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Ad Revenue Directly Linked To Depth Of First-Party Data

One of the greatest challenges that publishers are facing the world over, is an ever-changing digital landscape.

This new age of publishing comes with a wide range of demands; publishers must treat technological adaptation as imperative, devise more efficient ways of understanding net-new consumer behaviours as new generations age into news consumption, and always be prepared for the moment when, at the whim of a small handful of tech giants, months of work can be upended overnight. Lest we forget the mayhem that ensued when Google announced it would be eliminating third-party cookies.

Publishers and the global markets at large have, more or less, adjusted to the new normal – even though Google yet again delayed the cookie demolition to 2024 instead of 2023. Having adapted to first-party data, for the most part, publishers have been able to uncover reasonable solutions to all of the above demands. First-party data analytics can inform new insights and illuminate a multitude of fresh paths to heightened revenue and a diversification of income streams. One such stream is ad revenue.

Thus, to the laundry list of things publishers must have these days, one must add: a fully fleshed out revenue-focused ad space strategy. In the wake of Google’s big cookie announcement, advertisers quickly invested billions of dollars in order to capture as much value from third-party data as they could. Those investments were fast and furious, but quickly diminished after their peak in 2021. According to research conducted by Insider Intelligence, the rate that advertisers have spent on digital display advertising has since steadily declined as projections show diminishing investments in the years to come.

US Programmatic Digital Display Ad Spending

What does this mean as publishers, brands, and corporations look ahead?

No more cookies: what this means for publishers

It’s important to note that, in the chart above, not all of those display-ad investments were directly or even loosely tied to publishers. Businesses of all backgrounds advertise on the web, but the media and publishing industry is uniquely affected by the pending end of third-party cookies. Not to mention the rise of crucial privacy protection mandates emerging globally, all with the intent of safeguarding consumer data. At face value, this may seem like a daunting challenge for publishers who rely so heavily on data to guide their content and editorial teams – but is it?

The digitally savvy consumer is no longer anomalous, they are the norm. Modern consumers are far more protective of their privacy, well aware of the value their information holds, and they’re much less quick to trust any old businesses to respect their data. According to Deloitte, 40% of consumers don’t trust online services to respect their privacy. Which, when it comes to ad space and ad revenue for publishers, means they’re less likely to interact with unwarranted and unwanted ads.

A growing trend emerging in consumer behaviour is that the timing and relevance of an advertisement on their journey is of the utmost importance; they want the right ad for them, at just the right time – anything else will diminish their interest, trust, and brand loyalty.

Listen & Learn: earn an audience’s trust with their own data

With consumers more fickle (justifiably so) than ever, how can organizations navigate their user needs and meet their own business goals?

By forming real, meaningful relationships with them.

If a publisher is able to leverage their data to provide the content and experiences their audiences want to have with their site, consumers will feel connected to their brand. Over time, affiliation with the brand will nurture readers to develop an affinity for the publication, making them more likely to come back for new content. This means that publishers are in direct possession of their very own high-value niche-interest users that, if analyzed and segmented properly – can raise their ad space cost per mille(CPM) astronomically and give prospective ad partners access to ideal target audiences.

First-party data is the resource that allows publishers to create those kinds of brand experiences. Unlike third-party data, first-party data is directly collected from consenting users. Each time a user interacts with a site by visiting a webpage, commenting on a post, searching for specific articles, etc., each of those touchpoints provides first-party data points.

It’s through collecting all those insights that organizations can build rich audience profiles and create content that appeals to their users’ interests. This personalization of direct relationships between brands and their audiences is paramount to continued growth and success.

The rewards from personalization are highly engaged users who interact with more content on publishers’ sites, including personalized display ads promoted by their affiliates. Personalization is one of the keys to bolstering growth in audience, reduction in attrition, and improving ad and subscription revenue. According to McKinsey & Company, 71% of users want publishers to personalize their experiences.

The audience’s intent is laid bare; all that’s left is to do the work in order to analyze, interpret, and take strategic action with their first-party data.

