Digital Content Next (DCN) recently released findings from its second annual DCN Distributed Content Revenue Benchmark Report. The research, written about here and here, provides marketplace intelligence on distributed content strategies and the challenges confronting publishers when working with third-party platforms like Facebook, Twitter, Snapchat, YouTube, and others. The report confirms that despite the constant changes in distributed content policies and business practices, little has changed for publishers in the last 12 months.
Facebook and Google generate the most distributed-content revenue for publishers outside of Over-the-Top (OTT). However, together they account for less than 30% of the total distributed content revenue and represent only 5% of the total average digital revenue for publishers. Overall revenues from distributed content grew from 14% in last year’s report and now represent 16% of the surveyed publishers’ digital revenues.
Additional Key Findings
Monetization of distributed content for H2 2016 and H1 2017 represented an estimated $10.1 million and $10 million average revenue. For companies providing data for both H1 2016 (last year’s report) and H1 2017 for this report, distributed content revenue grew by an estimated 37% year-over-year.
Video, consistent with last year, represents 85% of the total, $8.3 million in 1H 2017, driven by TV/cable companies’ OTT monetization. The remaining 15% cuts across social media, Google AMP and syndication.
Facebook generated the most revenue for publishers, capturing $1.3 million (50% of social platform revenue) in H2 2016 and $1.5 million (59% of social platform revenue) in H1 2017.
Out of the specific third-party platforms tracked, publishers are active on Facebook, Twitter, YouTube and Instagram. However, for monetization purposes, publishers are still most active on Facebook and YouTube.
Despite the challenges, DCN found that publishers remain active across a range of channels distributing and monetizing content off their sites at levels relatively consistent with last year’s findings. Still, publishers remain cautious about increasing staffing for distributed content monetization.
Best Practices
1. Concentrate negotiation at the executive level of your company management; do not leave negotiations to lower-level management and/or individual brands or businesses.
2. Focus on products that leverage your core business, are replicable, get new money, and have the potential to scale.
3. Negotiate for business requirements that support scaling in partnership agreements:
ad server integration;
third-party measurement integration;
management reports (e.g. roll-ups by publisher and/or marketer);
and-data for advertising and subscription monetization.
4. Test and measure content consumption and monetization through both advertising and subscription on third-party platforms and compare results to on-site metrics to inform monetization strategies.
5. Centralize responsibilities or use active cross-functional teams for managing third-party partnerships.
Advertising is the most common form of monetization of content distributed on third-party platforms, with more than 85% of total average revenue sold directly by publishers. While distributed content remains an essential part of publishers’ strategic plans, the revenues earned do not match publishers’ investment. Importantly, publishers will continue to participate and test to find the best value and revenue model for their premium content.
Strategies for differentiating their premium news and entertainment companies in an environment of disruption, trust issues, and monetization challenges were the focus of the annual closed-door members-only Digital Content Next (DCN) Summit held Feb. 8-9 in Miami, Florida.
DCN CEO Jason Kint updated attendees on consumer privacy, net neutrality, and press freedom policy initiatives. He said that pressure on platforms will increase this year and that advertisers will seek greater transparency. Kint cited findings from DCN’s new Distributed Content Revenue Benchmark Report, which found that publishers only garner 5% of their revenue from social platforms. However, he also touched upon the growth in paid content, on-demand video, and promising signs of sustainable advertising models.
Trust
For the digital media industry, Trust has reached a crisis level, Kint said. He and other speakers throughout the event pointed to the 2018 Edelman Trust Barometer, which reveals a low consumer perception of the media, platforms, and advertisers—particularly around digital.
An absence of trust has been a driving factor toward regulatory scrutiny in the U.S. and abroad. It has also profoundly affected digital advertising, one of the mainstays of the industry. Kint applauded DCN members for embracing DCN’s new tool for rebuilding trust: TrustX. The cooperative private programmatic marketplace serves as a collaboration platform for marketers and publishers to create innovative advertising solutions that drive measurable value and improve the consumer experience with confidence and safety at scale.
Kint was far from alone in extolling the importance of trust in the digital content marketplace, however. Fatemeh Khatibloo, principal analyst at Forrester Research cited the building blocks for trust, which include integrity, competence, transparency, privacy, and data security.
David Sable, Global Chief Executive Officer, Y&R, noted that trusted brands employ honesty, environmental sustainability, and kindness. He also pointed out that millennials are keen to identify trusted news sources. Building trust starts early, according to Sean Cohen, president, International and Digital Media, A+E Networks, citing how brands such as the History Channel have become a trusted source for students.
Brian Stelter, Katy Tur, Arianna Davis, and Jorge Ramos
While Edelman’s barometer noted a five-point jump in trust of journalists, a social media-weaponized world has given way to readers and viewers expressing anger, often anonymously and without consequences, as vividly reported by a panel of journalists— Arianna Davis of Refinery29, Jorge Ramos of Noticiero Univision, CNN’s Brian Stelter, and Katy Tur of MSNBC Live.
Brand Quality and Context
People won’t pay for brands that don’t focus on quality, noted Andrew Essex, former CEO of Tribeca Enterprises and Droga5 [pictured, top]. Quartz President and Publisher Jay Lauf also emphasized value-based selling over commodified volume selling.
Context is critical, he said, adding that marketers “are terrified” about ads appearing on an exploitive YouTube video or inadvertently funding fake news on Facebook. And Hearts & Science research on negative reach confirms advertising appearing next to content a consumer finds offensive does more harm than good according to the agency’s president Zak Treuhaft.
Sean Cohan, President, International and Digital Media, A+E Networks & Jason Kint, CEO, Digital Content Next
And, in a world dominated by memes and disembodied news delivered via social platforms, “Context is king,” according to Sean Cohan, President, International and Digital Media, A+E Networks. For example, he pointed to the History brand’s increased emphasis on providing a larger historical context for today’s news, such as the history of sports figures’ involvement in political protests.
Disruption and Opportunity
Disruption has led to a competitive marketplace imbalance as DCN member companies try to transform their business models, as Kint noted. At the same time, disruptive technologies, such as voice assistants, can create significant opportunities.
Loren Mayor, COO, NPR, spoke of the station’s mission to connect with people through storytelling journalism and is using on-demand audio and podcasting to enhance audience growth and engagement.
Smarter use of data and respectful personalization were subjects that came up in a number of conversations and presentations. More-informed data will help drive value, according to Lou Paskalis, SVP, Enterprise Media Planning, Investment and Measurement Executive, Bank of America Merrill Lynch.
Marcus East, EVP & Chief Technology Officer, National Geographic
Marcus East, EVP, Product & Technology/CTO, National Geographic, said that successful brands create personalized experiences and help consumers save time and money, create emotional connections, offer life-changing elements, and promote positive social impact.
