Two major shifts are causing disruption in the publisher space: audience behaviors are changing and traditional ad revenue is dropping.
According to McKinsey & Company, 73% of US consumers have tried new shopping behaviors since the COVID-19 pandemic began. Overall, they’re prioritizing value and convenience, open to buying from new brands, and taking their shopping online.
Meanwhile the lockdown caused a 48% decrease in traditional ad spend as consumers flocked to digital channels to satiate their news consumption and e-commerce needs.
This all points to an important realization for publishers — they need to start finding alternative monetization sources.
To survive, they don’t just need to make up for lost ad revenue (duh) but they also need to follow their audiences across channels and touch points, creating new strategies that meet their changing behaviors and values. That is, publishers need to understand people won’t always just discover — and come back to — their websites on their own.
Those audiences need to be found, nurtured, and re-engaged, so they can ultimately drive revenue and become loyal consumers.
Industry Insights: Alternative Monetization Sources
We’re sharing insights from publishers across the industry about how they’re finding and activating alternative monetization sources.
Here’s what they have to say:
1. Richard Reeves, managing director, Association of Online Publishers
“Subscriptions in particular were already playing an increasingly essential role in the monetization of online content and look set to become even more vital as publishers adapt to the new landscape […] the shift towards subscriptions and other diverse revenue sources is only set to grow, accelerated in part by the pandemic. The publishers that adapt to this change will be the ones that have the most to gain when the storm passes.”
2. Kayleigh Barber, senior reporter, Digiday
“With advertising revenue down across the board during the continuing coronavirus crisis, publishers are relying more on revenue cultivated from readers, particularly in their affiliate and commerce businesses. But now, beyond a faint lifeline to a challenged bottom line, several publishers are seeing commerce accelerating into an increasingly potent and sophisticated engine for their companies with distressed legacy revenue streams.”
3. Jason Fox, chief digital officer, Consumer Reports
“People are purchasing more than ever before online. For us, we have been intentionally building our affiliate marketing program over a number of years, but we’ve really supercharged it over the last few months as we’ve seen the consumer need and behavior. People want to buy in a safe place and in an environment where there’s a trusted brand and there’s curated shopping merchants and it doesn’t feel spammy.”
4. Salil Kumar, CEO, India Today Group
“Advertisers are now focused on how you weave a story around the ads that encourages users to interact with them. This will involve a mix of audio, video, and textual elements. This coupled with extensive audience mapping will fetch increased revenue for all publishers. Publishers should focus on creating powerful content that places advertisers in a good light and makes the user engage with the entire webpage.”
5. Angelica Irizarry, director of events, Inquirer
“Consumer revenue streams, including digital subscriptions and ticketed live events, are increasingly important to news organizations as reliance on traditional advertising revenues continues to decrease. Events […] supported in part by an underwriting sponsor, can also provide additional resources beyond consumer revenue.”
6. Jeff Kupietzy, CEO, PowerInbox
“Consumers will continue to try and get more and more content from trusted publishers, but publishers have to really think about how to now access those consumers on multiple platforms. So if you’ve traditionally thought of yourself as linear, now is the time to think about the alternatives. Do you have content on Apple News and are you monetizing that? Have you thought about growing your email list? Have you thought about trying a push product? […] How do you reach out to those people on a multichannel basis while still being able to look at them as a single entity? Those that do that well will be very successful.”
7. Anatolijs Ropotovs, CEO, Game Insight
“Bidding is the future of ad monetization across the [gaming] industry because it provides a more efficient and fair ecosystem and streamlines ad optimization, whilst providing a positive improvement on ARPDAU [average revenue per daily active user]. Publishers can expect to see revenue uplifts, as bidding surfaces the best prices advertisers are willing to pay for each impression.’’
8. Edward Romaine, head of marketplace image and monetization, Turner Sports and Bleacher Report
“80% of our total user base has opted into push alerts. This is important because it allows us to personalize their experiences and also keep them informed about other things going on from a nontraditional perspective, like when we have e-commerce releases, which has become an increasingly important part of our revenue composite. What we did see is that within the first two minutes of a push alert, 36% of our opens happen, which is crazy. It means people are actively looking out for these.”
9. Rande Price, research director, Digital Content Next
“Audio has proved to be a strong and viable business for publishers and they look to expand their audio businesses in 2021. Some have their business by producing dedicated podcast content while others grew through acquisitions. Many publishers are testing new formats for podcast integrations in content outside of news.”
10. Patricia Orsini, analyst, eMarketer
“In their quest for viable revenue streams beyond advertising, publishers are beefing up subscriptions and memberships, offering hybrid free or paid models, developing events and testing new platforms.”
The benefits of diversifying revenue streams
There are plenty of good reasons to start investing in alternative monetization sources: driving revenue, reaching customers on their favorite channels, gathering first-party data, minimizing risk in case one of those channels falls through… the list goes on.
Just start by looking at where your audience is already active — like on email, web browsers, and news apps. PowerInbox helps publishers launch targeted campaigns through these high-engagement channels, so they can meet their bottom line and deliver more personalized customer experiences.
If you’d like to hear more from digital publishing industry experts on alternative monetization sources, check out our recent webinar, here. Our CEO, Jeff Kupietzky and World Forum Disrupt welcomed panelists from Bleacher Report, FOX TV Stations, and Consumer reports to discuss this topic in depth.
Ready to explore new revenue streams for your business? Contact us to learn more.