Why Audience Ownership Helps You Control Your Margins
The dawn of digital publishing brought about a tumultuous shift within the media landscape. Publishers have had to adapt to many emerging realities – but the latest challenge still hasn’t been fully overcome.
Even if you found your place in the sun and now put all your efforts into creating top-notch content, it’s likely that the duopoly of Facebook and Google are getting most of the advertising revenue that you are generating, leaving you with the crumbles.
But it doesn’t have to be that way. Publishers can take charge of their own margins; the answer lies in owning the audience.
Rather than being swayed by changing algorithms and power moves by Big Tech, publishers should build loyal audiences and identify new revenue streams. So, how can you move from dependency to empowerment?
From “Only Platforms” to “Also Platforms”
It doesn’t come as a surprise that the Facebook-Google duopoly lands the majority of global advertising revenue. While some publishers struggle to get by, Google made $4.7 billion in revenue just from news content last year. This should push publishers to reassess the role these content discovery platforms have in their business models.
Contrary to popular belief, you don’t need to depend on intermediaries to thrive. They can work as content multipliers, but their ever-changing algorithms pose a direct threat to your strategy and make them very unpredictable partners. Moreover, they put their interests first: Facebook's average organic post reach is now only around 6.4%. And the easiest way to boost it is by chipping in some money. Not exactly a great deal, is it?
However, publishers shouldn’t abandon these platforms. Social media is critical to understand audience interest and current trends, and to engage with the target audience. Interestingly, the latest disruption in the social media realm shows us the best way to use social media. Instagram is currently experimenting with hiding likes – and Facebook might join in. Were that to happen, comments – and conversations more generally – would become the currency of engagement.
This shows something that the smart publishers already know: The only certain thing in the social media realm is that building engaged community matters.
Therefore, the best way publishers can leverage social media is by cultivating community. They can use all the available tools and channels, such as live streams, polls, contests, or unique hashtags, to move towards the best user-created content. All these efforts, however, should be centered around the ultimate goal – to bring users back to the website.
Adopt a Brand Mentality
We can all learn something from Google, which has two businesses. It has owned and operated properties – this includes Google Search, Gmail, and YouTube, where Google’s margin is above 80%. And it also runs the publisher network business – Google AdSense, where the margin hovers around 14.7%.
Google clearly prioritizes its owned and operated properties. It enjoys its high margins there simply because it has built a wealth of data that allows it to command a premium. The difference in the margins is what validates the value of audience ownership. Google does it, and that’s what publishers should do, too.
Publishers have a powerful arsenal at their disposal, but they often fail to overcome outdated approaches and convert into truly innovative digital brands. Traditionally, the media hasn’t been big on building marketing lists and instead relied on distribution systems, including vendors and newsstands, to reach their readers. Unfortunately, upon transition to digital, the distribution systems also captured their advertising dollars, and that's why publishers ended up between a rock and a hard place.
An owned audience is simply a marketing list that you truly own and operate. The objective behind abandoning the analog mindset and building an audience is simple: It gives your readers an opening in your world and sets up a communication channel with them. Whether it’s push notifications or email newsletters, always remember to set up a smooth and simple opt-in experience.
Reaching readers directly means that publishers can nurture them with inbound practices, highly-personalized messaging, and quality content. The website should serve as a hub that always offers something new and exciting to be discovered. This way, any publisher can develop a loyal community that both consumes their content and engages with it.
Identify the Sweet Monetization Spot
Audience ownership ensures publishers maintain direct access to their data, which over time compounds to become their true moat. It’s this data, together with the ability to directly communicate with the audience, that drives margins in the long run. It also brings the flexibility to experiment with alternative revenue models, including commerce and subscription.
When building the perfect monetization mix, be sure to experiment and test. Publishers should measure and report on the performance of different strategies – with ads, they can look at the volume of impressions and the impact they secured. The benefit is that promotion on trusted platforms generally gets better engagement, which is a factor playing in publishers’ favor.
Apart from ads, subscription models and paywalls are on the rise. According to a Reuters study, paywalls in the US have gone up from 60% in 2017 to 76% this year. And then there’s commerce: Publishers like The Economist are offering branded merchandise, from clothing and agendas to self-published books, with discounts for those who join their mailing lists.
It’s also worth noting that new opportunities are constantly arising. Just recently, The Washington Post unveiled a new ad tech platform. Its purpose is to help publishers to counter the loss in online revenue to the notorious duopoly. The tool, called Zeus Prime, is designed to easily execute ad campaigns across a marketplace of trusted publishers.
Audience ownership brings empowerment: By being in control, publishers have the upper hand to design interactive, content-filled reader journeys that have “a happy subscriber” as the ultimate end goal.
Related story: Rise of the Super Aggregator and the User-Centric Experience
Vivek Khandelwal is the founder and CEO of iZooto, an owned audience marketing platform that helps publishers build, engage, and retain their audience using web push notifications. Vivek works closely with publishers across the globe, empowering them to build and own their audience.