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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.

Top Revenue Diversification Streams For Publishers

At the root of every digital publication is an inherent goal to educate, interest, and engage with the intended audience. By providing relevant and informative content to the end users, publishers create thoughtful and fulfilling relationships with their readers. A consistent stream of high quality content motivates readers to return to the site and continue to consume the content.

The cycle repeats itself until the reader develops an affinity for the publishing brand. Visiting the website for the latest updates on the news of the day becomes part of a daily habit. As that habit becomes a growing need, those same readers become brand loyal users. These are the people with the highest potential to become paying subscribers for your top quality content.

All of that is well and good for building a loyal audience of passionate and engaged readers. But how do you monetize those efforts, and how can you introduce new revenue streams to scale growth higher and faster while maintaining publication standards and providing quality journalism? That’s what we’re going to discuss here.

Challenges for revenue-driven publication leaders

Increasing revenue requires a proactive push for subscriptions and a delivery of highly targeted ad inserts as part of an affiliate marketing program. The good news is that, according to Pew Research Center, 86% of American citizens get their news through a smartphone, tablet, or computer.

More importantly, over half of respondents said they prefer consuming content through these devices as opposed to TV, radio, or podcasts. This means there does remain a sizable audience to monetize from through revenue diversification strategies.

The bad news is that, as polarization deepens throughout the population, the amount of trust in journalism has waned. This is a particularly growing problem for US publishers.

According to a study published by Statista, United States citizens rank lowest on a list of 40 countries whose residents say they trust the media. Only 26% of surveyed Americans say they trust the news media. By contrast, 37% of neighboring Mexicans say they trust the media, while 42% of neighboring Canadians admit they trust their news sources.

All of these insights emphasize why there’s such a strong need for a high quality content strategy. Aligning content production to the tastes and interests of the intended audience is essential to boost onsite engagement. That’s what allows you to run affiliate marketing campaigns with select partners.

Examples of revenue diversification channels

As a business model, it’s always critical to live by the adage “never put all of your eggs in one basket.” The more you can diversify means of generating revenue, the less likely you are to falter if one of those channels stops performing at the level that your business needs. When it comes to revenue diversification strategies, knowing how to utilize each of the channels available to grow your brand is vital to scaling new growth.

So what are some of the channels available for your revenue diversification strategy? Here’s a quick breakdown of each and how best to use them to your advantage.

Subscription models: win them over with quality

This is probably the most straightforward revenue generating model for publications. By convincing more of your reading audience to pay for access to your top shelf content, you’re earning direct value out of each posted story across your publication.

Many readers actively want to add their own opinions to a published piece of content. If you gate access to the comments section and the community behind it, you incentivize those readers to become paying customers.

In exchange, they gain the means to participate in lively discussions with other engaged readers. It’s a two way relationship that benefits the reader and your publication. You just need to guide people to that decision by doubling down on high quality content that increases their propensity to respond.

E-commerce strategies: target the right offers to the right people

It goes without saying that data is essential for any digital experience to become a successful venture. However, the type of data makes all the difference between publications that have something to sell to their e-commerce affiliates and those that don’t.

First-party data has become the backbone of any e-commerce engagement strategy. It’s by using first-party data that targeted shopping experiences are provided to the audience. This type of data allows you to build highly informative audience profiles in which you can segment your readers by their interests and what types of content best capture their attention.

By curating these profiles, you can coordinate with your e-commerce affiliates to create relevant shopping experiences for the intended audiences. Align the offers to the reader’s passions, which you can determine based on the content they consume. This is how you improve the user experience and make some extra money through your affiliates.

Affiliate links: personalize ad inserts for maximum effectiveness

This is a very similar approach to your e-commerce strategy. Using first-party data and the profiles you create from it, your affiliates can customize the ad inserts they promote to specific types of readers on your site.

Customization and personalization are the best ways to generate views, clicks, and engagement from targeted advertising. Show your affiliates details about the end audience so that they can create highly curated messaging, images, videos, and other forms of content to connect with the audience. If done successfully, they should see a healthy return for their efforts.

Flexible commercial models: putting it together

Imagine if you could give your affiliate partners the ability to form a trusted partnership built around reliable, audience-driven, first-party data. How much more valuable would a relationship with your publication be to those affiliates as opposed to a standard commercial revenue vendor type relationship that other publishers will offer? There’s no question: you gain a significant competitive advantage by offering a commercial revenue partnership.

