Adblock Plus' new micropayment system for publishers

Adblock Plus and Flattr, a Swedish micropayments start-up, have created a new payment system that allows visitors to pay for content on the sites they visit most, without ads or having to sign up to publishers' subscriptions. However, industry experts are sceptical about third-party intermediaries, claiming it is just another tax on publishers and that it detracts from publishers' "value exchange." Flattr Plus is planning to sign up 10m users and donate $500m to content creators (any content creator can sign up to the Flattr Plus program).

Adblock Plus and Swedish micropayment startup Flattr have created a new payment system so readers can pay the publishers they visit the most, without relying on signing up to a publisher subscription service or seeing ads.

To sign up, users download the Flattr Plus browser extension and specify how much money they want to pay each month to their favorite sites. The browser extension runs in the background and distributes that budget to the sites readers are most “engaged” with.

“My immediate reaction is it is a yet another way that Adblock Plus is trying to tax publishers,” said John Barnes, chief digital officer at Incisive Media. “Surely if a user wants to pay a publisher, it makes more sense to do this directly with the publisher, not through an intermediary.”

Barnes argues that adding in more intermediaries and third parties could confuse the reader, which detracts from publishers’ goal of trying to educate about the value exchange in reading content for free.

Flattr Plus, which Adblock Plus parent company Eyeo has bought a minority stake in as part of the deal, receives 10 percent of the revenue. The company told Business Insider it plans to sign up 10 million users donating $500 million to content creators (an average of $5 per month per user).

Any content creator can sign up to the Flattr Plus program in order to start receiving funds. If a reader wants to donate to a publisher that hasn’t signed up to Flattr Plus, then the user keeps the money and Flattr Plus informs the publisher it should sign up. Any user can download the browser, but the aim is to roll Flattr Plus — which is in beta and will launch globally this summer — into Eyeo’s Adblock Plus, the ad-blocking browser extension, which has 500 million downloads to date.

It is unclear what Flattr Plus will deem as “engagement.” According to Ben Williams, Eyeo’s head of operations and communications, it’s too early to talk about the algorithm, but it will entail more than time spent on site and will take in a “nuanced approach that will account for several factors.”

“The share of engagement sounds very vague to me,” added Barnes, saying that handing out money based on what Eyeo sees as engagement doesn’t account for how publishers price their products, which could be based on international teams or the expertise of journalists — “the exclusivity or rarity of the content.”

Daniel Weilar, CEO of Swedish news group Nyheter24-Gruppen, agrees this detracts from the real problem of intrusive advertising, and sees this as a way for Adblock Plus to generate revenue at the expense of publishers. “They are after the money,” he told Digiday. “This is more proof of that.”

Two weeks ago, Weilar was appointed chairman of IAB Sweden and will head up a group initiative that 90 percent of Sweden’s publishers are taking to prevent ad-block users from seeing publisher content without paying and to clean up intrusive ads.

“To put it frankly, we have invested a lot of time into avoid having to deal with Eyeo whatsoever,” he told Digiday. “That’s what our whole initiative is about.”

The IAB Sweden is testing several other payment vendors that it can recommend to publishers to use during the initiative, which doesn’t leave much room for Flattr Plus. “I will be extremely surprised if any publisher from Sweden jumps on this offer.”

Flattr Plus could face another potential roadblock in introducing readers to a new micropayment solution, which has been challenging in the past. “It has traditionally been hard to persuade users to part with money on a micropayment basis,” said Martin Ashplant, digital director at the Metro. “So whether users can be convinced to pay on a voluntary basis for collective use of free-to-access websites remains to be seen.”