Across the digital industry, one of the most pertinent questions asked by publishers big and small is: how do I achieve sustainable growth? For 76% of media leaders, increasing digital subscriptions is now an important or very important revenue focus – surpassing display and native advertising alike – while three years ago, research showed the exact opposite.
These findings reflect how revenue models are shifting from being advertising-centric to reader-centric. As part of this change, the industry is turning away from ad saturation and clickbait in favour of quality editorial and advertising content. The Association of Online Publishers (AOP) brought together numerous thought leaders in its Crunch 4.3 webinar, to discuss how all media brands can approach reader-centric revenue diversification.
With experts understanding that growth and retention now come hand-in-hand, here are the best practices for getting closer to audiences and optimising revenue streams.
Always start with the reader
Effectively monetising audiences requires publishers to understand them from the outset. The digitisation of journalism has given rise to even more diverse audiences – not only in regard to who readers are, but also their content and consumption preferences. Audience segmentation is now an integral element of publishers’ revenue strategies, enabling them to collate insight on the times, platforms, formats, writers, topics, and even tones of voice that drive the strongest audience engagement.
If the lack of demographic information in that list is concerning, take note. Audience segmentation has evolved beyond age and gender to instead include readers’ needs, mindsets, and passions. This is essential for creating content that directly engages target audiences, adding value to publishers’ offerings, and authentically growing reader and subscriber bases. In addition, analysing segments in their entirety – such as where readers come from and how many articles they read per visit – helps publishers to build different paths to conversion.
With each publication having its own objectives and resources, harnessing this vast amount of insight may sound daunting. Starting ‘small’, however, can still unlock a wealth of opportunity. For instance, Lou Gautier, Principal at FT Strategies, recommends publishers begin with engagement segmentation, using frequency of visits to measure which of their readers derive the most value from their content. Knowing this, publishers can selectively deploy analytics to get closer to the audiences that matter to them.
Keep up with change
If there is one constant in the digital landscape, it’s that audience behaviours are constantly changing. To sustain growth, publishers must consistently adapt their approaches to revenue in response.
Luke Nicholls, Content Director for edie at Faversham House, witnessed an uptick in registrations following increased audience awareness of climate change and high-profile summits, such as the UN’s Climate Change Conference of the Parties (COP26) in 2021. As a result, a new segment of engaged readers were accessing the environmentally-focused publication. By identifying the unique interests of this segment, edie established a new community that reflected its audience needs and led to a potential new source of revenue.
An experimental mindset is crucial in these circumstances, as media brands should be agile when adapting their position and messaging. Tapping data-led insights enables publishers to make informed decisions and fully understand their challenges before developing solutions. While innovation is often the outcome of trial and error, a test-and-learn approach can unearth highly valuable information on readers’ needs.
Focus on value rather than volume
To construct a resilient, future-proofed business model, publishers must ensure their metrics concentrate on value, not volume. In prioritising digital advertising revenue, publishers can become biased towards monitoring clicks and page views but chasing these also results in high churn rates. When generating appeal for the masses leads to diminishing returns, media brands should instead develop robust retention strategies. Taneth Evans, Head of Audience Development at The Times, notes that publishers don’t need to use the entirety of their digital real estate to boost revenue — they need to allocate their finite resources to converting high-value prospects.
Boosting subscription revenue, for example, isn’t a volume game. Rupert Knowles, General Manager UK at Piano, has observed that although registered readers may not comprise the majority of publishers’ audiences, they are 10x more likely to subscribe. Converting and retaining them should be a high priority for publishers looking to establish sustainable business models. Through deploying a progressive onboarding experience, maintaining engagement, and reminding subscribers of their benefits, media brands can encourage habits that keep readers returning to their preferred publications.
Strike the best balance between revenue streams
Despite publishers’ belief that maintaining four different revenue streams will be important in the year ahead, the current sentiment is that balancing multiple streams creates conflict. This isn’t necessarily the case, however. The subscriber experience, for example, can still include digital advertising – especially if publishers safeguard quality by ensuring the subscriber sees a selective amount of highly relevant ads.
With that being said, it’s important for media brands to determine which revenue stream is their priority. Premium publishers such as the Financial Times and The New York Times have declared their commitment to the subscription model, supported by their high-value audiences and in-depth understanding of readers. For the FT, this decision led to growth in traffic and engagement, which in turn fuelled advertising investment. When publishers focus on their value proposition – whether that’s engaging communities with events, optimising the subscriber experience, or curating tailored content for engaged readers – it will directly support them with growing revenue streams.
There is no one-size-fits-all solution to achieving sustainable growth and revenue diversification, but publishers can leverage reader insights to direct their unique strategies. By delivering valued, trusted journalism that mirrors the interests of their audiences, media brands can rest assured that a reader-centric approach will attract higher revenue from subscriptions, sponsorships, and digital advertising.
Managing Director, AOP
The UK Association for Online Publishing (AOP) is an industry body representing digital publishing companies that create original, branded, quality content. AOP champions the interests of media owners from diverse backgrounds including newspaper and magazine publishing, TV and radio broadcasting, and pure online media.