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Perspectives | Revenue | Supporter Spotlight

What publishers should know about in-app advertising in 2023

According to Statista, around 3.4 million apps are available on Google Play Store. Additionally, the Apple Store has about 2.2 million apps. 

The high number of mobile apps signifies a serious revenue-driving opportunity for media companies. App Annie’s State of Mobile Report 2022 shows that mobile ad spending hit a colossal $295 billion in 2021 (23% growth from the previous year). 

Whether you are considering moving into mobile, or simply want to up your game, here are answers to the critical questions publishers will have as they consider in-app ad monetization. 

Which ad formats work the best for in-app monetization?

Ad technology has come a long way since its inception, and multiple ad formats are at publishers’ disposal. Choosing a suitable ad format can be difficult – but it’s essential. 

Many app developers stick to banner ads because they are the most widely deployed ad format. But to maximize revenue, it is critical to keep up with the times. Nowadays, there are a variety of engaging ad formats that retain users and keep their app experience intact.

We recommend that publishers explore rich media ads, interstitial ads, native ads, and rewarded ads. Experimentation is key, and the best way to learn what works best for your app’s inventory is through a split test. Here are some ad sizes that have historically performed well for our app publishers:

  • Banner Phone (320×50)
  • Medium Rectangle (300×250)
  • Fullscreen Interstitial Portrait (320×480)
  • Fullscreen Interstitial Landscape (480×320)

Is gamification of ads an ideal solution? 

Gamification allows users to interact with ads in fun and engaging ways. By turning ads into mini-games, audiences are more likely to enjoy interacting with them, and even be more likely to remember the advertised products or services.

This technique is similar to rewarded ads, except that users actively play a game instead of simply watching an ad. This helps keep their attention and provides a sense of satisfaction or accomplishment once the game is completed.

Overall, the gamification of ads is a solution that could help address user fatigue with more traditional advertising methods.

Instream vs. outstream video ads: what works?

In-stream ads are played within the same video player that a user is viewing video content. Outstream ads, on the other hand, are served on a display ad unit and do not require a video player.

So, which one is right for you? It depends on your goals, budget, and available video content inventory. If you want to drive more revenue with high eCPMs and improved click-through rates, then in-stream video ads may be a good option. Outstream ads may be a better choice if you want guaranteed viewability and enhanced user engagement for the app users. 

How to pick the right ad format type for your app? 

Not all apps are equal, so they all need a different ad format depending on the app’s design and niche. For example, native ads fit best for an app like Instagram, where users can slide past an ad in their feed without disrupting their user experience. At the same time, rewarded ads work best for gaming apps because they incentivize users to stick around for an ad or two to get a reward that will enhance their game experience.  

Figuring out what kind of ad formats give you the highest conversion rate can take time. Obviously, we believe that partnering with an ad monetization platform will help enormously. (For example, this can help you easily A/B test your app inventory to see which ad format works best.) 

However, if you’re looking to optimize ad revenue in-house, here’s a table we created that’s based on rigorous testing of billions of ad impressions across hundreds of apps. It’ll give you a headstart.

Niche Best ad format
GamingRewarded
E-commerceNative
Social mediaNative
FitnessInterstitial 
Travel (bookings, information)Sticky
On-demand service appsNative/Interstitial
Video streaming Instream
News/BloggingOutstream + Sticky

Final thoughts

In-app advertising is one of the most effective ways to reach mobile audiences. Given that people spend more time on mobile apps than on the web, in-app advertising offers publishers an excellent opportunity to improve ad engagement and performance. In-app ads will continue to grow in popularity in 2023, but they are only effective if they don’t disrupt the user experience too much. Thus, publishers must do their research and due diligence to create a scalable strategy. Above all, prioritize the user experience and find a balance between revenue and returning users. 

About the author

Kean Graham is the CEO and Founder of MonetizeMore, a leading ad monetization partner for web publishers and app developers. Under his leadership and guidance, the company has scaled to 15B+ monthly impressions for over 1000+ publishers worldwide.

Featured Post | Industry-Research | Revenue

What young media users pay for — and why

Content may want to be free, but that’s not always a sustainable business model. So, what content are users — especially the highly coveted younger demographic — willing to pay for, and why? It’s a broad question but one that’s worth trying to answer.

Massive amounts of time and money have been spent trying to figure this out. So we are aggregating many of the most salient data points to find out what younger generations are opening their virtual wallets for — and what they can do without.

Gaming

Gaming is hugely popular among all generations — especially for young people — and it holds more meaning than mere entertainment. According to 2022 research by Deloitte, 80% of U.S. adults report playing video games, and the practice is almost universal among younger adults: a whopping 96% of Gen Z and Millennials identify as gamers. The study on media trends in the United States, United Kingdom, Germany, Brazil, and Japan found that these young adults play 11 hours per week. 57% of Boomers and Mature audiences identified as gamers in the same survey, reporting an average of six hours per week gaming. Gen Z adults rank video gaming as their favorite entertainment activity in all countries surveyed.

More than three-quarters (78%) of U.S. gamers in Deloitte’s study report that the practice relaxes them; 61% said gaming helps them express themselves. In addition, 59% agree gaming has helped them through a difficult time, and 53% say gaming keeps them connected socially. These numbers show video games’ importance to people’s lives, especially the more immersive, complex games.

Gaming also leads users to discover other media content. For example, in Deloitte’s survey, 51% of U.S. and 71% of Brazilians said they often discover new music while gaming. While online immersive gaming worlds like Second Life are typically free to join, gamers often choose to spend money on branded virtual goods or even physical merchandise bought in-world. In-game live events such as music concerts are popular, with a quarter of U.S. gamers attending an in-game event last year. According to Deloitte, 82% of those attending live in-game events have made a purchase because of the event. Worth noting is that 65% of the purchases were digital goods, and 34% were physical merchandise, an indication of the overlap between real-world and virtual selves.

Over half of Gen Alpha and Gen Z players have spent money on a game over the past six months, according to a recent report by Newzoo, and 33% of them did so on a mobile device. While young users appear less likely to pay upfront for games on mobile devices due to the prevalence of free games, they are likely to spend money in-game for virtual goods such as currency, gear, or characters. Newzoo reports these are a particular draw for young users, with 93% of Gen Alpha and 91% of Gen Z gamers reporting having made such purchases over the past six months. 

According to Voxburner, the most popular games among Gen Z are Minecraft (76%), Call of Duty (73%), and Fortnite (68%). Roblox and Animal Crossing are also popular. While the mobile versions of these games are free or low-cost to install, companies are raking it in via ads and in-app purchases. For example, Fortnite made over $9 billion in its first two years, even though it is free to join and optional purchases such as skins are aesthetic with no impact on gameplay.

Streaming Video on Demand (SVOD)

Perhaps habituated by customizable gaming experiences, younger audiences seem to be customizing their video streaming experience — at least when it comes to spending. As a result, younger users of SVOD services are more likely than older users to churn through services — by joining and then canceling, sometimes repeatedly, according to Deloitte.

