side to that is automatically pissing-off the 48% of your potential customers that DO object. Obviously a niche brand would be fine with that kind of reach but a mainstream content provider? I don't know. Of course if they're generating subscription CPM's anywhere near the $100 Moore seeks, it may be a moot point. Apparently it's not enough to just "disrupt" the consumer, you have to rob them blind too.

    With such a strategy and statements like "Why are we so afraid to disrupt the user experience? We're in advertising.", how Mr Moore came to head the organization (supposedly) on the cutting edge of modern advertising techniques is completely beyond me.

    All I could think about while reading this article was; did he know the mic was live?

  6. Mark McLaughlin , February 22, 2010 at 9:15 p.m.

    My goodness, this is the keynote address at a LEADERSHIP meeting for the IAB.

    It is hard to believe that Mr. Moore's comments constitute the best and brightest thoughts about new ideas that will help solve for the decline of legacy media business models.

    What, exactly, has 24/7 accomplished under Mr. Moore that gives him credibility in the first place?

    The issue of new business models to support professionally produced media content is serious and important. But clearly this Bureau and this executive are not the place to focus if you want to get anywhere.

    http://www.mcstrat.com/audiencesdon'tpayforcontent

  7. Mike Einstein from the Brothers Einstein , February 24, 2010 at 9:50 a.m.

    This guy is a blithering idiot, which makes him perfect IAB material.

    Price-fixed subscription CPMs of $100 when ad networks can be bought for 1/1000th of that? Dream on...

  8. Ross Bradley from Qeg Pty Ltd , February 24, 2010 at 9:59 a.m.

    .
    I just wish they would be a little "moore" truthful in their dealings with many 'fringe' players in this fledgling digital advertising - publisher industry. (As I'm seeing it all).

    The UK's Guardian (12 months) ='s $200,880,000 (International "uniques").

    http://seekingalpha.com/instablog/36191-lookingconfident/55949-publishers-should-create-toll-gate-for-premium-content?source=new_post