The Association of Online Publishers’ (AOP) new report, Digital Publishing: Outlook and Priorities 2023, offers insight into this year’s top priorities for media companies – which unsurprisingly featured revenue growth. Publishers are also focused on talent and building a diverse and inclusive workplace.
As digital media companies look to grow their businesses, they assess internal strategies and external macroeconomic and legislative influences. Both publishers and solutions providers report being well-positioned for the year ahead and rate their confidence level a 7.2 based on a 10-point rating scale.
The AOP surveyed 92 digital publishers and 16 solution providers; 26% of respondents are at the board level in their organization, and 51% are heads of departments.
Internal business priorities
Revenue remains a top priority for publishers. Subscriptions (17%), sponsorships (15%), and lead generation (13%) rank as top revenue sources for growth among consumer-based publishers. B2B publishers see stronger growth opportunities in lead generation (28%), events (22%), and sponsorship (20%). Digital publishers targeting business and consumer audiences rank developing new revenue streams through product innovation as their highest priority (3.9).
Developing new audiences is important for revenue growth. To that end, consumer publishers work across multiple platforms to drive content discovery while B2B publishers are more reliant on LinkedIn (44%).
For advertising, publishers targeting consumer audiences report they depend more on advertising deals in the open marketplace. In contrast, B2B publishers divide more evenly across open and private marketplaces and non-programmatic. Further, 44% of all publishers expect revenue growth from private marketplaces and 42% from non-programmatic revenues.
Publisher respondents appear to be highly focused on their employees. Asked to rate how important different organizational priorities are [where 0 is not a focus at all and 5 is a very strong focus], B2B publishers ranked recruiting and retaining new talent as the most important priority, with a score of 4.1. Consumer publishers ranked ensuring a diverse and inclusive workplace as the most important priority, at 3.9.
External factors
With new legislation a key focus, digital media companies are mildly confident of their knowledge of the UK’s Online Safety Bill. This legislation establishes a new regulatory framework to ensure tech companies protect users from illegal content and activity, specifically social platforms, and other user-generated content-based sites. Publishers rate their confidence in understanding the Online Safety Bill’s impact on their organization at 5.6 on a 10-point scale and solution providers at 5.3.
Some publishers report that their companies are preparing for this new law by consulting with their legal teams, providing a comprehensive editorial policy, and relying on browser options. However, many also reply that no actions are needed because quality content publishers do not target children.
Further, publishers’ confidence rating is 6.5 regarding their readiness for the end of third-party cookies, while solutions providers report lower confidence in readiness (4.8). Publishers prioritize their investment in first-party data and user experience in preparing for the end of cookies:
Enhancing the engagement funnel to build better first-party data (23%);
Implementing tech solutions to provide a 360-degree view of audiences (15%); and
Investing in solutions to deliver a more personalized user experience (15%).
With a strong focus on first-party data, 58% of publishers are working to ensure their audience informs their business decisions and their investment in a data-led organization. Another 21% highlight the importance of internally managing and communicating audience insights throughout their organizations.
The AOP provides a snapshot of important focus areas for the year. A strong confidence level among media companies reflects positive internal alignment on essential strategies to develop and grow their businesses further. They are focused on building a diverse and strong talent pool. In terms of strategy, they are taking an audience-focused strategy and look to diversify revenue growth beyond advertising sales and subscriptions and increase sponsorships, lead generation, and event revenues.
“Only journalism will save journalism,” says Juan Señor, an award-winning journalist andPresident of the Innovation Media Consulting Group.It is heartening that, as he points out, “people have rediscovered journalism.” Its importance has been cemented over the past several years, he says, “starting with The Trump Bump. Then the pandemic. Now we have a war.”
Señor argues that high-quality, distinctive reporting produced during these tumultuous periods has had an impact. Now, he says publishers need to “keep this momentum going.”
This is a point he emphasizes in the latest Innovation in News Media World Report*, which Señor co-edits. He and fellow editor Jayant Sriram write that “we need to build from this position of strength, even as the media world at large is in a period of unprecedented flux.”
How can publishers do this? Based on our conversation with Señor, and his latest Innovation Report, here are fiverecommendations for publishers as they look ahead to the uncertainties of the New Year.
1. Keep your foot on the subscription gas
“The key thing is to press on with subscriptions,” Señor recommends. He is bullish about reader revenue, stressing the subscription spike many publishers have witnessed in the past few years. “People know they have to pay for news,” he says, “so be the one that they pay for.”
FIPP’s new Q3 Digital Subscription Snapshot finds that “growth for most brands remains healthy, with period-on-period gains of 5% or more for many.” But growth is slowing, cautions CEO James Hewes. Gains are “significantly down” from this time last year, “when low double-digit growth might have been expected each quarter.”
The cost of living crisis, coupled with rises in many subscriptions, may all be contributing to this. FIPP also points to a maturing of this market. That means that “it is inevitable that growth percentages will begin to decline.”
Despite this, Señor urges publishers to stay the course. “Keep pushing [subscriptions] first and foremost as a strategic priority,” he says, “even if it means heavy discounts.”
