There is no question the business model of traditional media companies has been disrupted over the past 10 years. Companies that aren’t experimenting with new, unique premium content experiences risk, at best, being left behind their competitors and, at worse, failing. Diversification is key to building a sustainable business model. But survival is not enough. So, here are three things for media companies to consider as they try not only to survive but to disrupt.
1. Embrace the change
The ad supported business model will never again be the sole salvation of the media business. Digital advertising has become dominated by Google and Facebook. These two tech giants pull in over 60% of all digital advertising spend and over 85% of all new digital advertising revenues. Those are 2019 statistics, so their slice of the pie is undoubtedly even larger today.
Innovative media companies are diversifying and building new revenue streams. They have shifted to creating premium content experiences that drive customer revenue through subscriptions and memberships. Media companies are also leveraging events and ecommerce as a new way of engaging their audience and to increasing revenue streams. With the death of the cookie they have no choice.
Fortune Media is a good example of this new product mindset. Historically, Fortune’s primary consumer product was their magazine. They’ve moved to digital subscriptions and diversified interactive content to grow subscriber revenue such as Fortune Connect, introduced in 2020. Fortune Connect is a combination of self-guided learning, best-in-class journalism and weekly networking events for business leaders. It’s an example of using data to discern customer preferences and create a new and different type of brand experience.
2. New players = new competitors for eyeballs and loyalty
There is a no-holds-barred competition going on for the attention and loyalty of digital customers. There are new and disruptive channels emerging competing for hearts and minds from companies creating unique and interactive experiences to drive subscriptions and brand value.
Take Peloton. They certainly don’t fit the traditional definition of a media company. But don’t let the bike fool you. Their business is subscription-based fitness content, which includes spinning, yoga, bootcamps, and meditation. They spent a reported $103 million on content development in 2019 designed to bind their customers to their platform.
It may not matter whether Peloton considers itself a fitness company, a hardware company, or a media company. However, it should matter a great deal to media companies. There are a finite set of eyeballs connected to humans. And they’ve got a dwindling amount of expendable time in their day to consume content.
It is all the more urgent that media companies find ways to deliver value that differentiates and builds loyalty.
3. Be nimble and fail fast
The ethos of many technology companies is to accept failure as a consequence of experimentation. Media companies can even celebrate failure (well, practically) – as long it is a part of the journey to success, of course. Digital media publishers should continually explore new monetization strategies to be competitive, even if some efforts don’t work out. If and when companies fail, it’s critical to do so quickly and understand why so that they can try another approach.
I’m a proponent of “failing smart.” Make a data-driven decision, do your customer research, validate product market fit and understand how your product satisfies a customer need. Identify and remediate issues and unforeseen challenges to drive a successful product. Don’t over-analyze and paralyze. Take calculated risks, listen to your customers and react quickly. Embrace the bold but be smart.
Quibi is a high-profile example of a failure I suspect wasn’t data-driven. On paper, the company seemed to have everything required for success. They had proven executive talent, almost $2 billion in funding, blue-chip media company investors, and A-list creative talent. Yet only 500,000 subscribers had signed up by October of 2020, though it’s reported the company had projected 7,000,000 by that date. Clearly the founders vastly overestimated consumer demand and willingness to pay for premium, short-form content.
To avoid these kinds of mistakes — both market fit and product fit — media companies should invest in product market fit research to validate customer needs, as well as invest in data platforming and cloud architecture to continually improve customer experience and build loyalty through deep learning and truly understanding customer preferences. Media companies can create value and new revenue streams by integrating customer-specific data and insights to power differentiated services.
Take action now
I suspect the definition of a media company in 2025 will be substantially different from the media company of 2021. The disruption by non-traditional media companies has already taken root, forcing traditional media companies to adjust quickly. The pandemic has only accelerated the need for change and innovation. How healthy traditional media companies will be in 2025 depends on actions they take right now.
As digital publishers diversify revenue strategies and develop ecommerce businesses, it is important to understand the consumer purchase process. For many publishers, ecommerce is more than just affiliate links, branded content, and online stores. Publishers are exploring investments in online shops, unique product offerings, wellness programs, virtual learning, and events. With new ecommerce businesses and multiple digital touchpoints consumers, expect an efficient and personalized shopping experience.
BlueVenn, a provider of tools and analytics for marketers, explores consumer purchase behaviors and engagement in a new report, Digital Divide. They partnered with OnePoll to survey 4,000 consumers and 500 marketers in U.S. and U.K.
Key findings include:
Over half (55%) of all respondents in the U.S. report that having a personalized shopping experience with a brand is important to them. Interestingly, only 27% report that brands provide a similar and cohesive shopping experience across all channels.
While marketers report that their businesses collect a lot of consumer data, only four in 10 report using the information. Clearly, it’s important to analyze the data and incorporate the findings to improve the consumer experience.
Fifty-seven percent of U.S. consumer report that they prefer to share their data directly with a brand they trust. This offers a unique opportunity for publishers to grow their ecommerce businesses since they already have a direct and trusted relationship with consumers.
Mobile ecommerce is the new norm in the U.S. Six in 10 U.S. respondents (61%) agree (32% “strongly agree” and 29% “somewhat agree”) that they’ve increased the amount of time they shop on mobile compared to last year.
The top two digital channels that U.S. consumers use to interact with brands include email (61%) and desktop/laptop web browser (51%). Interestingly, Facebook placed fifth (39%).
Close to two-thirds (63% “very important/somewhat important”) of U.S. respondents report that they think it is important for a brand to create a personalized shopping experience.In fact, 58% of U.S. consumers report that they are likely (23% “very likely” and 35% “somewhat likely”) to stop buying a product/service online due to the lack of a personalized experience.
Less than half (43%) of U.S. respondents report that brands understand their shopping need.
Browsing and browsers
When shopping for specific goods and services, U.S. consumers prefer overwhelmingly their desktop/laptop browser. Ranking and ratings:
Clothing, homeware, and exercise equipment – desktop/laptop browser (#1, 48%)
Holiday or leisure – desktop/laptop browser (#1, 54%)
TV, movies, or entertainment – desktop/laptop browser (#1, 38%)
Diversifying product offerings and revenue streams is helping publishers deepen their audience relationship. As publishers continue to build their direct-to-consumer ecommerce portfolios, it’s important to monitor the consumer’s digital shopping experience. Understanding the process of multiple touchpoints and shifts in online shopping behavior provides insight into consumer needs and expectations. There is a growing opportunity for publishers to play an important role in offering consumers a cohesive digital shopping experience.
In the publishing world, Substack has grown into a bit of a phenomenon. It’s a somewhat low-tech, self-publishing newsletter platform. However, it’s gotten outsized media coverage from top brands, including The New Yorker and The New York Times. Substack has also managed to attract a number of high-profile journalists from the industry.
So why does this relatively no-frills newcomer – along with its emerging competitors like Buttondown, TinyLetter, and Revue – get so much buzz? Substack and others like it offer a bit of a twist on the typical software offering: They encourage writers to monetize their newsletters through a revenue share agreement. The company is poaching top writers with upfront incentives in order to build their footprint. This is nerve wracking for premier editors and publishers. Will their own star writers get the bug and make the switch?
The rise in popularity of self-publish newsletter platforms is now forcing media brands to consider whether they’re keeping star writers and reporters happy. It is also forcing them to reckon with their own email programs.