The study found Gen Z consumers are especially sensitive to more expensive services, engaging in “churn and return” — repeatedly canceling and rejoining. This behavior enables them to acquire desired content — like a new season of a favorite series — while avoiding paying for a service when they aren’t using it. In the U.S., 35% of Gen Z users and 38% of Millennials surveyed had canceled and renewed streaming video services during the last 12 months, compared to just 7% of Boomers and older generations.

Similarly, a Morning Consult study demonstrated users of all ages prefer ad-sponsored content that is free or lower cost to higher subscription costs — and Gen Z adults are the most cost-averse when it comes to monthly fees. Only 16% of Gen Z adults surveyed spend more than $30 a month on streaming services, compared to 31% of Millennials. These findings suggest ad-funded tiers could cut churn rates, as subscribers are unlikely to cancel a service with no monthly fee.

Research also suggests that combining media offerings is appealing to younger users. For example, 51% of Gen Zs and Millennials in Deloitte’s survey indicated they would stay with their SVOD subscription if it included gaming, a music service, or another SVOD service.

Social Media

While social media platforms offer free admission, time spent there often leads to purchases. Deloitte found 70% of people in the U.S. say they follow an influencer, and more than half of Gen Z and Millennials say these influencers sway their purchasing decisions.

Social media ads are highly targeted and personalized. More than half of American respondents, 72% of Brazilians, and about 40% in the United Kingdom, Germany, and Japan surveyed by Deloitte say they see ads on social media for products or services they have been seeking. Additionally, 39% of Japanese respondents say that shopping is among the top three activities they engage in on social media.

News

Research by The Knight Foundation found most U.S. Gen Z and Millennials surveyed (65% and 64%, respectively) said it is fair to pay for news, at least under some circumstances. Only 39% of Boomers agreed. About half of Gen Z and Millennials say it is reasonable for news organizations to charge for events; 37% of Gen Z respondents say it is reasonable to charge for exclusive or special content.

Although Gen Z through Gen X report paying less attention to all forms of news compared with the national average, more Gen Z and Millennials say they are willing to pay for news in the future, compared to older generations (22% of Millenials versus 12% of Boomers). Conversely, younger audiences were also more likely to agree that news should be free for all users via government funding and/or private donations: 30% of Gen Z agreed news should be free, compared to 17% of Boomers. Gen X and Boomers are more likely to agree it is fair to support news through advertising (38% and 31%, respectively) than Gen Z (20%).

Research from the American Press Institute’s Media Insight Project showed Gen Z and Millennials are more likely to pay for streaming services that include news content (57%) than pay for news directly (28%).

According to the Knight report, 52% of Gen Z — compared to 45% of Boomers— say they look elsewhere for news content when encountering a paywall. About twice as many Gen Zs (10%) as Boomers (6%) and the Silent Generation (5%) say they try to find the story on social media instead. In addition, boomers (29%) and Gen X (33%) are more likely to skip the news story altogether when encountering a paywall compared to Gen Z (21%). So while younger adults may believe it’s fair for news organizations to charge fees, they also appear to think it’s fair game to try to evade those fees by seeking similar content elsewhere.   

Key takeaways for media companies

  1. Young consumers avoid paying for costly subscriptions by churning through the service. Therefore, SVOD companies should explore low-cost or free ad-supported tier options less likely to be dropped by frugal users.
  2. Young people tend to be committed gamers willing to spend money on in-game enhancements. So bundles and perks that include gaming could help SVOD services — and other media companies — retain more subscribers.
  3. While younger generations believe it’s fair for news providers to be publicly funded and/or charge for unique content, they also seek news elsewhere when faced with paywalls. A twofold approach of bundling subscriptions while enabling premium single-serving content to be purchased ala carte may succeed with younger users who expect interconnected experiences with optional or customizable payment options.

Younger audiences may be highly sought after, but their preferences are pretty straightforward. Publishers paying attention to these desires can build packages that cater to them and build a loyal audience for years to come.

Advertising | Marketing | Perspectives | Revenue | Supporter Spotlight

How sponsored content can strengthen revenue in a downturn

Amid growing uncertainty about the economic environment, it is wise for publishers to consider how to thrive and strengthen their revenue during the potential downturn. With economic uncertainty ahead, it is vital to understand how brands look to invest in marketing during 2023 to build a portfolio of offerings that support these strategies.

The situation

Typically marketing budgets decrease during an economic downturn. However, based on research done by Deloitte earlier this year, marketing spend has grown substantially over the last year. And, despite uncertainty at present, some bright spots stand out.

In the same Deloitte study, marketers stated they plan to increase their spending on DEI initiatives by 10.8% on average. And Hubspot reports that 83% of marketers are investing in higher-quality content. They also report that 80% of marketers expect to maintain or grow their budget for various inbound marketing activities – including content marketing, SEO, social media, and more – to reach and influence consumers at every stage of the buyer’s journey.

This data shows us that publishers would be wise to strengthen their content offering. These can include native advertising, sponsored content and even contextual targeting, all of which are ideal to help brands deliver their stories across publisher channels to reach these audiences.

The consumer perspective

Even at a potential downturn, brands seek opportunities to attract, delight, and engage. Therefore, it is essential to consider the reader and consumer preferences to support these efforts. So we must ask ourselves: what do consumers prefer? Ultimately they want to focus on the content they are trying to consume. 

According to an eMarketer report, over 40% of American adults think online ads seem to be aggressively following them. And this has led consumers to take control of their digital experience, with close to 47% of internet users now using ad blockers because they think there are too many ads online, according to GlobalWebIndex. 

However, according to a survey by Time Inc, close to 90% of younger internet audiences from Gen Z, millennials, and Gen X say that they prefer custom content, including native ads online, instead of traditional ads. This is an opportunity. 

This data shows that consumers are actively seeking ways to improve their web browsing experience and limit the distractions from the content they are seeking. We believe this will lead advertisers to start looking for strategies that do not distract from the reader experience to reach these consumers and improve campaign performance. 

A crisis of trust

Unfortunately, these days display ads just aren’t that effective: click-through rates are at just 0.05% across all platforms. This decline started years ago, and it is because consumers have lost trust in display; in fact, over 54% of users say that they don’t click banner ads due to a lack of trust.

Now, let’s look at social media. One reason that platforms like Facebook have come to dominate digital advertising is that they are able to provide advertising experiences that are seamlessly integrated into the consumers’ content. They offer opportunities for long-form editorial engagements, lower funnel activities like click-to-download, and short-form top-of-funnel branding executions, such as Instagram stories. 

But the reviews of social channels are not all bright either. Consumers increasingly distrust social platforms. According to Statista, 66% of consumers express concern about the accuracy of the content they see on social media. 

