Amid declining platform referrals and rising concerns over AI’s influence with developments such as the Search Generative Experience (SGE), publisher channels for direct-to-consumer (DTC) engagement and monetisation are and must be very much in vogue.
Earlier this month, Condé Nast CEO Roger Lynch announced plans to reduce the publisher’s workforce by some 5 per cent. In a memo to staff, he wrote:
For publishers, direct-to-consumer (DTC) means developing products and services that users are willing to register for, subscribe to or purchase directly from the brand. The New York Times is a poster child in many things industry-related, including its development and acquisition of special interest product verticals to better serve direct audiences. In an interview with The Verge earlier this year about playing the long game (here), CEO Meredith Kopit Levien reflected on the DTC strategy.
“Five or six years ago, a lot of the work that I, and the team of leaders around me, worked on was to say, ‘How do we actually transform this organisation for the business that we are, which is a fast-growing, direct-to-consumer scaling digital business with a giant product development engine of growth?”
So, what channels are available to publishers to support their DTC strategies, and how can they monetise those DTC relationships? Below are nine channel and nine monetisation ideas.
MX3 HQ Update
We’d like to see you at our upcoming events in the UK, Spain and Portugal!
>> Mx3 AI takes place on 7 December in London. From looking at the big picture to drilling down into current experiments, come and learn, discover, and discuss AI and the media with fellow professionals. Click here for more.
>> Mx3 Barcelona focuses squarely on innovation in media, emphasising creator-led, consumer and B2B media operating in and across media verticals. It takes place from 12-13 March. Click here for more.
>> The FIPP World Media Congress, which we produce on license from FIPP, takes place from 4-6 June in Cascais, Portugal. The magazine media world’s flagship global event, the 2024 edition will be the 46th one since it first launched in Paris in 1925. Click here for more.
Several channels are available to publishers to build DTC relationships and grow first-party data and understanding of their audiences. With a lot of competition in these channels, nothing is easy, but publishers have at least one advantage thanks to superior quality content as a “growth engine”.
In no particular order of importance:
Long a staple for publishers, the newsletter boom (see, for example, the growth of Substack) is evidence of the premium on DTC. One development to consider is the rise of the “individual expert”, which holds interesting potential for brands with strong subject expertise. How can you use the experts in your own stable?
- Interview with Sarah Ebner, Head of Newsletters at FT. (Mx3)
- The only way to succeed is through niches. (Mx3)
- The shift from institutions to individuals. (Mx3)
Publishers build DTC relationships on platforms such as YouTube and Vimeo. Condé Nast’s Roger Lynch had one caution here in his memo to staff on 1 November.
“This year in particular, video has been a volatile area of the industry as audiences move to places like TikTok and YouTube Shorts (up 600% over the last two years alone). Social video has helped drive overall audience growth (we expect to exceed 20B video views this year, significantly beating our target); however, these new video formats haven’t found monetisation models yet.”
- The state of video content: is it time to pivot again? (Mx3)
The ideal medium for expert conversations, podcasts are a good way to support and expand your DTC strategies.
While 3rd party referral traffic may be down, websites, with personalisation a continuing key trend, remain a central platform in the drive for developing DTC relationships. The Verge recently wrote about its new website design:
“Our goal in redesigning The Verge was to redesign our relationship with you, our beloved audience. Six years ago, we developed a design system that was meant to confidently travel across platforms as the media unbundled itself into article pages individually distributed by social media and search algorithms…
“But publishing across other people’s platforms can only take you so far. And the more we lived with that decision, the more we felt strongly that our own platform should be an antidote to algorithmic news feeds, an editorial product made by actual people with intent and expertise.”
Nowadays, more scalable thanks to the development of virtual and hybrid event strategies, in-person events and meetups especially allow publishers to develop deep audience relationships.
Marketplaces allow publishers to develop DTC relationships with buyers of products and services. They include e-commerce, gaming and more.
Many publishers develop learning products and services to directly build user relationships.
Perhaps not as much spoken about as a few years ago, brand apps on consumers’ home screens create powerful opportunities for direct engagement.
Other than “owned” apps, messaging (WhatsApp, Telegram, etc.) and community apps (Guild, Slack, etc.) allow for developing DTC relationships.
- Why publishers are doubling down on Telegram. (Mx3)
Clearly, there is a lot of talk about platform-driven traffic tanking, and it is one of the reasons why developing DTC channels is so important. Even so, media exists in a large and interconnected ecosystem, and platforms should continue to be part of publishers’ consumer acquisition strategies.
For news publishers, perhaps more so than specialist media, there is a major challenge on hand. Aled John, Director and Deputy MD at FT Strategies points towards the latest Reuters Digital News Report, which highlighted that audiences primarily access news via social and search. “What’s doubly concerning is that younger audiences are not going to news sites or apps directly – and there’s no suggestion this will change in the future – it’s a completely different form of behaviour emerging, and that’s concerning for news brands.”
A match not quite made in heaven, but one that cannot end in a complete divorce.
- What’s the Future of Search for Publishers? (Mx3).
- Meta goes PUR. (Mx3).
- Putting the brakes on AI. (Mx3).
Right, all good and well with all these channels, but how can you monetise your DTC relationships?