That said, in today’s uncertain digital environment, the hallmarks of reputable journalism have reemerged as critical for consumer trust and attention. Michael Anastasi, VP News, USA Today Network, Tennessee pointed to importance of the Indianapolis Star’s investigative coverage of U.S. Olympic gymnastics doctor Dr. Larry Nassar, which stands out in a time of local news outlets’ survival uncertainties.
Anastasi said that USA Today leverages its local/national symbiosis on to inform some of its stories. He cited the brand’s coverage of the opioid crisis across all platforms—and with national, local, and individual ramifications. The comprehensive coverage was made possible through a sponsorship from BlueCross BlueShield of Tennessee.
In addressing financial sustainability in non-profit journalism, ProPublica President Richard Tofel noted significant growth in donation-based revenues since the 2016 U.S. presidential election. The non-profit model seems to be working for ProPublica as Tofel said that they launched with a staff of 25 nine and a half years ago and now number more than 100.
Diversification and Monetization
Ed Davis, EVP & CPO, Advertising Products, Fox Networks Group
Unsurprisingly, revenue was a key topic at the Summit. And while advertising remains a critical focus, diversification was a dominant theme. In all aspects of monetization, good consumer experience and engagement were essential. As Ed Davis, EVP & CPO Advertising Products, Fox Networks Group put it: “Attention is currency.”
Maggie McLean Suniewick, President, NBCUniversal Digital Enterprises & Tracy Corrigan, Chief Strategy Officer, Dow Jones
Maggie McLean Suniewick, President, NBCUniversal Digital Enterprises, showed off the many ways the company’s Olympic coverage is tapping into a wide range of platforms to engage target audiences wherever they might be. Bloomberg Media’s initiatives include global partnerships that help it transcend the competitive U.S. market according to Scott Havens, Global Head of Digital, Bloomberg Media. And The Washington Post has launched 15 products specifically designed to engage consumer interaction according to Jarrod Dicker, The Post’s VP of Innovation and Commercial.
The History Channel is leaning into new platforms and partners with The New York Times on stories and photo spreads. Sean Cohan, President, International and Digital Media, A+E Networks said that the company is seeing doubled social engagement, significant newsletter interest, and substantial boosts in YouTube video revenues.
Marty Moe, Vox Media President, said his company focuses on finding ways to grow quality, scale, and audience across its eight brands while retaining relevancy on each platform. However, diversification brings challenges such as tracking and measuring performance on multiple platforms, noted Christy Tanner, EVP & GM, CBS News Digital CBS interactive.
Dr. Jens Mueffelmann, CEO, Axel Springer Digital Ventures GmbH, President, Axel Springer USA, said his company’s success in global acquisitions is based on later-stage investment, development and partnership. While its successful classified ad profits have stunned critics, Mueffelmann urged companies to “stay paranoid” and continue to keep a close eye on emerging digital technologies and players.
On the heels of the news that The New York Times added 157,000 digital subscriptions in the 2017 fourth quarter, pushing its subscription revenues – which comprise 60% of overall revenues – to more than $1 billion, COO Meredith Kopit Levien encouraged everyone to get into the subscription business. It’s important to understand what drives subscribers, she said. For The New York Times, it’s the resources to create better original content, including 250 daily stories, a popular crossword puzzle and a cooking app, she said, noting “our strength is as a brand.”
While challenges in trust, brand quality, disruption and diversification continue to throw roadblocks up in the news and entertainment industry, Kint emphasized that for DCN members, there is strength in numbers, citing The New York Times’ subscription victory as a victory for all DCN members because of what it symbolizes for the industry.
At the core, DCN members are focusing on what they do best and continue to innovate and experiment in order to best serve audiences.
“All of our members have a direct and trusted relationship with your audience and with your advertisers,” Kint told the packed conference room. “They come to your brands because they know what they’re going to get when they give you their valued attention or valued advertising dollars.”
We were wasting time chasing display advertising dollars.
That’s the big lesson Spirited Media learned at the end of 2017, an awakening of sorts for us at the parent company of Billy Penn in Philly, The Incline in Pittsburgh and Denverite in Denver.
Now don’t get me wrong, we believe still that there are companies in and around our cities that are interested in partnering with us to reach our audiences — which are generally young, affluent and very civically engaged. And we’d had an encouraging start to the year by pursuing display ad sales. We needed that success to continue; that’s what we built our budgetary projections on.
And then that early ad success faded. It stands to reason why, of course: Going head to head with Facebook, Google and the largest newspaper websites was always going to be tough, And our staffs (no larger than six doing editorial work) can’t tell the same traffic story as sales folks repping newsrooms 15-20 times that size.
Instead, we looked at all the other ways we’ve been able to grow revenue, and prioritized those internally into three tiers. We stuck display advertising at the very bottom. In other words, we’re happy to get it, but we can’t burn staff time and effort to chase it. We’ve got bigger things in mind.
Tier One:
There are three things in Spirited Media’s most important revenue tier: the first is sponsorships and ticket sales for the events we’ve become so adept at organizing. The second is a membership program we’re rolling out in the coming weeks across all our sites. And the third is offering our custom platform for others to use. Let’s talk briefly about each of them.
Events
Billy Penn launched in October 2014 – I was the site’s editor at the time – and we began hosting the first of our events a few months later. At the time, our staff numbered five people – myself, a community manager and two reporter/curators, and a brand new sales and events director. So, when we decided to start getting our audience together in person, putting together a lot of programming for those events wasn’t realistic. The same people building that event were the ones building our daily news report, after all. So the events (we tried many, but what worked best were happy hour gatherings) were very light on the programming. And when I say “light,” I mean we’d maybe grab a microphone for 20 minutes of a two-hour event.
These events proved incredibly popular with our audience and they had several things that recommended them over intrusive advertising on our site. One, the events lasted for a set amount of time; two, the events could only hold a certain number of people. In other words, we were able to create the scarcity that is nonexistent in a land of infinite Web pages. So events — the smart execution of them, ticket sales to attend them, and sponsors to underwrite them — are one of the pillars in our most crucial revenue tier. And, of course, events (and the potential early access to their tickets, or even their planning) will play in very heavily to the next item on our revenue punch list.
Membership
One of the things I consistently heard from Philadelphians as I walked the streets of the city was how much those who read Billy Penn loved it. Not just liked or respected, but connected with in a visceral way. So as we looked at how to build a business model that could withstand the seismic shift rocking the ad-supported media world, we of course considered whether we could turn that loyalty — hell, that love — into monetary support. But we can’t make this happen alone, so we’re working with the News Revenue Hub (Motto: “Fortifying the public’s access to quality journalism by helping news organizations build sustainability”), a spinoff of the stellar digital operation Voice of San Diego, a company that’s helped many newsrooms figure out how to turn their audiences into members. We’ll launch membership across our sites in the next few weeks, directly making a pitch to our readers that the work they’ve been consuming requires their direct support to continue. That’s because, plainly speaking, it does.
