Digital Publishers Need a Revenue Revolution
Digital publishers today face an unprecedented challenge. While U.S. digital advertising revenue is forecast to generate more than $116 billion by 2021, publishers aren’t seeing their fair share of that revenue. Ad revenue is being cannibalized by everything from ad blockers to walled gardens and user-generated content platforms, and the media landscape is increasingly fragmented across devices, channels, and platforms. With ad dollars harder to come by, publishers must diversify their revenue streams in new ways, while also strengthening what truly works for monetizing their content.
To meet the need, many publishers are building businesses around a number of revenue streams, including subscriptions, podcasts, video/audio, affiliate marketing, and email. But just because a business model works for one publisher doesn’t necessarily mean it will work for another. As publishers adapt and build for the future, they should keep in mind the following best practices.
Stay Focused on the Audience
First and foremost, digital publishers should focus on the needs and desires of their audience. Whether it’s an email, video, or podcast, a new line of business must serve the consumers in order to succeed. When exploring new lines of business, digital publishers should first ask:
- How can we be of service to readers?
- How can we bring them a better experience?
- How can we bring our audience more of what they love?
- How does our audience want to engage with us?
Once publishers identify what users want, they can determine how to create revenue streams, whether by monetizing a product itself or by selling ads around it. If consumers engage with a service or product, publishers should think about how to monetize it. From there, they can execute a proof of concept, and later increase investment if early results are encouraging. Revenue-generating products like paid memberships are born from this kind of deep understanding of a core audience.
Be Willing to Fail Fast — But Not Too Fast
New lines of revenue need time to succeed. Few businesses will launch quickly and be successful overnight. The most successful digital publishers recognize when it’s appropriate to invest more time and resources in a new line of business. When the business is not working for their audience, then it’s time to move on. If publishers have given a product a good run and it’s just not working, they must be willing to kill it.
Some business lines will require trade-offs due to resource constraints. If they’re confident that a new product will serve their audience, a publisher may choose to embrace the trade-offs and put their money where their mouth is. That might mean moving resources around in the organization until the product begins generating revenue.
The Technology and Analytics Should Be Right
Even when publishers know what customers want, they may still need to make adjustments to existing products, or when launching new revenue streams. Given how quickly the industry is changing, publishers must be willing to reassess what they’re delivering and make changes along the way. Having the technology and analytics in place to guide those business decisions can give them the confidence to make quick adjustments.
Test What Works from an Operations Standpoint
Each new line of business requires people to run it. Instead of hiring experts in specific channels, publishers need to bring on those who understand their brand and can think critically and flexibly. This will give them a solid foundation of skills regardless of business need.
One challenge within the broader opportunities for revenue diversification is integration. It may be difficult for discrete lines of business to work together. Clients might not be ready to buy an integrated package of products, or they may have different buyers for different products. This can further challenge sales teams and individual business units as they work cross-functionally to sell a package. The best approach is to consider the depth of the client relationship and their openness to a new event or subscription in gauging how to try out new products or integrate them in different ways.
Success is exciting, but digital publishers should avoid going all-in on a new product at the first sign of momentum. Instead, they should look for products and lines of revenue that can sustainably grow, and invest resources appropriately.
Also, remember that scale doesn’t equate to sales. A reader has to be in sync with the brand, and the content needs to be aligned editorially for it to grow well, which takes time. A loyal audience is more valuable than scale. Loyal readers come to the site more often and are more likely to purchase products. Publishers need to find ways of engaging their existing audience while identifying new ways to deepen the relationship.
The Final Key to Success
Diversifying lines of revenue is critical for digital publishers, and it will continue to be so as the world changes around them. One thing, however, will stay the same and ensure continued success: investing in quality journalism that serves the audience’s needs. Create great content and brand loyalty, and audience growth will follow.
Kerel is the Senior Vice President of Global Marketing at LiveIntent. He currently leads the marketing team and works closely with sales, product, engineering and customer success to create awareness and generate leads for key products and features. Kerel has 20 years of digital media experience building and leading Advertising Operations, Account Management, Partnerships & Product Marketing teams. Prior to LiveIntent, Kerel Cooper held positions at Advance Digital as the Senior Director Ad Platform Strategies and JupiterMedia as Director of Advertising Operations. Kerel has his Bachelor’s degree in Management Science/Marketing from Kean University and a MBA from Regis University.