First-party data is the key to an ad revenue boom

By creating a first-party data strategy, publishers can win over their audiences and create longstanding relationships with loyal consumers of their content. Imbued with brand-trust and their intrinsic value as consumers, these audiences become key partners in building profitable relationships with existing and prospective ad partners who want to buy engaged time with high-value interest-relevant users.

Google and Facebook dominate the digital advertising landscape, controlling a whopping 57% of all digital ad revenue. Although, even with the lion’s share in their possession, the returns on those investments leave much to be desired. According to HubSpot, 68% of marketers say paid display advertising is “very important” or “extremely important” to their overall marketing strategy. However, a “good” return on advertising spend (ROAS) is a 4:1 ratio, meaning $4 of revenue for every $1 spent.

Given the complexity of Google and Facebook’s algorithms, which have traditionally relied on third-party cookies to reach viewers, many advertisers fall well short of that average benchmark when calculating ROI on their ad campaigns. In fact, 80% of marketers say their campaigns were less effective without accurate audience identifiers. Those advertisers need to grow their businesses, and they need a better way to do so.

Publishers with detailed audience profiles are saviors for these advertisers. Audience profiles tell affiliate advertisers what consumers are looking for in terms of visuals, messages, offers, and promotions that motivate them to click on an ad insert. These profiles, built using first-party data, are far more valuable to advertisers than playing a guessing game with Google or Facebook.

The odds of achieving or exceeding that 4:1 ROAS benchmark are much higher with first-party data backed audience profiles.

The takeaway: don’t just collect first-party data – use it!

First-party data is the essential ingredient to creating a profound win for all parties. It’s a win for publications because they collect valuable audience insights that help inform what the best content to produce may be. It’s a win for audiences at large and individual users alike because they in turn receive more relevant content that appeals to their interests. It’s a win for advertising partners and affiliates because they know exactly what type of ad-content to promote on the goldilocks ad space that they now have access to. That audience-specific digital real estate will make it possible for them to cash in on greater ROIs that justify committing to high-end CPM digital ad spaces.

A detailed first-party data strategy has the potential to make any website very profitable. So long as publishers continue to build and maintain relationships with advertising partners that are eager to pay for access to their hard won audiences, first-party data informed ad-revenue strategies will always result in new and abundant revenue.

Warning Signs That Your Audience Isn’t Reaching Its Full Revenue-Generating Potential

With the proper engagement and retention strategies in place, your audience has the power to sustain your media company financially.

“Consumer revenue streams, including digital subscriptions and ticketed live events, are increasingly important to news organizations as reliance on traditional advertising revenues continues to decrease,” explains Angelica Irizarry, the Inquirer’s director of events.

There’s a clear connection between active audiences and elevated revenue. However, not all media organizations are tapping into the full value of their digital communities.

Keep your eyes open for the following warning signs, which indicate that your media company may be losing out on potential revenue from its community.

High Churn Rates

Your existing subscribers are often more valuable than new subscribers.

“It can cost five times more to attract a new customer than it does to retain an existing one,” reads an article on Forbes.

In other words, having high churn in your digital community can translate to significant revenue loss for media companies.

So if your company has an unusually high churn rate, you may want to consider reinforcing your retention strategy.

Work with your engagement tool and paywall providers to identify unengaged community members that may be about to churn, and then send them unique offers and discounts to re-engage them. That way, you’ll maximize the revenue your existing customers are funneling into your organization.

High Amounts of Toxicity in the Comments

If you notice a climbing number of user-generated posts getting disabled by your moderation system, odds are, your digital social spaces are infested with trolls or spam.

Allowing offensive comments to overtake the meaningful, productive conversations within your digital properties can scare away advertisers and community members. And that means less revenue for your company in the long run.

“You can protect your social spaces by keeping your community guidelines up to date and ensuring your moderation system can properly enforce them,” says Leigh Adams, director of moderation services at Viafoura. “To discourage trolling behavior, moderators and editors can also highlight and reward positive behavior whenever possible.”

