Juggling Ad Revenue: A Major Online Publishing Challenges
We’ll be publishing an entire article series addressing all the major online publishing challenges. In this first part, we’ll focus on how generating ad revenue has become a challenge in this post click era and how experts are doing it.
Over the past years, the gradual shift in the publishing industry has brought a revolution in the way content is being produced distributed and consumed. It won’t be wrong if I say that It’s all digital now. For the internet is the air we breath, content is being produced online, distributed online and consumed online. And this digital revolution has definitely brought along a bunch of opportunities and challenges for traditional as well as modern publishers. But what remains as the biggest challenge is generating ad revenue in this post click era.
Digital is the new frontier for print
You must have heard and read this phrase like a zillion time now, and I am not going to say any different for this is the present reality. However, for those who are unaware of the whole story, let me paint the picture of some past events for you about what happened and why it happened. The events that made most of the publishers either big or small switch their radar from traditional publishing to digital publishing.
That’s how it all began (before 2015)
These were the years when many big publishing brands realized that it was difficult to weigh the success of traditional publishing as there were not many tangible aspects associated with it. They required circulation figures, total readership claims and edition retention periods which was all formidably hard to verify. Unlike digital, there were no click-through rate or any other form of immediate response by which readers can respond to either a print ad or favorable editorial. And the worst of all, newspapers and magazines had exploited this lack of accountability to inflate circulation.
Witnessing the drop in traditional publishing standards
The year 2015 began with a massive drop in newspaper circulation and gave all the traditional publishers another reality check that it was now time to take some action. The decline proved to be yet another trigger to prompt the publishers to go digital.
The impact of the digital wave was not limited to newspaper publishers, it was equally spread through book publishing as well. The picture became more clear when New York publishers released their financial result for the rest half of 2016 as compared to 2015
- Penguin Random House (PRH): sales down 10.7 percent
- Hachette Book Group USA: sales down 6.6 percent
- HarperCollins: sales down 2.5 percent
- Simon & Schuster: sales down 3.5 percent
At this point of time e-books started emerging and gaining popularity with a steady rise of indie authors in the eBook market.
By the end of 2016, most of the big publishing players were emphasizing to shift their radar to digital. Most of the traditional publishers were turning into a modern publication or we can say, digital publishers. Those who realized it early definitely got some first movers advantages.
Digital publishing industry trends 2017
Unlike traditional publication, digital had the ability to be tracked at a deeper level and thus is clearly seen to be winning over traditional publishing. We can say that 2017 can be marked for the huge increase in demand and popularity of many online publications.
With the beginning of this new publishing era, many other associated aspects needed to be re- worked upon and one of the most crucial for publishers was to put in place a much more comprehensive strategy. A constructive and foolproof strategy in order to produce quality and original content at scale is unavoidable at this stage. Here are some of the many new trends that are being followed by modern publishers.
Marketing with no verifiable RoI is now unacceptable – Result driven efforts are the ‘only thing’ digital publishers needs to focus on and other aspects may just fall into place.
Creative strategies are changing – Social media, blogs, videos, virals are seen to be replacing offline campaigns at a huge pace. Not to forget about the rise of audio format and live video streaming which are some other add-ons to a publisher’s creative strategy. More and more content is getting syndication to capture more audience.
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SEO and link exchange is taking over PR – Employing traditional PR agencies who pester journalists to pass on your message is getting less useful as there’s an increased emphasis on online marketing techniques, such as SEO and link exchange.
See how your push notification campaigns can enhance your SEO
Data visualization tools are expanding and so is the need for data visualization – Though there are dozens of data visualization tools in the market already, but in 2017, every publishing business wants to start using them. As the technology gets more sophisticated, data analysis needs will be greater than ever.
Native advertising is exploding in popularity – The global spend on native is expected to double in the next few years, rising from $30.9bn in 2015 to $59.35bn in 2018.
Website optimization for reading on the desktop web as well as mobile web –
With the increase of the average time spend on smartphones, marketers are realizing and shifting their focus towards making their website/blog mobile optimized.
Credit: comScore Media Metrix Multi-Platform & Mobile Metrix, U.S., Dec 2015 vs. Dec 2014 vs. Dec 2013
Readers need personalized and meaty content – Attention spans have fallen to goldfish-like levels and the potentially infinite scrolls of social media newsfeeds from almost every brand and individual the readers follow, the only aspect that’ll help your content to cut through the noise is personalized and meaty content.
They skim articles, skip posts, sometimes share articles after only reading the headline (yes, we do it all the time). In response, more marketers are now learning that meaty, in-depth and well-researched content is key, making every line and every word count.