Newsletters are often an under-developed product. However, they have major potential to give writers a platform on which they can build a profile for themselves. They can also drive a lot of revenue. In traditional terms, it’s not much different than a writer having her own “FOB” column. These days, it’s not much different than a reporter’s active Twitter or Instagram profile. Rather than fear these emerging players, publishers should think about how to tap into their ability to retain top talent and make money doing so.
Publishers, make writers and readers happy…
First and foremost, the problem isn’t Substack. Email is a channel with enormous potential for many publishers. Substack, however, is a blaring wake-up call.
Some writers may leave for the big advance that they were promised. But many others are leaving because they want more creative control and a more direct connection to their readers. They also want the ability to directly profit from that connection.
There are publishers who have newsletters written by individual reporters, creating a more personal voice and a lighter touch in editing. CNN’s “Reliable Sources,” run by Brian Stelter, is a great example of this. Often writing late at night, Stelter confides in his readers and shares a bit about his personal life in a way that wouldn’t make sense on the website. He has a huge following. And it’s not just for a faceless roundup of the day’s headlines.
Email is an intimate, low-risk channel with which publishers can experiment to give key reporters a more visible persona. Axios has built a loyal readership by allowing reporters to publish emails under their name, encouraging them to create a human connection. Axios’ Sara Fischer is just one example.
Often, newsletters are templates that provide a list of links. Or they recycle content based on verticals of interest like travel or automotive, but with very little personality. Instead, give your travel editor the chance to write an intro paragraph. Or allow a field reporter to provide real-life snippets of what life is like on the job. These elements create more engaged readers and more differentiation from generic pubs.
Despite this proven approach, publishers are likely worried about giving it a go. They have successfully built reputable names for themselves by holding their identity close and in doing so, ensuring brand integrity and quality. Loosening the grip on the brand by allowing individuals to forge direct relationship with audiences sounds risky.
However, not doing so also creates risk. Stifle the creative potential of individuals who attract loyal followings and suddenly, publishing your own newsletter becomes enticing. Empower those same individuals to help grow the brand and tap into new revenue potential.
…And earn revenue doing it
Speaking of improving email performance, newsletters like Morning Brew, The Hustle, and The Skimm show that entire media businesses can be launched and expanded within the channel with a lot of revenue potential. Individual writers see that. They read these titles and want that same opportunity. The good news is that publishers can give it to them.
Revenue comes from a combination of factors. The first is to create a product that attracts brands. This requires scale, quality content and an engaged audience. Then, the publisher needs to have the tools to optimize advertising with flexible templates, reliable data collection, and good testing capabilities. To maximize engagement and conversion, publishers must incorporate elements like personalization and dynamic content.
Across all of these components, publishers already have major advantages over the upstart platforms. First is the benefit of scale. Even the worst newsletter program at a major publisher is competitive against the entire volume of the independent platforms. (Substack was recently estimated at only 250k total readers.) That scale means that audiences can be segmented. Content can be targeted for more relevance, which provides another major advantage with higher chances of success.
Publishers also tend to have key software capabilities in email like personalization (often tied to customer data from the website, subscriptions, events, and the like). This allows writers to get creative with their content development, offering different elements to readers based on past behavior and content preference, for example. They also probably have tools to create dynamic elements in email. Not every writer wants to pen 1,000 words of prose. Some may be talented producers and want to share videos, TikToks, or snippets of a podcast they recently hosted. Publishers have the tools for them to play with these capabilities, and more.
Substack isn’t a threat if publishers commit to improving their newsletter program. And writers will stay if given the chance. Not only do newsletters provide writers with a relatively low-risk venue for building connections between a brand and its audience, but it’s a revenue machine in the making.
Providing the incentive for writers to make their newsletters successful doesn’t require a jump to a self-publishing platform. In fact, most publishers can provide a much more robust set of email tools for writers with what they already have. This approach just takes a publisher that’s willing to ease up on creative control and allow their reporters’ personalities and names to become a part of the product.
About the author
Allison Mezzafonte has worked in the media and publishing industry for 20 years and is currently a growth consultant, as well as a Media Advisor to Sailthru. A former publishing executive for Bauer Media, Dotdash, and Hearst Digital, Allison serves as a strategic partner to media clients.
The demise of identifiers such as third-party cookies or Apple’s IDFA presents both challenges and opportunities for publishers. Some complain performance marketing will take a hit. This would force marketing teams to refocus on delivering product excellence and ditch bait-and-switch schemes that promised audiences better experiences than they delivered.
Others praise the advance of a more privacy-oriented approach to targeting that will finally prioritize consumer preference. They point to a “golden opportunity for a re-imagining of digital advertising.” Companies would reap the benefits of an ecosystem that isn’t tied to tracking a user’s every move, nor beholden to GAFA. Publishers who wisely embrace this worldview are also taking impressive steps to leverage their valuable direct relationships with audiences.
For some, including Vox Media, Condé Nast and, most recently, Penske Media, this means offering up their own first-party data directly to advertisers. For others, it means leaning further into digital subscriptions. Subscriptions offer publishers a proven monetization model in a post-pandemic environment that has seen digital advertising collapse and revenues driven by paid content rise through the roof.
But winning with a subscription model is hardly a walk in the park. This is more keenly felt at at time when marketing departments may need to spend more resources to collect and leverage customer data to clinch the sale
Driving conversions and convincing consumers to commit to a recurring cost for content demands publishers do their homework and innovate. They must build the capabilities to understand their audience, identify valuable users likely to take the plunge and define clear pricing (at the level subscribers are willing to pay). What’s more, they should muster the resources and resolve to develop, deliver and continually improve a great product that meets customer expectations.
Continuing with our series of video interviews, I talk to Sheri Bachstein, global head of IBM Watson Advertising and GM of The Weather Company. Bachstein has overseen a wildly successful pivot to paid as part of a larger move to diversify revenue at the IBM-owned property. Since launching a premium subscription offering just 18 months ago, The Weather Company counts nearly one million paid subscribers, a figure Bachstein says is seeing double-digit growth every quarter.
Bachstein shares her step-by-step journey to subscription success, including insights on tailoring the product to the consumer, targeting potential subscribers and building a winning customer service team. She also reveals her take on the future of advertising and a call to action for the media industry at large.
WATCH OR LISTEN TO THE FULL INTERVIEW
Peggy Anne Salz, Founder and Lead Analyst of Mobile Groove interviews Sheri Bachstein, global head of IBM Watson Advertising and GM of The Weather Company:
Peggy Anne Salz: Does it pay to pivot from an ad-supported model to subscriptions? Well, my guest gives us the inside track on the strategy that has allowed subscriptions to become the fastest growing line of revenue in the company. It’s impressive. And we’re going to spotlight some of the step’s publishers can follow to diversify their revenue streams. But first, of course, a bit about us. I’m Peggy Anne Salz, mobile analyst, tech consultant, frequent contributor to Digital Content Next, which as you know is a trade association serving the diverse needs of high-quality digital companies globally.
And now to my guest, she is the Global Head of IBM Watson Advertising and The Weather Company. And The Weather Company is an IBM Business. It offers the most accurate actionable weather data insights to millions of consumers via digital products that we’ll be hearing more about from The Weather Channel, weather.com, as well as Weather Underground. And previously, she was the global head of the consumer business there and was responsible for product management and design, content development, and global expansion across the organization on the weather’s owned and operated properties. So Sheri Bachstein, welcome to Digital Content Next. It’s great to have you here.
Sheri Bachstein: Hi, Peggy. How are you?
