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Web 2.0 is an outdated business model

Peter Lee

The entire premise of Web 2.0 was that access to content (and content services) would be free for users and that the value of web-based businesses depended on the nebulous concept of "eyeballs" and how "sticky" they could be made to be. The theory was that advertisers would flock to the busiest websites and that money could be made for click-through adverts (or adverts paid-for according to the number of times it was displayed). It was always a bad model, relying as it did on fickle "traffic" And the situation has become ever worse as those eyeballs have become harder to attract and even harder to both retain and make return.

The basic situation is simple: if you give people something for nothing, they become reluctant to pay for it. They will eat revolting processed cheese instead of paying a little more for high-quality artisan cheeses. The only time people pay more for something that does not deliver more is when they buy "designer" goods or eat at "celebrity" restaurants: in short, when they want to show off.

So-called social media allows people to show off at no cost to themselves. Even bandwidth costs are now almost insignificant to millions of users. Publishers are trying ever more means of attracting attention to the ads they promote. The annoying pop-over and pop-under ads have, largely, gone away from legitimate advertising: often, it is dubious criminal or pornographic enterprises that use them as a matter of course.

Facebook, LinkedIn and Twitter have loaded their products with advertising that many users find more than slightly annoying. Providers of ad-blocking browser add-ons play a cat-and-mouse game with advertisers, some blocking by size of ad, some by blocking specific networks and some by a combination. Some publishers deny access to visitors who use an ad-blocker, others put a nag-screen over the page, requiring users to click through it.

When some newspapers began to charge for access they were criticised but the "paywall" is a valid means of being paid for content but only if the content behind the paywall has value and is not available elsewhere without charge. Therefore those media that contain a large amount of agency material find themselves unable to build a subscriber base because the same content is available in hundreds (perhaps thousands) of websites without charge. They are, therefore stuck, reliant on uncertain advertising revenue.

It's time for a change in the business model and user resistance to advertising (and promoted advertorial) is having an impact. For example, companies such as taboola and outbrain (they provide the "recommended for you" box at the bottom of many websites) are easily defeated by adding a simple command to an ad-blocker. Facebook has announced that it is to change what appears in users' feed (what used to be called "the wall" and then "Timeline" to reduce the amount of paid-for content and adverts. Twitter has seen its formerly spectacular growth almost level out over the past four years or so (https://www.statista.com/stati...) as new users are balanced by users becoming inactive. Recent changes to snapchat to provide more advertising have angered many users who have taken to other platforms to say they are abandoning the recently floated company.

There are very few single-store on-line shops that make much money. The money is more often to be made in on-line platforms that provide the back-end technology and billing and accounting in return for a percentage of the sale price. But those platforms are often subjected to substantial misdescription of product, especially in relation to supposed discounts which, a little research would show, are outrageous untruths.

For news media, a mixed-use model (such as that employed by PleaseBeInformed.com) can work. This model provides that some content is free to read but advertising supported, some content is sponsored (therefore a section is sponsored and pages do not include adverts) and some content is only for subscribers. In addition, a hybrid model where subscribers can read free content without in-page advertising can also be deployed.

As many publishers have found, relying on a subscription-only model is problematic because, in truth, there is only so much news to go around. Worse, there are many people who write authoritative articles on blogs or company websites for which there is no charge. The only way of ensuring that there is sufficient membership revenue is to ensure that the content is unique and has considerable value.