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Articles by: "Rande Price, Research VP – DCN"

Advertising | Industry-Research

Consumers oppose being microtargeted by political advertising

Consumers are very aware that social platforms and websites collect information about them. However, most Americans say political campaigns should not be able to target them with digital ads based on their online activities. In fact, according to the Knight Foundation and Gallup’s new research, nearly all say they believe that Facebook and Google (97%), Amazon (96%), and news sites or apps (88%) collect data on their browsing history and purchasing habits. However, this research found that 72% say that internet companies should make no information about users available to political campaigns in order to microtarget certain voters with online advertisements.

Limited targeting

A much smaller population of consumers (20%) state that general details about internet users, such as their gender, age or zip code should be permissible to use for targeting. This is in line with the advertising policy at Google, which limits the information political campaigns can use for targeting. Interestingly, 7% of U.S. consumers are okay with microtargeting saying that any information should be made available for a campaign’s use. This is consistent with Facebook’s practice, which does not place any such limits ad targeting.

Acceptable approach

Almost 60% of consumers favor websites showing ads with the disclosure of who paid for the ad, how much it cost, and whom the ad is aimed at. However, there’s a smaller consumer population (20%) that wants no political advertising in absolute terms. This is the policy adopted by Twitter.

An even smaller consumer base of 4% want no political ads shown in the final month of an election campaign. Juxtaposed to this is 16% of consumers who believe ads should not be regulated because they are a form of free speech.

Further, almost all consumers believe platforms should refuse misleading content in political ads.

Specifically, consumers said social media should not allow political ads that would target supporters of an opposing candidate and provide the wrong election date (81%). In addition, consumers said that platforms should not allow display ads that say a politician voted for a policy if in fact, they did not (62%). Close to half of all consumers (45%) think that social media companies should not accept ads that misrepresents or omit facts about a candidate.

Political parties react differently

  • Democrats are more likely than Republicans to favor stronger policies regarding content in political ads. Nine in 10 Democrats (91%) say an ad targeting an opponent’s supporters with an incorrect election date should be refused, compared with 73% Republicans.
  • Seven in 10 Democrats (71%) compared to Republicans (55%) say an ad that contains an inaccuracy about a politician’s voting record should be refused, while half of.
  • Fifty percent of Democrats say an ad omitting some details about a candidate’s position should be refused compared to 41% of Republicans.

Currently, there’s much debate in D.C. and Silicon Valley about microtargeting political ads. Social seem content to make their own policy decisions. Unfortunately, this leaves consumers very vulnerable and concerned about the often divisive, and even false

Industry-Research

How “Behind the Story” cards affect readers’ trust in the news

In an effort to provide more transparency in journalism, McClatchy, a local news publisher with a footprint in 30 markets, designed an information card to help readers better understand the reporting process. To evaluate its effectiveness three McClatchy newsrooms undertook a study to explore whether the placement of these informational cards on a news organization’s website affected readers’ recall of the card and trust in news.

The information cards, called Behind the Story (BtS), highlight why a topic is important to write about, how the story is written, and who the journalist interviewed. The Center for Media Engagement, in partnership with three McClatchy newsrooms: The Wichita Eagle, El Nuevo Herald and The Sacramento Bee, conducted research with over 300 participants to assess recall and efficacy of the BtS cards.

Overall, the findings show that, while the BtS card appealed to most readers, a majority of readers did not notice the presence of the card when placed within the context of an article. Importantly, however, when shown outside the context of an article, a majority of readers said the card would improve their trust in a news organization.

Recall

In all, 34% of respondents said they remembered seeing a section titled “Behind our Reporting” when the card was placed within the context of the article compared to 21% who recalled seeing the BtS card when placed at the bottom of the article. Although a higher percentage of people noticed the BtS card when it was placed in-line, the difference in overall recall is not statistically significant compared to the card appearing at the bottom of the article.

Interestingly, non-subscribers were significantly more likely to recall the card when it appeared in-line (40%) than subscribers (30%).

Trust

Placement of the BtS card, in-line or at the bottom of the article, did not impact participants ratings to the trustworthiness of the article, the news organization or the reporter in a significant matter. Overall, the study suggests that using a card designed to improve transparency may positively affect trust. However, newsrooms need to ensure that it’s noticeable.

Previous research from the Center for Media Engagement found that less than 10% of readers in three communities thought that their local newsrooms adequately explained how and why they decide what stories to cover.

