Ultramercial Can Save Newspapers with Proven Business Model

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Ultramercial Creates Two New Revenue Streams For Newspapers While Still Providing Free Content

We brought this bridge between free and fee to Salon.com six years ago, at the height of the Dot Bomb

Two new revenue streams desperately needed by the flailing newspaper industry were unveiled today by Ultramercial LLC as part of its Newspaper 2.0 Business Model initiative. The patented model, six years in the making, introduces two streams of revenue that allow newspapers to break away from the "free" model without alienating readers, by giving consumers a choice about how to pay for their content. Six years of experience have proven that, consumers are glad to pay for what they consume, while advertisers get better return on their advertising dollars and publishers receive more revenue for their content.

While online readers have come to expect a rich news experience without opening their wallets, publishers have been trapped into a single revenue stream that doesn't replace lost subscriptions and ad dollars from print. Ultramercial's patented ad format eases the transition from free to fee with their socially-engineered value exchange that allows consumers to access premium content by choosing to either pay for a subscription - or - engage with a 35-second full-screen interactive ad in exchange for a "free" day pass that is underwritten by the advertiser. The full-screen interactive ad allows infrequent consumers to experience the newspaper's site without sacrificing revenue to the newspaper; the subscription option allows frequent consumers to access their favorite sites free from interruption.

"We brought this bridge between free and fee to Salon.com six years ago, at the height of the Dot Bomb," said Janelle Amrhein, Ultramercial's Director of Sales. "Pundits said then that no one would pay for content, yet Salon doubled its paid subscription base, while at the same time increasing its advertising revenue. One of the big upsides of our model is that it creates an on-going trial-and-usage program, that has proven itself able to convert readers from 'free' to paid."

In the transition from print to online, multiple revenue streams from subscriptions, newsstand sales, display advertising, classified ads, and subscription lists sales have been replaced by a single stream: small space ads. Not only is this limiting, it is proven risky, as advertisers can measure the effectiveness of these ads, and the findings are not friendly. The average click-through rate for in-page ads has fallen to 0.10%. That's one click per 1,000 ads displayed. This has sent CPMs falling because these ads are just not effective. Advertisers in the Ultramercial model experience click-through-rates 40 times higher, and this is reflected in the CPM.

"If newspapers do decide to charge for their content, how do they keep the eyeballs that the free model attracted?" stated John Osborn, Ultramercial's new Director of Business Development. "Give them the option to 'pay with their attention' instead of paying with their credit card. This keeps the content 'free' to the reader, and it provides big benefits to the advertiser, such as a guaranteed engagement, a full-screen canvas, total-time-spent metrics, and an historic click-through rate above 4.0%."

Ultramercial brings not just the model, but a full range of advertisers and publishing solutions to their partners. Ultramercial content partners include The Economist, TheStreet, Virgin Mobile's ads-for-minutes program Sugar Mama, and free Wi-Fi access at leading airports including Denver International and Oakland International. The company works with major U.S. brands who want a true two-way experience with visitors to these properties.

"Our company uniquely provides newspapers, advertisers and readers with an honest and straightforward value exchange that is better for everybody," added Jim Smith, Ultramercial's CTO. "People need to pay for what they consume; our model lets readers decide when and if they open their wallets for a subscription, and in the meantime, extracts the most value from advertisers. It's finally a sustainable business model."

Ultramercial's business solution for newspapers can be found at this link: http://www.ultramercial.com/newspapers


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Lori Jones
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