Tallying the Many Ways Publishers Earn Online Revenue
Meeting a publisher who makes almost no money online is still astoundingly easy to do. “Our readers prefer print” is always the response. I love print too, but waiting for next month’s edition is no longer how people consume news and information.
This is not a zero-sum game. There is no reason to trade print sales for digital. Add new dollars. There is a great upside in addition to more revenue: this increases the value of your company. In the past couple of years publishers who had 80% or more of their revenue from print sold their companies for .5x revenue on average. Companies “with more diverse revenue,” with print accounting for no more than 70%, sold for 1.2x -- 1.5x revenue, according to John McGovern, senior associate at W.B Grimes & Co. Imagine tripling company value.
You are already doing business online, most likely. Less than half the publishers I meet can name five ways to earn income directly from their websites. (Yes, I actually ask.) What is the last new revenue stream you have turned on?
At our company’s executive retreat last month I asked my colleagues to crowd-source a brochure with me, listing how many different products our clients are getting paid for today. Everybody called ‘em out and they went on a whiteboard.
Counting Online Revenue Generators
We identified 29 different products these publishers, media companies, and associations sell. 29! The answers represent a wide spread of ways to parse business information. As I compile a master list of products, I want to share the process in hope one product idea inspires a new way for you to slice and dice your offerings.
Take webinars. If you sell seats at a webinar vs. sponsorship of that same webinar, it is still one webinar, so I’m counting that as one product with the happy bonus of two ways to cash in. Selling a subscription to a series of webinars is a different animal, don’t you agree? +2 products.
How about good old advertising? Are ROS (run of site) ads and targeted ads the same product? Is contextual advertising the same as targeted advertising? Not really in my book, if contextual ads are delivered based on topic or keywords and targeted ads follow an audience member or demographic segment. Sponsorships are definitely a different product, since they can include many components. The more elements you can make a case for, the higher the price. Then we have a client who starts with our data, integrated with other products, and has assembled a profitable ad retargeting package. That’s a whole different animal. +3-4 products.
Here are two that sound similar. We have many publishers who successfully sell events on their sites. Another charges event producers for highlighted listings in their event section. Events and Event Listings, distinctly different products. +2 products.
Is your old content bringing in cash? Selling hard copies of back issues won’t make you rich; but it can’t hurt. The other side of the coin is charging for access to your online content archives. +2 products. We see clients doing lots with repurposing fresh content or evergreens, but that may not result in being able to name an actual product for my list despite some of this bringing in hundreds of thousands of dollars.
Selling market data presents some definition challenges. We decided if you package data as a one-off product, such as Lists, Directories or Market Reports, they all equal 1 product. There are many different delivery methods -- print, ebooks, PDFs, even spreadsheets -- but I’m trying to be conservative. If you sell access to ongoing, real time data in your market, that is definitely a separate product. Then there is a mix of products offering access to data which is not real-time, more of a wealth of data assets packaged in different ways. TBD how to define. +3 products.
The final list will cover a lot of ground; I’ve only touched on half of them. Syndication and Licensing are simple words (+2 products) that can be monster cash flows. Site Licensing is a huge business for some clients, with individual sales sometimes at a six figure price. On the other end of the spectrum some publishers put a price on individual articles of just $9.95; but people buying those articles often end up as bigger customers. +2 products.
The final number will change a bit, but not the point. I do not think all publishing websites should have a cornucopia of dozens of products. You are limited by market realities -- and taste. My suggestion is to make sure you are being creative enough to leverage your audience and editorial assets. Drop me a line if you would like a copy of the final list.
Andy Kowl is a journalist and entrepreneurial publisher with more than 30 years developing, marketing and growing publishing companies. He is senior vice president of publishing strategy for ePublishing Inc., the leading enterprise publishing system (EPS) provider which manages content, audience data, workflow, newsletters and e-commerce for hundreds B2B online publications. He helps publishers increase reader engagement and response by integrating behavioral data with contextual content, and shows them direct ways to monetize the results. Andy writes the B2B Beat blog for Publishing Executive magazine. His background in B2B includes publishing, editing and/or owning magazines and information products covering specialty retail, horse breeding, real estate, credit unions, Wall Street compliance and wireless technology.