With efforts like these, McClatchy is taking important and positive steps to help strengthen readers’ trust and negate concerns with misinformation and fake news. Fine tuning the placement of the BtS card and its messaging are encouraged. Future research should assess additional BtS designs, verbiage and continue to test best placement and overall impact on recall and trust metrics.

Industry-Research

Publishers prepare for 2020 with technology investments

Digital publishers see rays of hope as they continue to monetize premium content, transform business strategies, maximize technology investments, and increase revenue diversification. Just over two-thirds (69%) of digital publishers expect to see an overall revenue growth in 2020 according to a new report, Publishers Bullish on Talent, Tech and Growth in 2020, from Folio. Of those publishers expecting revenue growth, a quarter anticipate double digits. Only 4% of participants expect revenues to decline. This research is based on 182 surveyed industry professionals accompanied by eight in-depth executive interviews.

Growth expectations

Respondents report the top three categories for revenue growth are digital advertising including branded content (58%), live events (43%), and marketing services (38%). In addition to revenue growth, audience growth is also expected in 2020. Twenty-eight percent of publishers expect a 10% growth in audience while more than one-third (36%) expect single-digit growth. 

Audience development is more than just chasing clicks on digital platforms. It’s about learning your business ecosystem and how the pieces work together. Executives cite email (54%), social media (53%), and events (44%) as the strongest performers for audience development. 

2020 priorities

Publishers recognize the need to invest in the video side (35%) of their business as well as back end technology and operation systems (34%) for content management and advertising businesses. Publishers, especially traditional magazine businesses, see video as a very lucrative way to reinvent their content strategy and distribution model with attractive advertising packages at high CPMs.

Executive interviews

Catherine Levene, President, Chief Digital Officer of Meredith Corporation, participated in Folio’s executive interviews. Meredith charted its course in preparation for 2020. Levene said Meredith is keenly focused is on innovation. This includes technology investments, including a new content management system and a first-party data and insights platform.

She also mentioned Meredith’s investments in video production and distribution and new content-to-commerce capabilities. Levene sees a win-win for their audience and advertisers, “We are creating content and experiences that drive engagement and are offering predictive advertising that achieves results for our marketing partners.”

Erin O’Mara, President of The Nation, also participated in the executive interviews. O’Mara described the digital business as more than just a website, it’s about super-serving the audience. A new initiative, “The Nation Classroom,” uses their archives to create robust teaching modules for high school student. The goal for this project is to be profitable as well as to make available to schools that cannot afford it. O’Mara see this initiative as an important step to extend a brand experience through community outreach.

As Folio’s research suggests, there is no time digital media brands to standstill. It’s essential for media companies to take the steps to identify the key business and audience strategies and investment in them.

Industry-Research

Gen Z not only loves content, they pay for it

Media is embedded into the lives of Generation Z. This group, ages 14 to 22, are digital natives and socially driven. According to a new report from VICE Media in partnership with Ontario Creates, Gen Z: The culture of content consumption, media and pop culture have a significant impact on their identity. This study focuses on how Gen Z discovers, consumes and shares cultural content. This is defined as film and TV, art, lifestyle, gaming, music, and literature. (It excludes politics and hard news).

Three quarters of the Gen Z respondents (75%) report that original content is important to them. They like to hear about different topics and are open to storytelling in new and creative ways. Gen Z also likes to explore and engage in a variety of different voices and viewpoints. Their number one content preference is music followed by humor, memes/internet culture, gaming and food, dining and drinks.

Content discovery

Gen Z discovers content most often from personal recommendations from family and friends, music streaming services like Spotify and Pandora and from publisher websites.

There were born to social platforms and it plays an important part in their content discovery. YouTube is their number one content source with Instagram as a close second followed by Facebook and Snapchat. TikTok is also gaining popularity. Gen Z tends to like content on social platforms, that is transparent, with few barriers between the creator and the audience. In order to successfully engage with Gen Z, publishers should experiment with different storytelling techniques on social platforms.

Multitasking

True multitaskers, Gen Z often has a second device in hand (60%) while watching shows and movies for entertainment. The second device is used to socialize, engage in another entertainment mode (e.g. gaming), or find complementary information on the content being viewed.  

Subscriptions

Nearly all of Gen Z consumers (90%) pay for their content with, on average, four different content subscriptions. Music and video streaming are the top paid services followed by console games, PC games and mobile games. Gen Z reports that they are willing to pay for content if it offers better quality (61%), better experience (56%), and is more convenience (50%). Only four in 10 noted the need for an ad-free environment. Gen Z is looking for a frictionless and personalized experience with their subscriptions. They like the idea of platforms curating high quality content for them.