Platform
We’re proud to be a company that puts our users first. Editorially, that means we pay attention to what we think people want to know. And we’ve also committed to respecting their time and their experience online. That means unlike other news providers’ sites, we don’t pop advertisements up in front of the story you’re trying to read, or force an auto-play video into your quiet office, or load up the top, middle and/or end of your story with some photo you just won’t believe about a 70s TV show star. We try to respect people’s time and their attention.
How’s that working out for us? Well, our research shows that more than half our audience is under age 35, and 75% of our readers are under age 44. That’s a startling figure for a media company, and it’s due in no small part to the way we’ve built our sites, using a custom WordPress theme that gives us what we think are clear advantages in the market:
One, it’s very easy for journalists to write and post their work onto our sites (and, automatically, Facebook Instant Articles, and Google AMP pages). We’ve also baked newsletter functionality into the back-end as well. Because we have very small staffs, there’s no separation between a reporter, an editor and our audience.
Two, our sites make a small amount of content look and feel like a lot. The home pages of Billy Penn and The Incline (and soon Denverite) spotlight the most important stories we’ve published, and then present a list of the most important events and other news stories happening in and around our cities, whether or not we’ve written them, in what we call “The Stream.” It’s basically a Facebook feed of what you need to know at any given moment.
Three, we’ve baked membership tools right into the platform. These pages, and the action funnel on which they’re built — driving occasional readers to become repeat readers, into newsletter subscribers, and into paying members — take advantage of a sea change in how the news industry is realigning itself in the midst of the great advertising breakdown.
And we’re finding that this suite of tools is attractive to other small publishers that are also seeking revenue that’s immune to the whims of Facebook and Google. In fact, we’ve closed one deal with a publisher to provide them the same tools we’re using, and following up on other requests about it that have come over the transom. We’ve seen enough interest, in fact, to prioritize platform sales as part of our most crucial revenue streams in 2018.
Another thing we’ve heard through the course of our existence is that people were interested in starting a “Billy Penn” newsroom in their city, but owned and operated by them. Until now, we have not pursued those arrangements; however, in the course of our reevaluation, we’re willing to explore arrangements like this.
Tier Two:
Consulting
My boss Jim Brady, the former editor-in-chief of Digital First Media, former editor of washingtonpost.com, and a former news executive at AOL, has also consulted at many of the world’s biggest and best media brands — ESPN, USC and The Guardian, among them. Our VP of Product, Brian Boyer, was most recently the Senior Editor for Visuals at NPR; he came there after building the News Apps team at the Chicago Tribune. Me? I’ve been the Executive Online Editor at the Philadelphia Inquirer, and the top digital editor in two of Hollywood’s oldest news institutions, Variety and The Hollywood Reporter.
Among us, we’ve worked in newsrooms covering local, national and international news; in verticals (sports, entertainment, politics), launched departments and won awards for videos, innovation, public service and more. And we’re finding interest in accessing that expertise among other media companies, which out of necessity have cut their digital workforces down in the face of the ad cataclysm.
So we’re putting out our consulting shingle, and negotiating with those seeking everything from advice in reaching the audience we have now or the audiences we’ve reached in our past. Why isn’t this a Tier One revenue stream? Simply put: bandwidth. While we can hire developers should interest in our platform take over, we can’t easily clone ourselves to grow a consulting arm. But the money we make in this fledgling endeavor can help extend our company’s runway as we push toward profitability.
Grants
We’ve already received grants to support our work —we hosted a Knight Foundation fellow for one year in Philadelphia, and are the proud recipients of a $106,000 grant for work on a Playbook for Mobile News. We’re also finalists for a Report for America grant, which would support a Spirited Media reporter working in Pennsylvania’s state capital of Harrisburg. These kinds of efforts can help underwrite important journalism in our cities while easing the burden on our budgets. In addition, a two-year partnership with Politifact funded a reporter position to help us fact-check Pennsylvania, thanks to a grant from the Democracy Fund. So we’re no stranger to grant-funded journalism, and are actively seeking out new ways to bring it into our newsrooms.
Tier Three:
Display Advertising
Finally, we’re not going to say no to companies that only want to buy space on our sites. But, as we said, it’s just not a great use of our time to sit through endless agency meetings on the off chance that we score the rapidly declining dollars to spare, once Facebook and Google gobble their share. We’re delighted with the roster of repeat advertisers we’ve had across all our sites, of course, and hope to continue working with clients as diverse as the Philadelphia Eagles, Comcast and Beneficial Bank — but, as often as possible, we’re hoping to convert those advertisers into sponsors supporting the events that are increasingly part of the future of our businesses.
We’re confident that future is bright. After all, local news is a lot closer to our users than the national and international sources. We’re down the street, just around the corner from our readers. It’s sobering but heartening to come to the realization, as a company, that those readers are even more directly responsible for our future than we’d first considered. But then again, that makes sense. We’re always telling them how important they are. We’re now giving them the opportunity to prove it.
Today, Slate unveiled a sweeping redesign that includes its logo, website, mobile, and events branding. But this redesign runs much deeper than a new aesthetic approach. Slate’s new look reflects the organizations’ emphasis on audience engagement over scale.
“Our last major redesign, in 2013, was at the height of the Facebook boom. Social was the driver.” That design was very successful, according to Slate’s editor in chief Julia Turner. However, like most websites, it prioritized social sharing over increasing user interaction and time on site.
The landscape has changed a lot since 2013. In fact, the only constant has been change—with traffic, audiences, and distribution largely reliant on the algorithmic whims of search and social platforms. This is evident in Facebooks recent decision to de-emphasize news articles and anything published by brands in user’s News Feeds. While many publishers are concerned over how the latest change will affect traffic, few are surprised.
Engagement versus Scale
However, the pursuit of likes and shares was just one symptom of a larger trend that dominated the thinking of digital publishers: the quest for scale. As Dan Check, the president and vice chairman of The Slate Group, describes it “social isn’t about increasing time spent on site; it is about touching more people. Scale is fundamentally the pursuit of uniques.”
According to Turner, “We began to see fairly early on—in late 2104, early 2015—that the pursuit of scale for scale’s sake, didn’t make sense for a brand like Slate.” In fact, last September the company moved to engaged time as its primary measure of success, which enabled teams across the organization to put loyalty at the forefront of their initiatives. “The Landscape has become inhospitable to cheap scale. But even more, it doesn’t suit our audience and values.”
The new design builds upon Slate’s commitment to understanding and serving its audience, which Turner describes as “a highly-informed omnivorous media consumer.” Given that they are looking for “sophisticated next-level analysis,” she said it was important that this new design help guide them to information that will offer a deeper contextual understanding of topics in Slate’s five verticals: News & Politics, Culture, Business, Technology, and Human Interests.
With the new design, regardless of whether the visitor is a regular or lands on a page via search or social, Check said “We wanted to give people stronger signposts and a better understanding of what they can expect from us.” The redesigned Slate (which doesn’t use a third-party recirculation partner) will “show people more relevant content and tell the story about who we are. For years, our message was ‘like us on FB, follow us on Twitter.’ Now, it is more about contextualizing what you’re seeing.”
