The Digital Migration: Understanding online audiences is the key to success

Business Day, and more recently Naspers publications Die Burger, Beeld, and Volskblad, are some of the titles that have recently erected paywalls – charging readers for content. It is not a new model however; in June, 2010, Britain\’s The Times erected a paywall to varied public reaction. More recently it has been reported that more than 300 US dailies now charge a modest monthly subscription for their online content. At the heart of this move by an increasing number of publications is dwindling advertising revenue accrued  by their print counterparts.

Media Impact

Over the past two decades advertisers have been hardest hit by the migration from traditional platforms (print, radio, and television) to new media platforms (internet and mobile devices), with the efficacy of the former dwindling in the face of platforms that demand an increasing amount of attention from its audiences. A 2008 online consumer behaviour study found that the internet has twice the impact of its closest competitor, television, and approximately eight times that of printed media.

Advertising agencies on the other hand have welcomed the change, with personalisation being one of the key factors. In a 2001 interview – a period when pioneering ad agencies started exploring the internet as a suitable platform – New Jersey-based Gillespie Advertisings\’ owner Richard Gillespie was quoted as saying:

“The delivery of the message has been made easier. Rather than sending out junk mail and trying to gain a 1% to 2% response rate, the more I know about the person I’m communicating with, the more valuable I can make that information. Rather than my invading your space with generic messages, I can send you communications that have value to you.”

Therein lies the crux of the matter: understanding audiences. For advertising to be successful, and therefore attract more advertising revenue, audience information is an essential component. Where traditional advertising platforms rely on complex and often expensive procedures, like focus groups, to gather information about prospective audience groups, new media platforms are often designed around the user, allowing each individual to customise his or her account on a given platform or device according to individual preferences. These preferences along with other personal details can then be used to display ads tailored to the individual rather than a group, thereby making new media advertising more effective.

Social media influence

Yet while audiences respond well to online advertising, with South African online advertising revenue growing to R60m from 1994 to 2003, and to approximately R760 million in 2011, it remains to be seen whether these very audiences will shell out their hard-earned cash to pay for something that was once free, and can yet be freely found by looking in the right places.

Social media is playing an increasingly-important role in the decision-making process with regards to online purchases. While advertising may initiate interest in a certain product or service, online users will often refer to their peers, product forums, or even blog posts to determine whether the money spent will be worth it. Online review websites such as Cnet provide a central location for technology users to share their joy or frustration about computing equipment, mobile devices, and more.

Locally, mybroadband.co.za has become an unofficial review hub where users often voice their dissatisfaction with local products or services. Since social media is capable of influencing product sales, it has effectively transferred power from a once neigh-autocratic traditional advertising industry to the end-user.

Unique content required

Again, in a time where users have high expectations of those businesses they transact with, will dailies like Die Burger, Beeld, and Volskblad, be able to provide content and media unique enough to justify the rates they are asking readers to pay? Here we\’ve not mentioned Business Day, because it is a niche publication with content not easily found elsewhere.

While there is no question that local, foreign, and international news publications need income to stay afloat, strategy can be the difference between success and that terminal period on the last page.

Both South Africa\’s own Mail & Guardian and its prior majority shareholder, the UK-based Guardian, have enjoyed tremendous success in recent years with payment models created for special editions (such as kindle and iPad), while providing unrestricted access to content on their websites.

In contrast, London-based The Times has enjoyed very slight success, with the number of digital subscribers amounting to an estimated seventh of its print distribution (as opposed to the Guardian, where it\’s online readership almost doubles its print figures).

Of course on the internet nothing is certain. The whims of thousands may change based on a single social media comment. The fulcrum upon which success and failure gently sway on opposite ends, for our paywalled South African publications, is content, and whether it\’s worth paying for.

Bangula helps conventional brick and mortar businesses, as well as internet-based startups maximise their online potential with audience-specific branding and brand strategy development.