Pop culture and media play an important role for Gen Z. To attract this generation, publisher’s content should strive to:

  • Embody diversity
  • Entertain as well as inform
  • Attract global representation
  • Empower and support unique voices
  • Ensure quality (advertising platforms are fine)
  • Promote discovery and engagement across platforms

Importantly, the content needs to connect with Gen Z on an emotional level and showcase authenticity. Gen Z is conscious of content brands and publishers should think about ways to establish their credentials with this generation.

Industry-Research

Edelman Trust Barometer indicates the distrust of media is fueled by social platforms

In the past, encouraged by a strong economy, consumers found core societal institutions, government, business, NGOs and media, both competent and of high ethical standing. Unfortunately, according to the 2020 Edelman Trust Barometer, this sentiment is no longer true due to the rise of violence, government corruption, fake news, financial insecurity, and other unsettling conditions. Today’s consumer does not trust the government, businesses, NGOs, or media.

Edelman defines trust based on a combined measurement of these two distinct attributes: competence (delivering on promises) and ethical behavior (doing the right thing and working to improve society). The Edelman Trust Barometer is based on an online survey sampled of more than 34,000 respondents across 28 markets.

Edelman reports a significant imbalance of trust, a 14-point gap, settings a new record among the informed public and the mass population. The informed public, defined by Edelman as a wealthier, more educated and trusting consumer cohort, are far more trusting of every institution than the mass population.

Media trust

Within the media sector, search engines and traditional media (newspapers and broadcasting) are equally trusted at 61%. Social media, on the other hand, is the least trusted media source at 39%. And in developed countries traditional media outperforms social platforms by 30 points on average.

Social platforms continue to fuel the growth of distrust in media. While smartphones offer the power of communication in the user’s hand, this accessibility also accelerates the flow of user generated content and comments. Unfortunately, social amplifies and exaggerates false and misinformation and magnifies filter bubbles of extremism. It’s no wonder that three-quarters of respondents (76%) said that they worry about false information or fake news being used as a weapon.

For the first time this year, the Edelman Trust Barometer asked respondents to rate if an institution is doing well to very well on different issues. Related to this was a question to gauge the potential impact on trust associated with each issue. Media companies scored lowest on five issues: keeping social media clean, being objective, information quality, important vs. sensationalized content and differentiate opinion and fact. However, if media companies perform better on these issues, it will drive significant consumer trust.

Insert To build trust chart

It’s important for premium publishers, when working with social platforms, to ensure their brands are clearly differentiated from the platforms where their content appears. Further, publishers should continue to find new ways to build trust, especially on the issues with the most potential to growth in trust. Because, given their direct one-to-one relationship with consumers, trust is a critical factor for publisher success. 

Industry-Research

Reuters finds reader revenue critical for the future of media

Mobile and social media received a lot of attention this last decade. Major media trends included fragmented attention, intermediated media, and growing distrust in journalism. So, what will the next 10 years present? The Reuters Institute once again looks at our past and evaluates emerging trends to forecast what’s ahead in media in its report, Journalism, Media, and Technology Trends and Predictions 2020. Overarching themes for digital media in the next decade center on internet regulation, the re-establishment of trust in journalism, and creating a closer connection with the audience.

In addition, the report includes key trends and predictions for 2020 (see full report for the entire list).

1. The media business looks good; journalism less so.

The media business has a positive outlook but not so for journalism itself. While media executives feel confident or very confident about their company’s prospects in 2020, they feel less so about journalism in general. Their confidence for the media business centers on reader revenue and paid content, stable and growing income while advertising remains unstable. Further, the media business looks strong while consolidation is expected to continue. The latest in consolidation is a focus on keeping the editorial voice of the brands acquired while integrating back-end tech and data systems.

2. Digital leaders have mixed reviews for platforms.

Those surveyed are more positive about Google and Twitter than Apple, Facebook, Snapchat, and Amazon when it comes to initiatives to support journalism. Sixty percent of respondents rated Google as average or better while the other platforms were less favorable (it’s important to note that many publishers surveyed are currently or past recipients of Google innovation funds).