Listening to Opportunity’s Knock
This, in turn, is intended to deepen visitors’ time-spent on the site and affinity for the brand, both of which translate into revenue opportunities. While Slate CRO Charlie Kammerer says that the company has been able to “baseline monetize purely with our programmatic dollars,” the new design will offer more premium membership prompts for SlatePlus as well as newsletter sign ups.
It will also better surface and integrate Slate’s popular roster of podcasts on the homepage and throughout the site. Check points out that for many years, podcasting was a medium awaiting a business model. However, in the decade between the company’s first podcast (in July of 2005) and the explosion of podcasting a revenue driver, Slate remained committed to the format—in large part because its audience was. “Podcasting was something that garnered a lot of audience interest for about a decade. There’s rabid listenership. So, though it wasn’t a business for a number of years, it always made sense from an audience perspective.”
Today, Slate claims 2% of the podcast market share. Kammerer said “We’re glad we stuck with it because when the model matured, we were already in a good position in terms of expertise and audience.” And, with this redesign, Slate will also be investing more in audio, further increasing its roster from a current 24 podcasts and putting out more original shows like its hit Slow Burn, about the untold stories of Watergate, which hit #1 on iTunes on its first day out.
However, Slate’s emphasis on audio and the written word is not an indication that it has “abandoned video” said Turner. “Our video focus is what we can do well.” And, as Kammerer pointed out, the “the case for the pivot to video was a case for scale. The CPMs were higher so a lot of outlets chased those CPMs forgetting that video is expensive to produce well, and that the margins aren’t that great.” In his experience, the CPMs for audio are as good or better than video. “It’s about focus for us and we continue to focus on maintaining a super-premium audience. The written word and podcasting delivers that audience in a very meaningful way.”
News Judgement
And, while engaging its existing audience is a critical piece of Slate’s strategy, they plan to continue to build a quality audience without embarking on an unbridled quest for scale. As Turner put it, “It isn’t that social isn’t a good way to drive traffic. But what you want is a real relationship with your audience that isn’t dependent on social media.” She reports substantial growth in Slate’s Google and Apple News-driven traffic.
Referring to Facebook’s decision to downgrade publishers’ content in News Feed, Kammerer said “If they really want to drive more meaningful interaction, I like our chances. But who knows what changes they’ll announce two months from now?”
As Check put it, “You saw big publishers reach huge audiences through Facebook; a lot of people discovered content they wouldn’t have otherwise. Unfortunately, it has also given rise to a lot of things that aren’t great like fake news and low-quality content.” He sees a genuine market opportunity for existing or emerging aggregation partners who “want to be more responsible.”
Ultimately, Turner sees a real upside for Slate in Facebook’s move to back away from media distribution. “My instinct is that being an arbiter around the news space requires a whole set of real responsibilities and rigor that they’ve been fairly freaked out about. Now maybe we’ll see the return of news judgement to the institutions that have been cultivating that judgment for years.”
The past 12 months were pretty brutal for large swathes of the media and creative industries. We witnessed unpresidented (sic) attacks on the mainstream media from the Oval Office and White House surrogates; digital darlings like BuzzFeed and Mashable, missed targets, laid off staff or saw their businesses valued at a fraction of their previous levels. Meanwhile, the #MeToo campaign rightly garnered considerable attention, with its ramifications still being felt in early 2018.
So, what can we expect in the year ahead? Here are three key strategic areas that media execs must keep an eagle-eye on:
Show Me the Money: Making Media Pay
“Journalism needs new revenue models, particularly ones that align all our business incentives with our editorial ones,” Wired‘s editor-in-chief Nick Thompson wrote in a recent Facebook post.
His comments came at a time when both Wired and The Atlantic, publications which have predominantly eschewed these income models, have decided to pivot to paywalls. Previously these outlets have typically encouraged readers to “whitelist” their sites, bypassing audiences ad-blocking preferences.
The move by The Atlantic is particularly notable given that they’re one of the organizations enjoying a discernible “Trump bump” as younger readers “flock to old media.” It also comes, just a few months after introducing The Masthead, a new $100-a-year membership program which promises “founding” members exclusive content “at a moment rife with challenges for independent journalism.”
Meanwhile, The New York Times — fresh off the back of hitting record levels of subscribers — has decided to halve the number of articles it offers for free each month (from 10 to 5), as it seeks to further grow its subscriber base by putting more content behind the paywall. The move mirrors a similar approach in 2012, when the Times reduced the number of free articles non-subscribers could access from 20 to 10.
As of December 2017, the Gray Lady now has more than 3.5 million paid subscriptions and over 130 million monthly readers; more than double their audience from two years prior. Their efforts to become “a subscription-first business” were reiterated last year in their 2020 report, “Journalism That Stands Apart” which argued:
Breaking news: @nytimes now has more than 3.5 million paid subscriptions and more than 130 million monthly readers, more than double our audience just two years ago.
Efforts to generate more paying consumers, and to double-down on opportunities to create additional income from loyalists, are understandable.
But they beg two key questions:
Firstly, is there enough money to go around? Will 2018 be the year when we hit peak-paywall? Afterall, general audiences have historically been pretty reticent to pay for content.
Secondly, if there is a finite pot of subscription monies to go around (and I believe there is), then local news outlets are the ones most likely to suffer. They don’t have the scale that national and international outlets can potentially tap into. That’s an outcome which if far from desirable, given the pressures the sector is already under.
To counter this, local newspapers (the medium most at risk) will need to aggressively make the case (to readers and advertisers alike) that supporting their outlet isn’t just about your own consumption needs, it’s also about supporting the type of society you want to live in. And that’s one where we should guard against the expansion of media deserts, and stress the need for strong original reporting from across all parts of the information ecosystem.
Primary Colors: When Politics and Policy Collide
If 2017 was the year of “fake news” and “alternative facts” then 2018 promises to be a year where the media landscape risks becoming even more partisan and polarised.
In the coming months, we won’t just see missteps and mistakes in the mainstream media being weaponized, we can also expect to see regulation, competition rules, as well as M&A activity, being increasingly viewed through a political lens.
Whatever your political persuasion, it’s hard not to detach the different approaches being deployed here from the current political climate. That may always have been the case, but in 2018, this promises to be more overt than ever.
The implications of these developments, of course, will resonate far beyond Washington and the boardrooms of Fortune 500 companies.
Changes in net neutrality rules may make it more difficult for local players and start-ups to afford new access fees; it will certainly be much harder for them to access the super-fast highway than content creators with deeper pockets.
Moreover, consumers may find themselves facing higher internet and phone bills, more politicized local news coverage, and the need to subscribe to yet another OTT service, as Disney launches its own on-demand products and removes its content from Netflix and other rivals; as it seeks to grow its own audience (and direct revenues) in this space. Despite the financial implications, it’s a move that becomes more appealing to mouseketeers the world over if/when Fox’s vast library is also folded into the mix.
