March 29, 2016 | Authored by: Vindicia Team
How subscription billing solves the issue of ad blockers
Websites during the early days of the Internet were a chaotic environment of popups and advertisements filled with malware. As a result, consumers haven't fully trusted online ads since, and many install software created to block these intrusions and let users browse uninterrupted. According to Computer World, the gaming site Destructoid sees ad block rates between 36 and 42 percent, meaning the company is losing about a third of its potential advertising revenue. This is bad news for the website and other online organizations that receive money for ads viewed. Some sites refuse to show their content to users with ad blocking extensions unless they disable the software - or add the site in question to its whitelist - and refresh the page. While this tactic might be effective for die-hard fans, the new or casual user is just as likely to leave the website and head somewhere else.
"36 to 42 percent of Destructoid's viewers use ad blockers, severely limiting revenue."
What these companies need to understand is that ad blocking software isn't going away. Instead of fighting the consumer preference for an ad-free experience, they should adapt and figure out new ways to provide their services. The answer is simple: Websites should convert to an online subscription business model that lets users enjoy an uninterrupted experience for a recurring fee.
Subscription billing solutions solve the revenue issue
According to 1to1 Media, the technology magazine Wired gave its ad-blocking users two options. They could add the website to their blocker's whitelist, thus allowing it to bypass the software and show users the same content with advertising. Otherwise, users could pay a subscription fee to experience an ad-free version. There were two payment options: $1 per week or $3.99 every four weeks.
"Our team of journalists creates 30 posts every day, with the same commitment to great storytelling and impactful design as the magazine," Wired wrote on its website. "We have valued ad-free access to this experience at $3.99 every four weeks."
Similarly, the video startup Vessel gives users an adless experience for either $2.99 per month or $19.99 per year. YouTube Red, one of the latest offerings from the popular video platform, is doing the same. Subscribers can listen to music uninterrupted for $9.99 a month.
Making ad-free subscriptions work
Recurring billing solutions are a fantastic way to provide an uninterrupted experience for users who are already dedicated to a particular service.
"A subscription model relies on already having engaged and returning users who are willing to set recurring payments,"Felipe Ogibowski, CEO of the mobile app ad service IconPeak, told 1to1 Media.
But what about viewers who are new to the website? They have yet to see the benefits of a certain service experienced by their more devoted peers and thus have little reason to sign up for a subscription. The trick is for businesses to understand who these potential subscribers are.
Developing a customer profile is a lengthy process requiring dedicated tracking and considerable amounts of data. However, understanding it lets businesses design the best acquisition methods and set subscription prices that are the most effective at attracting, attaining and keeping customers.
As more Internet users install ad-blocking software onto their browsers, companies must find new ways of receiving revenue. Subscription billing is the perfect solution. It gives users a choice - as in Wired's case. They can either stop using their ad blocker or pay for an ad-free experience. Either way, users get the content they seek, and the business gains revenue. In addition, businesses that use subscription billing can rely on regular payments from their customers.
Which billing platform is right for B2C subscriptions?Download