Ultimately, success for publishers rests on developing diversified revenue models. In a survey for the second edition of our Innovators in Specialist Media Europe report, consumer publishers listed subscriptions (38%), advertising (34%), in-person events (29%), e-commerce (25%) and marketing services (24%) as the top revenue streams they plan to invest in most in the next five years. (This edition of the report will launch in the week of 20 November 2023. You can download the first edition, focusing on B2B media, for free here).
- How diversified should your revenues be? Hint: A lot but not too much. (Mx3)
DTC offers several direct and indirect monetisation opportunities to make part of a diversified model. Below are nine ideas, in no particular order of importance:
Having advertising here may not seem logical, but DTC presupposes the generation of first-party data and insights that can feed the advertising beast. While there is a lot of anguish about online advertising trends, advertising remains a critical component of diversified revenue models.
- Trends from this year’s Advertising Week in NYC. (Mx3).
02 Subscriptions, memberships and donations
With various approaches to and channels for subscriptions and other reader-driven strategies available, this has been a field of some interest (and with clear demonstratable wins) over the past few years.
While there are strong signs of maturation and a shift from growth to retention, subscriptions will remain a critical DTC revenue generator.
Moreover, the opportunity is not only about subscriptions at a brand level. It is also about verticals, creating desirable niche products and services focused on user groups’ deep-seated personal and professional interests and passions.
- Best practices in registration, metering and digital subs. (Mx3)
- Stop the churn: Strategies for improving subs retention rates. (Mx3)
- Publishers see subs mature into “forever business”. (The Rebooting)
- How paid podcasts fit into The Economist’s subscription strategy. (DCN)
03 E-commerce, e-learning and other e-services
Publishers can directly monetise audience relationships by selling e-books, digital downloads such as reports, personalised or branded goods and merchandise, affiliate sales, and various services to their audiences.
- Reinventing the ‘Bible of Baseball’. (Mx3).
Events are a great way to develop premium monetisation strategies around personal and professional interests and DTC relationships, from selling tickets to add-ons and monetising audiences through sponsorships and other activities.
While in-person remains the most effective platform, webinars and virtual technologies allow publishers to scale at least some of their event activities.
From developing intelligence-driven products and services to creating lead-generation opportunities, the better the DTC-generated first-party data, the better the opportunity to monetise. Also, check out this handy Deloitte guide with four approaches to monetising data.
06 Sponsored content
It is obvious that, much like advertising, the more first-party data you generate and the more insight and knowledge you develop about your audience, the higher the premium to develop sponsored content aimed at that market.
07 Consulting services
Thanks to their expertise and the data-driven understanding of their audiences, publishers can develop direct third-party consulting opportunities as part of the revenue model.
08 In-app purchases
For those who have cracked the app code, there are opportunities to sell virtual goods, additional content, premium features and so on within an app.
09 NFTs and collectables
Perhaps not as hot a topic as a few years ago, publishers can sell exclusive digital content as, for example, collectable items through blockchain technology.
- 20 Mint creates NFTs to fund its print magazine. (INMA)
POWERING THE FLYWHEEL:
DTC is about developing and deepening direct audience relationships and first-party data. This forms a flywheel, driving product, service and monetisation strategies. However, a publisher may have all the DTC channels and monetisation opportunities down to a tee, but if its content – the electricity powering the flywheel – does not hit the mark, it is pretty much futile.
For specialist media, this should be par for the course thanks to the targeted nature of their businesses and content that addresses the personal and professional passions, interests and needs of their audience communities.
For news media, “news avoidance” presents yet another challenge. As FT Strategies’ Aled John points out, the question is how they “can create content that people – outside of power users – want to read. Potentially that means news content that is increasingly actionable and provides hope to the next generation. Providing people with a sense that they can make a change off the back of information.” He believes, “there needs to be a focus on making the news more engaging in formats that will attract and engage new audiences. For too long, the methods of storytelling have remained the same, and it’s clear that these aren’t grabbing the attention of audiences, leading them to turn away.”
Lastly, we should also ask, what makes up a good content bundle today? In his latest newsletter, Brian Morrissey has a quote that I thought was on the money. It came shortly after news that The New York Times had broken through the 10-million subscriber mark. Referring to The Times’ subscriptions value proposition, he wrote, “The Times has achieved its success by morphing its strategy from a paywall for news articles to a multifaceted news and lifecycle bundle that’s future growth is more reliant on finding the next Wordle than the work of the Baghdad bureau.”
Value is multi-dimensional.
WHAT HAVE I UNDER- or OVER-STATED or MISSED?
Have I under- or over-stated the importance of some things, or have I completely missed something? Quite possibly! Let me know at firstname.lastname@example.org.
MEDIA MAKERS MEET – LIVE!
We’d like to see you at our upcoming live events in the UK, Spain and Portugal!
Join your colleagues who have already registered to attend.
Mx3 AI takes place on 7 December in London. From looking at the big picture to drilling down into current experiments, come and learn, discover and discuss AI and the media with fellow professionals. Click here for more.
Mx3 Barcelona focuses squarely on innovation in media, emphasising creator-led, consumer and B2B media operating in and across media verticals. It takes place from 12-13 March. Click here for more.
The FIPP World Media Congress, which we produce on license from FIPP, takes place from 4-6 June in Cascais, Portugal. The magazine media world’s flagship global event, the 2024 edition will be the 46th one since it first launched in Paris in 1925. Click here for more.