A key factor behind this rationale is the cost of attracting new subscribers, which is typically more expensive than keeping new ones. That’s one reason why many publishers are increasingly investing in efforts to reduce churn.
The habitual, relationship-based, nature of media consumption also matters. As economic conditions improve, you may be able to nudge up prices or upsell existing consumers. That’s harder to do with audiences who have churned off.
Retention tactics identified by the American Press Institute and featured in the Innovation in Media 2022-23 World Report.
2. Continue to explore opportunities for revenue diversification
Alongside maintaining relationships with existing audiences, publishers need to continue to find new routes to revenue. To help them do this, the latest Innovation Report outlines 14 different business models publishers can adopt. Publishers can mix and match these efforts to pull together a good range of diversified offerings.
Aside from subscription-led approaches, other possibilities include a blend of B2B and B2C models such as memberships, events, affiliate marketing, and “think tank” style output. Educational activities, such as those offered by The Economist’s Executive Education program and Family Handman’s DIY University, may also be a good fit for some publishers and their audiences.
As many publishers know, if you wait long enough, then everything old becomes new again. In this regard, Señoris excited about what he describes as “the original habit-formation tool for newspapers – puzzles and games.”
The New York Times’ acquisition of Wordle is the poster child for this, having brought “unprecedented tens of millions of new users to The Times.” And, as The Innovation Report points out, “If even a fraction can then be converted to paying subscribers it would make for an excellent business proposition.”
Puzzles and games are again in vogue as gateways for publishers to capture new subscribers, generate fresh revenue streams and increase the “stickiness” of their relationships with audiences.
Nevertheless, as Esther Kezia Thorpesuggests, “offering games is not a strategy in itself … Publishers need to find ways to bring regular puzzlers into a deeper relationship,” she says, “whether that be through newsletters, social features, or additional layers to the games themselves.”
Examples of different publisher business models, from the Innovation in News Media World Report 2022-23
3. Unlock the power – and results – of product thinking
Publishers have invested – and continue to invest – considerable resources in areas such as games, newsletters, and podcasts. Much of this is driven by a belief that these ventures can serve as a gateway to your content and drive subscriptions and aid retention by deepening bonds with their consumers. Señor calls them “conversion monsters.”
These efforts reflect product thinking, which has risen to the forefront of media strategies over the past decade.
“Product thinking begins with realizing that every way people experience the news is a possible product or feature,” the Innovation Report observes.
Each of these touchpoints, of course, is also potentially monetizable.
As a result, “publishers must now become product companies and not just news media publishers,” Señor believes. That’s a sentiment increasingly applicable to revenue strategies, as well as content propositions.
“Product is changing everything,” agrees Luciana Cardoso, the Brazil-based Vice Chair of News Product Alliance’s Board Of Directors. Cardoso comments on how product is a driver for innovation “because we need to have the customer at the center of everything.”
4. Be tech-led, not led by tech
This desire to be more consumer-centric, is accentuated by the need for publishers to prepare for a world without third-party cookies. Describing this as a ”first-party data moment,” Señor says these developments are “the key to a stronger future for our industry.”
“First-party data gives us the chance to have a direct relationship, control the pricing, content and dialogue with our readers without intermediaries,” the Innovation Report states. “This is a massive shift and one we must prepare for.”
Publishers must also look to the possibilities of Web 3.0. Señor points to the availability of “journalism without browsers” as one critical dimension of this brave new digital world.
“When you look at how Condé Nast is experimenting with this, it’s very, very interesting,” he told us.
One of their titles, GQ magazine, recently launched on Discord. “The way that we are thinking about it is we are throwing a party, GQ is the host, Discord is the venue and you are invited,” says Joel Pavelski, GQ’s Executive Director of Global Audience Development & Social Media.
Condé’s approach enables them to engage with communities in private online spaces, potentially reaching new audiences and serving existing ones in fresh ways. It’s part of a “conscious uncoupling” some publishers are having with traditional tech platforms; and part of a wider shift in media habits seen within the creator economy.
Tapping into these emerging spaces and behaviors may reveal insights that can inform continued product thinking, drive subscription models, as well as support and shape first-party data strategies.
5. Invest in content, especially visual media
Despite encouraging publishers to keep a watchful eye on emerging tech trends, Señor emphasizes that organizations shouldn’t go overboard.
In terms of the industry’s wider financial footing, “the Metaverse, Web 3, none of this stuff will make the difference,” he contends. “What will make the difference is investment in journalism.”
“We need to do original reporting. A lot of people want that,” Señor says.
As part of this, he stresses the importance of high-impact visual journalism, which he believes is “absolutely essential,” and “perhaps the most exciting new field in journalism right now.”
Product thinking can also shape how – and where – these visual-first stories are told. ”This is transformative,” Señor says, pointing out how many of these efforts are driven by a “story first, platform second” dynamic.
Memorable examples, such as video Op-Ed’s pioneered by The New York Times and The Miami Herald’s award-winning “House of Cards” investigation, can also yield multiple outcomes for publishers. Impactful content can be integral to industry recognition (e.g. awards), and a key driver for unlocking new subscriptions, as well as the retention and upselling of existing consumers.
