Can Content Pay Its Way Through Social Shares And Tailored Email Newsletters?

Publications like The Times of London, the FT and the New York Times have been hammering away at paywall-based business models that let them make money not just from traffic-based advertising but getting users to pay for the content they read, while newspapers like The Guardian have eschewed the idea on their website but opted for apps where payments are in place. While the basic paywall concept continues to evolve, a new startup out of London called Sharewall is hoping a new idea it has developed around social networking might complement that, if not replace it altogether.

Sharewall, as the name implies, gives users access to a site’s content based on how many people they share the stories with.

The premise was borne out of questions that co-founder and CEO Anders Ibsen started to ask himself after seeing a publisher present a keynote about the problems with paywalls. “What currencies are acceptable to users?” he says he asked himself. “You have two different piles for news: need to have or must have. If you are a banker you have a high willingness to pay for the WSJ or FT, or your office might pay for it. But most of the rest is nice to have.”

Enter social sharing as a “currency”.

The request to share stories on Sharewall — users are given a selection from which to choose — comes up with a frequency that is based on how big your social networks are: the more people in your circles, the less frequent you are asked to share stories because each one resonates that much more. (Sharewall knows how big your circles are because you register as a Sharewall user and authorise the widget to post on social networks on your behalf.)

Ibsen tells me that this works out for the average users to sharing requests for every 15-20 stories read.

The idea is to use this basic sharing premise in a few different ways: to generate some “viral” marketing of a publication and its stories via social networks; to drive more traffic to the site through those shares — which Ibsen says increases by a full 32% on shared stories, based on the tests that they’ve been running so far; and then a third way that complements those first to but comes a bit out of left field: to use the resulting database of Sharewall users to create email-based newsletters, to drive even more traffic and in-mail ad revenue.

It’s this third area, email, that founder Anders Ibsen describes as “the huge monetisation part” of Sharewall.

“If we look into e-commerce marketing revenue, one of the biggest drivers today, at 30% of all revenues, is related to search. But just below that we have emails,” he explains, referring to direct marketing activities from the likes of eBay, Amazon, Fab and so many more. “But none of the big publishers are really that active in the email space.”

This can take publishers into into strong competition with performance marketing companies, but it’s where they need to go if they want to make more advertising-based revenues, Ibsen contends. “Emails come with a different attention span than what we see in banner ads,” he says. “Publishers are mainly relying on banner ads now but only 3% of online commerce spend goes there.”

The data that Sharewall collects on what articles people like to read will be used to produce targeted emails with suggestions for further reading. Those emails subsequently become inventory for more ad sales.

“We have combined the email with machine learning and AI to predict what kinds of interests a user may have and what is relevant,” he says. The publisher adds one line of code and Sharewall adds everything else, he says. “a fully automated plug and play solution.” The ads that then run in the emails could either be from the publisher’s own inventory, or from ad networks that Sharewall will work with. And he says that ultimately, all user data stays with the publishers themselves — not Sharewall.

Screen Shot 2014-07-03 at 12.45.58Sharewall might sound familiar to some in name and concept: the basic idea of tracking and recognising social sharing by specific users was sketched out by Khoi Vinh, a former designer at the NYT who is now VP of user experience at Wildcard; it was then expanded on by Xavier Damman, a co-founder at Storify (acquired by Livefyre) as a format that could see the “shares” sponsored by brands and as offers of one-time passes over a site’s paywall.

Ibsen laughs when I bring this up to him: “It’s a coincidence,” he says. “We started working on this three years ago. By the time that post was published in March, we’d already raised our seed round and started developing the go to market version of the product. Also, from a publisher perspective I think the essential part is the monetisation from emails.”

It’s still a big question mark whether this will be seen as one more spammy social feature, or whether advertisers and publishers will bite.

Ibsen tells me that initially Sharewall will be rolled out on mobile internet sites as the most natural fit on the user side. “There is almost a 100% correlation between people who read news on mobile and people have social networking accounts,” he says.

There is one publisher already signed up for the service, and two more in the final stages of evaluating it. All three are recognisable names that currently do not have any kind of paywalls on their websites are are looking for ways to drive more revenues without resorting to them.

Sharewall has raised a seed round of £150,000 from Ingenious Media and is in the process of closing its Series A.