Rachel Williams, Product Marketing Manager—Outbrain, Author at Digital Content Next

The publishing industry is going through a transformation due to continued shifts in reader habits. As readers spend more time within social platforms, publishers are exploring new opportunities both on and off their sites to reengage users and grow their bottom line. Revenue diversification has become a priority in the media business.

With a large number of readers congregating on social platforms, advertisers and publishers followed them there. All types of content that ranges from personal posts to advertisements to videos have made their way into people’s feeds. But akin to display ads in the early stages of internet advertising, the feed has driven a need to break through the clutter. In today’s media environment “normal” coverage doesn’t always make it through – surprising events do, particularly when main metric that news outlets are judged are through ratings and page views.

The changing social relationship

Social platforms are characterized constant changes to algorithms, the latest of which prioritizes posts of friends and family members over publishers. At the same time, Facebook regularly tries to entice publishers to try new products and features.

Earlier this year, the social media giant also informed its production partners for news shows on Facebook Watch that it won’t renew two-thirds of its existing news shows. At this point, publishers aren’t likely to put too much faith into these so-called partnerships. As a result, they have to seek out new revenue approaches that rely less on social platforms.

Even web natives like Buzzfeed have recently struggled with layoffs, reinforcing the view that diversified revenue streams outside of platforms are imperative for survival. These venture-backed sites have seen issues surrounding the need to prove profitability faster than they can grow organically, causing a focus on sheer traffic and get-rich-quick strategies.

A healthier approach

Then there are niche players, like wellness publication Well+Good, which have done the exact opposite. They focus on growth by creating content and real-life experiences for their core audiences in order to connect with their readership in new ways and create additional streams of revenue. As they understand the lifetime value of their readers and cater to their wants and needs, they’ve created a loyal following that transcends from online to real life.

By noticing a trend for “one-stop wellness” among its readers, Well + Good created experiential events through teaming with other wellness brands and expanded their offering. Readers can now experience the brand through wellness retreats, in-person monthly talks, and the potential for health & wellness pop-up shops.

Flowing with the revenue streams

However, it is important to recognize that new revenue opportunities need to be a natural extension of the brand. At the 2019 American Magazine Media Conference in New York City, Troy Young, president of Hearst Magazines, mentioned how media brands need to be more “thoughtful, research-oriented and data-driven.” At the same conference, CEO of Bonnier Corporation stated “…it’s dangerous for us in media to think we should stay in our swim lane. We are not going to get out of media, but we’re attached to it,” when commenting on how he would “future-proof” Bonnier by proposing one-third of his revenue comes outside of publishing.

Revenue streams outside of ads are not a one-size-fits-all. And figuring out how they fit within existing infrastructure can be difficult. But publishers that get it right have new ideas that focus audience attention and command bigger media budgets from brands. “There is going to be a new crop of players like us that accelerate because they understand how to connect content, commerce, and conversation,” Erika Nardini, CEO of Barstool Sports said. “Companies that do that are going to be in a good spot.”

Experience and growth

Leading local news organizations like Gannett are diversifying their revenue through subscriptions, though they are still focused on ad yield and engagement. To help with this, publishers are starting to personalize the onsite reader experiences with unique and proprietary formats to prove engagement with audiences for a higher price from advertisers. This is revealing to be a viable strategy for revenue over struggling standardized banner units. As people continue to shift toward mobile where there’s less real estate for ads, it has led to the rise of publishers embracing native, according to Digiday.

A recent eMarketer report forecasts that the spend for native display ads from US advertisers will be $43.90 billion in 2019, a $24.6 year-over-year growth. They also anticipate native display ad spend to grow over 20% to $52.75 billion in 2020. Principal Analyst for eMarketer, Nicole Perrin said “Native formats have made significant inroads in channels like mobile apps, but there are still a lot of traditional display units being traded programmatically, especially on desktop and the mobile web.”

It’s interesting to note that when it comes to the share of native from social, eMarketer sees a slight decline from 76.6% in 2018 to 73.5% in 2020. Yet this may be a silver lining for publishers. As Facebook finds itself embroiled with data concerns with its ad-targeting tools and constant change of its ad policies, it may become less appealing to brand marketers. It may also give publishers pause in how they include social as a part of their online strategy.

If today’s publishers want to explore new opportunities to diversify their revenue streams while making meaningful connections, a native feed experience is a viable strategy. It can help improve reader engagement by personalizing content experience and shift share from the social media giants and bring publications back into the spotlight.

Publishers are reclaiming their voice when it comes to how and when they are reaching their most important readers. As the market continues to feel pressure from ever-changing trends of the duopoly, publishers are putting more effort into direct relationships with their audiences and leveraging actionable intelligence from data. This means much more than ad targeting today. Data allows publishers to better serve their readers and, as a result, better profit from true engagement.

A study by the American Press Institute surveyed over 4,000 consumers of news and found that 78% respondents value getting reliable, accurate facts. An audience survey conducted by The New York Times, found that 73% polled believe “that it has never been more important to support quality journalism.” As consumers are willing to pay for quality journalism, publishers are looking to leverage these trends to deliver their best content and form meaningful reader relationships that will sustain the media business.

Although the vast majority of readers don’t subscribe, those that do are the that do are the most impactful. They spend longer on site and drive greater revenue. Of course, it is important to remember that there is no one-size-fits-all for subscriptions. Solutions will be different for every publisher and publishers must adapt to audience behaviors quickly, as they change often.

Flexible paths to subscription

For example, some audiences respond well to metered paywalls. Among digital subscribers, it was found in the same study by the American Press Institute that 47% of respondents became a subscriber after they reached a limit on free access. Other audiences engage after enjoying a newsletter. Deciding on what content to show and when to show it is something that needs to be finessed in order to satisfy audiences (and hopefully entice them to subscribe).

Yet, even as subscriptions become a focal point, advertising revenue still accounts for the majority of publisher revenue, despite per-ad revenue declining. At the same time, readers are getting savvy about how they choose to consume content, bouncing quickly from pages when they are blanketed with disruptive ads. Publishers that deliver a clean website experience are more likely to build long-term relationships with readers.

Engagement is key. But getting there is not easy. One route is personalization. In fact, publishers who successfully drive subscriptions share a common theme in understanding the importance of integrating both analytical and editorial teams to provide deeper reader personalization in this digital era. This can mean content personalization, but it can also take the form of personalizing subscription offers based upon customer behavior and preference.

Data driven success

Hearst Newspapers has integrated various initiatives where their growth is fueled by data. The publisher’s goal was to evolve its digital properties into a portfolio of diversified subscription and ad-supported sites. Through the use of AI, Hearst analyzed over two years of subscriber data and can now identify what users are going to convert and where, as well as analyze pre- and post-subscription patterns.

Editorial teams at The New York Times use content analytics platforms to understand readership in real-time. They also centralize the data for actionable intelligence that helps them better serve their audience. (We’ve seen customers who take this kind of approach increase conversions up to 200%.)

Data enhances the reader experience and makes valuable connection for publishers by allowing editors adjust content strategies based on where audiences come from and how they convert.

By being data informed, publishers can better understand reader engagement as well as how that readership consumes their content and what helps convert them from casual readers to seriously committed, and even to become subscribers.

Articles by: "Rachel Williams, Product Marketing Manager—Outbrain"

How integrating analytical and editorial teams drives subscriptions

Flexible paths to subscription

Data driven success