House of Cards: @MiamiHerald’s interactive investigation of the Champlain Towers South collapse is a riveting real-time multimedia masterpiece that helps make sense of the senseless tragedy that killed 98 people with corruption, incompetence and neglect https://t.co/ObrRnUL9vC
Strategic synergies: bringing these principles together
Noting that next year’s Innovation Report will be their 23rd annual publication, Señor says the examples they feature are focused on reach, relevance, or revenue. Often, these elements are deeply intertwined.
Parlaying that relevance into different spaces and products, and encouraging audiences to pay for it, remains essential if publishers are to traverse stormy economic waters and successfully navigate their way through 2023.
“Whatever you do, put all your efforts into gaining and retaining subscribers,” Señor advocates. Everything should be “about sustaining, developing, [and] amplifying your subscription strategy.”
There’s a myriad of interconnected ways to do this. This includes multiple means to generate revenues, distinctive products to attract and retain subscribers, the knock-on effect of memorable – often visually-led – journalism, as well as deepening relationships with audiences both on and off-platform; including in new and emerging digital spaces.
This consumer-centric model eschews the shiny object syndrome that many media players have been guilty of in the past. Instead, as a new year begins to loom on the horizon, focusing on solid content-led foundations should be their guiding light.
As the sun sets on 2022, publishers will once again set sail and steer a path into an uncertain future. Meeting audience needs through the trifecta of content, product and subscriptions, must be their North Star as we quickly advance into these unchartered waters.
*The Innovation In News Media World Report 2022-23 is available to WAN-IFRA members (for free) or for purchase via INNOVATION’s website.
The news media plays a crucial role in supporting a healthy democracy. Newsrooms are to provide accurate information and holding powerful interests accountable for their action. However, new research shows that most Americans now think news organizations prioritize their business needs over public service. The research highlights a central contradiction of the U.S. news media: It is an institution with critical public duties within a system of little public funding.
The Gallup/Knight Foundation report shows that approximately 76% of U.S. consumers strongly or somewhat agree that most news organizations are “first and foremost businesses, motivated by financial interests.” Only 12% of consumers strongly or somewhat agree that most news organizations are “first and foremost civic institutions, motivated by the public interest.”
This report is Part 1 of a two-part study, American Views 2022. The first part focuses on consumer attitudes and behaviors, and the second will delve into what drives Americans’ trust in news. The analysis includes survey results from over 5,500 U.S adults aged 18 and older.
Nearly two-thirds (62%) of U.S. adults report that news companies lean more toward staying in business than serving consumers. Younger Americans, 67% of Gen Z and 70% of Millennials, are most likely to believe news organizations prioritize their business needs. Only a small percentage (6%) of consumers think news organizations lean toward providing a public service. Importantly, 30% of those surveyed think news organizations balance business needs and public service well.
Further, more republicans (81%) and Independents (82%) than Democrats (69%) strongly or somewhat agree that news organizations are motivated by financial interests than serving the public interest.
The Gallup/Knight analysis shows that the 29% of consumers “very favorable” toward the news media also say news organizations are first and foremost civic institutions. More than double the amount compared to the total consumers at 12%.
According to the Gallop/Knight analysis, almost three-quarters (72%) of Americans report never paying a news organization directly for their content. Among the 26% paying for news content, the majority did so via subscriptions (86%), donations (39%), membership (36%), micropayment (10%), and day pass (5%).
Those more likely to pay for news include:
Younger Americans (Gen Z and Gen X)
Democrats are more likely than republicans and independents
White Americans
College educated (four years)
High income, more than $150,000
Predictably, those with more favorable attitudes toward news media are willing to pay to access news in the future. One-third of consumers (33%) with favorable attitudes about the news media report having paid for news in some form. Further, 25% of consumers with favorable attitudes about the news media would pay to access news in the future.
Seventy-six percent report their decisions to pay for news depend on the content, and 62% say that the deciding factor is the cost. Gen Z and Millennials are considerably more likely to report that content is an essential decision factor, 82% each.
As new organizations look at new revenue streams, they should carefully target Gen Z and Millennials. We know Gen Z and Millennials index higher on willingness to pay for content. However, they also show a stronger inclination towards paying for events and exclusive content.
Striking a balance between servicing the public and managing a news organization’s financial interests is tied to consumers’ willingness to pay for news content. Ensuring this balance can help drive consumer favorability and grow their willingness to pay for content. Further, younger adults appear more open to diversified revenue streams, such as news organizations charging for events, newsletters, and exclusive content. As younger generations continue to gain buying power, these attitudes could translate into real financial growth opportunities for news outlets.
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.
Over the past 20-plus years, digital subscriptions have become essential to sustainable growth for media companies as part of their revenue diversification strategy. We know the pandemic created a strong consumer appetite for subscriptions. However, the digital media industry is wisely considering the future trajectory as the subscription marketplace faces heightened competition and inflation.
The research
Digital Content Next (DCN) partnered with FT Strategies to better understand the digital subscription market, explore the macroeconomic influences, and identify best practices for future growth.