Even though it’s early days for products like Amazon Echo and Google Home, research from the Reuters Institute for Digital Journalism indicates some of the potential. CNN, the BBC,Wall Street Journal, and many others all experimenting with these technologies. Voice assistants have the potential to transform local search and content, with local newspapers joining NPR, the Washington Post, and a plethora of other publishers, who are exploring whether these platforms can deliver new audiences and fresh opportunities for monetization.
To these digital horizons, of course, we also need to add Augmented Reality (AR) and Artificial Intelligence (AI).
Speaking at the Global Editors Network conference (GEN Summit 2017) in Vienna, Austria, last summer, Amy Webb, founder of the Future Today Institute,felt that newsrooms and media companies – by focussing on virtual reality – had been “following the wrong fish.”
Reflecting on the energies being poured into these areas by some of Silicon Valley’s biggest companies, she argued that “the future of news involves object recognition and Augmented Reality. “But,” she said, ”there isn’t a single news organization that I know of on the planet that’s working on a visual object recognition strategy for revenue advertising or for content.”
Perhaps that will change in 2018, not least because I expect Facebook and Snapchat to get much more behind these tools/platforms, especially AR. Facebook has already made some noises about this; and just as they incentivised publishers and celebrities to help kick-start their live video offering, it’s not unreasonable to expect they may take a similar approach to another format that they’re particularly keen to grow.
Finally, with AI tools already being used for live reporting, work being done by agencies, and the automation of some content – such as the local news experiment, supported by Google Digital News initiative – this fast-moving technology remains one to watch.
The Dollars Trilogy: What this Means for You
How you categorize, these digital-led developments (the good, the bad and the ugly), will vary – depending on your particular standpoint. But, these new realities cannot be ignored. Each of these trends has the potential to impact your bottom-line. For good or ill.
As we enter the end of the current decade, the media landscape probably feels more like the wild west than it has for some time. The impact of the three topics outlined here, coupled with ongoing strategic considerations — such as ad-blocking, the consequences of changes to Facebook’s algorithm, and the continued reliance on many third party platforms and services — means that many media companies continue to face an uncertain, unpredictable, future.
Yet, at the same time, this uncharted territory also offers tantalizing prospects for content innovation and potential opportunities for new revenue streams.
The world is full of digital cowboys, but with 2018 promising more paywalls, evolving policy and the growth of emerging tech platforms, media companies may need a few more gunslingers. Change is in the offing, and as a result, execs will need to carefully marshal their resources, and once again saddle up for another year where change and opportunity will go together hand-in-hand.
The New York Times, Wall Street Journal, LA Times, and others continue to report increases in subscriptions. Undoubtedly, this is a trend that media organizations of all types would like to get in on. It is helpful, then, to understand who these subscribers are as well as why are they willing to pay for their news. A new study, The 3 types of news subscribers: Why they pay and how to convert them, from The American Press Institute and The Associated Press-NORC Center for Public Affairs identifies the emotional and behavioral factors that affect consumers’ news subscription decisions. The research methodology included the use of in-depth interviews to uncover the values and motivations key to subscription habits.
Three types of subscribers (and how to attract them):
1. Civically Committed: those individuals supporting goals and initiatives that reflect their personal values. The Civically Committed subscribe to a higher-than-average number of subscriptions.
High willingness to pay for news content.
Views their support of journalism as a moral duty.
Subscription decisions are more emotional than practical.
Subscribes to a higher-than-average number of publications.
Prioritizes organizations whose goals and values align with their own.
High loyalty; likely to pay for subscriptions even if they aren’t using them.
Low price sensitivity.
Key descriptors
Likely a news organization member, or donor.
Subscribes and donates to multiple news sources.
Likely donates to other causes and/or volunteers.
Strategies to attract
Publicize the news brand’s mission, values and community role. Ensure the brand’s mission and agenda is public. The Civically Committed support news organization aligned with their thinking.
Partner with civic-minded organizations and brands. Affiliate with causes the Civically Committed are already involved in and become part of their community.
Create events where they can meet journalists and get to know one another.
Reward them with appreciation. The Civically Committed see their subscription as an extension of themselves. Remember to thank them and be personal.
Allow them to donate to a news publication by adding a philanthropic relationship to their subscription. The Civically Committed want to support journalism.
2. Thrifty Transactors: consumers who pay for no-nonsense value and are highly selective in their subscriptions.
Moderate willingness to pay for news content.
News subscriptions are a combination of utility and relevance.
Price sensitive; needs to have high value.
Loyal to a small, highly curated number of publications.
Specific reasons for subscription such as part of a daily ritual.
Key descriptors
Subscribers usually have at least one publication related to hobby or special interest.
Fans of coupon clipping.
May rely on a news publication for its coverage of one topic (look for digital users with high engagement in one area).
Strategies to attract
Provide excellence and ensure content stands out as high value and unique. Thrifty Transactors look to dedicated sources for items that really matter to them. Find these subject areas and serve the Thrifty Transactors.
Consider offering subscriptions by verticals or specialty areas. Thrifty Transactors only want to pay for the content they use so make sure they know the details of the publication’s reporting areas.
Think of magazine marketing partnerships to promote subscriptions of like content.
3. Elusive Engagers: generally do not like subscriptions. They see news and information as a commodity that should be free.
Low willingness to pay for news content.
Utility drives subscriptions.
Sees news and information as a commodity.
Not comfortable with transaction and commitment of subscription.
Low loyalty.
Key descriptors
Likes free trials.
Prefers digital.
Likely to find content through search.
Strategies to attract:
Offer one-time-payment options with no commitment and include easy cancelation policy. It’s important to avoid monthly payment reminders.
Monetize Elusive Engagers outside of subscriptions. Market other products such as books, souvenirs, e-commerce, third-party paid promotions, etc.
The subscriber segments identified in this research are based on behavior, attitudes and beliefs, not demographics. This means an individual’s group will not likely change as they get older. However, further analysis of the segment groups by print and digital usage and demographics are also valuable in establishing marketing and monetization plans. Importantly, pinpoint the key differentiators of the news brand by segments to use in acquisition and renewal strategies.
With billions of dollars at stake, the digital advertising industry has attracted bad players who are fraudulently siphoning revenue from our industry, costing both publisher and brands dearly. It is estimated that it could cost the ad business over $16 billion globally in 2017 out of a total $85 billion in spend. As a result, the industry is looking for ways to deal with advertising fraud. Ads.txt is at the top of the agenda as a way to help resolve this problem.
What is ads.txt?
Ads.txt is an initiative driven by the IAB Tech Lab that helps publishers declare who is authorized to sell their inventory therefore helping to prevent profit from counterfeit / fraudulent inventory.
