A good number of digital publishers rely solely on advertising as their source of revenue. With the presence of tech giants in the publishing industry, it has become very difficult to remain competitive with a single revenue stream.
Publishers need to diversify their revenue stream to survive in the long run.
As we move into the 2020s, revenue diversification for publishers is easier than ever. But where should you draw the line? To what extent does focusing on multiple revenue streams interfere with your content quality?
In this article, we’re guiding you through the process of diversifying your revenue while also considering the factors that come into play while adding revenue streams.
But first, let’s dive deeper into why publishers need to diversify their revenue streams in 2021.
When your money keeps rolling in, it's easy to get complacent. You start relying on that fixed revenue stream and become increasingly hesitant to pursue new opportunities, not wanting to be one of the 75% of businesses that fail to launch new projects and initiatives.
However, this entails the classic risk - putting all your eggs in one basket.
If that revenue stream starts fading away, you will still be required to pay your expenses while attempting to adjust the course and find a new revenue source.
Here’s why diversifying your revenue streams will protect your publishing company’s future:
It should go without saying that businesses cannot rely on a single source of revenue to survive in the long run.
It makes no difference how amazing your client or customer base is, or how well your connection is currently working. That might change at any time. A change in your financial situation necessitates a renegotiation of your contract.
Moreover, they may simply find a better deal elsewhere. The best way to protect against future financial crises is to always be on the lookout for new sales to establish a stable customer base.
The advantage of revenue diversification is that it allows organizations to make the most use of their resources and completely realize their potential.
You might be able to diversify by only introducing new verticals. For example, social video news company NowThis News has introduced more than 10 verticals in less than 8 years in operation.
Alternatively, you might enter a whole new market segment with a new client base to capitalize on significant growth potential. However, in any case, you will be making the most use of your resources and aiming for the highest potential ROI.
We've seen it too many times when one main revenue stream begins to demand more and more attention until it completely dominates everything. It might be your first valued client or customer, or it could be your most profitable revenue stream.
Regardless, it may rapidly become an impediment to development and success by consuming too much of your energy and resources, leaving you with little with which to seize new opportunities.
Learn to avoid this happening in the first place, because trying to untangle yourself later is considerably more difficult than avoiding it in the first place.
Instead of blindly following what other companies have done to diversify their revenue streams, you need to assess your position to determine what works best for you. Here are three things you should consider to choose the most appropriate revenue mix.
First and foremost, you must get a thorough understanding of your target audience.
What do they appreciate and despise; what are their demographics; are they inclined to pay for the online content they consume; are they willing to accept a lot of advertising; and so on. Knowledge is power, but understanding your consumers or audience well is absolutely important.
Then you should assess yourself, your strengths, and your limitations. Do you provide unique, high-quality original content? Do you have great technical skills? Do you have strong ad operations skills? Do you have a solid sales team? and so on.
There is no one-size-fits-all revenue balance, and choosing one without the ability to apply it properly can be disastrous to your digital business.
This is the relatively simple part: after performing some basic research, it is quite apparent what the primary options are out there. Concentrate on what is truly driving revenue growth and where consumer trends are going.
Finally, if you followed the first two steps correctly, selecting which revenue streams to include in your mix should be simple.
The conventional method for web publishers to utilize a data management platform (DMP) entails leveraging data acquired from your online presence and other available second- or third-party data.
This includes viewing behavior, interests, affinities, intent, a previous purchase, and more. Many publishers utilize this data to supplement their continuing direct-sales bundle offered to agencies and brands, therefore increasing ad revenue.
Though it is a time-consuming process, direct ad revenues are gold, ensuring more revenue and your own campaign. To do so, create a media kit or a dedicated webpage presenting specific advertising and marketing information for your website.
Then, create your advertising rate card to list the prices for your inventories. Lastly, you can create a material specification document to clarify the terms and conditions.
But most importantly, identify your target audience and value propositions. Stand out amongst your competitors and be persistent.
Direct ads CPM (Cost per thousand impressions), CTR (Click-through rate), RPM (Revenue per thousand impressions), ROI (Return on investment).
With the help of your most loyal customers, digital subscriptions and membership can help you create additional revenue.
Consumers have a lot of options when it comes to what they read, so if you can persuade them to commit to you through a paid membership, you've earned audience engagement as well as extra money.