The overall sentiment from publishers regarding platforms is they want a level playing field where they can compete fairly and get proper compensation for their content and its value. Publishers in the EU are trying new intervention tactics to address these companies dominance. One example is the EU’s new copyright directive, aka the link tax. This policy requires platforms to pay for unlicensed content that appears in aggregated news services. France is the first member state to carry out the directive. Google reacted with displaying less content rather than pay. Courts will be deciding the next actions.

3. Reader revenue is a major focus for the new decade.

Executives believe reader revenue offers stable and growing income for news publishers. Half of those surveyed report that reader revenue is the most important revenue stream going forward. Subscriptions and memberships help publishers access reader information. In fact, many publishers rely on consumers login to their services for first party data. With new data tracking regulation in play and opt out ad-tracking browsers, publishers need to entice readers to register and login.

4. Audience growth, better measurement and ease of access will continue the growth of podcasts.

By 2021, US podcasting revenue is projected to grow by approximately 30% a year to reach over $1 billion. New formats are being explored from the recognized interview and chat format to new documentary formats.

Bigger audiences, better measurement, and easier access have combined to change the economics of podcasting. This is encouraging publishers to invest in creating more quality content and platforms to invest in better distribution and monetization.

Overall, the report finds that digital publishers seek to diversify revenue and strengthen user engagement with multiple touchpoints and products in the decade ahead. Newsroom have the added challenge of modernizing their presentation without compromising quality and trust and receiving proper compensation from the intermediates. While many industry challenges continue, publishers are well positioned to tackle these issues.

Advertising | DCN-Research

New DCN report offers insights on programmatic marketplace

Digital Content Next (DCN) has released a strategic advertising report, TRUSTX Programmatic Market Insights Report, which offers learnings on the mechanisms, practices, and performance in play in the programmatic market. The report is based on interviews with publishers as well as insights from the teams at DCN and TRUSTX – DCN’s cooperative and private marketplace launched in 2016. It gathers insights from publishers and distills best practices to help educate and drive a positive industry discussion in the programmatic ecosystem.

Publishers report that there is an overall institutional resistance to adopting a cost-per viewable model at scale within a media ecosystem predicated on low CPMs and often low-quality content. The report also uncovers some high-level insights into the programmatic market and offers an insider’s view into programmatic practices.

Supply-Path Optimization (SPO) and Demand-Side-Platform (DSP) Throttling

Two specific industry practice noted by publishers include:
Supply-Path Optimization (SPO) and Demand-Side-Platform (DSP) Throttling

This practice occurs when DSPs exclude an SSP’s bid based on bidding history in order to increase the likelihood that a bid will win. DSPs favor the SSPs with the highest number of queries per second (QPS). This enables DSP supply path optimization intelligence to “learn” how to win.

These SPO algorithms can be a barrier for smaller, newer SSP entrants. SPO algorithms, as they are designed today, favor established, larger scale SSPs. Increased visibility into the opaque ad tech ecosystem was cited as one of the most valuable benefits of participating in TRUSTX. Publishers believe that transparency is critical to strengthen the digital advertising market.

Hidden Reselling

It is not uncommon for SSPs to leverage indirect buying channels (other ad networks and exchanges) to tap into unsold inventory. These additional supply-chain interactions, through what are known as resellers, increase non-working media costs to buyers (additional ad-tech taxes), and diminish revenue to publishers. Reseller routes to premium publisher inventory are typically invisible to buyers, and sometimes not visible to sellers. (Note that TRUSTX does not permit any resellers in its supply-chain; all buyers get a direct path to all publishers.)

While publishers agree that TRUSTX has advanced the programmatic marketplace, they also see opportunity to further evolve marketplace dynamics. This includes marketing officers and agency executives directing their buyers to spend only in premium programmatic environments that are based on value-driven economics rather than auction-based systems predicated on cheap CPMs and cost

Industry-Research

Consumers are excited about 5G connectivity. Less so about escalating privacy concerns

Perhaps the word of the year for 2019 should be “connectivity.” According to Deloitte’s new report, 2019 Connectivity and Mobile Trends (CMT), the average household now has 11 connected devices, with seven different smart screens to view content. Smart home devices are also popular with more than a quarter of U.S. households (28%). Consumers are using connected thermostats, security, lights, and other connected products.

Consumers are also enthusiastic about 5th generation wireless networks (5G) and the promise of higher performance, greater reliability, and more cost-effective usage. Awareness is quite high with close to two-thirds of consumers reporting that they are familiar with 5G wireless networks. In fact, 28% of consumers say they are “very likely” to buy a compatible smartphone when the service is available in their area.