The first-party data you possess and the audience profiles you build allow affiliates to send out promotions that will earn engagement. People end up coming to your site and the site of your affiliates. It’s more scalable, more flexible, and more beneficial for everyone involved.

Conclusion

With an analytical approach to the data available to you, a definitive goal, and an audience-first content strategy, the right revenue growth tactics will become increasingly evident. Keep in mind that each of the above approaches, while uniquely effective, may not align with your brand and its interests – which is OK! Carefully curate strategies that are in alignment with your brand’s overarching POV and they will in turn effectively serve the long term goals of your organization and contribute to the growth of your audience and, subsequently, your revenue.

After Facebook’s News Ban in Australia, Media Organizations Must Start Owning Their Audiences

In what was perhaps one of Facebook’s most aggressive moves so far, the social media giant last week blocked all news content and links from its platform in Australia. All news pages, and even some government pages, were wiped clean and news organizations were unable to deliver critical information to millions of Facebook’s users.

Facebook’s decision to ban news came after Australia’s government proposed to make big tech giants legally obligated to pay news companies for the content they host.

And while there has been some reconciliation between Facebook and the Australian government resulting in the recent restoration of news content, there’s a greater issue at hand: Big tech giants could abandon countries at any time, without any notice.

In fact, a similar event happened back in 2014, when Google closed its news aggregation services in Spain.

If there’s one takeaway we can learn from this issue, it’s that news media companies need to stop relying on big tech platforms to engage their audience and start building thriving, digital communities of their own. If they don’t, they risk losing the bulk of their traffic overnight.

The Dangers of Not Owning Your Audience

By allowing a third-party platform, like Facebook, to act as a middleman between your brand and its followers, you have no direct ownership over your audience. This scenario creates several challenges for your company.

First off, if you don’t own your audience members, you have limited access to their data. Having access to this first-party data will be the single most important thing for media brands in the coming months and years. Not to mention you can’t prevent your content from showing up near misinformation or falling prey to trolls on other platforms — and that can significantly damage your brand’s reputation.

Meanwhile, you’re at the unpredictable whims and algorithms of a third party, which can disconnect you from your audience in the blink of an eye. That was certainly the case for Australian media companies when Facebook wiped news from its platform without hesitation.

“Web traffic to Australian news sites began to drop significantly just hours after the ban,” reports Business Insider.

Media companies that initially thrived on the platform and had most of their website traffic travel through Facebook can no longer tap into that audience.

With news making up only 4% of Facebook’s content, it doesn’t make sense for media business leaders to put their trust in a platform that has no loyalty to news companies.

Where Media Organizations Need To Go From Here

There’s no question that news companies need to stop relying on Facebook for growth and revenue. So what can shell-shocked publishers that depended on Facebook for traffic, or other big tech platforms for that matter, do to become self-sufficient?

The answer is surprisingly simple: They need to start rebuilding their communities on their own digital properties, where they have complete ownership over their visitors, their data and their revenue. Organizations that take control of their audiences can also encourage visitors to depend on their digital properties instead of social media for trusted content.

“The long-term task for news [organizations] and journalists is to convince the public – especially young people – that it’s worthwhile to actively seek out professional news and journalism as part of their daily online lives, rather than simply reading whatever comes across their feed,” states Diana Bossio, a lecturer for media and communications at the Swinburne University of Technology.

If media companies can form strong, direct relationships with their digital community members on their own properties, they’ll be well on their way toward generating sustainable revenue.

Why On-Site Engagement Tools Can Help Media Companies Reclaim Their Independence

Between 2019 and 2020, consumers worldwide spent an average of 145 minutes on social media each day being, well, social.

And this isn’t surprising: Engaging social experiences encourage people to connect and participate in ongoing digital conversations. But that doesn’t mean you need to rely on social media to engage your audiences socially.

To encourage loyal audiences to form a direct path to your website or app, you can adopt moderated social engagement tools right on your digital properties. From built-in conversation and live chat widgets to live blog tools and personalized social feeds, there are several ways media organizations can embed social experiences into their websites or apps.

Viafoura data reveals how social engagement tools help media companies activate and retain their audiences. Not only do engagement tools drive between 30% and 50% of all user registrations on Viafoura’s customer sites, but engaged users spend three times longer on media websites compared to unengaged users as well.