Even with this in mind, however, marketers are looking to invest more in short-form content. Hubspot found that 33% of B2C Marketers already invest in short-form content. While another 33% have yet to, but plan to do so for the first time in 2022.

What we see is that there is an appetite for this content. And, given growing distrust in social media, brands may be actively seeking ways to scale their efforts on the open web.

What do publishers offer to the industry? Trust

Publishers have built a robust ecosystem and relationship with their audiences. As we have said before, this trust can be utilized as a point of differentiation, especially when competing against programmatic offerings. When ad dollars are invested into more strategic initiatives, publishers must lean into the inherent trust they have built with their user base.

In a study by OpenX, 77% of people say they trust articles they see on open web websites more than those they read on social media channels. Pair this with the fact that 70% of consumers prefer to learn about new products and services through content rather than traditional advertising, publishers have the winning formula to provide high-value solutions to advertisers.

The winning formula

To thrive during any potential downturn, publishers need to create offerings that support the strategies brands are investing in for 2023. At the same time, they must maintain the inherent trust they have built with their audiences. To do that publishers must consider the following:

Privacy First 

Focus on solutions that don’t rely on third-party targeting. Rather than using invasive data practices, use content to attract, delight, and engage. This allows you to provide contextually relevant advertising solutions so brands meet their customers where they are in the purchasing journey.

Prioritize Premium 

Brands will look for unique ways to reach their customers, break through the noise, and remove the blindfolds of banner blindness. For digital publishers, that could mean leaning heavier on executions, such as sponsored content that allows brands to tell their stories, from new products to use cases and any DEI initiatives. Give brands the ability to scale their story beyond their audience and benefit from the trust publishers have built with their readers.

Integrate Short-form Content

As mentioned above, brands seek to invest in short-form content. To build a diverse revenue portfolio, publishers can offer solutions to run executions similar to Facebook and Instagram stories or TikTok’s short-form videos. This will allow advertisers to scale these strategies outside social channels within trusted environments.

With a downturn ahead, or not, aligning to meet brands where they are seeking to invest in 2023, will result in a win for publishers. Understand that content moves the needle for consumers. Advertising that places quality messages within trusted content will rise above the clutter. In particular, short form content offerings will allow publishers to integrate the social environment brands are seeking into the publisher site experience. 

photo at table level of open laptop on table displaying data dashboard with charts
Innovation | Perspectives | Revenue | Supporter Spotlight

Five ways publishers are reducing costs with automation

Faced with challenging economic realities, more publishers are looking to artificial intelligence to improve content performance and ensure that each cent invested generates the maximum return. AI can increase ROI in many ways — two stand out for publishers: optimizing decisions at scale using real-time and granular data, thus leading to better performance and yield, and automating tedious, repetitive tasks, thus reducing expenditures of time and cost required for these processes.

There is a perception that only larger publishers can successfully integrate AI and automation, given their greater financial resources to invest in developing and implementing AI systems. But advances in AI technology mean this is no longer the case. Ready-made, third-party AI solutions require far fewer resources and can be implemented within the existing framework of a publisher’s workflow, producing great benefits for publishers of all sizes.

Let’s examine how AI benefits content distribution strategies in particular and outline five ways publishers are incorporating AI to reduce costs and boost ROI.

AI in action

Newsweek adopted automation to save time on curating and sharing content to social media while boosting reach and performance. By integrating artificial intelligence into its workflow, Newsweek saves over 20 hours per week while doubling referral traffic from Facebook. 

“It takes a lot of time out of the day to post new content, recycle a ton of content, and everything else you’re supposed to do in an 8-hour workday,” Adam Silvers, Newsweek’s Associate Director of Strategy explained, highlighting why the team initially turned to automation, and why AI has become indispensable to Newsweek’s workflows: “There’s no question about the benefit.”

Five ways automation can reduce costs for publishers

  1. Scale and enhance teams’ output at no additional cost: Not all publishers have the resources to dedicate staff to managing and optimizing content distribution. For these small teams, AI can be a cost-effective solution to ensure coverage without additional staff investments. 

    Publishers can automate the entire workflow of distributing content — from selecting content to writing and posting messages at the optimal time — without requiring human involvement. Email — another key distribution channel for publishers — can also benefit heavily from AI, allowing publishers to fully automate the entire process of curating, personalizing, and sending newsletters. 

    Non-profit news outlet San Antonio Report takes advantage of intelligent automation to power its social media presence without a single staff member dedicated to social media, saving on people costs while generating important online engagement with its content.
  1. Automate to extend coverage without requiring more resources: Large and small newsrooms alike use automation to fill gaps and supplement their existing structures. Publishers such as the South China Morning Post (SCMP) augment their social media teams with automation to save time and cover unsociable hours. With a global audience, SCMP uses automation to ensure 24/7 coverage and remain responsive to trends or stories that break overnight or on the weekend without needing to invest in out-of-hours staff.
  1. Use AI to maintain referral traffic and revenue despite algorithm changes: Facebook is the most important social media platform for publishers by a long shot. Despite news of slowing user growth, Facebook generates the most traffic for publishers from the largest global audience.

    Understanding the intricacies of Facebook’s algorithm is therefore vital, especially as the company makes fundamental changes to the way in which content is surfaced. Social media algorithms are constantly changing, from slight tweaks to substantial overhauls. By employing AI technology, publishers can stay responsive to these changes with software that monitors vast datasets to discern patterns and trends. They can react quickly to the findings. Publishers using AI in this way ensure constant and automatic protection against platforms’ algorithm changes that can severely impact referral traffic and, therefore, ad revenue. 
  1. Use AI to extend content’s lifespan and value: Every story requires a significant investment to produce, and AI is helping publishers ensure they extract maximum value from each piece by optimizing reach and exposure. 

    One example comes from social media. Reposting stories on social platforms is a highly cost-effective means of maintaining a robust supply of social content, leveraging a publisher’s archives, and increasing engagement. Our research shows that reposted content offers significant value, gaining an average of 67% of the clicks a piece generated the first time around. 

    But it is more complex than just reposting the best-performing articles. AI constantly calculates the right time to post (an aspect as important as the content itself in generating engagement) and reshares posts automatically, earning additional exposure at no extra cost.
  1. Use AI to avoid costly guesswork and gain new insights: Understanding your audience is perhaps the single most important element of a social media strategy that drives ROI. AI has a few important uses in this regard. 

    Publishers like Hello! and The Telegraph run A/B tests on Facebook posts, not only to increase performance but, in the case of The Telegraph, to demonstrate the efficacy of certain stylistic choices, such as a shorter headline.

    AI-powered testing can work hand-in-hand with journalists, editorial and social media staff to generate greater ROI from audience development by automating the process or even suggesting subjects to test based on algorithmic analysis. 

    Publishers are also using AI in a similar way with their email newsletters. AI solutions can run continuous and complex multivariate tests to better optimize emails for individual subscribers, testing everything from the ordering of content to layouts and fonts. In this way, publishers are increasing engagement with their newsletter campaigns — a key aspect of keeping subscription numbers high — without needing to invest more time.