The IAB Tech Lab states that its mission is to “increase transparency in the programmatic advertising ecosystem.” The “ads” in ads.txt, the IAB continues, stands for “authorized digital sellers” and it’s “a simple, flexible and secure method that publishers and distributors can use to publicly declare the companies they authorize to sell their digital inventory.”
The idea is simple: Publishers place a file on their server identifying exactly which companies they sell their inventory through.
Why is important to the buyer?
As publishers adopt ads.txt, buyers will be able to more easily identify the authorized digital sellers for a participating publisher, allowing brands to have confidence that they are buying authentic publisher inventory.
Buyers are also trying to reduce layers of intermediaries — they want to feed more money to the publishers and prefer to work with networks like Sovrn that have a direct relationship with the publisher.
Many key buyers and buying platforms, including Google’s DoubleClick Bid Manager (DBM), are making it clear that they will show a preference to publishers with the ads.txt file installed. The director of programmatic at DigitasLBi said in an open letter: “We will be looking to adopt this protocol in our buying as soon as the fourth quarter of 2017, so we encourage your participation as soon as possible.”
“By the end of October, DoubleClick Bid Manager (DBM) will only buy inventory from sources identified as authorized sellers in a publisher’s ads.txt file when a file is available,” writes Ginny Marvin in Martech Today. “Presumably, at some point, ads.txt will be a requirement for DBM.”
Why is this important to the seller?
Ads.txt gives publishers control over their inventory in the market, making it harder for bad actors to profit from selling counterfeit inventory. This is clearly a big issue for major brands, but the adoption across the industry as a whole is important, as it will deliver an industry standard for everyone going forward.
The actual ads.txt file is extremely small and takes almost no time to load. Implementation is relatively easy, and there’s no cost involved.
Another bit of good news for publishers: the Wall Street Journal recently reported that “the average price of ad space purchased through Google’s ad-buying systems has increased over the past three weeks,” thanks to ads.txt.
As more sites adopt ads.txt, buyers will more frequently prefer to buy from sites with the file live. Therefore, we recommend you do this sooner rather than later and make sure you include Sovrn as a trusted source. Also consider familiarizing yourself with the IAB Tech Lab’s spec on ads.txt, a peer-reviewed standard developed with the support of the OpenRTB working group.
Finally, the introduction of OpenRTB 3.0 will bring a new iteration of ads.textin ads.cert, which will endeavor to certify the type of data transferred in an ads.txt file. Note that this is unlikely to see widespread adoption until Q3 2018 or beyond, when most of the major platforms have upgraded to this new version.
Andy Evans has worked on all sides of the media industry from print and digital publishing, in an ad agency and most recently, ad tech. He’s worked with many of the world’s leading global brands and has been in digital media since 1997. Since the acquisition of OnScroll, he joined the executive team of Sovrn to integrate and run its European operations with Sovrn and has more recently taken on the role of Chief Marketing Officer for the brand globally. Andy is also an industry panelist and speaker on all things digital advertising, with key expertise in viewability.
Video has become an increasingly important delivery medium for media brands. Given the investment, it might seem like they’d want to keep this video traffic firmly on their own sites. However, as with other types of content, most publishers have developed a distribution strategy for multiple platforms. Because YouTube offers such an efficient way for viewers to find, view, and share video content, it has become a de facto video distribution channel for many media outlets.
Undoubtedly, YouTube has become a primary video viewing destination for internet viewers. And media companies need to go where the viewers are. This is true regardless of platform – desktop, mobile, or OTT. It makes little sense to make a significant investment in video exclusively for your site if the video audience is off watching somewhere else.
So, it follows that companies investing in video content are giving YouTube a hard look. Of course, as with every content distribution decision, there are always trade-offs. However, many believe that reaching the sizable YouTube audience is worth the effort. While he described the evolution of their YouTube strategy as “a work in progress,” Jigar Mehta, SVP, head of video at Fusion Media Group believes it is well worth the effort. Topping the list of priorities is making Fusion’s video more discoverable on what he describes as “the second largest search engine in the world.”
Establishing a YouTube strategy
Each company will need to develop a YouTube strategy that suits its resources and objectives. However, some may want to follow the Washington Post’s lead. They think of YouTube as a distinct content delivery channel that attracts viewers who might not normally visit their website. That provides an opportunity to introduce your brand to an entirely new audience, an exciting prospect for any content producer.
“YouTube is a space with a great deal of audience and revenue potential that we have only begun to tap into. We see it as the primary place to build a diverse audience that will think of The Washington Post as video-first and engage with our visual journalism,” Nadine Ajaka senior producer for video platforms at The Washington Post explained.
She said that they have separate strategies for how they approach video on the Post’s website and what they deliver on YouTube. “The difference between what we choose to publish on washingtonpost.com and what we publish to YouTube is that for YouTube it must stand alone. On the site, there are times when video will lead the story, but often we are plugging in and embedding clips and social video that are meant to add to what has been written,” Ajaka said.
Although they share the Post’s desire to build an audience that might not frequent their site, Kasia Cieplak-Mayr von Baldegg executive producer for The Atlantic says her company has taken a different approach. YouTube is central to their video distribution strategy.
“We recently switched to YouTube as our primary video hosting service. Now, we host all our videos on YouTube and integrate the player throughout TheAtlantic.com. This decision was motivated by a desire to build audience beyond our owned and operated platform. YouTube’s subscriber features, search functionality and recommendation algorithm all help us do that,” she said.
Long form anyone?
While audience development seems to be the be a primary driver behind using YouTube, it also offers a place to hone and deliver longer form content. This is because people see it as a destination where they can stay for a while and watch – if the content is compelling enough.
“YouTube emphasizes watch time over clicks and encourages viewers to watch with the sound turned on. We’ve seen amazing engagement. A recent 15-minute documentary has earned an average watch time of eight minutes,” The Atlantic’s Cieplak-Mayr von Baldegg said.
Mehta pointed out that this emphasis on watch time correlates with better performance for Fusion’s long form content on YouTube. He said that they approach YouTube as a specific content destination (and not a competing channel for their own sites). As such, they specifically optimize their videos for the platform.
Ajaka from the Post emphasizes that you have to really present video people want to see on YouTube, or you won’t build a subscriber base for your channel. “With YouTube, there’s a real opportunity to hone your video inventory and create a coherent body of work. For some news publishers, video can be a churning out of quick-turn clips. Luckily, we have editors and video journalists who are continually working on long-form reported visual stories, that tell a cohesive story. These are perfect for YouTube as a platform,” she explained.
Monetizing content
YouTube offers more than delivery tools and audience engagement. It also provides a means for monetization, which is certainly welcome given that producing quality video can be expensive.
In fact, Mehta finds that YouTube offers better monetization options than Facebook or Twitter and he is optimistic about YouTube’s long-term roadmap. “We are currently utilizing AdSense on YouTube which is their programmatic option. YouTube also has other products including YouTube Red and YouTube TV that as they become more mature will be interesting options as well,” he said.
