As Ad Rates Sink, More Websites Explore Ad-Free Business

'Why Jump on a Failing Model?' Andrew Sullivan Asks

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The founders of the website The Good Men Project predicted early on that their lean operation would turn a profit from ad sales once it started attracting about a million unique visitors per month. And as traffic neared that mark late last year, the company indeed turned in its first profitable quarter. So why did it just start offering an ad-free version?

The Dish has no ads. Other sites are exploring similar approaches.
The Dish has no ads. Other sites are exploring similar approaches.

"It became clear that banner ads are annoying to people and they just aren't that profitable," said Lisa Hickey, CEO of Good Men Media. "The CPMs slowly go down," she said, using industry shorthand for the price advertisers pay for every thousand views on a site. "The number of ads we have to put on the site to break even goes up. It's a balancing act that doesn't get us to where we need to go."

This is web publishing in 2013, when declining ad rates and the sense that each buck is harder to get than the last is leading increasing numbers of publishers to strip out the ads and ask readers to pony up. Even The New York Times has at least contemplated the idea of an ad-free version, asking readers about it in a recent survey about potential new products. Its sibling The Boston Globe already operates two websites, the free Boston.com, which is packed with all kinds of traditional ads, and the subscriber-only BostonGlobe.com, with far fewer, and much less intrusive, ads.

But ad-free experiments are taking root faster among smaller publishers and blogs, for whom the economics of digital advertising can be particularly punishing. You wouldn't call it a sea change, but there is a lot of splashing in the waves.

The popular video games site Penny Arcade last year used crowdfunding site Kickstarter to raise over $500,000 that would keep ads off its home page for a year. The influential media blogger Jim Romenesko, who recently asked readers for donations so that he might go ad free, has bowed out of a blog ad network that caused hiccups on his site -- but still runs a Google AdSense unit. "Going ad-free would be great, but it looks like the best I'll be able to do is ad-lite," he said in an email

"I've had loyal readers donate, but I'm not interested in banging the tin cup very hard or doing a beg-a-thon," he added, calling his site "a retirement hobby blog," not a business.

The Good Men Project, a site that ponders the nature of manhood with posts like "The Measure of a Man in the Digital Age," asked its readers what they'd want in return for a paid subscription. There was one answer that stood out: no ads.

In the week after offering a premium membership that costs $20 per year or $2 per month, hundreds of people signed up, according to Ms. Hickey. For their money, they'll receive invitations to an annual webinar and monthly video chats, a book and DVD, and an ad-free site experience.

There is a caveat, actually: Certain advertisers looking to have a conversation with readers could still get access to the Good Men Project's premium audience.

Andrew Sullivan's new site The Dish arrived with a paywall -- a meter, actually -- and no ads. "Why jump on a failing model?" he said in an email, capturing the frustrations of a growing list of publishers less than enthusiastic about declining ad rates as well as the usability and design restrictions posed by ads.

His site raised $650,000 in subscriptions soon after he broke it off from The Daily Beast and turned it into a metered operation. The details remain a work in progress: He first charged $19.99 per year to read more than seven stories in 30 days, but lowered the meter to five free stories in 60 days after realizing many regular readers weren't hitting the wall because they visited from multiple devices, each with its own article count. And this week he started allowing subscribers to pay $1.99 each month instead of requiring a yearly commitment.

Prior to The Dish's early February, Mr. Sullivan called the decision not to have any advertising "the hardest." Asked whether a couple of months of running the site has changed his tune on ads at all, he said it had not yet, at least. "I don't know of any blog that has gotten $650,000 in ad dollars in two and a half months, but obviously the issue is the long term," he wrote in an email. "It looks clear to me we can now run the core blog (frugally and only just) with reader subs alone. The question is how aggressively we want to move into commissioning long-form journalism as a supplement to The Dish -- a project we dub 'Deep Dish'. We're still discussing that."

He's never ruled out selling ads and, on the contrary, he has been mulling a free ad-supported version of The Dish to run alongside the subscription, metered one. "The beauty of it is that it adds value to both sides -- the ad-supported one, and the ad-free one," he said. "I bet you people will pay for a clearer higher signal-to-noise ratio site."

Elsewhere on the web, a reader survey validated Charlie Suisman's decision to drop ads from his Manhattan User's Guide, a daily email that goes out to a small but loyal list of more than 26,000 people interested in things to do around Manhattan. Ad support from the city's cultural institutions was dropping off as those same institutions discovered social media and built up their own data based.

"It became apparent to me that we were on the wrong side of the bell curve: they could use those tools without needing our list as much," Mr. Suisman said. "We dropped our ad rates as I guess many others have had to do, but couldn't replace the revenue with any kind of volume."

His survey found that 75% of respondents supported a reader-supported model. In practice, fewer readers have donated so far -- but at higher-than-expected amounts. Some also told him "We don't mind the advertising," he said. "And of course that was the problem. It wasn't frequent enough to be particularly noticeable."

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