Over 200 media figures descended upon London at Press Gazette’s latest conference. A key topic of discussion was around the future of revenue generation. We present 5 lessons on revenue generation to take back to your teams.
1. Ads are making a comeback, but they may not be best for all audiences
The correct strategy for ads and subscriptions comes with knowing your audience and niche. David Dinsmore, COO of News UK gave the example of The Times and The Sun.
The Times as a legacy newspaper has attracted an audience who are used to paying for news. That’s why they were an early pioneer of the digital paywall with subscriber revenue at the heart of their business model. This business model is now supplemented by premium ads, even for subscribers.
The Sun’s nature as a tabloid however attracts a different demographic of user. It’s lower cover price and more informal nature means that readers generally are less willing to pay for news so choosing to focus their revenue strategy on ads is natural. Being able to benefit from their time, even if it is free, needs to be paid for and ads are the way to do this. Know your audience habits to give them the best possible offering and provide you with sustainable revenue.
2. Surfacing the correct and right number of ads should be central to your strategy
Knowing your audience is also crucial to surfacing the correct and right number of ads. With their nature as a broadsheet newspaper, Karen Eccles, Managing Director of Digital, Partnerships and Innovation at The Telegraph underlined how it is important to not get carried away with the money available from ads. Publishers must maintain a focus on user experience. For The Telegraph and their ad providers, 1 premium ad has proved to be 5 times more valuable than 5 ads on a page. In fact, the overall yield of ad revenue at The Telegraph decreased when they tried to introduce more than 1 ad per page. Experiments with ads are great, but make sure to keep the audience at the heart of your decisions.
Knowing which ads appear next to which stories can be problematic. Piers North CRO at Reach PLC discussed how Reach built Mantis as an approach to brand safety and contextual advertising. Through using keyword blocking and more, this helps Reach to ensure that inappropriate ads are not placed on pages where stories are sensitive. North added that at the time of the Queen’s death, Reach suspended all ads to ensure maximum sensitivity, being open with ad providers about the move. Good ads usage focus around caring for your readers.
3. Ads are finding a home in podcasting, but creators must get the right price
The golden ticket for podcast revenue is ads. Kate Lockie of Acast argued that the art of adverts in podcasting lies in having ads which are relevant, so ads are valuable for both podcasters and advertisers, and fit seamlessly. This knowledge comes from knowing your audience and being able to present them to the right partners. After all, Matt Hill told how the best podcasts have a long-term sponsor as they can keep them happy.
Small podcasts can also benefit from advertising. Auddy’s Meera Kumar highlighted how they often group smaller podcasts of similar topics together when selling to advertisers and they show how they can spread their ads over multiple shows. This gives smaller podcasts a slice of revenue. Elsewhere, publishers are in a great place to generate revenue quicker than creators due to their existing footfall on their websites.
But, it is important to remember that podcasts don’t make money from day 1, even for publishers. Matt Hill provided the example of Week Unwrapped. The podcast had to make 40 episodes until a sponsor came onboard. When they eventually got a sponsor, this sponsorship paid for the previous year’s content costs. Patience in podcasting is a virtue.
Matt Hill powerfully told how pricing for podcast ads should be easy for publishers as they are already used to working with ads. He encouraged publishers to see a 30 second podcast advert as the same value as a page ad in the days paper, and then to charge the same. Done well and ads can drive sustainable revenue for podcasts.
4. Paid podcasts are still challenging but have potential
Subscriptions around podcasts were still seen as difficult. Matt Hill argued that just 2-5% of your listenership will pay to do whatever you want, then 10% may also buy in if you fight for their attention. The rest won’t pay. One of the key reasons for this is podcasts are often on platforms people already pay to access for. Double payment is a difficult topic for consumers, particularly in times of economic hardship.
The willingness of this 2-5% however shouldn’t be left untouched. Meera Kumar discussed the impact Patreon has had on creators. People are able to reward creators for their content by sending money, but rewards can often be expected. Kumar encouraged podcasters to look beyond ad-free experiences for rewards and be creative, like sending merchandise to Patreons or letting them attend podcast recordings. Kate Lockie built on this. She believed that people will pay for your lowest tier of content to support journalism. Going to a premium offering must have bonus content. Suck readers in for free and push them down your funnel to paid experiences, just like with written publications.
Building an effective paid podcast strategy lies in understanding what your listeners want and then eventually putting it behind the paywall.
5. Surprise revenue coming from branded content
An exciting look at revenue generation also came through branded content. Over the last 12 months, Alex Wood, Managing Director of Forbes Europe revealed that their consumer revenue is up 40%, and a surprising proportion of this has come from merchandise. People are willing to wear the Forbes brand. The example was given of colleagues buying Forbes baby clothes for his newborn child!
This was also the case at Footballco. Mundial football magazine spotted a niche for nostalgic football clothing and memorabilia. Juan Delgado, CEO of Footballco told how they tapped into this with their own internal shopping desk, with their highest selling item away from the magazine being Mundial socks. Their other title Goal has seen similar success with merchandise. Their Goal Studio store now generates gross revenue in the tens of millions. These products offer a low margin for media, but they’ve worked well.
Delgado’s biggest piece of advice for success in branded content? “It’s about how you create a brand which builds a cult around it. You can sell whatever you want as long as it’s authentic”.
Want to learn more about emerging news technology, join us at the Digital Growth Summit.