Salz: Good. And even better because we’re going to zero in on, I think the question of the hour, the pivot. It’s a time of transition, accelerated change, and you’ve made a move. And I think a lot of publishers are thinking about this move, which is diversifying your business model, specifically ad-supported to subscription, as I said. In a nutshell, why the pivot, Sheri?
Bachstein: So we just found that we want to continue diversifying revenue, it’s really just that simple. You know, to have a business and if you have a bulk of your revenue coming from one stream, that’s dangerous, especially in changing times. And so we started on a diversification path, actually several years ago. And really subscriptions was the next thing in that funnel of what we’re trying to do to diversify.
Salz: I said at the top, it has paid off. I know the numbers. Our viewers don’t. So why don’t you share some of those numbers that show just how subscriptions are evolving?
Bachstein: Yeah, so our subscription business launched about 18 months ago. So I think we’re still just starting, I like to say, because I think that’s a short period of time, and we’ve rolled it out on our apps. And actually, just next week, we’ll be rolling it out on our web platform as well. But in a very short time, we are approaching a major milestone with a million users that are subscribers to our business, and you know, it’s taken other publishers twice as long to reach that volume. So we’re really pleased with the number of subscribers that we’re getting. And then if you look like our quarter-to-quarter growth of subscribers, it continues to be in the double digits. So every quarter bringing on more subscribers.
Salz: That is amazing because this is a time where you’re asking someone to commit to a recurring cost. But it must be that way because they’ve gotten the value proposition or rather, they grasp your value proposition. How important is the product in this mix?
Bachstein: It’s extremely important. It’s the foundation of a subscription business, you know, the value exchange you have with the consumer, very important. With subscriptions, I feel that value strengthens. You actually have higher expectations as a subscriber. I know I do in my own personal apps that I subscribe to. You have a higher expectation. So it’s really important that the product live up to that expectation and that your customer service, very important as well, that you’re able to connect with those consumers if they do have a problem and resolve that very quickly. So the value exchange is very important, whether you’re doing a subscription business or you’re actually doing an ad-supported business.
Salz: I do want to get to those steps, step by step so that publishers can benefit or at least think of a roadmap that they can be following as they make this shift from ad-supported to subscription. But let’s take just a step at a different perspective, just zoom out a little bit because another big question is not just how do I get more value out of my customers, my users, my readers, my audience, but also, what are we doing right now? Because pretty soon the way we do this marketing is going to change very drastically. So from your perspective, what are some of the ways that this shift from cookies and identifiers and toward privacy-first might actually represent an opportunity for publishers because you have certainly grasped that?
Bachstein: So I do agree Google does plan to deprecate the cookie, and so that will go away. But really, I think as it relates to identifiers, identifiers is a really broad word because there’s a lot of ways to identify someone. It could be an email, a lot of different data points. I don’t necessarily see identifiers going away. What I do see is how we use those identifiers is what’s changing. So what’s happening is we’re moving from a society where we had consumers opt-out to a society where we’re having them now opt-in. So that gives them more choice, more transparency upfront, and really the decision of how they want to share their data.
Consumers should have control of their data. So again, we’re really moving into an opt-out society as it relates to advertising and targeting and giving consumers that choice.
Salz: What can you share about what has worked for you and what maybe other publishers need to get right? Because one thing you’ve done is, for example, really focused on getting the product, right, as you said, but there are other aspects of it.
Bachstein: So first, we did exhaustive customer research and listening. We asked our customers, one, “Would you pay for a weather app?” That’s first and foremost and what percentage would. And then secondly, “Okay, if you paid for it, what are the features that you would pay for? What is it that you want?” So we really listened to our customers. And that’s the part of the plan, the product plan came from that. Then we did testing, we did learning, and we kept improving. So a lot of testing went into what’s the right price, you know, to charge for a subscription app?
Again, asking the consumers, “How much would you pay for this feature? So when I think about what are three tips I could give to fellow publishers because I think us helping each other is really important to protect the open web. First takeaway for me is get rid of those perceived inconveniences for your customers.
So for my customers, those that start their day with us, end their day with us looking for weather, some of those customers, they just want to get into the app, find out what their weather is and move on to plan their day, mornings are very busy for a lot of people. And so they felt that ads clutter their experience that it was in their way, so we removed them in the premium experience. So that’s one tip.
The second tip, trusted human expertise is highly valuable. So how can you humanize the information that you’re giving? So for us, you see all this weather data, but how do you give context to that? How do you humanize that weather data for those that want more in-depth coverage?
And so we’re working on that, how to humanize that. And really the third thing is really around what you said before, the product.
Salz: That is really interesting, Sheri. I mean, I know it makes sense to ask the users. I wouldn’t say I would ask the user about the price, but that is surprising because I’ve also read a lot of research that we are actually more willing to pay a price that is higher than even, in many cases, the app developers, the companies themselves would charge. So it does make sense.
The humanizing of the information, now that is intriguing. Is that saying that you tap a team of writers, of journalists, of experts and trying to get that into the app? Because I think our publishers would be really interested in this at a time when, yes, we can automate a lot. And we’ll get to that in a moment. But this human part doesn’t seem to be something that you can automate or in any way streamline. This is roll up your sleeves, get down to work. How are you doing it?
Bachstein: Yeah. So for us, obviously, we’re unique in the weather space. But we do have some consumers that they want more information. So they want a meteorologist to explain, why is an outbreak of tornadoes actually happening? We actually are doing a test right now and we’re using Twitter to do the test where we had a meteorologist create a very short video that really explained how we forecast a tornado, what are the three elements that we look for in forecasting a tornado and describe it so people could see better like on a radar map those areas that may be under a tornado threat. And the response has been great. For those people who like to geek out on weather, they love having that extra information.
And news organizations could do it as well because you have journalists like yourself that have amazing expertise. And how do you take that story, just one level deeper, to really dig in with your consumers around more information that they might want? So almost, probably, getting into some debate, I would imagine, in the news world. So I think there’s ways to do that. But I think, for some, it might be easier than others. But you’re right, it’s something that’s unique. It’s not something I would say that can scale to millions. But if it’s a unique offering, someone’s really willing to pay for it, you could probably get a premium for that.
Salz: Exactly. And that’s the point because subscribers are the valuable users. They’re willing to pay. They’re worth customizing to. Interestingly enough, they also leave a very interesting data trail. They’re frequently engaging with the app or service. They show behavior patterns like no other. That’s why they are the valuable users. What are some early signs for you of a high-value user so that we can also help other publishers focus their efforts and investments?
Bachstein: So we are doing a couple things to really help target who are those consumers that want to be subscribers? One of the things that we’re doing is around propensity modeling. So who are those subscribers that really have an interest in a more premium experience? And so we’re looking at that, we’re using machine learning to do that. We didn’t do it in the early days. We kind of had this one blanket promotion that we did. And we learned a lot from it. Again, it’s that test and learn. And then we learned, “Well, we really need to just focus on these consumers that would be interested in this.”
Same thing that you do in advertising, right? The whole premise around understanding the consumer by the data that they share is so a brand can connect with the consumer. And that’s what publishers do, they bring the two together. So that same type of targeting information is important as you do a subscription business.
Salz: And you’ve leveraged AI to create a more compelling product as I understand it. What has actually worked for you? I mean, you’re lucky, you’re sitting on the source with your AI abilities within Watson, but what has worked for you?