According to Deloitte’s findings, both Gen Z and Millennials plan to use 5G for its promise of speed and bandwidth for gaming and entertainment services like augmented reality and virtual reality (AR and VR). These services require high-speed, low-latency connections. Further, mobile gaming will also see a surge in usage. Nearly half of both Gen Z and Millennials familiar with 5G (49%), report that they will play more mobile video games using 5G connectivity.

Data collection

With consumers more connected than ever before, they are also more aware of the realities of the data economy including the collection of their personal data. Nearly three-quarters of consumers (72%) agree that they are more aware of how their data is collected and used than a year ago. Connected devices are a way of life. So too is the exchange of personal data for free digital services.

It appears that over half of consumers (52%), agree that the value they derive from digital services overrides their privacy and security. It’s important to note, this study did not differentiate between the data collection of publishers compared to social platforms or between first-party or third-party in its line of questioning.

Vulnerability is key here. More than half of consumers (58%) are “very” or “extremely” concerned about the privacy of their smartphone data, and 59% feel similar about its security. Consumers are also concerned about the privacy and security of smart phone speakers (73%) and about the privacy of home automation devices (72%). Importantly, 90% of consumers report that they should be able to see and delete data that companies collect about them. Further, 84% state that they want to be paid by companies that profit from their data.

Data protection

Consumers see platform and online services that collect their data as “most responsible” for protecting it (35%). This is followed by consumers themselves (26%), and the government (15%). Nearly two-thirds of consumers (61%) report that platforms and online services are making it harder for them to understand how their data is being used. A full 56% also state that they have less trust in these companies than they did a year ago. Interestingly, most consumers (84%) agree that the government should do more to regulate the way companies can collect and use data.

Consumers clearly welcome better connectivity and improved service performances. However, this comes with heightened awareness and concerns over their data privacy. While they value the online services they use, consumers want more control and transparency on the data collection, usage and a share in its monetization.

Industry-Research

Publishers have reevaluated their platform relationships

As 2019 comes to an end, we see that publishers have reevaluated their relationship with technology platforms. According to the Tow Center for Digital Journalism’s new report, Platforms and Publishers: The End of an Era, news publishers no longer expect scale and ad-based platform products to earn significant revenue or bring audience growth. Publishers recognize that monetizing traffic from posting a news story on Facebook is not a sustainable business model. Tow’s year-long research included 42 interviews with individuals from 27 news organizations (representing national and local outlets, national and local digital natives, broadcast, audio, and magazine), six platform companies, and one foundation.

Selective partnerships

According to the Tow report, this new publisher sentiment is a complete departure from a year ago, when publishers were still hopeful about partnering with platforms to help sustain the news business. Today, publishers report that they are examining internal business strategies and the rise of reader revenue to further revenue diversification (e.g. live events and podcasts) to regain control of their audiences.

Publishers are thoroughly assessing which platforms fit their needs best and identifying the necessary requirements for the platforms to meet. Tow’s research identifies four key explanations as to why publishers are more selective today about platform partnerships. They:

  1. No longer feel they are missing out if they choose not to partner with a platform
  2. Have seen insignificant return on investment from previous platform partnerships and products
  3. Better understanding of the extensive integration costs and expense of supporting third-party products
  4. Have greater recognition of the conflicting business models between publishers and platforms

Little fanfare for new platform products

Publishers note that platforms are closely following subscription growth in the marketplace and now offer their own subscription products. Last year Apple announced and launched Apple News+, a magazine and news subscription service at $9.99 a month. In their deal with publishers, Apple takes 50% of the revenue and the remaining is left to be divided among participating publishers.

Google rolled out a product called Subscribe with Google (it takes in the range of 5 to 15 percent of the revenue); and Facebook launched a paywalled version of Instant Articles. However, unlike previous rollouts of similar offerings, these overtures received little fanfare from publishers.

Platforms investment in relationship

Further, publishers recall Google’s and Facebook’s “goodwill initiatives” to help build stronger relationships with news publishers with healthy skepticism. In January 2019, Facebook committed $300 million to local news projects. In March, they kicked off with their first local news summit as an effort to address newsroom operations. At the same time, Google announced its commitment to local news and started a boot camp for eight local subscription publishers.