Your Most Engaged Audience Is Coming From Social Media

We’re well aware that social media holds millions of active users and advertising opportunities for brands. But this comes at the cost of precious first-party data, direct relationships with audience members, trust and, ultimately, complete revenue ownership.

Having social media at the center of your community engagement strategy jeopardizes your company’s control over audience members and over any of the revenue earned from them.

Instead of giving a portion of your profits to big tech companies, there’s a better alternative for media companies: to invest in their own properties.

That’s what led one media to build a brand-new podcasting app rather than relying on a third-party podcast streamer.

“We needed it to be an experience that we control so we built apps to do this and the experience of doing the discovery, the experience of convenience, the experience of actually being in the Zetland universe when you listen to it, I think it’s quite important,” states Zetland CEO Tav Klitgaard.

Companies can even replicate the social experiences offered by social media directly on their own properties with the help of audience development companies like Viafoura, to keep visitors on their sites and interacting for longer.

Engagement Spaces Aren’t Being Leveraged for Ads

Integrating audience engagement tools into your website or app can help your organization activate interest and conversation around your brand. However, some media companies don’t realize that there’s a significant amount of advertising revenue that can be earned from audiences through these tools.

By failing to run advertisements in these social spaces, you’re missing out on the opportunity to maximize engagement around your ads. Organizations can instead become more successful by advertising to highly engaged community members.

“Today advertising value is measured by engagement so if publishers want to improve their ad offering, they must devise a successful engagement strategy first,” says Chris Waiting, CEO of The Conversation U.K.

As you work to build, retain and monetize community members, keep your eyes open for warning signs that your company may be losing out on potential profit. Adjusting your business strategies accordingly will help you increase the revenue your organization can earn from its audience.

How Advertising Is Changing for Media Brands

Throughout the past few months, the media industry has faced a number of advertising-related challenges. As advertisers slashed marketing budgets and started blocking important keywords during the pandemic, businesses watched their ad revenue drop.

But advertising is still alive and well and, as long as brands can make a few simple changes, it will continue to be a part of the future for media companies.

“[Advertising] is an industry that is constantly talking about wanting to transform itself, but that is also constantly sticking to very traditional approaches,” explains Marcelo Pascao, the marketing VP for Coors beer. “Old habits die hard, but people are being forced out of necessity to adapt faster.”

To maintain revenue earnings and brand integrity as we venture through the new normal, the relationship between media brands and advertising is evolving. Here’s how:

Consumer Engagement Has Become Mandatory

There’s more to a digital community than just the number of clicks and views on a page.

The level of consumer engagement around a brand’s content now plays a significant role in producing a high-value environment for advertisers.

According to Chris Waiting, CEO of The Conversation, “today advertising value is measured by engagement so if publishers want to improve their ad offering, they must devise a successful engagement strategy first.”

Condé Nast also created a new metric in partnership with Deloitte that measures consumer engagement, brand influence, content quality and overall trust levels. A Condé Nast representative explained how these details could showcase the appeal of running ads on a highly engaging and trusted platform.

By hosting ads within engaging digital spaces, media companies can ultimately assure advertisers that active audience members will see their content.

Positive News Is Pulling Advertisers Back In

Many media companies have been covering major news stories related to the pandemic and social justice regularly — two topics that advertisers are wary of.

So how can businesses stop advertisers from pulling their ads while keeping consumers informed on these critical issues?

Some publishers are creating content that takes on a positive or encouraging angle to rope advertisers back in. For example, TIME focused some of its content on individuals who were recovering from COVID-19 and earned a significant amount of related sponsorship revenue.

“There’s neutral and positive-sentiment news around coronavirus that’s a perfectly reasonable place to advertise,” says Joe Barone, brand safety manager for media marketing firm GroupM.

Social Media Is Becoming Less of a Focus

Social media has triggered a series of hurdles for advertisers: misinformation, trolls and an overall lack of control over their content.

