Following on from the earlier post about Smashing Magazine’s cash crisis, and the extraordinary measures they’re taking to raise funds, and in response to a comment made there, it struck me that while there’s plenty of talk about how free content is an outdated and unworkable model, hardly anyone talks about the real elephant in the corner – free advertising.

Trying to break the free content model, some publishers risk looking like Canute

The common conversation, when critics of the free content model get started, uses the example of a real physical newspaper. ‘You’d never dream of getting it for free, would you?!?’ they say scandalised. Well, there are plenty of free papers out there – in most cities you’ll find free local papers that survive based on circulation, low distribution costs, and highly targeted advertising. Obviously it’s not fair to compare your local event guide to the New York Times, The Guardian, or any serious national/international newspaper – their costs are much higher. But when you pay for your newspaper, you’re paying for only a small part of the costs – the bulk of any serious newspaper is paid for by its advertising revenue. Take away the advertising revenue and you have a flawed business model for most newspapers – they woulnd’t be able to survive on your subscription.

And when a newspaper/magazine goes online it can reduce its costs to the essentials – the labour required to produce it, and maintain the technological infrastructure of delivery. If the magazine is wildly succesful in terms of readership then advertising should follow, and here’s where the problem occurs.

Online advertising is essentially free, thanks to the major models available ranging from google’s dominant adsense network through to the various affiliate networks available. What publishers are expected to do online is to display a brand prominently to their readers for free. They – in the majority of cases (obviously the bigger a publisher gets, the more leeway they have to negotiate) – only get paid when the reader clicks through the advert.

Imagine a similar situation in the traditional media. A newspaper only gets advertising fees if the customer produces the newspaper when buying a product;  a tv program gets advertising revenue only it can prove that customers of product x have bought it because they saw the ad during their program break.

It wouldn’t fly – not just because of the technical implausability of it, but because it ignores a fundamental that advertisers know only too well. The purpose of advertising is to build up brand recognition – and its a repetitive constant task – the end goal of the advert in a newspaper is not simply to make you jump up like Archimedes, and run to your nearest shop shouting ‘Eureka, give me product x before I explode!’.  The ad men would be delighted if that was your reaction, but they more realistically hope that when confronted with a multitude of choice in the supermarket aisle, you’ll recognise their brand and so favour it. That brand process is being fulfilled by online ads, regardless of the click through.

How to change the model? It’s almost as difficult as changing the free-content model, given that it’s the predominant way people place adverts online. The change certainly won’t come from the advertisers, who are in a win-win-win-win situation. Maybe, instead of the Canute like measure of trying to erect a payment wall around all their content, Murdoch’s minions would be better off using their circulation clout to negotiate realistic advertising fees for placement on their sites – now that would be something useful.

Food for thought:

Free: The Future of a Radical Price

The Ultimate Guide to Google Adwords

The Cathedral and the Bazaar by Eric S. Raymond

You can buy the above books directly from the book depository, for free shipping worldwide

We’ve started work on a site for a self-publishing author recently, who already had a basic site setup at one of the more prominent free website networks for authors. He has his own domain name, and – frustrated at how poorly his site has worked thus far, in terms of search engines in particular – decided to take the plunge and set up a more robust and sophisticated site to promote his book.

First problem to encounter – transferring his domain name to a new server. He registered the domain name through this self-same prominent network, paying a whopping $99! Had he registered the name himself, using any accredited domain registration service he would have paid under $10 for the same thing.

But that’s not all. On closer inspection, the network have registered his domain using their company as the official registrant – making them, not him, the legal owners! It’s an old and dirty trick. It remains to be seen whether they’ll transfer the domain name back to him without a fee. In this case, if he kicks up enough fuss, there shouldn’t be a problem, but imagine that his book had already taken off and his name was getting well known. In that case the network would have every possibility of holding onto the name, and exploiting it for their own purpose. It’s a recipe for a marketing disaster and perhaps costly legal battle.

If you’re an author, and you’re setting up a website, get informed before you sign up for things like domain registration, or website design. Don’t think that because the company you’ve chosen to print and package your novel have done a good job in that field that it automatically makes them the people to trust with your online presence.

Our unfortunate author did, and he ended up

Paying over ten times the market value for his domain
And effectively handed over his online presence at the same time

So, how to avoid it? Ask questions. Shop around. There are plenty of sites that give free advice. We, at Bodu Web, for example are happy to explain technical issues like domain registration, free of charge and with no obligations.