The research, Navigating the Future of Digital Subscriptions, used a three-prong approach to analyze market conditions and identify business practices for subscription growth.
Qualitative interviews with a subset of senior executives from DCN member organizations to discuss business development and strategies for capturing future opportunities.
A quantitative survey among DCN member organizations on their priorities for the future as the subscription economy develops.
Review of data, analyses, and reports from the government, financial institutions, industry, trade organizations, trade publications, and consulting firms to identify and explain factors affecting the overall economic climate in the U.S. and their impact on the digital subscription economy.
Macro analysis
The Covid pandemic was a critical inflection point that significantly impacted consumer behavior and subscription offerings in the digital content market. However, as the effects of the pandemic wane, the market faces new economic pressures.
On the business side, higher interest rates could affect business investment. For consumers, increasing inflation rates, accelerating price-increases, and the reduction in consumer savings may force many to cut back on what they deem non-essential. Further, falling unemployment rates impact digital media companies in acquiring and retaining talent, which can also add costs.
Even with the economic factors plaguing the market, our analysis concludes that the digital subscription economy is expected to continue its strong growth and is somewhat insulated from adverse economic conditions. However, digital content companies must be mindful of the risks posed by the changing macroeconomic climate.
The report, which is available to members of DCN, provides details on the economic forecasts for advertising and subscription revenue, plus additional insight into the cost of doing business and the competitive marketplace. As the subscription economy continues to grow over the next three years, audiences will likely be the target of many subscription businesses from a broader set of media outlets.
Navigating the future
The research outlines four areas of focus on how best to navigate and implement new strategies for future growth in digital subscriptions.
Align the subscription mission with a highly collaborative organizational structure.
Find and leverage the right audience data to act as a common language across the organization.
Think more broadly about what innovation means to attract new audiences.
Expand content distribution to accelerate audience growth.
Digital media companies are in a stronger position now to invest and prioritize their subscription business. While overall market projections look positive, monitoring and responding to shifts in macroeconomic factors is essential to inform how best to navigate the future of the digital subscription business. The full report includes a macro analysis of current market conditions, market forecast, and steps to navigate future subscription growth.
Full research report for DCN members only. Register to download. The link will appear immediately below. If you’re already registered, the login button is on the top right of the page.
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.
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.
The channel has arguably revived Criteo’s fortunes as the third-party cookie dwindles into irrelevance. Walmart, Target, Kroger, Best Buy, Home Depot, Gap, CVS—it seems like every other week another major retailer carts out a brand-spanking-new retail media network.
All that ad spend sure sounds great for retailers. But what about publishers? Are retailers siphoning spend away from the already beleaguered publisher set?
Quite the opposite, in fact. The retail media revolution is helping line the pockets of premium publishers.
Cautious journey to digital advertising
In a nutshell, retail media is when retailers offer advertising access to their customers on-property (or off-property). It’s not a new concept by any means, but it’s been mainly relegated to advertiser campaigns in actual brick and mortar stores. (Think about specialty brand displays at department stores or supermarkets.)
While retailers’ online traffic grew with the rise of ecommerce, many were reluctant to plunge into digital advertising because of their hyper focus on user experience. A 2006 Amazon study famously found that every 100ms in extra load time cost 1% in sales; a 2017 Akamai followup suggested that every 100ms of latency cut conversions by 7%.
Unfortunately, digital advertising has a bad reputation for latency, as well as other factors that ruin user experience: gauche creative, code that breaks a page, open doors to device-infecting malware, etc. All those issues can arise before programmatic enters the picture. With bad user experience being detrimental to online sales, digital advertising simply wasn’t worth the risk for most retailers.
Yet they no doubt had their eye on Amazon’s flourishing ad business. There should be an asterisk by eMarketer’s $41 billion in 2022 US ad spend figure: about 78% of that goes to Amazon. However, the $9 billion left over is nothing to sneeze at, and you may have noticed Amazon does a fair deal of third-party media buying.
U.S. retail mainstays like Walmart, Target, and Kroger have been ramping up their digital retail media operations for the last five years. And then came the Covid pandemic: Suddenly consumers weren’t in stores; they were flooding websites and apps and racking up online orders. The opportunity to monetize this traffic was just too good to pass up, especially as major retail brands had proven that integrating ads wouldn’t necessarily harm user experience.
Advertiser appeal
Retailers have the kind of high-quality audience data that make advertisers swoon. Through tools like loyalty programs, many retailers boast comprehensive customer profiles that can be used for precise targeting. Retailers are stocking up on data scientists to drive customer insights and behavioral trends, and for many advertisers measurement goes all the way to point of sale.
In addition, retail sites and apps are a data oasis in the increasingly untargetable mobile ecosystem. The presence of emails and other deterministic identifiers make retailers ideal partners for identity solutions like LiveRamp and LiveIntent in finding audiences on third-party properties.
On-property advertising is really only the jump-off point. The huge gains are in audience extension, or when retailers start finding their customers on third-party sites and apps.
Quality quest
That’s where premium publishers come in. When asked at the IAB Annual Leadership Meeting in January if she felt that retail media networks were a threat to revenue, BET EVP and CMO Kimberly Evans Paige replied, no—we’re partnering with them.