Then in May, Facebook announced that it was bringing its Digital News Initiative stateside by funding projects to help generate revenue and increase audience engagement for local news. And, in September, Facebook awarded “Community Network” grants, to support initiatives that connect communities with local newsrooms. Even with these significant investments (in the range of $1.0 billion in total) publishers remain very skeptical about the platforms’ commitment to journalism.

Publishers reinforce the basics

Publishers think a lot about the future. Undoubtedly, the platforms and their role in the online information ecosystem cannot be ignored. As seen in the Tow report, publishers present their new awareness in pragmatic terms. They are regaining control of how they publish and how they bring in revenue. Importantly, while publishers are not abandoning the tech platforms, they are much more carefully evaluating platform products in terms of business models, audience growth, and the editorial relationship.

Industry-Research

Out of control: Consumers increasingly wary of data collection, use, and security

Consumers are increasingly concerned about their privacy and apprehensive about their activities being tracked. They are also very worried about the ways in which their data is being used and about its security. According to Pew Research Center’s new study, Americans and Privacy: Concerned, Confused and Feeling Lack of Control Over Their Personal Information, 81% of U.S. consumers say the potential risks of data collection by companies outweigh the benefits, and 66% say the same about government data collection. In fact, most Americans do not think it’s possible to go through daily life without having data collected about them by companies or the government (62% and 63%, respectively).

Out of control

Consumer concerns about digital privacy includes those who collect, store, and use their personal information. Nearly eight in 10 consumers are “not too” or “not at all” confident that companies will admit or take responsibility if personal information is compromised or misused. Further, 69% also report this same lack of confidence in the way companies use their personal information.

Most consumers in the US do not feel in control of their own personal data. Eight in 10 consumers report they have little or no control over what data that companies (81%) and the government (84%) collect about them. Consumers report seeing little benefit from all the data that companies (72%) and the government (76%) collect about them.

Privacy, please

Concerns about the right to privacy can be traced to the Constitution. In 1965, the Supreme Court ruled that the right to privacy can be inferred from the First, Third, Fourth, Fifth and 14th Amendments. The concept of privacy has evolved for consumers and now includes access to their digital footprint and all of their personal information. Pew finds that consumers specifically identify privacy as “other people and organizations not being able to access their possessions or private life” (28%) and “control over information, possessions, self; deciding what’s accessible to others” (26%). Many also feel the term “personal data” is interchangeable with “digital data.”

Data insecurity

Given the number of major data breaches in the last few years, (Marriott International, Yahoo!, Facebook, Equifax to name a few) it is no wonder that 70% of consumers report that their data is less secure today than it was five years ago. 

Few consumers know what companies and the government are doing with the data collected on them. Further, most consumers lack the understanding of personal data tracking policies and restrictions.

Digital sites, especially premium sites with a direct consumer relationship, must find a way to clearly communicate their data tracking polices. Further, it’s important to clearly message data tracking policies with complete transparency on what data is being collected, what data is being used and how it’s being uses.

Industry-Research

Research confirms healthy consumer appetite for digital subscription products

A new research report, Connecting the Dots: Digital Subscriptions – Media Subscribers’ Motivations & Preferences, reinforces our findings earlier this year that the subscription marketplace is vibrant and growing. The News Media Alliance, Star Tribune, and the University of Minnesota Hubbard School of Journalism and Mass Communication research echoes the findings in our DCN Digital Subscription Economy report, which was released in September.

Both reports used online surveys to collect information on consumers’ willingness to pay and motivations for subscribing to news, entertainment, and sports content. DCN conducted its survey among a national sample of 1,000 U.S. adults while the News Media Alliance research sampled residents of Minnesota, with 497 respondents. Regardless of the sampling different methods, both studies produced similar findings in terms of consumer appetite for digital subscriptions in the marketplace.

Number of paid media subscriptions

The News Media Alliance analysis identified that the average household subscribes to on average almost four paid subscriptions across newspaper (print, online, or app), streaming music, streaming movies, streaming television, and magazine (online or app). More specifically, the average household pays for about 1.3 news subscriptions and approximately 2.5 entertainment subscriptions. The DCN Digital Subscription Economy research reports similar findings, on average, subscribers pay for 4.3 different digital media subscriptions.

Digital subscription spending

The News Media Alliance research reports that consumers are willing to spend, on average, $636 per year, or $53 per month. Almost exactly to the dollar, the DCN research found that digital consumers are willing to spend $54 per month on average or a total of $648 per year. Importantly, the News Media Alliance research also focuses on local news media. Readers of Star Tribune, the leading major newspaper within Minnesota, are willing to pay $70 per month, compared to subscribers overall.