To top it all off, advertisers are noticing that social media platforms value profit over brand safety. Facebook in particular has introduced ad spots for in-stream videos, which could theoretically run alongside misinformation and offensive content.

“They’re prioritizing maximizing inventory at the expense of making it brand-safe,” states Erica Patrick, MediaHub’s VP of paid social. “You shouldn’t have to make a giant investment to get into brand-safe content.”

Media companies have already started pulling ad dollars out of Facebook, and will likely continue the trend as little has been done to rectify these issues. As a result, companies are now prioritizing their own digital properties to run advertisements.

Diversifying Revenue Streams Is Essential

Although advertising powered the media industry in the past, it is no longer stable or strong enough to sustain an entire media company.

Businesses have started looking at a wide variety of revenue sources to maximize their profits. This involves stepping beyond the boundaries of advertising to monetize membership programs, user data and events.

For instance, Future plc has managed to thrive amid the volatile economy by expanding its revenue streams. The media group predicts that it will finish the year off with an impressive $110 million in profit.

“The shift towards subscriptions and other diverse revenue sources is only set to grow, accelerated in part by the pandemic,” says Richard Reeves, managing director for the Association of Publishers. “The publishers that adapt to this change will be the ones that have the most to gain when the storm passes.”

The dependency on advertising revenue is certainly shrinking throughout the media industry. But having a healthy flow of ad revenue is still important.

By embracing change, media companies are re-establishing themselves as reliable — yet self-sustaining — partners in advertising.

Announcing Viafoura’s New Performance-Based Pricing Plan — No License Fees. No Overage Fees. No-Brainer.

Interested in joining a growing list of publishers — like Reach PLC, Tribune Publishing, Postmedia and Media News Group — who are leveraging Viafoura’s new performance-based pricing plan to scale their community engagement strategies?

Good news for publishers and media companies everywhere: Viafoura is now offering its entire audience engagement and community-building platform free of charge through an ad-supported pricing model.

“Media companies are quickly realizing that the key to sustainability is creating a highly engaged, loyal community,” says Jesse Moeinifar, Founder and CEO of Viafoura.

Unfortunately, many available community-building solutions are either expensive, require huge amounts of internal effort or are low quality. But now you can have the best of all worlds.

“Our ad-supported revenue model offers all media companies equal access to the tools and services they need to build a profitable community, regardless of their financial resources,” Moeinifar adds.

This means that companies are now able to build and monetize an active community online by hosting ads and subscription offers within Viafoura’s widgets.

Rather than having to pay a recurring license fee, our new pricing model is powered by revenue earned through ads and offers running on Viafoura’s tools. Companies can then reap the rewards of their engaged communities — including more subscriptions, long-term loyalty and new incremental revenue.

Customers using our platform saw a 44% increase in comments, 34% increase in average session length and 38% increase in total on-site engagement.

And that’s only the tip of the iceberg. Explore how Viafoura’s ad-supported pricing plan can benefit your business below.

Flexible Advertising

With advertisers gradually increasing their budgets as restrictions around the pandemic ease up, it’s the perfect time to optimize your ad spaces for engagement.

Viafoura offers a wide range of flexible advertising opportunities to satisfy all of your ad-related needs.

For example, you can choose which of our widgets run advertisements, select ad positions and set ad frequency:

We also give you the option to work with our brand-safe, premium advertising partners to maximize CPM/eCPM rates. Alternatively, you can use your own ad-serving platform.

Finally, you have the freedom to define your blacklists and run any of your in-house or third-party ads and offers.

Maximize Engagement With Your Ads

Research has proven that digital social spaces attract active community members.

Since we embed advertisements right into social spaces, media companies like yours can expect a high level of engagement with their ads. Companies that have implemented our ad-supported model have seen a 3-5x increase in click-through rates (CTRs), over 80% viewability of ads and significant gains in overall ad performance.

“It’s a way to isolate your most engaged audience and put ads in front of them,” says Dan Seaman, VP of product at Viafoura.