Advertising revenue is incremental for retailers. Therefore, advertising must be accretive to the core revenue business. On-property, this means high-quality, brand-safe ads that don’t cause latency. Landing pages can’t send customers to competitor sites and only authorized vendors can be allowed through the pipes, lest data leakage become a concern.
Going off-property is not just extending the audience, but also the retailer brand. During an AdMonsters Ops session in June, Christine Foster, Vice President, Media Operations at Kroger mentioned that a great deal of their offsite ads are actually co-branded. So, retailers with big advertiser budgets in tow may be reticent about appearing adjacent low-quality ads, scam ads, or ads with questionable content, which could range from gambling to marijuana to even crypto.
When retailers buy off property, they need high-quality inventory in well-lit spaces. To ensure brand safety—both their own and advertisers’—retailers are pursuing guaranteed direct deals with premium publishers as well as private marketplace arrangements. Certainly, major publisher brands with massive traffic are already benefiting. But there’s definitely room out there for niche publishers with ties to specialized retailers.
Lifting all boats
The excitement around retail media stems from the fact it’s beneficial for just about every party in the digital media ecosystem: Advertisers reach key audiences with confidence; ad tech companies like Criteo and CitrusAds develop new business; publishers gain revenue; and of course retailers are able to further monetize their customer data.
Publishers of all sizes need to investigate retail media opportunities. However, they also need to understand that their ability to rake in revenue here greatly depends on the quality of their environments.
Leilani Han Executive Director of Commerce, Wirecutter
Affiliate marketing is a dynamic endeavor, with myriad factors driving strategic decisions on how to sustain a healthy revenue stream while maintaining consumer trust.
In this Q & A, Leilani Han, Wirecutter’s executive director of commerce, shares her insights on strategies driving Wirecutter’s success.
DCN: There appears to be a renewed or intensified interest in affiliate marketing as a revenue diversification strategy. How do you see it?
Han: There’s always been a keen interest in affiliate marketing, but the space has certainly evolved with who was investing in the channel over the last 10 years. In our space, we’ve seen many media companies realize this was a smart strategy for engaging with your audience more deeply while providing a service to them that could evolve into a revenue stream.
This coincided with an evolution in the consumers’ relationship with their shopping journey. Affiliate has the unique capabilities of encompassing all channels so that it fits in perfectly with social media, the internet, and being able to provide greater value to people’s lives.
Wirecutter has been at the forefront of this trend, as we helped to prove to others this model could scale successfully. Today, millions of readers turn to Wirecutter’s advice for inspiration and making smarter shopping decisions.
DCN: What is your company’s approach to affiliate marketing, content/commerce mix, video, social?
Han: Our recommendations – and affiliate marketing – have always been at the core of our business since its 2011 launch. While we’re technically classified as commerce content, we don’t separate our work into content or commerce. We are simply focused on providing the best service journalism to our readers.
Compared to competitors, we are not in the business of worshiping products. We are in the business of helping users find out what is worth paying for and what is the best product for the price. We employ a journalistic, methodical process to uncover the right information.
We make a recommendation – not just a review. We communicate in a way that is relatable and direct – not academic. Wirecutter cuts the time and stress of shopping by providing direct and actionable buying advice.
We knew if we took care of the reader experience and prioritized their trust in us above all else, the monetization follows. That’s an indication we’re hitting the mark on being helpful to them. That’s a balance we have to strike to serve our readers and our ability to monetize. Our team does a great job of finding that balance.
As digital innovation has evolved over the years, so have the channels through which we can reach our audiences. We view video and social media as another way to introduce new readers to our advice while reaching them in the moment in the spaces where they’re organically spending their time.
DCN: What are the driving factors underscoring where to put the efforts?
Han: Our core mission is to serve our readers with helpful advice and earn their trust. Our recommendations are at the center of our efforts. We try to be thoughtful about how we engage with our audiences and whether we’re successful in meeting their needs.
We aim to be as impartial as possible from any business interests. Our approach is being transparent through every point of the user experience.
The affiliate model aligns well with our reader service mission because we do not earn commissions if we are not successful in earning trust and making the right recommendations. A successful affiliate business is a clear indicator we are doing right by the reader. The data helps inform us whether we’re meeting the mark on what readers need advice on and what to buy.
Han: One of the biggest challenges at the beginning is figuring out what resonates with your readers, how you can gain traction with them to return and click through to purchase, and then scaling that in a way that honors your service for your readers. While affiliate marketing can be a very meaningful revenue stream, it is not as turnkey as some other channels. It requires time, effort, and a lot of testing to eventually find the sweet spot of your editorial voice and how to monetize effectively.
Another challenge is in how to strike the right balance between sources that are key drivers of your business and ensuring you’re diversified enough to withstand changes that are outside of your control.
One example of this for Wirecutter is organic search and the ever-changing algorithms that can impact how much traffic is coming to your site.