The bottom line

As their cost decreases and use cases multiply, AI solutions will become only more prominent within the industry. 

AI technology can fulfill multiple roles: data analyst, social media manager, and audience development manager, to name but a few. By leveraging its power, publishers can generate significant efficiency gains, reduce costs, and free up vital human resources to focus on activities that elaborate their distinct value proposition and ultimately drive ROI.

About the author

Antoine Amann is the Founder and CEO of Echobox, the leading solution for publishing automation used by 1,500 brands worldwide to automate and optimize content curation and distribution.

Innovation | Revenue | Supporter Spotlight

3 lessons from National Journal’s digital transformation

Uncertain market dynamics are forcing many businesses to shift course. But how many publishers can actually point to hard data to say that they’ve not only radically altered their business practices, but those changes have made a material impact in how they drive revenue?

That’s exactly what Kevin Turpin and his team have done at National Journal. They’ve engineered a complete overhaul of the company’s business model. From a traditional media advertising model, to an information services company with an ever-growing number of digital products and services, they’re helping government affairs professionals navigate policy, politics, and people. 

Over the course of that evolution, the share of National Journal’s revenue from advertising went from 50% to 3% in just five years as the company shifted its business model to membership subscriptions and custom research engagements.

Turpin joined 3Pillar Global’s Innovation Engine podcast to talk about this remarkable digital transformation and share some learnings that can help anyone looking to spark digital innovation at their own organizations.

1. Invest to differentiate, not just improve

Tighter competition makes digital transformation a necessity. But that transformation needs to have a purpose. National Journal knew that it had to “buckle down” and invest in being competitive. But the company first had to step back and decide who it was competing against.

Turpin recalled a direct quote from National Journal’s chairman David Bradley, “Always make the investment to be different in kind, not degree.” So rather than try to be faster or better than their media competitors, the National Journal team looked at the bigger picture. Google and Facebook were altering the market, making it “harder and harder to be successful in that ecosystem, especially if you’re producing something that was only different in degree,” Turpin said.

“Our decision was, let’s choose the hard road and let’s recreate. Let’s create anew what National Journal is and that really pushed us to certainly the more aggressive approach, which was totally transforming what our business was,” he said.

2. Failure to evolve opens the door to disruption

Digital transformation isn’t a one-time decision. It requires constant evolution to keep pace with other competitors. Once National Journal realized that its transformation would move it away from a traditional ad-supported media company to an information company, it began looking at the kinds of services that it could provide its member clients.

Once again, Turpin and his team did this with a great deal of intentionality. Customers’ market challenges do not stay the same year after year, and the future of the company depends on keeping up to date with what its members need to succeed.

“You can get shifted out of a budget line if you’re not sure what challenges are driving your members at a given time,” Turpin said.

To develop the products that have become National Journal’s main revenue driver, Turpin’s team always starts by listening to member needs. They want to know where the puck is going so they can help their members now and in the future.

“We always start with asking our members questions like, ‘What’s keeping you awake at night this year? What new things are you investing in that you didn’t invest in a year ago, that you didn’t invest in five years ago? What’s the number one priority that your boss is asking you to complete this year?” Turpin explained.

3. Transformation is only possible with accountability

Sustainable transformation can be challenging with limited resources. National Journal’s process is to make sure that its products are actually meeting the needs of its customers, and that requires the discipline to see each product launch all the way through, but also to admit when something’s not working.

New solutions that come under consideration must be additive, rather than stretching the market. National Journal never launches new products “just to do new.”

Another critical component is sticking with products to ensure that products scale and are set up for long-term success. Turpin advises companies to avoid leaving a launch product too early, as well as admit when they’re wrong if it’s quickly clear that a product just isn’t meeting the market’s needs.

“I found it’s a lot better if you get to that answer earlier in the process by sticking with it than letting it languish for two years and then coming back in and having to make sure it fits your decisions,” Turpin said.

Not every company will follow the same trajectory as National Journal. However, any publisher can undergo a digital transformation that sets it apart from the competition and positions the brand for growth.

Advertising | Perspectives | Revenue | Supporter Spotlight

User privacy and revenue are directly linked for publishers

It seems we’ve entered an era where an increasing ratio of stories on the advertising industry are opining on what new regulations may come to pass or when big tech companies will (or won’t) deprecate third-party cookies. With so much coverage focusing on external pressures, it’s easy to fall into the trap of forgetting what lies at the core of digital advertising: the consumer.

What regulators and big tech alike are providing aren’t, at their essence, constraints on the advertising ecosystem but rather the opportunity for consumers to choose how their data can or cannot be used for digital advertising. And when given that choice, consumers are increasingly acting in ways that protect their own data privacy.

What publishers need to know is that this means advertisers are facing an environment where half of users are browsing in environments that restrict cookies (Safari, Firefox, etc.). Of those who are browsing in Chrome, 40% disable tracking on their own. This leaves only 30% of the open web available for targeting with advertising. As consumer choice grows, so will the percentage of audiences that are traditionally unaddressable.

Luckily, publishers are better equipped than any other part of the ecosystem to directly connect with consumers. Largely, consumers aren’t objecting to their data being used responsibly by the website they’re on or the app they’re in, but rather they’re opting out of being tracked across the internet by adtech or big tech. This means an overwhelming majority of consumers’ data is visible to the publisher alone.

Protecting consumers and revenue alike

The evolution to more responsible marketing practices — where data is secure by design — is primed to benefit publishers. With that, there needs to be a focus on solutions that are grounded in user consent and choice in order for publishers to be able to operate sustainably and protect both their consumers and their revenue.

The right data infrastructure and insights gives publishers 100% addressability and the tools to activate audiences consistently across all media transaction types. This means publishers are uniquely equipped to offer advertisers the opportunity to extend the scale of their own data by partnering directly to activate first-party audiences.

Publishers’ rich audience data enables advertisers to reach high-value audiences with targeted messaging, without infringing on user privacy. This is invaluable to advertisers, helping them to continue reaching consumers with relevant content, even as addressability declines. For example, U.S. News’ first-party audience data allowed its advertisers to see an uplift in engagement of up to two times by activating valuable cohorts.

Further, Bauer Media’s Illuminate offering has been shown to positively affect user perceptions and purchase consideration. Post-campaign research for a leading manufacturer showed a 44% increase in users who said they would be highly likely to buy from that brand, compared to non-exposed.

How publishers benefit from user privacy

It’s clear that the close proximity publishers have to their audiences is transforming the digital advertising ecosystem. What publishers do with this opportunity will redefine how they are able to successfully activate and monetize their users in the future.

We’ve entered an era where publishers are responsible for user privacy practices when it comes to the collection, management, and usage of consumer data. They serve the needs of consumers who are growing increasingly aware of how their data is used as well as advertisers looking to buy across highly addressable publisher inventory.