Bachstein: So the propensity modeling I just spoke of, we’re just rolling that out so we can better target the right consumers so we’re not burdening people seeing our promotions who aren’t interested. So that improves the experience. But the other thing that we did is on the IBM Watson advertising side, which is the other part of my business, we’ve created ad-tech solutions rooted in Watson AI.
One of those solutions is a predictive real-time dynamic, creative solution. So I actually took that tech and used it on the publishing side, I’ve got to use my own products, to drive subscriptions. So what that really did was it enables you to create a lot of variations of an ad. So you put in a few images, call to action, and then using AI, it’ll target consumers differently based on what we can learn about them with the information that they share or their behaviors.
And it’s been an amazing tool for us. We actually did a test by using that ad tech. We got three times the number of subscribers than when we just did a normal promo doing it manually on our own.
And so it’s really been beneficial to use AI because you can put all of this data in there. It does the work for you and delivers amazing results. And frankly, we offer that ad-tech to everyone. Any publisher can use it, any DSP, SSP. So we are creating open ad-tech solutions that can drive business for a marketer or brand or it can help a publisher increase their subscription business or even their loyalty programs.
Salz: That is really interesting because dynamic. That’s the key here. It needs to adapt to the users. And actually, publishers need to adapt to this as well. So you’ve also called for industry-wide collaboration on privacy initiatives as we move into our cookieless future. Why is it important for publishers to be a part of those conversations?
Bachstein: It’s extremely important for actually everyone in the ad ecosystem, publishers and ad-tech providers, to be part of that conversation. What’s happening right now is you have about…we have two states. We have Virginia, we have California that have come up with their own privacy laws. There’s another 12 that are thinking about doing that by the end of the year. What happens is we get a patchwork of laws, really challenging for publishers. It’s not scalable to have different laws for different states. It’s really, really hard to be able to scale that and to do that.
And so, me along with many other publishers and leaders within this space, including the IAB, DCN, we are pushing for federal legislation so we can all be working from the same laws, the same rules. And then we have to clear up some of those rules as well. There’s a lot of gray areas when it comes to this. So let’s all be working on the same definitions of words. Very important that we’re all working together so we can become our consumer privacy focus. None of us are saying that we shouldn’t do that. We all think it’s a good idea. Let’s do it together in the right way, and let’s build some consistency across publishers so consumers know exactly what to expect.
Salz: Good point. I’m based in Europe where we’re still figuring out.
Bachstein: Yeah. But at least all of your countries got together and put it together, GDPR. There are still some gray areas, no doubt. But at least you guys took that step to do that, which is important.
Salz: What can help publishers better understand and even stop churn before it starts? So it’s about understanding subscriber behavior and reducing churn.
Bachstein: Yeah, so definitely two parts to any subscription business. There’s acquisition. I think consumers will say, “Well, I’ll try something once,” or, “I’m up to try something.” And certainly, you can give free trials. That’s been a technique that’s worked really well for us. But then the retention side, a really big part of the business. We’ve been fortunate to have retention as high as 75%, which is much higher than the industry. But it all comes down to the product. If you are delivering on the expectations that a subscriber has for your product, you will retain them.
And so, again, it’s really having a great strong product. We’re choosing to enhance the features and give them more as subscribers. So are we improving their experience? And so we found that to be really successful with retention. So we definitely pay attention to that. But I also feel customer service is important. When your subscribers have an issue, you have to respond to them. They are paying money out of their pocket and so they deserve to be listened to and to have their problems troubleshooted as quickly as you can. And so we definitely have made a big investment to focus on our subscribers to make sure that if they have issues that we are solving them for them very quickly.
Salz: You really do love a challenge in your job. What’s the hardest part of your job?
Bachstein: Oh, well, how much time do you have, Peggy? No. It’s funny, I think for every leader, you have to have a strong strategy. And it’s got to be a focused strategy. And then you have to stay focused on that strategy. That can be challenging sometimes because the world around you is changing. But if you really believe in that strategy, only working on that. Stop working on things that just don’t align to that. It’s very important, not only my business but all of IBM is doing that as well.
Salz: What do you see overall as the biggest opportunity on the horizon for publishers?
Bachstein: I absolutely think the biggest opportunity is the use of AI, especially in the ad-tech space. Using AI to really bring together the brands and the marketers with the consumers in a way that uses all different types of signals that doesn’t rely on the cookie is just a really big step forward. And one of the reasons I think so is because AI has the ability to predict. So the cookie only tells us what happens in the past. With AI, we can actually go forward, and we can predict, and we can forecast. And so being able to do that with AI is just, I think, a really great tool and it really has a bright future. I really feel it’s a transformational part of the industry. And really is a new tech that we need to embrace.
Salz: And to your point, I mean, advertising…which works, I’m not saying it’s broken, but through using cookies, identifiers, IDFA, we’re looking backward. And with AI, we’re going to be looking more forward, more predictive. So it does make a lot of sense to say that the opportunity is to understand what I may be doing, what I may be wanting, and to target that rather than maybe my past behavior.
Bachstein: That’s right. It’s all about a new technology, a new foundation or backbone to the ad industry, having it be AI instead of what we’ve been using in the past with cookies. It’s a way forward. I mean, advertising is not going away, but it is evolving. And we can be smarter, and we can use better technologies to connect consumers with our brands and marketers.
Salz: And speaking of connecting, Sheri, it was great to connect with you today. Thank you so much for sharing. How can people stay in touch with you if they want to maybe continue the conversation or understand a little bit more about tips, they can follow to move their app from ad-support to subscription?
Bachstein: Yes, reach out to me on LinkedIn. You can find me on LinkedIn. I’m happy to have a chat. And I’d love to just know what other companies are doing as well and how can we collaborate and work together?
Salz: Absolutely. Well, thank you. And thank you for tuning in. More to come of course in the series. And in the meantime, be sure to check out all the great content, including a companion post to this interview at digitalcontentnext.org and join the lively conversation on Twitter at DCNOrg. Until next time, this is Peggy Anne Salz for Digital Content Next.
With the continued presence of the coronavirus, 2021 appears far from “business as usual.” However, for many publishers, the pandemic acted as an accelerator in media innovation. New ideas for formats, operations and business models were quickly put into action. Now, we see that many of these quick pivots in business practices are becoming long-term plans. Reuters Institute’s annual report, Journalism, Media, and Technology Trends and Predictions 2021, identifies changes, trends and predictions for the media marketplace. Reuters surveyed 234 media leaders across 43 countries to create the report.
Two key themes identified in this study include newsroom transformation and a renewed focus on revenue diversification efforts (see full report for additional trends and predictions).
Journalists continue to work remotely and use online tools like Zoom, Slack, and Teams for interviews and collaboration. 2021 brings a remix of the in-person and virtual to the newsroom. However, the sustainability of hybrid newsrooms looks uncertain with many questioning the creativity and production quality delivered in a virtual setting.
According to Reuters, journalists want more face-to-face interactions and to renew a community focus in their work. That said, new technologies and approaches may offer more community participation with crowd-sourced content and audience-driven investigations. In terms of format and delivery, news stories will focus more on data and visual storytelling formats. Breaking down complex stories to create easily understandable content is a key objective.
Media businesses face continued competition from Google and Facebook, which account for most of the advertising growth in the marketplace. This leaves publishers with little to no growth in their advertising revenues. Given this reality, publishers continue their efforts to grow digital subscriptions and other reader revenue in 2021. Further, publishers are exploring new member benefits and price reductions to retain readers who subscribed during Covid-19.
