Publishers' commercial models will ‘splinter’ in coming years, says WSJ ad sales chief while discussing rise of ad blockers

Media owners’ commercial models will likely “splinter” in the coming years as they continue to battle ongoing issues including ad fraud and explore new pricing and measurement methods, according to Wall Street Journal (WSJ) advertising sales chief Trevor Fellows.

Speaking to The Drum Fellows admitted he has been “struck” by industry-wide developments such as the rise of ad blockers, and applauded the Financial Times’ move to diversify its digital advertising strategy to incorporate time-based selling.

Although the WSJ has not chosen to adopt a cost-per-hour (CPH) model as an online trading currency, Fellows described the road its overseas rival has taken as “interesting”, and one the publisher will “watch with interest”.

He added: “It’s clear you’re seeing brands move towards more reputable publishers that offer deeper engagement. I think that it’s an interesting experiment and the FT is right to try it. Anything that focuses brands’ minds on the fact that an ad needs to be viewable and the content around it needs to be truly engaging for that ad to work, is really good.”

The FT has been open about its plans to encourage other publishers to work with it on adopting the model, which it has said provides strong engagement with readers, and several other publishers are understood to be actively looking to explore the model.

However, the WSJ has no immediate plans to follow suit, with Fellows saying it could become confusing for it to have multiple currencies side by side. “I’m not sure quite how you would reconcile that. We are not against CPH as a measure in some instances, but not convinced it will become the dominant measure here, because the whole ad ecosystem is geared around CPMs and impressions. I think it is massive change. So kudos to the FT for pioneering something different,” he said.

“Models are likely to splinter in the coming years, and the methodology and currency will depend on the outcomes. In short we have no plans to introduce CPH but it has helped advertisers think about the importance of engagement, which is good,” he explained.

Media owners and advertisers are continuously searching for the model of non-interruptive advertising, a pressure compounded by the continuing surge in mobile traffic for publishers. “Most of us tolerate it [interruptive advertising] because we want to watch the content, but people’s tolerance shrinks as the size of the screen shrinks," added Fellows.

Over the years the online display ad market has become increasingly commoditised and in the process has bred inferior ads which have flooded marketplaces, which some blame for the rise in ad blocking software.

Fellows described the swift rise of ad blockers as a “fascinating” development. “I don’t know what the answer is to it but I am struck by what seems to be a very rapid rise [of ad blockers]. It’s not having a discernable impact on our business currently, and that’s partly because we are really careful about the format of ads we send to our clients. We of course have to do that because our readers pay for our content, and that changes your relationship with them quite significantly,” he said.

Publishers which operate in a competitive, niche market will want to guard against allowing bad ads to creep in, likewise if a publisher has a paywall such as the WSJ and the FT. Yet those in neither of those camps can be “cavalier” about what advertising they put in front of people, according to Fellows.

“But we do care, which means we are less prone to the ad blocker issues. It’s those sites with the horrible animated ads which pop up saying things like ‘how to lose 30 pounds in ten days’ that cause problems. Whereas no one minds seeing a good-looking ad from an IBM or Barclays.”

The WSJ's subscription business continues to provide strong revenues, with average global subscription sales across print and digital editions totalling 2,197,000 for the first quarter of 2015. It has also seen steady growth from its native advertising arm, which combined with overall custom content it creates for advertisers, comprises 10 per cent of overall digital revenues, according to the publisher.

The publisher relaunched its website last month to cater for its ever-growing mobile audiences– one of the latest in a string of digital innovations it has unveiled in the last year. It has also revealed plans to extend its brand to Europe and Asia.