Fortunately, this ecosystem is also one where publishers will be fairly compensated for the value they create, as they are positioned to provide addressability, relevance, and scale for advertisers. And these advertisers are seeing results.

By working directly with publishers, a global beverage CPG brand course-corrected over-indexing in Chrome, helping solve its addressability problems and reaching double the audience that was previously hidden in Safari. That same campaign was also able to deliver 2.1x the number of impressions served in Safari vs Chrome, which resulted in a 21% lower CPC and a 123% higher CTR compared to the benchmarks.

Publishers and advertisers must work together to restore consumers’ trust in their data privacy. Concern needs to go deeper than worrying about the deprecation of the third-party cookie or simply meeting regulatory compliance. Building consumer trust comes from publishers seeking consent and data solutions that are secure by design.

About the author

Isabella Jenkins is a Client Revenue Partner at Permutive. Isabella supports publishers on new Permutive products and features to ensure their platform use aligns with their data strategies. Isabella has over six years of experience in adtech, previously heading up Client Success at Captify.

Perspectives | Revenue | Supporter Spotlight

Publishers: here’s how to build a resilient audience extension offering

The case for programmatic media buying typically references a common mantra: “Right person. Right time. Right place.” Marketers enjoy the control that programmatic media buying affords them. They have the ability to value each ad impression independently on the basis of the user, the point in time within their purchase journey, and the quality of the media environment, among several other factors.

However, if pressed, many marketers would be willing to sacrifice “right place” in favor of “right person” and “right time”. In other words, they value the user and information about that user more than the location where they find said user.

Brands, and their agents, will frequently make room for strategic partnerships with publishers and content creators. However, the time and resources they have invested in developing audience insights and segmentation practices dwarfs their efforts to manage these strategic relationships. Advertisers have built out CRM databases and partnered with third parties to build robust customer profiles. They have partnered with data on-boarders and identity graph solutions, third party data providers and clean rooms. And yet, there is still an appetite for more targeting information, unique audiences, data points, and triggers – some of which are unique to publishers.

This focus on audience above media environment may represent a risk for publishers that are reliant on sponsorships and page takeovers. Those publishers may see performance media dollars redistributed to a wider swath of publishers where marketers can find their precise audience targets. However, it also creates opportunities that some publishers have already seized.

Audience extension: opportunity and trade-offs

One such opportunity that more publishers should be taking advantage of is the creation of an audience extension practice, in which a publisher makes their audience available to advertisers while those users are outside of their owned and operated domains. This practice can create a valuable stream of incremental revenue. It can be particularly valuable for publishers with access to unique data about their users, whether it’s in-market for products and services, interests, or authentic age and demographic information. However, there are several factors to consider when building an audience extension offering and ensuring that it is resilient in the face of cookie deprecation.

To make this work, publishers must be willing to accept certain trade-offs. Historically, publishers have expressed a few key reservations about launching an audience extension business. They cite concerns that it will detract from their direct sales business and loss control of their audiences among others.

These reservations can be addressed to a certain degree by how the offering is productized. For example, publishers can restrict audience extension to media plans that also include ad placement on owned and operated properties. They can also confine the activation to managed service rather than advertiser self-service, and limit advertiser tracking tools such as DMP tags. Ultimately, publishers will need to balance these tradeoffs in order to develop successful programs and earn recurring business from advertisers.

Getting audience extension right

Beyond the tradeoffs, there is more to consider as publishers look to stand up a successful audience extension operation. First, it will require sales and marketing resources that can effectively connect a publisher’s audience composition to a marketer’s target definition. Demonstrating the uniqueness and integrity of the publisher’s audience segments, as well as the potential scale, is critical to creating demand.

Second, it is important to have the tools to develop and configure audiences that meet buy-side criteria, as well as scale those audiences via sophisticated look-alike models. Third, it’s critical to have skilled and experienced execution teams. While Demand-Side Platforms (DSPs) have become more user-friendly over the years, teams that can execute quickly and flawlessly will have more success in maintaining advertiser relationships.

Finally, publishers need to maintain a focus on measurement and analytics. This approach can position an audience extension offering as more than an add-on audience reach tactic, but rather a performant strategy that drives business outcomes for marketers.

Preparing audience extension for the future

As we look to the future, publishers should be thinking about how existing audience extension offerings need to evolve moving forward. As third-party cookie deprecation continues to erode cross-domain targeting, publishers that execute audience extension programs through Demand-Side Platforms (DSPs) will face the same challenges that marketers face. They will struggle to deliver advertising at scale, particularly on Safari and Firefox, and they will find it difficult to demonstrate performance metrics that advertisers have come to rely upon.

Also, publishers that want to preserve their audience extension revenue streams will need to explore and test alternative methods of targeting, whether it’s an alternative identifier based on e-mail addresses or an anonymized identifier generated by the publisher. A publisher’s audience extension business can act as a solid testing ground for deploying alternative ID solutions, allowing publishers to see the end-to-end process and understand scale and performance.

Although Google recently announced a delay in Chrome’s cookie deprecation timeline, marketers are using this time to do more head-to-head testing between cookie-based buying and alternative IDs. They’re also preparing for measurement and optimization in the absence of third-party cookies. And they’re shoring up first party data and experimenting with clean room solutions.

Likewise, publishers with a vested interest in growing their audience extension business have an opportunity to prepare. Publishers will need to balance trade-offs as they decide which methods they use and who they partner with as third-party cookies continue to dwindle. Now is the perfect time to test and understand the revenue implications of shifting to alternative methods of executing audience extension programs.

Perspectives | Revenue | Supporter Spotlight

How to get back to growth in the post-pandemic subscription marketplace

The pandemic marked a period of explosive growth for subscription commerce. However–given the economic situation, easing restrictions, and a shift in lifestyle–the tides have turned.

Subscription brands—especially media organizations—are seeing new challenges arise in both retention and acquisition. Streaming giant Netflix made headlines by losing 200 million and nearly 100 million subscribers in two consecutive quarters this year. A different strategy and renewed attention are required to expertly navigate this next phase of our endemic subscription landscape and beyond.  

In this article, we delve into what’s changing in the subscription landscape and how recurring revenue businesses can adapt and flourish. 