Reuters’ data shows that publishers, on average, report four different revenue streams as being important or very important to them this year. The top four revenue streams publishers are focusing on include subscriptions (76%); display advertising (66%); native advertising (61%) and events (40%).
In addition, e-commerce is forecast to double over the next four years to $7 trillion, driving publisher interest in this area. Many plan to curate their content to offer a direct consumer pathway to purchases. Reuters cites Wirecutter from the New York Times and the Strategist from New York Magazine/Vox Media, as examples of successful sites earning affiliate revenue. Publishers are also joining the e-shopping sites, like Buzzfeed’s Tasty brand. They now create their own cooking products and link to the Tasty site.
Others seek to join in the subscription economy. They are testing their strength in selling other company’s subscription offerings in areas such as music, fitness, flowers, and food. Publishers with scale and strong data targeting may prove to profitable in these sales efforts.
2021 looks to be another year characterized by experimentation and transformation. Publishers find themselves providing content across multiple connection points. However, many product offerings and end-goals remain the same. Publishers continue to focus on offering relevant and engaging content in exchange for consumer loyalty and long-term sustainability. The road to success is the ability to be nimble while speedily translating new learnings into actionable business practices.
Traditionally, many media companies earned the bulk of their revenue from display advertising. But as the pandemic continues, media companies face an increased need to explore more innovative models of monetizing their content. Here are several ways media businesses can generate new revenue streams:
Data is the future of driving revenue. Consider what Conde Nast is doing with first-party data, with its Now|New|Next Segments. These explore what consumers are buying now, how the behaviors might change, and who will spend next. Increased audience engagement is driving the ability to discover new customer segments, opening the door for advertisers whose doors are closed during the pandemic.
Advertising spend decreased during the early months of Covid-19, but now media companies are starting to look at data offerings to entice advertisers. GDPR and additional privacy laws have dictate that this monetization strategy must emphasize a cookie-less future.
2. Monetizing Talent
Reputation and brand are important in the media industry. Quality journalism keeps people coming back — and talent is a big part of that. Media has begun to recognize the value of monetizing the individual. For example, Spotify gained exclusive rights to Joe Rogan and Michelle Obama podcasts, and The Athletic gathered a cult of the best sportswriters. Quake, a subscription-based podcast founded by media veterans, just launched in October 2020 with $2.5M in seed money. Its exclusive shows are headed by top talent in politics and media, like Laura Ingraham, Soledad O’Brien, Mike Huckabee, Andrew Gillum, Marc Lamont Hill, and Buck Sexton.
If media companies don’t start monetizing talent, the best journalists will begin creating their own micro-brands instead. This will further crowd the competitive space and the talent is likely to take their dedicated followers with them.
Some ways to explore the Ecommerce opportunity include:
Creating newsletters with embedded content to promote either brand advertising or direct-response advertising.
Allowing partners to pay for news real estate by writing their own opinion pieces.
Opening an online shop, like BuzzFeed.
Offering affiliate links for products mentioned.
Opening a pop-up boutique and e-commerce shop for the holidays.
Promoting events with merchandise (for its livestream with Billie Eilish, Spotify is promoting with an exclusive t-shirt).
More media companies are putting digital subscription strategies ahead of other initiatives, and the numbers show that’s paying off. The New York Times has reported an increase in subscribers of 2 million year over year, and their digital subscription model is now finally more profitable than their print model.
And the latest report from the Digital Publishers Revenue Index, shows an overall increase in revenue from subscriptions over the past decade. 10 years ago, subscriptions made up only 7% of digital revenue, and now the data show that has increased to 22% of total revenue. Many publishers have begun to explore paywalls — from soft, hard, metered, and dynamic models. If you’ve not yet done so, now’s the time.
5. Communities and Membership Models
With the cancellation of in-person events and social gatherings, there has been a huge decrease in networking opportunities. Companies like Fortune are successfully solving two problems with one (big) concept. Problem 1: What’s a way to monetize virtual events to decrease revenue loss? Problem 2: What is a new way to bring in revenue and create a loyal customer base?
Traditionally, Fortune’s live events were designed for a finite number of people; there could only be 50 people at the Top 50 CEO’s retreat, for example. But Fortune realized an opportunity to grow its community to include previously untapped leaders and create a broader community by launching Fortune Connect in the fall of 2020. This online learning platform and community provides ongoing networking events and educational content to aspirational mid-tier leaders. Fortune is using a membership model to build, and grow, a sticky community.
6. Over The Top (OTT)
A growing list of brands are expanding into broadcast and streaming TV to grow their brand, engage their audience where they go, and bring in a new revenue stream. TIME & Univision won an Emmy. Vox has a top-ranked Netflix show. Axios is on HBO. Vice, New York Times and BuzzFeed have turned to streaming content. Beyond their well-known “Explained,” Vox has branched out further into unbranded production shows.
OTT is no longer an opportunity limited to legacy video or television brands. Media companies of all sorts are finding creative ways to monetize their video investments because it engages a new audience and establishes a new habit for the consumer to connect to the brand.
Media companies are providing a growing number of learning/education courses for readers. For example, TIME has expanded its iconic TIME100 people with TIME Talks. The Wall Street Journal launched a mobile app to help provide resources on managing finances during the pandemic. Morning Brew has been putting together 101 courses on topics like Marketing, Finance, and Branding. And Axios is starting 101 video courses on topics like 5G, which are sponsored by companies related to the topic.
Publishers are seeing an opportunity to develop deep subject matter expertise and be the go-to source on certain topics in addition to news stories. It improves the value they can provide to subscribers and pulls in more targeted advertisers since they can reach a highly engaged niche audience on long-shelf life content that can continuously draw an audience.
Most hard-news outlets saw a drastic hit to their advertising revenue this year. Even an increase in subscription revenue failed to offset the advertising losses. But evergreen sites like Dotdash — which owns sites like SimplyRecipes and TreeHugger — have seen an 18% increase in revenue. While Dotdash does rely on an ad revenue model, they use ads about ⅔ less than a traditional news outlet and bet on fast page load and better UX for their growth.
What makes it particularly effective is their diversification of brands and content. Their travel brand ads, for example, have decreased while their health verticals have exploded. Having evergreen content allows them more flexibility in what content to create and how valuable each piece is to them since it doesn’t have a shelf life.
As news media becomes increasingly competitive, companies must find innovative new methods of generating revenue that also help attract and retain new customers. By exploring a wide range of approaches, with a focus on your core competencies and customer needs, news publishers are able to stay competitive and build healthier diversification of revenue sources.
Digital subscriptions have helped shape a stronger business for publishers. FIPP’s latest Global Digital Subscriptions Snapshot (Q3 2020) shows that subscriptions are serving to support publishers during the pandemic. In fact, research by Press Gazette reports that during the Covid-19 crisis the largest newspaper groups in the US and UK gained more than one million new digital subscriptions. Not only are large publishers faring well but smaller, regional and specialist brands are also showing record subscriptions.
Despite positive performances in digital subscriptions, Covid-19 brings with it challenges to the industry. Zenith Media expects a 9% decline in internet ad spend this year. The agency estimates a 6% recovery in 2021, driven by the rescheduled Tokyo Olympics.
On a global front, the middle east and Africa will be hardest hit with a 20% decline in advertising revenue. Western Europe anticipates a 15% decline and Latin American a 13% decline in ad spend. The Asia Pacific, Central and Eastern Europe markets are estimated to decline by 8%, respectively. North America expects to register the smallest decline (7%) due to the large spend on political advertising this year.
