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Evan Williams to publishers: You can’t just tax content

In the view of Medium CEO and Twitter co-founder Evan Williams, content websites that rely on traditional display advertisements amount to tax-collectors.

Williams on Tuesday put that belief into action by announcing his online publishing platform Medium would seek to generate money not through those display ads, but by launching a new set of services for commercial publications and brands.

Medium said it will give publishers and bloggers that use its platform the option to host content from brands, which will show up as links at the bottom of their own articles. Medium's initial brand partners include Bose, SoFi, Nest, Intel, and Volpi Foods, the company said in a blog post.

"I think that a lot of people have realized that in order to get someone to pay attention to something today, you can't just tax a user experience or tax other content, meaning just put ads around it. It just doesn't work that well," Williams told CNBC's "Squawk on the Street" on Tuesday.

The goal, he said, is to create something people choose to consume. He acknowledged sponsored content will not work for every brand and requires a high level of skill in order for it to work.

The announcement comes as more publishers choose to publish through Medium. The company said Tuesday about a dozen companies, including The Awl and Pacific Standard, would do so. Time Inc. will also publish offshoots of its Money and Fortune periodicals through Medium.

While promoted content will be labeled as such, Williams told CNBC it would be integrated seamlessly into Medium's signature clean, simple display.

To be sure, it's uncertain whether sponsored content will solve the well-documented problems publishers have faced in monetizing their online content.

Online analytics firm Chartbeat found in 2014 that just 23 percent of readers scrolled through online articles paid for by advertisers, compared with 71 percent for normal content.

In a survey of 542 U.S. internet users conducted by Contently the same year, 54 percent of respondents said they don't trust sponsored content and 59 percent believed news sites lose credibility if they feature it. Younger Americans and those with less education tended to be more forgiving of sponsored content and publications that host it.