Advertising spend is expected to shrink over 8% worldwide by the end of 2020, according to WARC’s Global Ad Trends Report. This drop of nearly $50 billion has prompted publishers around the globe to adapt their revenue models to make up for the shortfall.
Combined advertising-subscription models have emerged as an attractive opportunity for media organizations as audiences are spending record amounts of time online engaging with digital content. In this article, we’ll explore a few changes publishers have made to their revenue streams recently that you can use for inspiration in your own business.
The shift to subscription models
According to the chart below from our recent Adweek report, Combined Revenue Models Gaining Traction in Media Industry, 71% of publishers plan to develop new products and/or revenue lines as a result of the public health crisis and its economic effects. Subscription models are the answer for many of these media companies.
Subscriptions are an ideal choice because they serve both publishers and audiences, enabling consumers to decide which content to pay for.They also provide media organizations with an additional revenue source, as well as rich audience data to attract advertiser dollars.
Three examples of subscription success
The Atlantic increased its subscriber base by 300,000 since fall 2019. When the pandemic hit, the publication began to track new subscribers’ activity more closely to better understand how to meet their needs.
The Atlantic found that its newsletter was a powerful tool to keep subscribers engaged, and that those who visited its website at least 3 times per month were less likely to let their subscriptions lapse.
The international business publication Quartz has doubled its subscriber numbers since November 2019, and now has over 20,000 members. The media company launched a Covid-19 newsletter this spring to deliver must-have information to its audience. It later shifted to cover topics such as changes within the workforce and the importance of mental health.
“Our email subscribers are by far our most loyal readers and most likely to sign up for membership, so we’re focused on growing that subscriber base,” said Katie Weber, President of Quartz. “Our readers come to Quartz because they want something that’s global in perspective, useful in their work, and aligned with their values.”
Slate’s subscription success is largely due to the publication’s enthusiastic podcast fan base, with half of its 60,000 premium members signing up to receive bonus audio content. The media organization has now created its own podcast platform called Supporting Cast, with the intent to attract other publications into the fold.
“Growing subscription revenue through Slate Plus is a top priority. By building Supporting Cast, we were investing in Slate Plus’s future, giving ourselves new tools to provide a great member experience that might not have made financial sense if Slate were the only user,” said David Stern, Vice President of Product and Business Development at Slate.
In addition, by inviting other media companies to use Supporting Cast, Slate will gain even greater knowledge about the platform’s audience to help boost advertising revenue.
Beyond subscriptions: other revenue streams
Subscription models have proven to be an effective way for publishers to foster valuable connections with their audiences and advertisers alike. However, if the Covid-19 pandemic has taught our industry anything, it’s the importance of being agile and getting creative to weather the economic storm. Here are 2 examples of other revenue streams you can explore in your business.
Brick and mortar retailers may be closing their doors in growing numbers over the past few years, but e-commerce is booming, with global spend approaching $3.46 trillion in 2019—an increase of 18% over the previous year. This trend presents a significant opportunity for publishers.
“While advertising allows publishers to receive a thin slice of the commercial value their content generates, commerce enables them to take advantage of that purchasing behaviour more directly and claim a greater revenue share,” stated this article by ExchangeWire.
Media organizations would be wise to explore avenues such as branded storefronts, and selling not only products (such as images by photojournalists) but also services online through vehicles like shoppable newsletters and ads.
Virtual events have proven to be wildly successful in 2020, not only out of necessity, but also due to their ability to allow audiences to engage with content after the fact and at their own pace, among other factors.
For example, British publisher Tortoise Media uses virtual events, called Tortoise ThinkIns, to build relationships with its audience and increase its subscriber base.
“You have to be a member to attend a Tortoise ThinkIn – so if you see a guest you want to meet, or a conversation you want to be part of – you need to join up to attend. You can start with a 30-day free trial,” said Katie Vanneck-Smith, Co-founder of Tortoise Media. “ThinkIns are the key to engagement and therefore retention.”
The future of media
No one has a clear line of sight down the next 12 months on the calendar. However, Lineup Systems is committed to helping publishers stay up to date on industry trends to help inform their business decisions as best we can. That’s why we commissioned the recent Adweek report, Combined Revenue Models Gaining Traction in Media Industry.
In this report, you’ll gain insight into other media organizations’ revenue mixes, how they feel about the tech giants, and how they plan to rise above the challenges presented by the Covid-19 pandemic and the resulting drop in advertising revenue.