The changing sands in subscription commerce 

The same factors that fueled the subscription explosion during the pandemic seem to now be shifting in the opposite direction. Our research has found a number of factors that are impacting consumer appetite for subscriptions and the overall subscription landscape: 

  • Shrinking expense budgets: Rising inflation and fears of an impending recession are curtailing consumers’ discretionary spending behavior. Just over 90% of subscribers say they are concerned about inflation and its impact on the cost of goods and services.
  • Reduced movement restrictions: As social distancing compulsions ease, people are once again enjoying in-person shopping experiences. This movement shifts several premium-priced subscription categories from “necessities” to convenience-based “luxuries.” The impact is clearly felt in consumers’ increased cost sensitivity towards subscriptions, which has dropped from 2% in October 2021 to 22% in March 2022. 
  • Lifestyle changes: As travel and entertainment options resume, lifestyle shifts are happening. Statistically, 46% of consumers expressed excitement about in-person dining, 45% about domestic travel, and 43% about in-person events. This shifting preference has a natural spillover to weekends dining out instead of dining in, for example. This impacts the different “stay-at-home” subscription bundles like meal kits.
  • Classic subscription fatigue: The impact of subscription fatigue is also becoming apparent. Consumers realize they are spending more on subscriptions than they need or desire. In addition, 22% suggest feeling overwhelmed with the number of subscriptions they currently own. And that clearly feeds into their decision to withdraw.

What to make of this mercurial market? It’s time for merchants to harness the above insights to intervene and adapt.

How to stabilize during this COVID aftermath

Stabilizing through the changing tides requires businesses to pivot their subscription models to increase consumer value perception as a result of their changing interests. 

Here are some actionable ways merchants can adapt to changing consumer preferences:

  • Help people save money: As consumers become more cost-conscious, offering subscriptions that promote saving can be powerful. As found in a Recurly study, only 20% of U.S. subscribers intend to sign up for more subscription services, while 49% plan to keep their subscriptions the same due to the rising prices. Introducing “Subscribe and save options” or providing handsome bargains for “lock-in” subscriptions–for example, securing an annual subscription at a lower monthly rate–can be helpful to reverse price-conscious unsubscribes. 
  • Introduce greater price flexibility: For non-essential subscriptions (the “nice-to-haves”), offering tiered packages can help mitigate churn risks. Allowing users to pay less for reduced features can fuel retention. Netflix has leveraged this by offering lower subscription fees for consumers consenting to watch ads. 
  • Put customers in the driver’s seat: Customers now want greater freedom, personalization, and choices as their lifestyles change and consumption patterns shift. For example, 82% of subscribers state that being able to pay with their preferred payment methods is one of the features they want most from merchants–and that’s up from 69% in October 2021. That said, offering too many options can cause analysis paralysis, so experiment with pricing and packaging to find the right balance for your subscribers. 
  • Help people save their time: Studies suggest 81% of shoppers wouldn’t mind continuing subscriptions if they could save time and enjoy greater convenience, despite surging inflation. Merchants offering pricier subscription bundles that help people save the value of their time can continue to triumph if they can effectively convey that value.
  • Ensure excellent customer experiences: Customer experience remains paramount to successful subscriptions and even more so in the current volatile and maturing market. Allowing customers to pay easily with their preferred payment methods, access flexible renewal and cancellation opportunities, and enjoy prompt support as needed will fuel lasting retention outcomes.
  • Increase win-back chances with pause options: Despite efforts toward retention, some customer segments may still be unwilling or unable to continue.. Offering them a softer alternative of pause can help to retain them in the fold and increase their likelihood to re-subscribe in the future. We’ve seen merchants that use our pause feature experience a 46% reactivation rate, demonstrating the power of this magical button.

While the pandemic accelerated the demand for subscriptions, the current correction demands a pivot to thrive in this evolving market and inflationary climate. 

Subscribers continue to seek value–whether for their money, time, or both. Hitting the sweet spot requires making necessary changes to existing models or subscription bundles to adhere to the reimagined consumers’ preferences. 

About the author

Theresa McEndree is the Chief Marketing Officer at Recurly, a subscription management and billing platform that maximizes subscriber lifetime value with expertise, technology, and insights for global brands.

Perspectives | Revenue | Supporter Spotlight

How to increase your subscriber base despite the economic downturn

Throughout the pandemic and well into 2022, the narrative in publishing was simple: subscriptions are the future. With third-party cookies on the way out and traffic from social media less reliable than ever, subscriptions emerged as the stable revenue source digital media had been seeking for well over two decades. And the numbers backed it up. When the New York Times hit 10 million digital subscribers it was was touted throughout the industry. And numerous otheroutlets have reported a surge in paying customers.

Some deflation was probably inevitable, and in the last few months it’s started peeking over the horizon. Reuters’ Annual Digital News Report was bullish on subscriptions in 2020 and 2021, but this year’s installment says that “there are signs that overall growth might be leveling off.” NiemanLab, citing data from paywall tech company Piano, also recently reported that “a significant number of new subscribers cancel their digital subscriptions within a day.”

There is no question that subscriptions are still a highly viable revenue source, and will remain so for the indefinite future. But outlets that want to maintain and expand their subscriber base in a challenging, competitive environment will need to develop a deeper sense of what keeps readers subscribing––and what brings them onboard in the first place.

What drives readers to subscribe––and renew?

Access to quality content 

The common wisdom used to be that your best stories should go outside the paywall because those were the stories most likely to bring in new users (and help boost pageviews and ad dollars in the process). 

Recently, though, some have turned that common wisdom on its head, with intriguing results. Look at Business Insider: in recent years they’ve aggressively paywalled some of their biggest scoops, and have grown their subscriber base significantly in the process. Scoop, of course, is the key word here. Users are willing to pay for the kind of distinctive content they can’t get for free elsewhere.

Feeling part of a community

As the big social platforms know well, community is the “stickiest” thing a company can offer. Nothing draws users back more reliably than vibrant on-site conversation. Data from OpenWeb’s network of 1,000+ global publishers shows that those who engage with the conversation view 4.5X more pages. They also spend 3.6X more time on-site, and drive 3.2X more revenue than non-engaged users. Better yet, on average, 25% of these users return monthly. Publishers have been trying to turn their websites into social hubs for over a decade now. But with Facebook effectively abandoning the social news space as it pivots to TikTok-style videos, publishers have more breathing room to cultivate communities of their own. 

Subscriber perks

The last few years have seen more attention paid to what InPublishing calls a “rounded membership proposition”––i.e., everything an outlet offers besides its content. This can take countless forms: from puzzle games (like the New York Times’ Wordle) to subscriber-only podcasts, newsletters, Discord communities, cooking courses, and more. These can go a long way towards that “bang for your buck” feeling that keeps subscriptions off the chopping block.

Interactivity

According to the Piano data referenced earlier, 40% of subscribers are “sleepers”––i.e., people who don’t interact with their subscription at all. As it happens, a large percentage of these people cancel the moment they “wake up.” 

The solution? Prevent them from falling asleep in the first place, through interactive content. Things like expert AMAs, live blogs, and staff Q&As are simple to set up and great for retention: they force users to come to your site at specific times and get them used to checking your content regularly.

Appeal of individual journalists

At this point, certain journalists are minor celebrities in their own right––and publishers should do everything they can to harness that star power. The New York Times’ newsletters do an excellent job of this. However, every publication has actual or potential stars, and cultivating them can go a long way towards boosting reader loyalty.