Last fall, we launched a subscription product because we know that our journalism is worth paying for and we are focused on deepening our relationship with our readers. This allows us to reach these readers directly and lessen our reliance on other traffic sources to bring readers back to Wirecutter. So far, we are seeing positive results that confirm our belief that Wirecutter’s service journalism is a meaningful resource in people’s lives.
Despite our priority to grow our subscriber base, we are continuing to focus on our affiliate business as well. Our affiliate business model remains unchanged. If you click a link on our site and buy something we recommend, we may receive a commission.
As always, our writers and editors are never made aware of any business relationships we have with retailers. We’ll continue to make picks independent of all business and financial interests. Those things will never change: helping readers make the right buying decisions will always come first.
The change happening with browser updates and privacy regulations is also top of mind for many publishers and what the deprecation of cookies means for the industry. Many of the major affiliate networks have been addressing this by updating their tracking technology to help mitigate any losses from these changes, while Wirecutter has proprietary technology that has also helped us to mitigate any loss.
Education may not be an obvious segue for a news publisher. But when you look more closely, it can actually be an incredibly powerful way to leverage the expertise of journalists to create something valuable for your audience (and bottom line). The Economist launched its Executive Education pillar in February 2021 as a growth initiative that would allow it to leverage its journalists’ deep knowledge and understanding of global issues.
The education sector itself is vast, and there are many routes publishers could take, from accredited courses to partnerships with schools and universities. The Economist decided to focus on its existing audience, and tailor its courses at highly qualified senior executives. “We’re already catering to the needs of mid-career executives who are upskilling, and that’s our target audience for our courses,” explained Fionnuala Duggan, Executive Director of Education at The Economist Group Media.
“We chose a format for a course and topics that would resonate well with them and at the level they were looking for. The whole operation is pitched to their needs in terms of their ongoing executive development, corporate professional development and career development.”
Now, they are expanding their offering with a new course on fintech and the future of finance. Billed as giving attendees a “future-focused view of the major issues”, the aim is to demystify personal fintech, blockchain, and cryptocurrencies. Notably, the program will draw in implications for both the business and personal lives rather than being solely work-related.
Quality not quantity
Each course runs for an average of six weeks, and requires between 6-8 hours a week from participants. They are delivered online, which was a pre-pandemic decision to widen participation to a global audience. Courses contain a mix of writing, infographics, video, audio and links. Each is led by a head tutor alongside a team of tutors who guide students through each week.
The Economist decided to take a guided approach with scheduled start and end dates rather than run on-demand courses because it offered a higher quality experience. Having tutors that can answer questions, stimulate discussion and provide feedback helps participants get more out of the courses, which underpins the value of the four-figure price tag.
Duggan also noted that having a schedule means they can bring participants together. “There are around 72 countries represented in most courses,” she said. “If you’re discussing something like international relations with people from the U.S., Australia and central Asia, you get all these different perspectives. There’s an enormous amount of learning from each other.”
Although the courses may run to schedule, they are far from being one-hit wonders. The first course Economist Education ran was on International Relations, which is now on its sixth presentation. “Each of these courses takes quite a long time to develop — four or five months,” Duggan said. “That’s why we have a smaller number of courses that are high quality.”
Blending journalism and pedagogy
One key part of the publisher’s approach has been separating the focus of this pillar from the rest of the business. Although there is a great deal of collaboration between the departments, their approach is different. “We’re not in the media business,” Duggan said. “We’re in the business of education. But we’ve benefited enormously from all the things that The Economist and The Economist Group has.”
This has also meant the team are able to acknowledge what strengths they don’t have within the business. Duggan was cognizant of the fact that The Economist had never run courses before, and that this needed additional expertise in order to meet audience expectations. They chose to partner with GetSmarter, an EdTech firm who deliver online education from world-leading universities like Harvard and Cambridge.
“We really wanted these courses to be from The Economist, so that they would be able to carry over people’s expectations journalistically, and also bring the coverage into the courses,” Duggan explained. “At the same time, the journalists aren’t teachers. So we’ve found a really cool way of blending what they’re able to bring with the pedagogical expertise that our partner has.”
“This means we have this very constructive, collaborative relationship with the journalists and all of the knowledge and knowhow and context they bring. Our editorial processes are also involved clearly in the editing of the course. And then we bring in the pedagogical experts who can shape the course, and we have the best of both sides.”
Duggan’s advice for other publishers is to focus on getting the proposition right, and partner up if necessary. “For a media brand to go into education, it’s very important to execute very well,” said Duggan. “But it’s also important to understand what your brand brings.” The Economist brand’s vast reach helps with attracting an audience to the course. But that’s not all: The courses put the publisher’s journalistic expertise front and center of both the courses themselves, and the marketing strategy.
“Bringing the newsroom into our courses is absolutely central to our offering,” Duggan emphasized. “When you’re talking about topics that are extensively covered already in our publications, we need to make sure that the courses have the same take on subjects, the same access to the sources the journalists might use, and of course, the journalists themselves, because they are the best people to comment on these topics.”
Top marks and takeaways
The courses so far have been a success. Each one sees completion rates of around 94%. “When very busy executives are giving six to eight hours a week into a course, that’s quite a lot of time,” she said, noting that the lack of attrition highlights the strength of the content.