Take your community’s experience with your business to the next level using first-party data from our engagement tools. Simply gather insights from your community’s engagement data to target ads and content to consumers based on their behavior and interests.

Ultimately, our ad-supported revenue model is a way for you to build and monetize a thriving community of loyal brand advocates… all without straining your budget.

Interested in joining a growing list of publishers — like Reach PLC, Tribune Publishing, Postmedia and Media News Group — who are leveraging Viafoura’s new performance-based model to scale their community engagement strategies?

Get in touch with us here to find out if our ad-supported pricing plan is right for your business.

Media Buyers are Blacklisting Coronavirus Content, and It’s Damaging the News Industry

Calling all fellow marketers: blacklisting coronavirus content for your advertisements is harmful to your business, your communities and the entire news industry.

“News organizations are working tirelessly to provide reliable and trustworthy information to their communities; a life-saving service at this unprecedented time,” states David Chavern, CEO of News Media Alliance. “Keyword blocking serves to punish publishers for this very same coverage, with potentially catastrophic effects.”

One of these catastrophic effects is already taking form. The Interactive Advertising Bureau reported a recent drop in online ad revenue for publishers by a whopping 33 percent.

If we stand by and continue to block keywords, industry experts are concerned that the future of news will be a grim one — and unfortunately, your organization and community won’t walk out unscathed.

The Effect on News Organizations

Over the past few weeks, we’ve seen that media organizations are suffering as advertising dollars grind to a halt. There have been hundreds of staff layoffs, significant salary cuts and hiring freezes across the entire news industry.

The reality is that, without the help of advertisers, publishers invest in coronavirus news at their own expense to keep their communities informed.

But this type of business model isn’t sustainable, and will cause the quality and efficiency of journalism to suffer in the long run.

“In the absence of your ad dollars, news organizations are losing journalistic resources,” says Dan Seaman, VP of product at Viafoura. “These organizations can’t step up and meet the demand for information if they’re unsupported.”

Protecting Consumers

In countries where governments can’t be trusted for reliable information, the survival of news companies is directly connected to the public’s well-being.

The Toronto Star’s CEO, John Boynton, turned to LinkedIn to send this message to advertisers earlier this month:

“I also ask that you have staff speak to your ad tech supplier and have them stop “blacklisting” sites covering this COVID-19 crisis. It is very ironic/harmful that at a time when we need real journalism for safety purpose and we need to avoid sites that still carry fake news, that the advertising tech companies actually block sites that carry the facts.”

Information can save lives. And as the speed in which newsrooms provide fact-checked, critical information declines, marketers must act now if they hope to protect their communities.

“It’s the support of businesses like yours that helps us continue to provide clear, accurate and trusted information to millions of readers through responsible journalism,” Boynton adds.

The State of Advertiser Businesses

Based on data from previous recessions, Brand Consultant Mark Ritson describes on Marketing Week how companies that increased their advertising budgets during challenging economic times thrived both during and after a recession. In contrast, those who reduced ad spend during these times underperformed for up to three years following a recession.

Ritson also explains that marketers who keep injecting their ad budgets into campaigns right now will reap the rewards as competitors reduce or stop advertising altogether.

“Rather than pulling your budget and putting reputable brands out of business, you have an opportunity to get your brand in front of people and show solidarity and support to those who are living through this crisis,” Seaman stresses.

Plus, if you fail to support trusted news partners now, there may not be many left to run ads with in the future.

The Solution

There’s a massive captive audience right now on news platforms. Marketers can use this to their advantage by adjusting their existing campaigns so they make sense in the context of coronavirus news.

Ritson even suggests that one of the “strongest plays in advertising” is to actually increase your ad spend in this type of climate to help build your brand up.

“If you are a brand with access to an advertising budget, you have a moral obligation to spend that budget on reputable news sources covering the coronavirus topic,” states Seaman. “And the industry should be aware of which companies are punishing news organizations through their ad dollars.”

At the end of the day, we as marketers are largely accountable for the health of the news industry. So make a simple change to your business strategy that will keep newsrooms running and save the lives of countless people.