There’s been a lot of hand wringing about pay walls in digital media lately, but not a lot of discussion on how they’re working or how to improve them.

The pay wall that’s gotten the most press, of course, is that of the New York Times — instituted on March 28. The Times asks people to pay for access after they’ve accessed 20 articles online.

Unlike its previous pay experiment, this time the Times’ effort appears to be working. But it could be a lot better, and bring more value both to the news organization and some of its users by using more powerful advertising technologies. I’ll get to that in a moment.

The Times’ pay wall scheme is really more of what I’d call a “pay fence,” because someone with a bit of technical acumen can easily get more than the official allotment by, say, switching browsers, deleting cookies or getting links from social media and search.

The Times also, as predicted in a radio interview early last month, has been playing with pricing models. Prices have fluctuated since launch from a trial 99 cents for four weeks to $15-$35 per month (for various web, smartphone and app bundles), to the most recent discount pricing of $1.88-$4.38 per week, for 26 weeks.

Anyone who subscribes to any print package (the cheapest appears to be Saturday-Sunday at $3.15 per week for 12 weeks) gets all digital editions thrown in, except for some e-readers such as the Kindle.

So it’s not surprising that one short-term business benefit appears to be an improvement in the Times’ print subscription revenue, as noted in our recent Mediatwits podcast.

Because the Times still makes the lion’s share of its revenue from print, if it can shore up its dwindling print base, it stands to support the operation for at least a while longer as it tries to transition to the more fully digital era.

And, by making the pay “wall” so porous, the news organization continues to get the large volume of transient traffic from search and referrals that keeps page views — and advertising impressions — high, and that revenue stream flowing.

HuffPo Surpasses Times: So What?

i-a2ffb38429eb505a423fab87a6d82a4a-NYT_quantcast.png

Some have pointed out that it looks like the Huffington Post shot ahead of NYTimes.com in page views recently, according to comScore, a web measurement company.

There are a few bones to pick with this argument. For one, Quantcast, another measurement company, said HuffPo actually surpassed the Times last fall, well before the pay wall was in place (see image to right).

Second, it’s wrong to think the pay wall is the key factor. It’s more that the Huffington Post has had a significant boost in traffic referrals from new owner AOL. The Times’ traffic, with around 15 million unique U.S. visitors in May, is about the same as it was a year ago, according to Quantcast. ComScore said “May traffic was about 34 million monthly uniques”, a bit higher than a year ago.

Finally, and most important, page views alone are not necessarily the best indicator of value.

The Times’ revenue per page may be higher than the HuffPo’s, for example, because it gets some revenue from subscriptions and some more from ads that may be worth more than on HuffPo (which can be a result in part of having an audience made up of paying subscribers whom advertisers will pay more to reach).

The Times is also probably just as influential as HuffPo, even with its smaller numbers, because many among the political and business elite see the Times as a “must-read.”

While visits to NYTimes.com were said to have dropped as much as 15 percent immediately after the pay wall was put in place, those are not the huge drops of more than half some have seen in the past. An analyst noted that the Times could lose 20 percent of its web traffic and still break even with 107,000 subscriptions.

Times CEO Janet Robinson said in an investor call April 21 that the Times had picked up 100,000 new digital subscribers in the first weeks after the pay wall was instituted. The analyst said a sponsor has agreed to pay for another 100,000 subscriptions.

Using Ad Tech to Serve the Pay wall?

But all that doesn’t mean the Times doesn’t have room for improvement, at least from a business perspective.

It could boost its revenue further by using ad targeting technologies to try to get more page views from people who are of more value to high-priced advertisers.

The same ad targeting technologies could be used to identify users to show them relevant ads, and let people identified as having higher income and education levels through without showing them the gate after they’ve reached a 20-article limit.

The idea was mentioned by industry experts at last months IAB’s Networks and Exchanges conference, where I conducted video interviews for the industry group.

While it may not be pleasant to think that not all users are equal, it is a business reality.

The Financial Times, which uses a pay meter system similar to the Times’, is expected this year to see digital content revenue overtake print and its digital ad revenue take the lead in 2013, according to an article on Foliomag.com last year.

i-72da77a67eb7e698b74ce456681addfc-TimesSelect.JPG
The Times’ 2006 experiment with walling off opinion content didn’t pay off. This time, the strategy is different.

The Wall Street Journal, which has over the years played with various forms of bundles, gating and pricing, has more than a 500,000 paid digital circulation and still leads U.S. papers in print circulation.

It’s not just the big, international brands that claim success from charging users for access. A source at Gannett told me that two newspapers in the chain that had applied stronger pay walls than the Times’ have kept a strong majority of their page views and unique visitors.

They are in state capitals where there’s not a lot of competition, either from other news outlets or from blogs, and people in the state want to know what’s happening.

While it’s far from proven that publishers can support their operations through digital media, the Times and a few others are starting to find ways to at least prove some revenue is to be made from asking people to pay for the news they consume.

In 2006, the Times instituted TimesSelect, charging $49.95 yearly for columnists and other choice materials, and blocking them from much linking and search.

A top Times executive at the time told me the effort was made because columnists couldn’t be “monetized” any other way — advertisers didn’t want their ads next to columns that might disturb a significant portion of their customers.

But walling off the columnists was blocking off something that brought the Times much of its traffic and notice, and the scheme led to a rash of people posting columns on unapproved sites. TimesSelect was canceled within two years.

This time, the Times appears to have done “their homework,” in the words of media strategist Steve Yelvington, keeping page views relatively high while getting loyal readers to pay for access, if for no other reason than avoiding the hassle of hunting for ways to get stories for free.

An award-winning former managing editor at ABCNews.com and an MBA (with honors), Dorian Benkoil handles marketing and sales strategies for MediaShift. He is SVP at Teeming Media, a strategic media consultancy focused on attracting, engaging, and activating communities through digital media. He tweets at @dbenk.