The publisher declined to give any specific revenue figures, but did note that each course is attended by between 100-300 people on average. Given the price is £1,475 per person for their current selection, it is safe to assume each course is generating a healthy six-figure sum.
Now Economist Education has established itself and had time to iron out the kinks, they have a wide range of topics they can develop courses on next. Duggan confirmed that their next course will be on sustainability, coming in October. They are also exploring the B2B enterprise market. “From where we are now, there’s plenty of opportunity to continue growing quite quickly,” she noted. “There’s an awful lot of scope in the education sector.”
Although The Economist’s approach is specific to its own needs, there are still plenty of takeaways for other publishers looking to extend into educational courses. First and foremost, it is important to consider what your brand would bring to an education course. There may be lots of opportunities depending on the type of coverage. But educational courses like this are best suited to super-serving existing audiences rather than bringing in additional subscribers.
It is also crucial to acknowledge where skills may be missing at a publication. A well-crafted course will almost certainly need input from educators. Consider partnering with educational institutions or companies who specialize in pedagogy in order to bring the most value to a course.
Ultimately, however, as publishers’ seek ways to build value for audiences and diversify revenue, there are lessons to be learned from The Economist’s successful addition of an Education pillar. Given a media brand’s strength and deep institutional expertise, there may well be value for audiences that want to engage more intently and enhance their own knowledge further.
Once seemingly unstoppable, subscription-based digital media services like Netflix now look vulnerable. Netflix reported seeing a drop in subscribers for the first time in 10 years, prompting a recent selloff that shaved more than $50 billion off the company’s market cap. Other streaming services, from Disney to Roku, also reported similar drops. Many worry that we’re witnessing a phenomenon known as “peak subscription,” where consumers facing an increasingly uncertain global economy are growing weary of committing to a laundry list of ongoing subscriptions.
Some publishers have felt the repercussions of peak subscriptions and competition from free alternatives. Quartz reported that some readers subscribe just to read one specific article and then quickly unsubscribe afterward; behavior that hindered real growth. Although metered paywalls have proven effective at driving subscriptions for many publishers, some believe it is a “blunt-force instrument” that won’t work for everyone.
Even as the total number of subscriptions is still high across publishers and creators, there are concerns that the supply of content sources outstrips demand, particularly when we consider more commoditized content. Despite the fact that the global subscription economy is projected to grow by $51 billion dollars in 2022, competition is fierce – even for the likes of Netflix.
As subscription fatigue becomes a growing concern, and competition among subscription-based content of all kinds continues to intensify, media companies seek ways to go beyond pure subscriptions and increase their revenue. The good news is that various solutions already exist.
Redefining the journey to becoming a subscriber
One of the key solutions to combat subscription fatigue is to let audiences become paying readers and members at their own pace. Instead of asking people to lock themselves into a subscription model off the bat, some companies monetize the subscriber journey in smaller steps.
To move away from relying solely on the one-size-fits-all subscription model, streaming services like Disney+ have opted to offer a lower-cost version of their service that includes ads. The potential rewards of this move are clear: Disney’s own Hulu streaming service has turned commercials into a $1 billion revenue stream. Comcast’s Peacock and AT&T’s HBO Max now both come with ad-supported and ad-free versions. Even Netflix, which stood clearly opposed to integrating ads in the past, will now launch an ad-supported version sometime in the future.
Publishers such as Vox and The Guardian have also moved to a membership model, believing that readers will want to voluntarily support their publication even without the added pressure of a paywall.
Quartz also offers a subscriber-only newsletter that gives paying members exclusive access to additional content and various other benefits. However, it has made content on its main site free to access. Vice News has opted for an even more reader-friendly approach by adding a “tip jar” to its website, in case readers want to voluntarily make a contribution to the publisher.
The demand for incremental revenue streams to reach readers averse to committing to a subscription is why à-la-carte payment solutions emerged for publishers and content creators. These solutions allow users to buy paywalled text, audio, or video content with one-off payments or make voluntary contributions for open content.
Publications understand that having multiple monetization solutions builds engagement from different audience segments. This also feeds the subscription funnel with loyal users. Instead of asking casual visitors to commit to a subscription with discount offers, they are given the chance to engage in incremental steps.
The new era of reader revenue
The shift from relying solely on subscriptions signifies a clear acknowledgment of the need to give consumers flexibility and freedom. For audiences, this is a sure boost to their overall experience.
Digital publishers and content creators will benefit as well. Overall, a growing number of people are willing to pay for content. According to the 2021 Digital News Report from Reuters, 17% of people surveyed stated they were ready to pay for media content — a definite increase from the previous year.
Offering multiple reader-revenue solutions like exclusive memberships, micro-bundles, ad-supported bundles, à-la-carte payments, and even a tip jar makes it easier for publishers and content creators to monetize different audiences segments and capture rich first-party data. Alienating large swaths of audiences with an all-you-can-eat subscription offer will no longer suffice in a world where users are spoiled with choices.