With the help of Viafoura’s audience engagement solution, media organizations even saw up to a 50% retention rate for engaged users after two months of visiting a site.

Conversation-based tools give users the addictive experiences of social platforms without sacrificing any of your company’s data, revenue or reputation to a third party.

Facebook’s ban on news in Australia had countless media organizations feeling betrayed and abandoned by the tech giant. And just as this wasn’t the first time a big tech company trampled over media organizations, it certainly won’t be the last.

By investing in building communities on your owned and operated digital properties, you can help your media company rise above the whims of tech giants and take control of your most valuable asset — your audience.

Gaining your competitive edge for the 2020’s

Right now, media companies everywhere are racing to stay on top of the ever-evolving trends and technologies in the industry. But with the future constantly barrelling towards us, the most effective path to revenue isn’t always straightforward. As a result, many brands aren’t properly equipped to deal with digital challenges on the road ahead.

No one really knows for sure what the best practices in the media industry will look like in five, 10 or 15 years. What we do know, however, is that you are very capable of putting your best foot forward in setting yourself up for ongoing success.

So would you believe us if we told you that a few simple steps could protect your business?

Well, you’d better buckle up — we’re about to walk you through everything you need to do to futureproof your business. Prepare to gain an edge over your competitors.

1. Invest in New Sources of Revenue

For most media organizations, social media is no longer a reliable source of revenue. While social media proved to be a great source of revenue and digital traffic several years ago, constantly changing algorithms and brand-daming toxicity has since diminished the relationship between media and social platforms.

The best lesson we can take away from the history between media and big tech companies is that media organizations need to stop relying on third-parties to generate revenue from consumers. Instead, it’s important to continuously be testing and analyzing direct ways to earn revenue. Long-term stability will require a direct relationship with your audience, and the more ways you

“There is going to be a new crop of players… that accelerate because they understand how to connect content, commerce, and conversation,” the CEO of Barstool Sports tells the Digital Content Next association. “Companies that do that are going to be in a good spot.”

Sustainable revenue models are now shifting away from ad revenue and towards consumer revenue models, where brands have complete access to their digital community and profits. Gain a competitive edge and set your brand up for success by monetising your audience directly.

2. Optimize Your Platform for Engagement

Whether you’re a news publisher or operate a video-streaming platform, building loyalty among your audience members translates into long-term success. That said, social engagement is a powerful building block of trust and loyalty in a digital community.

So instead of trying (and failing) to grow loyal followers via social media, incorporate engagement tools right into the fabric of your brand’s platform. Intertwine tools like live conversations, real-time blogging, ratings and reviews as well as live chats with your content to get people seriously interested in what you offer.

Add additional layers of interaction to your platform by engaging with your audience directly, through digital Q&As, personalized emails and recommended content lists. By having popular journalists or TV personalities chat with your audience, you can generate excitement in your community and prove that your content is worth the subscription fee.

At the end of the day, you don’t want to be a stranger to your audience. Interacting with them shows that they mean more to you than money. And that, folks, is how to generate long-term trust, no matter what kind of curveball the future may throw at you.

3. Set Up Preventative Moderation Measures

Nevermind the future, the present is already volatile.

There are trolls, bots, spammers and misinformation wreaking havoc throughout the internet. So if you can’t protect your brand in the face of existing threats, how can you possibly be prepared to deal with these growing issues in the future?

In both the present and future, moderation across your user-generated content is a must for any brand hoping to draw in active subscribers and retain them.

For a moment, picture sports fans debating over a penalty during a live stream of a game. A real-time chat, where individuals exchange passionate thoughts, is a perfect opportunity for building community engagement around this event. However, a troll can easily ruin the experience by taunting, mocking and harassing your loyal users. This is why it’s essential to put some kind of moderation in place to protect your community.

Explore the different types of moderation here.

4. Implement the Perfect Conversion Strategy

According to a new report by What’s New In Publishing, consumer subscription fatigue is becoming a reality for many publishers and streaming platforms alike. Creating an effective conversion strategy matters now more than ever with so much competition fighting over consumer dollars.

So once you have your paywall and engagement tools in place, it’s time for you to connect all of the moving pieces together. Plant those seeds of engagement to grow your audience. Then ensure your engagement and paywall solutions are working together so that your active, subscription-ready users can be sent a paywall message.

