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Pay-per-click: new business model in digital media

As journalism becomes increasingly digital, many media outlets begin to adapt a new business model where web analytics and pay-per-click concept play an integral role in the way that revenues are generated.

Nieman Journalism Lab publishes a summary of a study conducted by researchers at the University of Glasgow about the digital transition experienced by the Financial Times and the Telegraph. The Financial Times has evenly split its focus between the print edition and its web version, but as digital subscriptions increase, optimizing the publication’s web usage and digital content naturally becomes more important in order to maintain its customer base. The problem compels the editors to use their best judgments between choosing the stories that matter and deciding what “added value” they can offer to the readers so they will stay engaged. The Telegraph also faces the same situation.

Some news organizations could not survive the highly competitive digital news industry. CEO and founder of Minyanville, Todd Harrison, recently announced the shutdown of the online financial news provider which occurred because “the digital media model is broken”. Harrison argued that the state of the current news industry, where “most of the players chasing clicks and treading water” and “the volume of noise is rising with less being said”, is inconsistent with the company’s vision.

The emergence of digital media also puts pressure on journalists to write and publish stories that will attract readers to click and read more, especially since many media companies enforce a new algorithm where profits made by writers are determined by the number of clicks their articles get. Erin Biba, a science journalist featured on JimRomenesko.com, said the new media industry renders sharp reporters and highly-researched and fact-checked articles of little value because those won't get many clicks. Biba added that the Internet and the click-driven model steer journalism to a different, if not, terrible direction.

For media startups, the pay-per-click method works to make profits but it creates what Harrison calls “a fear-mongering, can-you-top-that headline chase”. However, there will always be people who rely on traditional news organizations as their accurate and informative source of information. The question now is whether those media outlets can strike a balance between publishing stories that will sell in order to compete and doing so in a way that doesn’t degrade true journalistic values.