FIPP Q3 findings:
News publishers’ subscription growth
The Athletic reports 1 million subscribers as of September 2020. Unfortunately, with only a few new subscribers in Q1 2020 and cancellation of live sporting events, the company laid off approximately 8% of its staff. In addition, there were pay cuts across the company to offset expenses.
Caixin Media in Beijing grew subscriptions by 70%, adding 210,000 new subscribers for a total of 510,000 this year. It’s the first media company in China to place all of its content behind a hard paywall.
Dow Jones reports that digital revenue now accounts for 71% of total revenue, up from 63% compared to the same time period last year. Total subscriptions, across print and digital products, is at 3.8 million, driven by a 28% increase in digital subscriptions. Interestingly, 2.2 million of the Wall Street Journal’s 3 million subscriptions are digital-only. Across the entire Dow Jones group, digital subscriptions account for 67% of subscription revenues.
Gannett is centering their business around digital transformation. To date they are close to one million paid digital subscribers.
The New York Times’s added 669,000 new digital subscriptions in 2Q 2020 for a total 5.7 million digital subscriber. In fact, for the first time ever, digital revenue now exceeds its print revenue. Overall, the company’s operating profit of $52.1 million is down 6.2% compared to same time period one year ago.
South Africa magazine closures:
Associated Media – company closure
Caxton – selling off 80 titles
Media 24 – closed 2 of 5 titles
UK magazine closures:
Immediate Media – closed 11 titles
Bauer Media UK – closed 10 titles
Broadly – exited New Zealand, closed 8 titles and consolidated with Australian Mercury Capital
PLC – closed 6 titles
T1 media was acquired by Future
Netflix consistently delivers content with new productions and licensing deals to the consumer market. As of Q2 2020, there are a 193 million subscribers globally.
Amazon Prime Video, part of Amazon Prime, is very successful in the SVOD market. Subscribers reached 150 million globally. The company does not break out Prime Video from Amazon Prime. The company does not provide details on active users of Prime Video. However, the Kantar Entertainment on Demand Report offers a third-party analysis SVOD users. The Kantar Q2 2020 analysis shows that Amazon Prime Video subscriptions account for 23% of all SVOD subscriptions. That marks a 14% increase from the prior quarter.
China’s merger discussions between Tencent Holdings and iQIYI could establish the world’s largest streaming service with more than 231 million paying subscribers.
Disney+ is exceeding all expectation with currently has more than 60.5 million subscribers.
Apple TV+ claims 10 million subscribers. However, many subscribers are part of a 1-year free trial offer because they are users of the hardware. Further, Bloomberg estimates that about half of Apple TV+ subscribers never used the service.
The coronavirus’ impact on the advertising industry further strained publisher revenues and forced several to close their doors and others to consolidate. The pandemic also showcased the consumers’ need for trusted news and entertainment content. This need feeds into the relationship of publisher and consumer. Its why consumers value the content and are willing to pay for it.
A life-changing event is when something happens that reshapes everything in your life. And many people see the pandemic as a life-changing event. We’ve altered our work environment, transformed our social behavior, and changed our media habits. However, according to Damien Radcliffe’s new report The Publisher’s Guide to Navigating Covid-19, some Covid-era changes will become new norms. To capitalize on these opportunities, publishers need to emphasize their audience-first focus.
Renewed consumer focus
Businesses across different sectors are reporting negative financial impact due to Covid-19. The most significant revenue declines to date,according to WARC, are travel and tourism (-31%), leisure and entertainment (-29%), finance services (-18%), and retail (-15%).
Within the entertainment sector, the media business is showing financial declines for the year.GroupM expects the US advertising market performance to decline 13% this year (excluding political advertising for 2020’s presidential and other elections). WARC estimates advertising growth for three specific media platforms: social media, online video and search. The hardest hit medium will be newspapers. PwC’s Global Entertainment and Media Outlook 2020-2024 report estimates newspaper advertising (print and online) in the U.K. will register a decline of 27% over the next five years Global Entertainment and Media Outlook 2020-2024 report estimates newspaper advertising (print and online) in the U.K. will register a decline of 27% over the next five years.
With a downturn in advertising, publishers see the importance of a renewed focus on the audience. By doing so, they can accelerate their efforts to establish new revenue streams to lessen their dependency on advertising — an industry imperative that has come into even sharper focus of late. Finding the right path to fulfill audience needs can help publisher identify new revenue opportunities.
Audience-first directs path to new revenue
By all reports, consumption of content increased during the pandemic. In part, working from home during Covid-19 offered the audience more opportunities to consume content. There were marked rises in internet usage and streaming video viewing. Even local news publishers are benefitting from consumer interest in information relating to Covid-19 in their neighborhood.
Further, record traffic metrics and increased subscriptions illustrate a strong and trusted relationship between publisher and consumer. Publishers are also experiencing churn improvement according to Piano, a digital analytics company. Piano’s data analysis shows that U.S. publishers’ churn rate is flat and European publishers’ churn rate declined 34%.
Unfortunately, increased media usage alone does not equate to increased revenue. However, an engaged audience, producing less churn, can help direct a path to subscriptions, new product launches, and other monetization opportunities.
Getting back to normal
Even amidst the ongoing pandemic, consumers are trying to return to some sense of normal. According to a GlobalWebIndex (GWI) survey of more than 17,000 internet users in 20 countries, consumers no longer want to see Covid-related ad messaging. Further, Pew Research reports that 71% of US consumers say they need to take a break from news about the coronavirus. A full 43% report that news leaves them emotionally drained. Consumers are seeking out new content as a pathway to escapism.
Without a doubt, the pandemic has profoundly impacted consumer media habits. The increase in content consumption and subscriptions, cannot be taken for granted. Consumer boredom and discretionary income can easily change given today’s social and economic vulnerabilities. By renewing their audience-first strategy allows publishers will be able to focus on avenues for new revenue.
Digital publishing revenue declined 2.3% year over year against Q1 2019, according to the latest quarterly Digital Publishers Revenue Index (DPRI) from the Association of Online Publishers (AOP) and Deloitte. During the first three months of the year, income from subscriptions experienced strong growth of almost 20%. However, display and recruiting advertising both suffered significant declines, falling by 22.5% and 12.8% respectively in Q1 2020.
Publisher revenue diversification efforts helped offset the ongoing decline in digital ad revenue for publishers, as the duopoly continues to account for the vast majority of growth in this sector. This decline was, of course, intensified by the pandemic.
On a 12-month rolling basis, subscriptions and miscellaneous revenues performed strongly, growing by 18.8% and 25.9% respectively. Online video revenue grew by 10.7% and sponsorship experienced a slight increase of 3.2%. Growth in these areas however failed to offset the substantial reduction in revenue from display advertising formats — down by 17.1% year-over-year. Overall, digital revenue fell by 4.0% on a 12-month rolling basis.
Despite downturns across multiple revenue areas, the B2B sector was able to maintain revenue by growing sponsorship (10.9%), online video (10.6%) and subscription (2.3%) income.
A growing number of AOP board members reported prioritizing non-advertising revenue growth and cost reduction strategies. According to the DPRI, almost 90% of publishers cited non-advertising revenue growth as a high priority for the next 12 months, up from 78% who said the same in Q2 2019. Meanwhile, 78% of publishers identified cost reduction as a high priority for the next 12 months, up from 44% who were focusing on this area in Q2 2019. None of the publishers surveyed reported seeing expansion by acquisition as a strategic priority over the next 12 months, reflecting their need to focus on existing business operations.
