I have already visited four news websites this morning to get an update on what’s happening in the world.  I don’t know how much longer I will be able to do this. We are rapidly reaching a point where news organizations will not be able to continue posting their content on the Internet for free.  It is no secret that the newspaper industry is in crisis, and it is the newspaper industry that has historically gathered the lion’s share of in-depth news on which we depend to understand current events. While most news media have embraced the web and are committed to deliver breaking news on their websites, advertisers are not willing to pay enough for the online ads that appear on these news sites to offset the cost for delivering content.  A banner ad is generally not considered as effective as a print ad or television commercial.  Hence, the lower perceived value results in lower advertising prices. 

The news media (mainly newspapers) are trying different methods of monetizing their websites.  Online subscriptions.  Pay-per-article-viewed.  Combination hardcopy newspaper/online subscriptions.  But to be honest, I am not aware of a method that has proven to pay out for the media.  After all, as long as there are other news sites that provide content for free, why would someone want to pay for it?

One interesting concept for monetizing the news sites is coming from a group out of Houston called YouData.  These guys have figured out a way to pay consumers to look at online advertising.  It works like this: consumers register with YouData and provide some basic information about their interests. Then, they are served online ads that relate to their interests.  Each time they are served an ad, they are paid a few pennies; and paid again if they interact with the ad and ultimately visit the advertiser’s website.  The advertiser’s online banner is shown only to those folks in the YouData database who expressed interest in that kind of product or service.  The advertiser is charged for each ad exposure to a high potential prospect, and then a second time if the prospect clicks from the ad to the advertiser’s website.  The news site (and YouData) also gets a cut of the advertiser’s payments. 

In theory, everybody wins. The consumer only sees relevant ads and is paid to look at them. The advertisers only pay for the high potential consumers who look at their ads and go to their sites.  The news site enjoys a new income stream.

Only time will tell whether this approach will work – after all, how much consumer response can we expect for a few cents?  The Internet allows for this kind of performance-based approach to advertising.  And it could ultimately be the difference between profit and loss for the news providers.