Ajaka said the Post is talking to YouTube about direct-selling of their ads, but it hasn’t yet come to pass.
At The Atlantic, Cieplak-Mayr von Baldegg said that they are “primarily focused on direct sold sponsorships and pre-roll, both on our domain and off. Our main challenge month over month is keeping up with the demand,” (which is a good problem to have).
As with any external platform, there are going to be trade-offs, but YouTube offers companies a way to distribute video that puts it in front of an engaged audience with a good search engine and monetization tools. “Our YouTube audience is seeking video first and foremost, and will have an easier time surfacing our videos than someone searching the site,” Ajaka said. That seems like a compelling reason for any media brand to build a YouTube presence.
With the introduction of new advertising formats, ad types, and methods of buying and selling inventory, consumer publishing is undergoing some big changes. To get a closer look at what’s working, MediaRadar conducted the “2016 Consumer Advertising Report,” using our data science-powered platform to review these trends for 2016 and Q1 2017.
Here’s a look at some of the most notable findings.
Native advertisers up 74 percent.
High CPM ad placements are surging. Native ad buyers, in particular, are up, rising three-quarters (74%) from Q1 2016 to Q1 2017. This represents the largest growth in buyers for any ad format. Looking back further, we found that demand for native has nearly tripled since January 2015, which had less than 1,000 buyers (981). In January 2017, there were almost 3,000 (2,882). Consumer advertising is shifting as audience consumption patterns evolve. We foresee advertisers will keep spending more on native because it often outperforms traditional ad units.
Print ad spend declined 6 percent.
The number of print ad pages in Q1 2016 was 117,551. Compared to Q1 2017, the number of print ad pages has decreased 8 percent year-over-year to 107,698. Similarly, estimated print ad spend has declined 6 percent from Q1 2016 to Q1 2017. However, even with this decline, there are still a considerable amount of pages being bought. We notice niche and enthusiast titles are on the rise, with some regional titles flourishing.
Programmatic buyers down 12 percent.
According to our data, 45,008 advertisers purchased ads programmatically in Q1 2016. In Q1 2017, however, the number of programmatic advertisers dropped substantially, falling 12 percent year-over-year. On the quarter, more than 5,000 fewer advertisers (39,415) bought programmatically.
After years of growth, the decline in programmatic buyers is likely attributed to concerns around brand safety – especially given the recent problems for companies like YouTube. This form of advertising continues to evolve as brands seek more control over where their ads are running. We expect to see programmatic rise as more brands move to programmatic direct models.
Our report showed that native is surging, and buyers are investing accordingly. Print ad spend is declining as a whole, but is buoyed by vertical subject matter and titles. Publishers can also expect to see programmatic rise as more brands shift to programmatic direct models. It will be interesting to see how these developments play out in the second half of 2017.
If 2016 was the year of the platform, 2017 is the year of the subscriber.
Amid a backdrop of political change, wavering trust in government and media, and the rise of fake news, subscriptions are up among the largest U.S. publishers, proving that consumers value high quality journalism. According to Pew Research, the numbers show that in 2016, The New York Times added more than 500,000 digital subscriptions – a 47% year-over-year rise, and The Wall Street Journal added more than 150,000 digital subscriptions, a 23% rise. Even Facebook recently announced that it’s building a feature that would encourage readers to subscribe to news publications, in response to publisher interest.
And this trend isn’t going away. According to WAN-IFRA’s 2017 World Press Trends report, understanding paying commercial models is the number one priority of publishers this year, particularly as audience revenues surpass advertising revenues among global newspapers.
While the industry rightfully focuses on growing new subscribers and experimenting with business models, the discussion should not end there. What we’re not talking enough about is that subscribers are a distinct audience. They engage with your content in a different way and are loyalists in a different way. Understanding these differences is where publishers will build their revenue strategies to take their businesses to the next level.
Subscribers are Unique
No one will pay for content that doesn’t repeatedly engage them.
Loyal readers, which on average account for the majority of pageviews across all channels, have time and time again proven to be your most valuable as they consume more of your content.
And what is that link between loyalty and subscriptions? Active engagement. A recent report by the MIT School of Management, Turning Content Viewers Into Subscribers, presented the Subscriber Ladder of Participation as an illustration of reader lifecycle. Rather than thinking of your reader journey in a passive way, it encourages you to build your strategy around action: moving readers from Anonymous to Subscriber by encouraging them to act.
MIT School of Management’s Subscriber Ladder of Participation
And this active participation is central to Chartbeat as well – our research has shown that analyzing and optimizing the reader experience around engagement patterns as opposed to just empty pageviews drives returning visitors, motivating users to proverbially ascend the ladder towards subscriptions. Subscribers are loyalists who engage with your content in a unique way, and understanding that engagement is key to driving more loyalty.
As Kritsanarat Khunkham from Die Welt put it, “Our whole subscription model is based on returning visitors—they’re essential. You can only turn users to subscribers when they’re returning. I’d rather have 500 returning visitors than 5,000 one-time users. They’re [the ones] who appreciate my work, who trust my brand.”
Besides the simple fact that returning visitors increase ad impressions, they also represent a crucial point in a publisher’s subscription funnel. Every new visitor is a potential subscriber, but — to put it bluntly — no one will pay for content that doesn’t engage them.
Subscribers are Ideal
Once you’ve engaged your subscribing audience, you need to focus on keeping them and getting more. To do this, you need to study how they engage and drive like-behaviors in your loyal/returning audience to turn them into subscribers.
Khunkham notes that often, their consistent eye on data uncovers what topics their audience is truly interested in. This justifies expanding coverage in those areas, often areas they might not have expected. “Sometimes [our audience is] more interested in political news than we expected, and we have such potential for [an audience] who reads seriously,” he says. “When we can prove to [journalists] that readers engage with their meaningful work, it motivates them.”
In other words, publishers need to start thinking about taking their data past the point of conversion. Once a reader has subscribed, are you continuing to dig deeper into their behaviors and deliver the content that they have demonstrated a complex interest in? Discover not only what content your subscriber communities engage with, but think of subscription status as another lens to evaluate all of your editorial strategies — from social media channels and platforms, to devices and portals, and even relationship-building campaigns.
At the end of the day, understanding new visitors and their journey to return is important, but garnering deeper insights around how subscribers engage with your content differently can unlock durable retention and growth strategies for publishers across the board.
Terri Walter, the Chief Marketing Officer of Chartbeat, works every day to ensure that publishers and newsrooms have the tools and insights they need for quality content to thrive. A digital marketing veteran of 20 years, Terri has worked over the course of her career to position high potential brands and spearhead thought leadership in media and analytics at companies including DoubleClick, Razorfish and Microsoft Advertising.
Campbell Brown, the former NBC and CNN broadcaster who is now Facebook’s head of news partnerships, confirmed in a speech at a digital publishing conference that the social network plans to roll out support for subscriptions as part of its mobile Instant Articles platform.
