8 Things to Remember When Monetizing Content
With online advertising revenues continuing to decline, publishers know they need to do something to generate new income, which has led the industry to put all its focus on reader revenue generation. We’re bombarded all the time with new terminology: paywalls, paygates, memberships, freemium models, dynamic audience segmentation, etc. But they all amount to the same thing: charging readers, one way or another, for your content.
I’m not here to promote one approach over another (anyone who has read my previous columns already knows that I support publishers pursuing user engagement as a means to generate sustainable reader revenue). Whichever approach you take, it is entirely possible to make money with paid content. But to do so, you have to be prepared upfront to commit to the process and to follow certain rules and patterns.
In other words, there is no magic bullet.
First and foremost, you have to understand that successfully monetizing content and building sustainable revenues requires a change in lifestyle. The results will come if you put in the time, effort, and understanding to see the success.
Think of it like starting a new exercise regime. If you start going to the gym, you're not going to see any significant results for at least 6-8 weeks – that’s when the changes start to kick in. Until then your body is still getting used to exercise, so you’re tired, sore, and putting in a lot of work for little in the way of visible results. Many people quit the gym within the first two months because they’re not seeing results. Ironically, this means they’re quitting right before things start to work.
You’re not going to look like Arnold Schwarzenegger after working out a few times. And in the same way, after deriving much of your revenue from online advertising, you can’t simply expect to switch to a new strategy and immediately succeed. You need to plan on taking as much as 18-24 months in order to build up significant reader revenue streams. After the first year you’ll see encouraging, sometimes even good results, but it is the second year that unites the power of low-friction models and high-friction subscription models.
That’s right – it can take as long as two years. And you need to be aware of that going in. Otherwise you run the risk of giving up because you didn’t achieve the results you expected right away. It takes time because driving engagement with your readers is a process, not a one-off activity. Mastering this process, successfully onboarding, and optimizing your strategy are essential. You need to make sure you have a steady stream of content that you can monetize and should expect to be busy calibrating your offerings, testing different approaches, and tweaking the results.
The Lessons to Learn
Platforms and solutions for monetizing content may vary widely, but regardless of the strategy you embrace, you should take these lessons into consideration:
- Build the right team. Plan on carving out a dedicated team to run your monetization program. You may be tempted to view this as a technical issue – and your engineering team can certainly be involved – but the heart of that team needs to be on the business and product side. The engineering team is not focused on a user-centric business approach, but rather on the magic of having one tech solution from which success will inevitably follow. Instead, put content monetization in the hands of the people who actually create your content and who run Product – they need to be ones calling the shots.
- Make sure you have an audience. This may sound obvious, but it’s worth reinforcing nonetheless. To be successful generating steady reader revenue, you need either high numbers of regular users or very exclusive niche content for a small but very engaged community. Without one of these, you’ll either lack the traffic to develop meaningful income or the content to keep your loyal visitors coming back. Simply having a paid content strategy is no substitute for reach.
- Offer the right content. You need to make sure you are providing content that is of real relevance to your particular audience. It must be exclusive, enticing, or relevant in order for your audience to engage. And you must be publishing enough content as well – having just two articles every week won’t create engagement. People want to choose what they read every day.
- Be strategic. You need a strategy. Do you have one? “Put up a paywall” is not a strategy – it’s just a tactic. A real strategy addresses the critical questions you’re facing and provides a means to tackle them in order to generate revenue. A strategic approach to paid content is to sell your content in a variety of ways to address different audience preferences, from fly-bys to loyal users.
- Don’t expect audiences to stumble into your paid content offering. In other words, spread the word about your paid offering across all of your properties. It’s your best content, after all, so make sure it’s prominently featured on your site and in your social media posts, your newsletters, and any other promotions. This means making sure that your marketing team is looped in as well, so they can help maximize visibility and impact.
- Pay attention to the data provided by analytics. If your platform is regularly generating data on customer transactions and behavior, make sure that your team properly understands and is interpreting that information. Your readers are sharing their preferences based on how and what they buy, and you need to understand how people react to your paid content offering so that you can improve it.
- Don’t set it and forget it. There is no catch-all model that is going to work right out of the box, and there is no magical setting that is going to start churning out money from day 1. As I mentioned above, this is an iterative process. Listen to the data, interpret what it is telling you, and from that determine how to adjust your offerings, pricing, volume, timing, and more.
- Never underestimate the power of individual pieces of content. Subscriptions may remain the holy grail for most publishers, but if you make it easy for people to buy single articles, you can ultimately bring in more revenue than selling a single copy of said publication. Imagine a user purchases one article for just 50¢, then shares it with their friends, three of whom also like it enough to make a purchase. In one step, you have essentially generated the same revenue that you might from a daily subscriber, all by simply giving the user the opportunity to read one article that they are interested in.
It is essential to be realistic, particularly in the early stages. When you move from a house to an apartment, you need to reset your overall expectations – what you can bring, how you will live, and so forth. In the same way, when moving from analog publishing to the digital world, you cannot expect to compare print apples to digital apples. The revenues will come, but they require a different approach and a new mindset. Managing your own expectations and leveraging the insights above will keep you on the right track for a successful integration, no matter which content monetization approach you choose.
Cosmin Ene is the founder and CEO of LaterPay, a payments and technology company with offices in the US and Germany. Under Cosmin’s leadership, LaterPay has become the monetization standard for local publishers in Germany with over 200 clients, and has expanded to the US market.