It is also imperative to understand users’ willingness to pay for different types of content. For example, the exact same content bundle might be worth $10 per month to half of your audience and worth $5 per month to the other half. The one-size approach is to offer a $7.50 bundle to everyone. However, the maximum revenue approach entails creating two separate bundles for each of the audience segments. Unbundling content to understand user willingness to pay for each type of content can actually pave the way for publishers to resurrect the appropriately priced recurring payments.
If you’re a subscription-based digital publisher, the message is clear: the time to look for incremental ways to monetize and engage with a wider audience — including the elusive “never subscribers” — is now. Learning from the examples set by the companies above will save you from wasting time forcing one, rigid monetization strategy on an audience that doesn’t want it.
About the author
Dushyant is a Co-Founder & Chief Commercial Officer at Fewcents, a plug-and-play solution that helps digital publishers and creators monetize content with cross-border micropayments in the form of pay-per-content or tips. He spent 13 years at Google where he led strategic partnerships, working closely with some of the biggest digital publishers in Asia. Prior to Google, Dushyant has worked at SAP Ariba, American Express, and two tech startups. He holds an MBA from the ISB, Hyderabad and is an active angel investor & advisor for startups in Southeast Asia.
Publishers continue to remain highly focused on revenue diversification and the value of first party data according to new research from the Association of Online Publishers (AOP), a UK industry body that represents digital publishing companies. The AOP undertook its Digital Publishing: Meeting the Future survey to provide “a snapshot of how digital publishing companies across the UK are continuing to respond to the challenge to change.” The research offers a look at publishers’ business priorities and the future-readiness of the media industry.
The AOP carried out its survey between January 5 and February 9 of 2022. Of the 111 responses, 83% were from publishers and 17% from organizations providing solutions to the publishing sector.
Diversifying revenue streams
Across all types of publishers (B2B, B2C, or a combination), respondents said that their highest priority is developing new revenue streams through product innovation. Ensuring data privacy compliance and transparency ranked second.
The AOP’s publisher respondents ranked opportunities for revenue growth over the next three years. More than half (55%) feel that subscriptions are the big revenue opportunity right now, with lead generation-based revenues ranking second (33%). The report concludes that these findings mean that publishers are highly focused on building direct relationships with audiences and leveraging their first party data.
Audio and ecommerce tied for third (31%) in terms of revenue priorities, which points to continued revenue-model innovation. The research finds that both B2B and B2C publishers agreed that subscriptions have the most potential for growth. However, publishers that target both B2B and consumer audiences saw ecommerce as the most promising revenue generator.
Data dominates
While publisher concerns about ensuring privacy and providing transparency rank high, they clearly know the value of their first party data and seek to maximize its use. According to the report, publishers are focused on building the right ecosystem of commercial, data, and tech partnerships.
In the shadow of cookie deprecation, some publishers are considering collaborating on data initiatives. AOP found that, while 12% of publisher respondents are unsure of their next moves and 12% do not expect to collaborate, many publishers are either already collaborating (20%), are discussing collaborating (16%), or are open to the possibility of collaboration (40%).
The majority (75%) of publishers said that they are working to ensure that audience data informs everything they do and that they are investing in tools to help achieve this. Despite the emphasis on data, however, only 17% of publishers said that all their teams are aligned internally around their audience data. Half of the solutions provider respondents suggest that, while publishers understand being joined up internally around audience data is important, many don’t yet have a strategy in place to achieve their goals.
Workforce and workplace concerns
Interestingly, recruiting and retaining talent, and ensuring a diverse and inclusive workplace, are rated higher (tying for third place with “developing new first party data strategies”) than the tech-based challenges you might expect the digital publishing sector to be focused on.
Most respondents (75%) report that “supporting and retaining current employees” is their top priority when it comes to recruitment and workforce development. This was followed by adapting the publisher’s offering to appeal to new talent entering the industry.
Putting in place recruitment processes that eliminate bias and support the development of a more diverse workforce is ranked third here. However, when asked how they would describe their organization’s diversity, equity & inclusion (DE&I) strategy, respondents suggest confidence in their progress on this challenge. Just over half (51%) believe they have made good progress with areas for continued improvement, and 24% believe they have an effective DE&I strategy. Only 5% of respondents don’t believe they have a clear strategy on DE&I.
As Covid-19 restrictions are being eased in the UK and elsewhere, publishers are evaluating their working environments and plans to return to offices. This survey found that 37% of respondents say their ideal working pattern would be to work from the office two days a week and 24% would be happy to come in for the occasional key meeting, but primarily work from home.
Nearly a third (30%) of respondents expect their employers to be fully flexible and happy for them to choose to work as they wish. However, 66% believe they will be asked to work at least a few days in the office each week.
Clearly, the past couple of years have seen trends like ecommerce intensify and placed increased pressure on publishers to innovate. That innovation has, unsurprisingly, focused on product and revenue. However, it has also required publishers to reexamine workplace culture, recruiting, and retention strategies. The AOP’s survey finds that digital publishing companies that understand the bigger picture challenges and have identified many opportunities. However, it appears that they may still be working through the best tactics and strategies to provide the requisite competitive advantage moving forward.