Furthermore, digital subscriptions shift the emphasis away from page visits, preserving the integrity of your articles and preventing clickbait headlines.
The regularity with which someone reads local news is one of the most important factors in determining whether or not they would subscribe. Consumers who read national news and wire-sourced material are five to ten times less likely to join up than people who read local news and wire-sourced stuff.
Incorporating a lot of local information may result in increased subscribers, often up to ten times as many. People want to see the worth of your brand and its relevance to their needs.
Subscriber acquisition rate, Subscriber churn rate.
Today, there are two major disparities in how podcasts earn money for publishers. When combined, they generate a consistent revenue stream that might help you in earning an income from podcasting.
The most common techniques now fall under the area of direct monetization. Direct podcast monetization occurs when the show itself is sold. You may make money by generating unique content, reusing it, and providing paying members special access.
The flip side of the coin is indirect podcast monetization. This is when you utilize your podcast to promote other products. Your podcast becomes a medium for product promotion and demand generation among your audience.
According to the Pressgazette, the total US podcast market revenue reached $960 million in the year 2020. And the IAB report says, the industry expects podcast advertising to grow by 15% this year.
Downloads per episode, audience engagement post ads, exclusive promo codes used, traffic redirected.
Ecommerce monetization options are increasing for publishers. Publisher eCommerce revenue today includes commissions and fees from affiliate or partner marketing content, curated eCommerce marketplaces, and branded products.
According to an Insider Intelligence study conducted in December 2020, publishers anticipate that eCommerce will become a larger income source in 2021.
The majority of US publishers (62 percent) projected eCommerce to be one of their top three revenue streams in 2021, with 36 percent expecting it to be their top revenue source. Furthermore, affiliate advertising rated in the top three revenue streams for 31% of respondents, with 9% expecting it to be their top revenue source.
Conversion rate, audience churn via eCommerce, product feedbacks, cart abandonment rate, net promoter score, acquisition cost, the average order value of a visitor.
Create a common list of audiences that spans the key industries represented by your advertiser clients. Use bespoke setups for high-value marketers or those who do not fit inside the regular set. Work with the client to develop a plan that is appropriate for the specific campaign — message, cross-screen, sequential, and so on.
You have the option of selling directly to buyers or making the data available to any buyer via a DSP data provider set. If you don't want to sell under your own brand, another alternative is to join an anonymized data exchange.
When it comes to passive income, affiliate marketing is another great option to supplement your income. This revenue-sharing strategy entails connecting to valuable brands or products and receiving a share based on the people who make a purchase. According to Business Insider, affiliate marketing accounts for 15% of the digital media industry's revenue.
Many publishers choose the metered approach, in which casual readers are allowed to read a set number of articles per month before being required to subscribe. This strategy assists in converting your most engaged readers into paying clients without alienating casual readers with a hard barrier.
Even if they are unlikely to subscribe, it allows them to "taste" your products and read a few articles.
While many companies send web push notifications, the strategy has to be a bit different for publishers. The objective is to entice users to return to the site, where they may consume relevant content and engage with it.
With a tool like Monsy, you can use a simple banner floating on a side of your webpage and optimize your ad revenue. Publishers can easily capture their audience and efficiently market to them across multiple platforms.
The amount of segments you create is entirely up to you. You may segment your viewers and target them with sports-related advertisements if you offer a sports section.
If a big chunk of your readers is from a certain geographic region, you may wish to promote local events or companies. Segmentation may give your readers a more customized experience while also assisting you in selling advertising more effectively.
Audience extension, which allows your advertisers to reach their audience after they've left your website, is one approach to reach new audiences. This type of audience extension strategy allows for more precise audience targeting and can help you land more advertising clients.
When you know a certain percentage of your audience is interested in specific content you can start to market towards them. Then make sure it is reaching the right people to whom it would be most relevant. And if two or more topics are relevant to one person, show both of the content to them.
The publishing industry's paradigm shift demonstrates that for digital publishing firms, innovation and out-of-the-box thinking are the way ahead for building a strong brand and establishing confidence among audiences.
But diversifying your revenue doesn’t necessarily have to be hard work.
If you are just looking for a tool to assist you to enhance customer satisfaction along with generating more revenue with your traffic, you can give Monsy a shot.
Monsy offers top-performing ad formats for publishers and guarantees an 85% revenue growth. Get started today and watch your revenue grow in no time!