There have been multiple reports that the company was working on such a plan, including a recent piece by Digiday that quoted a number of sources, but Brown’s speech is the first official confirmation. She said testing of the new feature will begin in October.
This plan is likely to cause some cheering in media land, because a number of publishers have been clamoring for paywall support from Facebook. They have also criticized the lackluster performance of the existing Instant Articles format when it comes to generating revenue.
As with most things involving Facebook, however, this deal sounds like a classic Faustian bargain.
What’s the Deal?
According to Brown, subscriptions will work this way: If a publisher chooses to implement support for a paywall, readers will get 10 articles for free — in much the same way they do with the New York Times’ “metered” access plan. After that, they will be prompted to sign up for a subscription. If they already have one, Facebook says it will make it easy for them to log in.
And what about the revenue — will there be some kind of sharing plan, where Facebook takes a percentage, the way Apple does with its 30%? The company isn’t saying, but it seems likely that there will be, although perhaps not to begin with.
Update: In a statement on Wednesday, Brown said “Quality journalism costs money to produce, and we want to make sure it can thrive on Facebook. As part of our test to allow publishers in Instant Articles to implement a paywall, they will link to their own websites to process subscriptions and keep 100% of the revenue.”
Brown did say that the social network would give publishers control over all of the reader and subscription data involved in the process, which is also likely to come as good news to many. At least they don’t have to hand all of that over to Facebook as well as all of their content. But that doesn’t mean this deal is something media companies should leap at.
The context to this offer, as a number of people have pointed out, is that Facebook is taking some sustained fire for its dominance of the advertising industry (along with Google), with the News Media Alliance arguing its members should be exempted from antitrust laws so that they can present a combined front in bargaining with the digital giants. I wrote about that idea in a previous post.
Not only that, but a number of publishers — including the New York Times, an early partner — have talked openly about how Instant Articles has proven to be a bit of a bust revenue-wise. Some have turned their back on the platform completely, despite Facebook’s attempts to improve things.
The Bottom Line
But the bottom line with this subscription offering is the same as it has been with Instant Articles and Facebook video and half a dozen other things the social networking behemoth has come up with: They are fundamentally designed to benefit Facebook, and to centralise control in its hands, and to generate as much content as possible. Any benefits they provide to media companies are ancillary at best.
If you connect your subscription plan to Facebook, will you get increased reach? Probably. Will it help you drive some new sign-ups? Perhaps. But it’s important to remember that the entity in control of every aspect of that relationship is Facebook, not you — Facebook decides who sees what and when, what it looks like, how it functions, and how much revenue you get.
In other words, you are working on land that has been given to you by a feudal lord, and that rarely ends well.
Mathew Ingram covers the evolution of media and the social web. Most recently, he was a senior writer at Fortune magazine. Prior to that, Ingram was a senior writer at Gigaom.com, one of the leading technology blog networks in the United States, based in San Francisco and founded in 2006 by former Forbes and Business 2.0 writer Om Malik. He also served as the first communities editor of The Globe and Mail, a daily national newspaper based in Toronto.
The lack of metrics and tracking in the world of podcasts has kept many advertisers away from the space. However, podcasting has been a boon for direct response advertisers like Squarespace, BlueApron, and Samantha Bee’s favorite, MeUndies. Apple recently announced that it will finally share analytics on listener behavior in aggregate. This is a tremendous advancement for podcasting. The data will help producers understand what content hooks listeners and where they drop off. But, beyond measuring listener behavior, Slate wants to answer one big question for brand advertisers: Do podcasts work?
To answer this question, Slate Group Studios partnered with Prudential Financial Inc. on a program called Wealth Wits and paired it with the first study of it’s kind to assess the impact of a branded podcast program.
Slate was an early pioneer in podcasting and has been a leading force in the space for more than 12 years. As listeners flock to the medium, brands are keen to experiment. In 2015, Slate created its first branded podcasts with HBO, GE and Prudential. However, the lack of measurement has hampered aspirations to build out robust, long-term podcast marketing strategies.
Our Wealth Wits Investigation
The Prudential Wealth Wits program offered a customized content experience powered by the listener’s own financial behavior. The capstone of the campaign was an interactive self-assessment quiz, promoted on Slate, that served up a personalized podcast. The branded podcast was created in partnership with Prudential and hosted by journalist, comedian, and author Faith Salie. Wealth Wits intended to help people of all walks of life think about their retirement and plan for the future.
Slate Group Studios created a custom methodology in order to understand and assess the overall impact of the Wealth Wits campaign on Prudential’s brand favorability. The study looked at overall brand awareness, favorability and consideration. GFK Research measured the results.
For the study, control survey responses were collected prior to campaign launch to ensure no exposure to branded podcast. Exposed survey respondents were collected via a host-read at the end of the podcast to ensure exposure to branded content. The survey was hosted at an easy-to-remember vanity URL.
Measuring the Results
One positive result was that nearly 20% of survey respondents reported that they were very or somewhat likely to recommend Prudential to their friends and family.
Because this was a cross-platform program with interactive, display and audio elements, the study allowed us to compare the impact of different media types. These comparisons produced the most exciting findings, offering up valuable, statistically significant evidence of podcast advertising’s effectiveness. In short, the study found that podcast units were more than twice as successful than banner ads in driving statistically significant lifts in Brand Awareness (+14%) and Ad Recall (+21%).
In addition to finding that podcast units were more than twice as successful than banner ads in driving statistically significant lifts in Brand Awareness and Ad Recall, the units’ display creative also led to statistically significant lifts of 7% in Favorability and 8% in Consideration.
It was encouraging to see the success of Wealth Wits reflected in meaningful metrics. However, it’s even more exciting that the results offer up much-needed data on the effectiveness of branded podcasts as a medium. While the creativity afforded within the podcast space and the deep engagement have made branded podcasts desirable, the data to support the investment has often been elusive. With our custom methodology, the industry at large now has a model to follow and hard numbers to measure against.
We can now say emphatically that, yes, podcasts do work.
About the authors
Charlie Kammerer is Chief Revenue Officer of Slate, where he focuses on developing ways for brands to tap into Slate‘s audience through editorial content, podcasting, video, and custom programs. Kammerer joined Slate in 2017 after spending twenty years at Time Inc., where he was a brand builder and revenue generator across a diverse portfolio of brands, including Real Simple, Fortune, Food and Wine, Cooking Light, Golf, and This Old House. He’s based out of Slate‘s Brooklyn office.
Jim Lehnhoff is Vice President at Slate Group Studios, Slate’s in-house branded podcast agency. Formerly, Jim was Director of Advertising Strategy at Gawker Media, where he was responsible for overhauling the company’s go-to- market strategy while managing a team of six strategists. Prior to Gawker, Lehnhoff cut his teeth at Serious Eats, Curbed Network, and The Onion.