As Richard Reeves, Managing Director, AOP, commented, “Ten years ago, display advertising made up 58% of digital publisher revenue and subscriptions only 7%. Subscriptions now account for 22% of total revenue; with display advertising having shrunk to 42%. As income from display continues to decline, the shift towards subscriptions and other diverse revenue sources is only set to grow, accelerated in part by the pandemic. The publishers that adapt to this change will be the ones that have the most to gain when the storm passes.”
It’s a familiar scenario. One of the big ad tech players announces a change and we are all left to interpret what exactly it means. The only certainty is that it will take some effort to understand the full picture, the driving force behind it, and a plan of action.
As the big players quickly and quietly expanded their walled garden ecosystems, many publishers found themselves left without a key. We all know these big players own most of the market share and also dominate most of the growth as well. By the end of 2020, it’s predicted that nearly 70% of US digital ad dollars will be spent with Amazon, Facebook or Google.
However, publishers do have options for regaining control, especially when it comes to new growth areas like connected TV (CTV). Even before Covid-19 drove consumers to CTV and streaming in record numbers, 2019 saw a 330% rise in programmatic OTT/CTV ad transactions with CTV market advertising spend in the US valued at $6.94B last year. As you begin to build out your CTV strategy, it’s important to learn from the lessons of the past to avoid making the same mistakes.
Own your audience relationships
Distribution and tech partnerships often begin with great promise. When Apple introduced their Newsstand offering, it was positioned as a lucrative way to expand subscriber reach on iOS devices. Once Apple announced they would only allow single issue sales and began acting as an intermediary by keeping the subscriber data collected on their platform, the need for a business model more balanced with publisher needs became evident.
Nothing is more important than your audience and the ability to maintain control over the close audience relationships you cultivate. Effectively identifying these loyal audience segments and estimating user lifetime value is the foundation of a successful strategy. If you’re not working with an independent tech provider, it’s important to consider the potential implications and potential risks of partnering with a competitor or potential competitor and what impact that might have on your audience relationships.
Control and leverage your data
Your data is a key asset in your private garden. Controlling who gets in and what goes out is especially important as GDPR, TCF, and CCPA come into full effect. These changes have immediate impact on your revenue, but also secondary costs from the business model adjustments needed when third-party cookies are disabled.
Niche targeting, personalization, and frequency capping all depend on transparency and insights derived from data. Controlling and fully understanding your data makes it possible to hone your monetization strategy and create innovative opportunities for advertisers. When others have control over your data, it becomes more challenging.
For example, concerns have been raised around Google’s proposed TURTLEDOVE solution and its less frequent reporting structure. This poses a big challenge around leveraging data to fully optimize and capture revenue. As publisher first-party data becomes increasingly valuable and offers more monetization opportunities, it’s important to consider whether your provider is data neutral or more interested in harvesting your data.
Control your infrastructure
Make sure you are the one in charge of all the tech decisions in your private garden. In a technologically nuanced space like CTV look for partners that provide the expertise and infrastructure needed to ensure data protections, but also allow you to maintain control. Be wary of partnering with players who are also competing for your audience’s attention. And ensure that you will have enough flexibility in customization and business rules.
When Google first acquired DoubleClick back in 2008, they promised it would offer publishers more tools, enhanced productivity and additional revenue while freeing up resources to allow publishers to focus more on building and maintaining a web presence. In reality, it was one of the first deals that helped Google establish dominance and affect changes in customization and control that continue to ripple through the entire industry. Again, be very careful with who you let into your private garden.
Diversify your revenue
The end of third-party cookies means short-term revenue losses are likely. Many publishers have already begun exploring ways to diversify their revenue streams. Meredith is a great example of strategically embracing data management and ownership. The launch of their Data Studio and e-commerce sites connected back to their brands has helped optimize revenue streams.
Engaging loyal audience segments through registrations and subscriptions is another strategy that many of you have begun to embrace. Build upon existing successes like The New York Times has done with the introduction of their stand alone NY Times Crosswords and NY Times Cooking offerings. This is another avenue for strengthening audience relationships while building more robust first-party data.
This industry shift towards CTV offers another consideration for diversification. It also provides a prime opportunity to take back control and build your own private garden. Learn from the past in order to make careful choices around who you partner with and how you protect your investments from the start. This will give you the key to your own private garden and bring success in expanding into new growth areas.
Many media companies have turned to virtual events as a way to engage audiences on a personal level during the pandemic. From webinars to virtual festivals, teams have worked to evolve their offerings as the long-term outlook for physical events remains uncertain.
The Financial Times, The Atlantic, and Bloomberg, are among media companies that produce events as one of their diversified revenue streams. They are also among those that have had to evolve their revenue strategy as their teams hit their stride with virtual events.
Maturing virtual events strategies
In March, FT Live went from being completely focused on physical events to virtual in just days. As a test, they launched The Global Economic Emergency webinar. And with just three days of promotion, they racked up over 7,000 attendees who logged in to watch.
“We had these huge numbers, and it was a bit of a lightbulb moment for us,” explained Orson Francescone, the Managing Director of FT Live. “We quickly realized that we could do something bigger and bolder.”
Weeks later, the company launched The Global Boardroom. The three-day event featured 110 remote speakers and boasted 52,000 registrations. The event focused on the impact of coronavirus on policy, business, and finance. And it was so popular that a second edition is scheduled for November.
The Atlantic has seen similar success with online registrants, with over 20,000 attendees attending their 28 virtual events. “It’s a larger audience than we would have been able to convene in person,” said Aretae Wyler, COO of The Atlantic. “It’s more international, and we’re seeing the same caliber of attendees.”
Bloomberg faced a different challenge with virtual events, as they already had an established Bloomberg TV offering. For them, it wasn’t a matter of a pivot to video. Rather, it was creating a distinct experience and value proposition for a new offering. This meant the focus for its virtual events had to be on the level of interaction attendees could have, and what the value would be for sponsors.
“Once we got crisp on these elements…what we needed from a platform, resource, and process perspective became self-evident,” Bloomberg Live’s Global Head Patrick Garrigan explained. “Not only are our audiences tuning in, they’re staying with us and engaging.”
The value for sponsors
For Bloomberg Live, attracting sponsors came down to the basics of why clients support events in-person. “We distil it down to three core attributes: thought leadership, brand awareness, and content creation and amplification,” said Garrigan. “Similar to in-person, it then becomes a matter of identifying how our platform can deliver on these metrics.”
Bloomberg delivers this by creating sponsor “moments” throughout its virtual programs, as well as allowing sponsors to share the perspectives of their senior leaders. They then share segments from the events widely across Bloomberg channels.
For the FT, it is their technology stack – as well as their access to large global audiences – that has been a key selling point for sponsors. Early on, the team focused on ensuring they had a strong analytics functionality in place.
“We can analyze who is attending, what stage of the event, how they are engaging, and serve this intelligence to our sponsors,” Francescone outlined. “Sponsors really enjoy our platform because it’s giving them, from an ROI point of view, much bigger and more detailed numbers than in a physical environment.”
Big numbers are also a draw for The Atlantic’s sponsors. The publisher is gearing up for The Atlantic Festival in September which will be entirely virtual, and free to attend. Whereas they would normally have 3,000 in-person attendees, the team is targeting between one and 2 million registrants for the virtual version.