Video subscriptions drive value

Connecting the Dots finds that spending on entertainment content is a key driver of subscription spending in general and has an important relationship with spending on other types of content. It’s no wonder, according to Brian Wieser, global president, business intelligence, GroupM, with Netflix, Disney+, Apple TV+, Amazon, NBC’s Peacock, and AT&T’s HBO Max could each average around $5 billion on content in the U.S. Interestingly, the News Media Alliance research shows that the more money that respondents spend on entertainment, the more likely they are to spend on national and local news.

DCN’s Digital Subscription Economy report also concludes that streaming subscription value is driven more by video streaming services than by live TV streaming, digital audio, or digital print subscriptions. In fact, when respondents were asked if they had to choose only one type of paid digital subscription to receive, 36% of replied video and 33% replied television. This was by at least a 2:1 margin compared to other digital media subscriptions services (i.e. Live TV, magazine, music/podcasting/radio, newspaper, print and sports). This value-topping source of entertainment is fueled, in part, by big-budget original productions with significant publicity. This drives “must have” status, Fear of Missing Out (FOMO). It is also increasingly impacted by bingeing behavior, which affects the finding that video streaming subscriptions (movies and television) lead in ultimate value.

Both studies show a robust and rapidly growing digital subscription marketplace. It doesn’t appear that consumers are anywhere near reaching a tipping point of “too much” spending or “too many” services. Importantly, both studies provide publishers with insight into the dimensions of consumer value to help inform their subscription strategies, offerings, and messaging.

Industry-Research | Revenue

The publishers’ guide to ecommerce

While advertising and subscription revenues are core to publishers’ bottom line, developing alternative revenue streams is critical in today’s competitive environment. One diversification approach, ecommerce, has evolved well beyond affiliate links and branded content. A new report from Whatsnewinpublishing.com, The Publisher’s Guide to eCommerce, written by Damien Radcliffe, explores emerging ecommerce opportunities and lessons learned from publishers. The report details 10 ecommerce examples from publishers. Some used third parties to implement their ecommerce initiative, while others are developing inhouse teams.

The right recipe

As the report points out, eCommerce is not easy work for a publisher. They need to be thoughtful in identifying the benefits of brand extensions and messaging this to the consumer. Importantly, product relevance and quality must exist to build customer loyalty for any brand extension.

Tasty, BuzzFeed’s food brand, provides a great example of a healthy brand extension that organically fits its brand with snack-size recipes and videos. It successfully broadens the brand’s reach beyond its core site and social media channels. Tasty products include cookbooks and kitchenware, and even a partnership with McCormick Spices.

The report suggests that publishers stick close to their wheelhouse. For example, there might be a lucrative business living within their articles and photographs archives. The Denver Post and the The Seattle Times lead strong ecommerce channels selling special events and news coverage clippings for memorabilia, wall art, and keepsakes. Third parties are often used for the fulfillment, creation and distribution of these products, which reduces some of the publishers’ risks.

Social shopping

Social commerce is another interesting avenue for publishers to keep in mind. GlobalWebIndex research finds that nearly 3 in 10 online consumers say that researching and finding products online is one of the main reasons they use social. These platforms offer an opportunity for publishers to reach new and wider audiences.

As such, media analysts thought that social platforms would provide an optimal environment for a publisher ecommerce marketplace. Unfortunately, it hasn’t panned out just yet. However, Snap appears to offer a strong potential for experimenting in ecommerce. The research emphasizes that it is critical that publishers working to offer purchase opportunities on social strive for a frictionless experience.

Regardless of the approach, the report reminds publishers not to underestimate the cost and complexity of running an ecommerce division. It’s like building a startup business: Technology investments will be required (acquisition and fulfillment software) as well as those for merchandise and warehousing.

Challenges and rewards

First-party insights are important for a successful ecommerce initiative. This is particularly critical in establishing a correlation between the content the user engages into the product searches and products the user buys. Creating this type of first- party relationship between content and product will allow publishers to offer predictive analytics.  

There are a multitude of ecommerce ideas for publishers to experiment, from affiliate relationships to developing and selling proprietary products. Importantly, each ecommerce opportunity must be evaluated carefully to meet the necessary criteria to compliment the publisher’s brand. And publishers must recognize the level of investment required to undertake a successful ecommerce initiative.  

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