Traditionally, many media companies earned the bulk of their revenue from display advertising. But as the pandemic continues, media companies face an increased need to explore more innovative models of monetizing their content. Here are several ways media businesses can generate new revenue streams:
Data is the future of driving revenue. Consider what Conde Nast is doing with first-party data, with its Now|New|Next Segments. These explore what consumers are buying now, how the behaviors might change, and who will spend next. Increased audience engagement is driving the ability to discover new customer segments, opening the door for advertisers whose doors are closed during the pandemic.
Advertising spend decreased during the early months of Covid-19, but now media companies are starting to look at data offerings to entice advertisers. GDPR and additional privacy laws have dictate that this monetization strategy must emphasize a cookie-less future.
2. Monetizing Talent
Reputation and brand are important in the media industry. Quality journalism keeps people coming back — and talent is a big part of that. Media has begun to recognize the value of monetizing the individual. For example, Spotify gained exclusive rights to Joe Rogan and Michelle Obama podcasts, and The Athletic gathered a cult of the best sportswriters. Quake, a subscription-based podcast founded by media veterans, just launched in October 2020 with $2.5M in seed money. Its exclusive shows are headed by top talent in politics and media, like Laura Ingraham, Soledad O’Brien, Mike Huckabee, Andrew Gillum, Marc Lamont Hill, and Buck Sexton.
If media companies don’t start monetizing talent, the best journalists will begin creating their own micro-brands instead. This will further crowd the competitive space and the talent is likely to take their dedicated followers with them.
3. Ecommerce/Affiliate Marketing
Ecommerce in news media is poised for explosive growth. According to Digiday, 85% of CPG marketers are planning to buy more ads from retail media networks. Many media companies are forming partnerships with retail brands, as retailers are piggybacking on the reputation of established media brands, and vice versa. This could be especially lucrative during the holiday season.
Some ways to explore the Ecommerce opportunity include:
- Creating newsletters with embedded content to promote either brand advertising or direct-response advertising.
- Allowing partners to pay for news real estate by writing their own opinion pieces.
- Opening an online shop, like BuzzFeed.
- Offering affiliate links for products mentioned.
- Opening a pop-up boutique and e-commerce shop for the holidays.
- Promoting events with merchandise (for its livestream with Billie Eilish, Spotify is promoting with an exclusive t-shirt).
More media companies are putting digital subscription strategies ahead of other initiatives, and the numbers show that’s paying off. The New York Times has reported an increase in subscribers of 2 million year over year, and their digital subscription model is now finally more profitable than their print model.
And the latest report from the Digital Publishers Revenue Index, shows an overall increase in revenue from subscriptions over the past decade. 10 years ago, subscriptions made up only 7% of digital revenue, and now the data show that has increased to 22% of total revenue. Many publishers have begun to explore paywalls — from soft, hard, metered, and dynamic models. If you’ve not yet done so, now’s the time.
5. Communities and Membership Models
With the cancellation of in-person events and social gatherings, there has been a huge decrease in networking opportunities. Companies like Fortune are successfully solving two problems with one (big) concept. Problem 1: What’s a way to monetize virtual events to decrease revenue loss? Problem 2: What is a new way to bring in revenue and create a loyal customer base?
Traditionally, Fortune’s live events were designed for a finite number of people; there could only be 50 people at the Top 50 CEO’s retreat, for example. But Fortune realized an opportunity to grow its community to include previously untapped leaders and create a broader community by launching Fortune Connect in the fall of 2020. This online learning platform and community provides ongoing networking events and educational content to aspirational mid-tier leaders. Fortune is using a membership model to build, and grow, a sticky community.
6. Over The Top (OTT)
A growing list of brands are expanding into broadcast and streaming TV to grow their brand, engage their audience where they go, and bring in a new revenue stream. TIME & Univision won an Emmy. Vox has a top-ranked Netflix show. Axios is on HBO. Vice, New York Times and BuzzFeed have turned to streaming content. Beyond their well-known “Explained,” Vox has branched out further into unbranded production shows.
OTT is no longer an opportunity limited to legacy video or television brands. Media companies of all sorts are finding creative ways to monetize their video investments because it engages a new audience and establishes a new habit for the consumer to connect to the brand.
Media companies are providing a growing number of learning/education courses for readers. For example, TIME has expanded its iconic TIME100 people with TIME Talks. The Wall Street Journal launched a mobile app to help provide resources on managing finances during the pandemic. Morning Brew has been putting together 101 courses on topics like Marketing, Finance, and Branding. And Axios is starting 101 video courses on topics like 5G, which are sponsored by companies related to the topic.
Publishers are seeing an opportunity to develop deep subject matter expertise and be the go-to source on certain topics in addition to news stories. It improves the value they can provide to subscribers and pulls in more targeted advertisers since they can reach a highly engaged niche audience on long-shelf life content that can continuously draw an audience.
Most hard-news outlets saw a drastic hit to their advertising revenue this year. Even an increase in subscription revenue failed to offset the advertising losses. But evergreen sites like Dotdash — which owns sites like SimplyRecipes and TreeHugger — have seen an 18% increase in revenue. While Dotdash does rely on an ad revenue model, they use ads about ⅔ less than a traditional news outlet and bet on fast page load and better UX for their growth.
What makes it particularly effective is their diversification of brands and content. Their travel brand ads, for example, have decreased while their health verticals have exploded. Having evergreen content allows them more flexibility in what content to create and how valuable each piece is to them since it doesn’t have a shelf life.
As news media becomes increasingly competitive, companies must find innovative new methods of generating revenue that also help attract and retain new customers. By exploring a wide range of approaches, with a focus on your core competencies and customer needs, news publishers are able to stay competitive and build healthier diversification of revenue sources.