Finding the right strategy for your business may take a bit of trial and error. But testing out different ways to engage, target and monetize your audience members is a surefire way to boost revenue in the long run.

5. Put Your Audience First

In the digital age, your audience is everything. Which is why you should pull every possible piece of information you can about your audience members from your first-party data, and use those insights to your advantage.

Take the time to identify who your most loyal audience members are, and how to best cater to them. For instance, OTT platforms may want to consider personalizing the content-streaming experience, with recommended or related videos.

Your content strategy should be geared towards what subscribers find important and relatable. So: figure out who you’re serving, what content and experience they value, and invest heavily in that.

Condé Nast has also developed a short exercise for publishers that can help your team shift its editorial strategy towards a more audience-oriented approach.

“Anything that distracts a publisher from focusing on their most loyal audiences, is a losing strategy,” reads a report by the Tow Center of Digital Journalism.

Wise words for media organizations everywhere.

The Athletic’s Commitment to Engagement is Attracting Investors and Readers to its Ad-Free Publications

If you’re a diehard sports fan, you’ve probably at least heard about The Athletic by now.

Those who have subscribed for U.S. $3 to $4 per month have discovered a rich trove of city-based sports coverage that has begun to fill the void left by the dwindling number of newspapers that historically provided a daily sports fix.

Since going live in January 2016, The Athletic has expanded to 47 cities in Canada and the U.S. It’s also diversified beyond written online stories with podcasts and video products — all without a single dollar of ad revenue. Investors have taken note, likely enticed by the strong and growing community The Athletic has engaged.

The Shifting Sports Media Landscape

The company earned headlines from the get-go when it announced the U.S. $2.3 million in seed funding that its founders Alex Mather and Adam Hansmann had landed. Then again for its gradual recruitment of top-tier sports journalists from older, more established companies like Sports Illustrated and The Globe and Mail (both of which have seen their sports pages reduced in recent years).

Traditional media’s shrinking page count doesn’t mean there’s no competition for The Athletic. Established broadcasters such as ESPN, TSN and theScore carry big-time brand recognition online, and more sprawling media brands, like MSN and Yahoo, offer free sports content through various platforms.

James Mirtle, editor-in-chief of The Athletic Canada, says The Athletic’s stories gather “a different slice” of sports fandom compared to other media companies. “We’re doing something more analytical than what you’d do at a free website. You can tell because the comment section is usually more civil,” he says.

Those readers are regularly engaged through means that most will find familiar in 2019 — each reporter is active on social media (table stakes in modern journalism). But The Athletic has also formalized a Q&A regimen that regularly invites subscribers to connect with its experts.

“Initially, it was ad hoc,” says Taylor Patterson, director of communications at The Athletic. “A writer and editor would tackle a live Q&A for an hour, with the editor fielding the questions and the writer responding in real-time.”

But the company soon invested in expanding the in-house tool its product engineers built to facilitate this discussion, improving the UI and making it look “more professional,” Patterson says. The marketing team also hired a full-time community manager to oversee Q&As and build a calendar to coincide with season starts, playoffs, and other chat-worthy events.

The discussions are now a fleshed-out editorial program that averages 15 discussions each week across the network.

Active Subscribers = Retention

Mirtle says that the company has found that when “subscribers are active, taking part in the Q&As and the comment section, they’re much less likely to cancel their subscription. So we’re really invested in that.” Patterson also explains that approximately 80% of the subscriptions that come due each year are getting renewed.

The Athletic crested the 100,000-subscriber mark in 2018. At that time, industry watchers did some quick, back-of-the-envelope math and estimated average annual subscriber revenues between U.S. $6 million and $8 million.

It’s also worth noting that in the 12 months since breaking 100,000 subs, The Athletic has expanded to a dozen new markets to offer local coverage on every team in the NBA, NFL, and NHL and has added NASCAR to its mix.

Even if that revenue doesn’t cover costs yet, investors have not been hiding their checkbooks. Investment and funding information platform Crunchbase pegged The Athletic’s total funding (so far) at U.S. $89.5 million following its sixth round in May 2019. Whatever data those investors are seeing, it’s keeping their wallets open.

Overall, the company is confident that regular engagement with its passionate readers is the key to growth. As Patterson puts it, “when people feel they can connect on a personal level with something they read about every day — and can express their opinions on the topic — people are inclined to stick with it.”