Subscriber acquisition starts with knowing readers better

When publishers expand the scope of their content offerings, they create a positive feedback loop. Comments sections, subscriber posts, journalist Q&As––these things keep readers on-site for longer and grant publishers fine-grained insight into how their content is resonating. That data can then be used to further refine subscription offerings, bringing in even more users and even more data, which can then––well, you get the idea. Figuring out precisely what your audience wants is a difficult task, and no one size fits all. But knowledge in this arena is inevitably cumulative––data begets data, every time.

Even the most optimistic observer of the ’20s subscription surge knew, on some level, that it couldn’t last forever. A leveling-out was always in the cards. For publishers, accepting the challenge of this moment means getting creative––experimenting, seeing what works, and building the kind of audience that will stick with you through this downturn and long beyond it.

Perspectives | Revenue | Supporter Spotlight

3 tips for lean teams managing multiple subscription sites

Subscription marketing teams are managing more digital media properties than ever after what seems like near-daily announcements about media acquisitions. In light of the growing necessity of digital engagement and audience targeting to grow reader revenue, media companies are looking for opportunities to consolidate their resources and encourage staff to be more efficient.

For lean teams or individual champions managing multiple sites, taking a few simple steps can help streamline workflows and apply audience lessons more broadly.

1. Manage user identity globally

Google may have delayed its deprecation of third-party cookies yet again, but publishers are still wise to set themselves up for a future based on first-party data. For most publishers, the obvious way to develop a trove of user identity data is by encouraging users to register for accounts or pay for subscriptions. 

Regardless of whether your registration offer is free or paid, the big step to make this easier on both your internal team and your users is consolidating accounts across properties—in other words, creating one set of log-in credentials for users that control access across all of your managed sites and apps. This requires some up-front configuration, but it’s a win-win. Not only will your marketing twam have a holistic view of your audience, but your users will only have one set of credentials to remember and manage their access to multiple content sources.

2. Combine data analysis across properties

Analyzing user behavior across individual sites might leave you in the dark on key audience patterns. With your combined user identity system, you’ll be set up to analyze behavior metrics across sites rather than (or in addition to) in silos.

This view of user behavior on individual sites and across all properties will help you gain a deeper understanding of your audience’s motivations. Armed with this information, you will have fuel for targeted marketing and better user experiences, as well as more audience segmentation options for multi-property ad sales. This comprehensive view may also help you identify anomalies in your data, like a drop in conversions or traffic, to fix any issues that might come up for a single site or app.

3. Templatize experiences and conversion offers

Continuous testing and optimization is the name of the game when it comes to subscription growth. But it’s incredibly tedious to duplicate every update you make across 5, 10, or even 20+ sites for major publishing groups. We’ve found that creating these elements as modular, customizable units is the best way to manage this test-and-learn approach. 

This allows you to keep the framework you know is effective, while customizing specific delivery for individual brands or properties. Then, you can ideally deploy them across multiple applications from a centralized view. Building a template library over time will also allow you to reuse seasonal promotions, like discounts around the back-to-school season or for holiday gifting. This will also create efficiencies in delegating resources, as well. Rather than having individual resources managing the promotions, user flows, marketing, and more for each brand in your publishing group, a shared services resource can be working on multiple brands at one time. This allows you to make the most of your team’s bandwidth and do more with less.

Managing a handful — or even dozens — of sites and apps is no small feat. But implementing a smart system from the onset will set you up for long-term success.

Revenue | Supporter Spotlight

Why data is media’s revenue diversification differentiator 

For the better part of the last decade, there has been a clear case for revenue diversification as the key to sustainable success in media. Dependency on one or two revenue models is risky, especially amid times of economic uncertainty.

Revenue diversification is particularly critical as ad-supported business models provide less and less return. Programmatic ad buying increased efficiency. However, in many cases it has led to lower CPMs for media companies. As a result many have increased the number of ads per page, which limits advertising’s impact. Now, even that option is under threat as the digital media industry faces the challenges that come with cookie deprecation.

As important as it is, revenue diversification is challenging. Media companies have seized the opportunity to launch more revenue generating products over the past few years, including newsletters, podcasts, leadership communities, and live events, to name a few. Each of these products generates additional revenue, which is great. However, they also provide a precious resource: better audience data and insights. That said, not every organization has the ability to fully leverage these insights to further capitalize through diversification. 

Media companies that have a unified view of their data can better engage with audiences and drive them to new revenue-generating activities. Unfortunately, they rarely have a single view of reader and customer activity. The key to revenue diversification is uniting these viewpoints to maximize engagement and better understand and promote the products that are going to continue driving revenue.

Seizing the diversification opportunity

Before we dive deeply into the challenge, let’s spend some time laying out the opportunity, because it runs wide and deep. Media companies have explored myriad ways to drive revenue, from old-school methods like selling branded merchandise, to the new school, such as branded streaming services. 

While the roadmap will look different for each media entity, there are three diversified revenue streams that every company should consider. 

Live events

The first is events, which are experiencing a comeback as attendees get more comfortable with in-person interactions. Events are a way for a media brand to translate its content and expertise into a real-world experience. By building events around popular content topics and leveraging editorial staff as on-stage talent, media companies can create an engaging, replicable experience that drives revenue. While the pandemic may have paused in-person events, it showed that digital and hybrid events are a viable business model going forward. This opens the door to even greater scale for an events business. 

Ecommerce

Second is Ecommerce. More than opening an online store, the opportunity lies in integrating seamless opportunities for readers and subscribers to make purchases as a part of their engagement with the content and media brand. Many media companies leverage affiliate programs to match their content to products and monetize that connection. 

More advanced media companies integrate products and ecommerce links directly into their content so that they get credit for these sales, as opposed to having their audience buy a product elsewhere. By leveraging the trust in their media brand, they can promote products and drive sales, which helps both the media company and the retail partner.

Community

Finally, there’s the media company’s community. This isn’t simply about building a dedicated members-only portion of a website, or a unique newsletter. Community is about more than creating an environment. It’s about exciting brand advocates and aligning with activists in an organic fashion. 

In fact, there is a very large opportunity to build multiple communities that are aligned with a media property. Larger organizations can no longer view their audience as a monolith. Readers visit sites for a variety of reasons, and the larger audience may be composed of several smaller segments that engage with different content topics. Each of these audiences represents an opportunity to unite and align with a formal community, complete with targeted content, newsletters, events, and other revenue opportunities.

The roadblock to diversification

The challenge for any large media company is getting a single view across all of their readers so that they understand how to strategically market and promote these new revenue streams. Big media companies likely have numerous disconnected back end technologies that offer a view into their readers and how those readers behave on a site, interact with newsletters, or what they consume at events.

This happens because companies often use point solutions to manage the individual revenue streams. These systems may have different information on the same individual reader, but the media company can’t unite those views and get a full picture.This siloed data is much harder to use across different internal disciplines.