Sponsor interest has grown as The Atlantic’s confidence in their model and ability to pull in high-caliber attendees. “Most of the sponsors that we have worked with in-person have been interested in trying this model with us,” said Wyler. “Part of that is the belief they have in our power to convene and engage audiences. We’ve maintained a 75% average watch time for our audience, which is pretty incredible.”
Reader revenue and data
When it comes to audience revenue, the FT is now charging delegates for all its events from autumn onwards. But for the second edition of its Global Boardroom event in November, FT Live is taking a freemium approach.
The event has three tiers of ticketing. First, they’ll offer a free pass which gives live access to talks, Q&As and polls. A $65 pass provides on-demand access to all talks and summary reports. The professional pass, at $385, adds 1-1 networking, exclusive access to extra sessions, and a business community area.
Beyond ticket sales, the FT sees long-term opportunities for the newly engaged data. “Of the 52,000 people we had attending The Global Boardroom, about 75% were completely new to us,” said Francescone. These attendees can be monetized not just through the event, but as part of the FT’s core subscription strategy.
The Atlantic also sees opportunity in bringing in new subscribers. “We are constantly thinking about how this can be a driver of subscription growth,” Wyler emphasized. “The benefit of virtual events is that it’s an opportunity to convene both the superfans, but also to introduce The Atlantic to new audiences.”
In previous years, tickets to the in-person Atlantic Festival have ranged from $50 to $975. However, registration to the virtual Festival in September this year is free. That said, there will be subscriber-only benefits like exclusive sessions and Q&A opportunities to bring value to existing subscribers and entice new joiners.
Bloomberg has historically not charged for its events. However, the exception is their Bloomberg Breakaway CEO membership community, where virtual events have been leveraged as part of the membership package.
“We’ve created content that is exclusively for members. It gives them the tools, best practices, and essential feedback to grapple with the issues that are impacting business,” said Garrigan, highlighting the opportunity to provide another touchpoint to members through virtual events.
The future of virtual business events
Garrigan sees virtual events being a part of Bloomberg Live’s programming for the foreseeable future. “Given Bloomberg Media’s global footprint, virtual events are such a natural fit,” he said. “While we are incredibly eager to get back to in-person events as soon as it’s safe to do so…[virtual events] serve as a way to connect broad geographies in real-time that may not be able to join us in-room.”
For FT Live, their early success gave the team the confidence to run events for the rest of the year in a digital form. But for 2021, they are being cautious. Francescone suspects that they will iterate towards a hybrid event model. However, details (such as access and pricing) are still to be determined.
“We’ve set up a small internal task force within FT Live which is examining what the future is going to look like,” he explained. “What people’s preferences might be today might not be the same not only in five years’ time, but in months or even weeks.”
These publishers may have the scale that makes it easier to convince top-tier sponsors to get on board, but there are lessons for publishers of all sizes. Virtual events offer a wider audience and higher engagement than in-person events, whether that be hundreds or thousands of attendees.
As for reader revenue, features like on-demand viewing or virtual networking can be sold as an add-on, or as a subscriber-only benefit. The key is being flexible in your offerings and understanding what your audience will respond to as the situation evolves.
Travel industry intelligence site Skift has become the latest publisher to put membership at the forefront of their business. CEO and founder Rafat Ali announced the launch of Skift Pro on Twitter, saying that “Skift is now officially a Subscription-First business information company.”
Skift joins a growing number of publishers turning to reader revenue as a way to diversify revenue streams and mitigate the impact of the coronavirus pandemic on other aspects of the business like events and advertising.
We spoke to Skift co-founder and Chief Product Officer Jason Clampet about the details of the launch, how it sits alongside its other products, and why this is such an important shift for the niche travel publisher.
Laying the foundations
Skift Pro has been in the works for over a year. The publisher already has two existing subscription products: Skift Research, which does deep-dive reports, data and analysis on travel industry trends, and Skift Airline Weekly, a subscription product dedicated to aviation news and analysis. The two products were faring well. However, Skift had een eyeing examples from other B2B companies like Digiday and Business of Fashion, which made subscription models a more central part of their strategy to build business resilience.
The first task the team had to tackle before adding another subscription product into the mix was to bring everything into one payment platform. “We built our own database to store users and details about the payment process so that everything was seamlessly tied together,” Clampet explained. This meant that subscribers to multiple products would be able to manage their subscriptions in one place.
In the last week of February 2020, Clampet held a big team meeting where he walked everyone through Skift Pro. In particular, he told the team how excited they were to be launching it on March 16th. But March 11th would be Skift’s last day in the office.
“We decided not to launch Skift Pro at that point,” said Clampet, aware of the potential scale of lockdown disruption to the travel industry. “Instead, we did a Guardian-style contribution model. We said, “Hey, we’d love direct reader support. You can make a one time gift or a recurring gift.””
Spurred by the success of the contribution model, Skift then introduced a ‘Pay what you want’ model to their new online events and webinars, using the payment system they had built to support subscriptions the previous year. As the initial shockwaves of the pandemic settled, Skift Pro’s launch moved to the top of the agenda.
Despite the initial delay, Skift’s decision to launch a membership product marks an important shift in the publisher’s relationship with its readers. Rather than simply adding another revenue stream into the mix, Skift Pro will help build business resilience and audience engagement, as well as strengthening their editorial work.
“It’s become a centerpiece of how we think about our readers and customers,” said Clampet. “Hopefully it’ll be a much more significant part of our revenue, but it’ll also allow us to tie things together better.”
Clampet believes that Skift Pro members will be more deeply engaged with the brand, from attending events to reading its analysis and reporting. In turn hopes that he and the team will be able to learn more about them. “It’s a way for us to have a better insight into who our users are, and then serve them better,” he explained.
This plays a key part in the presentation of Skift Pro as a membership product rather than a straightforward subscription. Skift Pro goes beyond just access to stories online. It includes additional content and events, as well as a custom newsletter which will start up in August, for $365 a year, or $1 a day.
“We want it to be more than just a newsletter in your mailbox every day. It’s about being actively engaged with other things beyond just reading,” Clampet said.
Launching in a pandemic
Following the delay, deciding when was a good time to finally launch Skift Pro was a subject of much internal discussion. Skift’s other major revenue streams are from its content studio, which works with travel brands to develop bespoke content for them, and its events. Both have suffered as a result of coronavirus, making reader revenue a more urgent consideration. But the travel industry as a whole is also under immense pressure, with many furloughed or laid off.
“It’s hard to know what is a good time right now for anything,” Clampet explained. “The reality of business is that direct from consumer revenue is vital to just about any media business.”
“We also know that the people who are still at companies in Europe and Asia, which is waking up again. They need actual information to do their jobs better and make smarter decisions. We’re still here providing that, so in that sense, it is a good time [to launch].”
A new route
Skift Pro may be live, but the team aren’t resting on their laurels. Clampet’s main goal for the membership is that people are really happy about their decision after signing up, and that is going to require some changes to the product as time goes on.
“The launch is just the very first phase for us. We need to be constantly evolving the product experience,” he emphasised. “What it is right now is going to be very different from what it is a year from now, and hopefully we’ll have made a lot of smart decisions.”
This is a very important lesson that other publishers with subscription or membership products can learn from. For Skift, the launch is not the end of the road. It’s the starting point of a product which will change and grow as they focus on the reader response, and how they can best serve those needs.