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.