For example, consider an event attendee with an interest in crypto. The business publication running the event wants to own the crypto reporting and thought leadership space through newsletters and interest-based communities. Right now, they don’t have a way to promote additional content, newsletters, podcasts, or subscriber communities to the attendees once they leave the event, because that data isn’t accessible to any of the other teams. 

The event revenue is great, but there’s a missed opportunity for deeper engagement.

Engagement is the key to new revenue streams

I’ve written before about how the relationship with the content consumer matters more than ever. This is especially true with revenue diversification, where the goal is to use existing content and expertise to drive more revenue. Whenever audiences interact with content, it creates data that helps better understand their interests, which helps media companies identify new revenue opportunities.

It’s possible to find new revenue streams without a unified view of the audience. However, media companies are leaving money on the table if they don’t try to better unite their customer view in order to understand engagement.

Featured Post | Revenue

Is consulting the next revenue stream for publishers?

What’s the biggest challenge you’ve overcome in your publishing business? Increasing audience conversion and retention? Bumping up digital advertising yields? Effective content repurposing?

All of the above?

The chances are that there’s another publisher out there right now wrestling with exactly the same problems. And, if they knew that you had dealt with the issues they’re stuck on, they might just pony up to get you to help them out.

Media organizations large and small have spotted the opportunity to monetize their success in navigating the maelstrom of modern publishing. From global names like the Financial Times, Bloomberg and Axios to independent contract publishers like the UK’s Think Publishing, all are selling on the practical wisdom gained from doing what they do well.

Some benefited from making the move to digital early and are putting the secrets of their transition on sale. Others have developed new ways of doing old things and have priced up their processes. Still more have just been doing what they do for a very long time and are happy to let smaller players buy into their expertise.

Selling expertise

A perfect example of capitalizing on expertise is FT Strategies, the consultancy arm of the Financial Times. Their pitch explains that, as they transformed the 130 year old legacy print operation into a highly successful digital brand, they built “practical best-in-class expertise” that they will now share with other businesses trying to thrive in the digital economy.

When the division’s 2019 launch was covered by the consulting industry news site consultancy.co.uk, they recounted a consulting Gold Rush among ‘long-time incumbents’ across a range of industries. Established firms were selling advice to one-time competitors facing the problems that they had already tackled.

Interesting times

The disruption implied in the expression “May you live in interesting times,” is a curse to most, but a blessing to consultants. And in publishing, the ubiquity of problems with falling readership, rising digital competition and declining advertising revenues represents a very interesting opportunity for outfits with answers.

FT Strategies actually began with a curiosity about software sales: could The Financial Times commercialize some of their proprietary data technology. Vox Media and The Washington Post have both gone down that road; Vox has 350 clients on its Chorus platform and WAPO’s Arc XP platform supports more than 1,500 sites in 24 countries.

But the FT didn’t travel that path. Supporting a SaaS offering is a massive undertaking and the team worried elements of their offering could be commoditized. Better instead to offer advice on how to make the best use of available technologies.

Scalable skills

What might be FT Strategies’ smartest move was its choice to focus on one key area of publishing strategy: subscriptions. At the peak of the paywall pivot, having just announced a million paying readers, the firm hitched its consultancy wagon to the reader revenue cause.

Speaking to the Media Voices Podcast in 2021, FT Strategies MD Tara Lajumoke said her team was not trying to be everything to everyone. “We have a deep set of skills, and experience around recurring revenue models,” she explained. “Subscriptions represent a huge part of the work that we do.”

That highly specific set of skills is allowing FT Strategies to look beyond publishing and begin offering consultancy services to other sectors, including finance. In 2021, the firm more than doubled its headcount and worked with almost 200 clients in more than 30 countries.

Expertise in the niches

Of course the FT is not the only media business offering consultancy services. Top-tier media organizations from Bloomberg to Axios sell advisory services. But you don’t need to be a multimillion dollar conglomerate to sell consultancy. You just need to be smart in your niche.

In the UK, Rethink is the consultancy arm of Think, an independent contract publishing agency that focuses on serving membership organizations. Rethink was launched in 2021 to formalize work the business had been doing for years as an on-going part of its customer service.

Ian Mcauliffe, CEO and founder of the £15 million business, has said that the company’s clients, many having just one title, didn’t have the scale to do the things a bigger publishing company can do. “They can’t compete,” he explained, “So we were increasingly being asked for advice.”

The company now offers a range of consultancy services built on 20+ years of contract publishing experience, from benchmarking costs and developing sustainable commercial strategies to increasing the value of a publishing business and preparing it for sale.

The foundation of a consultancy strategy

Adding a consultancy arm to your publishing business can be seen as just another revenue diversification play, but I think it’s a bold one. To sell consultancy services, you need to have several critical components in place:

Strong reputation

No one is going to pay you to tell them how to fix their publishing business unless you are seen as an exemplar in your chosen field. The FT’s digital transformation narrative, and its standout success in subscriptions, is an important foundation for its consulting operation. That doesn’t mean you have to have the profile of a 100-year old international news organization. Being the best in your niche is enough.

Seth Godin describes this as being famous to the family: “You don’t need to be Nike or Apple or GE. You need to be famous to the small circle of people you are hoping will admire and trust you.”

Demonstrable expertise

Being famous will get you noticed, but when it actually comes time to pitch your capabilities, it is crucial that you can prove that you’ve been there, done that and made a lot of money selling the t-shirts. The success of the “Smart Brevity” editorial strategy from Axios is there for all to see.

In just a couple of years the company has grown its local newsletter portfolio to 14 with revenues of $5 million. That success has let it leverage its trademark newsletter formula into a software and consulting business that sees clients pay $10,000 a year for help replicating their winning formula.

Clever staff 

Building on your own company’s expertise is a strong foundation for a consulting business that’s tightly focused on your niche. The people that helped drive your success should be able to look at similar problems in other companies and develop practical solutions.

However, scaling into other areas is a different matter and a broader knowledge of business practices will be really helpful. The FT’s appointment of Tara Lajumoke illustrates perfectly the power of bringing in outside talent. Before joining the FT, she worked for McKinsey in London and Goldman Sachs in Europe, the Middle East, Africa and the US.

Process

Cozy chats about what to do next aren’t going to cut it if you’re looking for billable hours; your clients will need to be able to put your advice in action and evaluate progress against key metrics. That means building your playbook to enable your staff to deliver detail on the strategies and methodologies that have worked for your business.

In the case of Axios, they actually wrote a book on it. Smart Brevity, the power of saying more with less teaches the how-tos of the approach and shows real-life examples of the technique in action.

Consulting as part of diversification

Can consulting become a real revenue stream for publishers? Yes, absolutely. But like everything else in this industry, it’s not a silver bullet. It can make commercial sense to leverage the learnings of success, and failure, to help other businesses face up to the challenges of digital transition.

But like everything else in publishing it will take talent, time and laser focus to turn what you know into cold, hard cash.

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