The rise of ‘immersive experience’ content marketing – Now users want to feel that they’re doing more than staring at a phone or laptop screen and thus they are craving more immersive experiences. To accomplish this goal, publishers are now actively opting for augmented reality (AR) and virtual reality (VR) as two main technologies driving this forward. However, these two are not the only solutions to satisfy the users need, publishers are also offering 360 videos, hosting live webinars and workshops to make the users feel like they’re living in a moment. The idea is to establish high user engagement and the key is to provide some level of interaction in a way that makes people feel like they’re a part of something bigger.
Ad Revenue: One of the major online publishing challenges
Though digital has made it easier for publishers to weigh their success and provided more opportunities for them to grow their business, it does bring along a bunch of challenges that every modern publisher is now struggling to overcome. And generating ad revenue is one of the major ones.
For any publisher, be it, traditional publisher or modern day publisher, revenue generation is highly crucial. And the digital era makes it somewhat more difficult. One of the ways to generate revenue is to generation it via digital advertising (search advertising & display advertising, in most of the cases) and almost all the publishers indulge themselves in it.
How do you generate revenue?
The percentage of modern publishers leveraging native advertising to generate publishers is huge. What’s being embraced by them is a mix of native advertising, sponsored posts to create an interactive income stream in the era of social media and Buzzfeed. Native advertising allows them to generate ad revenue by not only leading advertisers their platform but also offering their editorial expertise, brand reputation, and audience. Some of the publishers like Mashable, Forbes are also seen to be successfully running Sponsored content on their sites. Modern publishers are treating their site as a platform instead of just a billboard. A platform where they can bring relevant advertisers to have a meaningful dialogue with their community without disrupting them. Choose from the list of top 111 adnetworks.
However, native advertising is not all goody goody as it appears to be. There’s a lot more to it that does spark some complaints.
With 16% of publishers saying that they’ve received customer complaints because of native advertising, one thing is sure that native advertising is not every reader’s or viewer’s cup of tea. Another concern for the publisher is about blurring the lines between commercial and editorial, to avoid making their audience feel deceived by poorly labeled ad content.
Quick question – How do you label your native ads?
If we want to take a step further to understand the current and the future scenario of native advertising, then this report by the Magazine industry must be referred. This report provides following takeaways-
Native Advertising will grow and add value
According to the report, 52% of publishers already offer native advertising as a service and another 37% are likely or most likely to add the option in the future. In addition, those who currently offer the service expect that 30% of their overall ad revenue will come from native advertising in 2018, which is up from 19% in 2015.
Facebook and twitter are some shining examples of native advertising.
Some publishers don’t label native advertising content
More than half of publishers say they label native advertising pieces as “Sponsored Content” to differentiate it from editorial content. However, 11% of publishers say they don’t label native advertising content at all.
Native advertising can take many forms but digital and printed articles along with video based content performs the best.
According to the report, publishers see online articles (66%), video content (61%) and printed articles (50%) as the most effective types of native advertising content.
“With newer, better ad revenue models around subscription and native ads. Not enough publishers are focusing on innovation around how they can get customers and businesses to pay. The right blend and a new set of products are required.”
Founder, Youth Ki Awaaz
Storytelling in an absolute must
Unfortunately, many publishers find that convincing their advertisers to tell real stories in their native content is difficult, with 37% saying it’s one of their biggest native advertising challenges. Using overtly promotional language is not how you tell a story—or get your audience to connect with your brand. Telling real stories is a great way to engage with your brand in an authentic way, while also providing them with information and that entertainment factor.
Paywalls and Content Lockers / Subscription Models
If you have been thinking that the only source for you to generate ad revenue are advertisers then you are mistaken. Some of the publishers have now moved beyond this and are now keen on earning ad revenue from their readers than advertisers. Some of the methods that are being tried by them are Paywalls and subscription models.
“Irrelevant ads are the worst dampeners for user’s experience on your website. This is where native content and ads are replacing dogmatic display banners. The coming year will see digital ad pie growing at approximate of 28-42% as per the best-made estimate but the future will only be by Content, Data Analysis, and User Profiling. These will very fast evolve as the barometers of the digital ad space. “
Regional Head, Manorama Online
For those who are unaware, paywalls and subscription model are a way for publishers to drive more user-generated revenue directly or capture valuable user data that can also be monetized. In simpler words, the subscription model for paywalls is asking readers to pay for reading a content. The types of paywalls includes strict paywalls (all content must be paid for), metered paywalls (a limited amount of content is free), and the freemium content model (a blend of free and premium content is offered).One of the earliest examples of this was WeChat testing paywalls for publishers. It is seen as one of the more positive developments in recent years. Then why is this a challenge?
Only 25% of US millennials pay for some sort of digital news service (newspapers, magazines, or news apps), according to a 2015 survey from the American Press Institute. Meanwhile, 55% of them pay for entertainment content. As paywall and subscription model works for traditional publishers, but might not work for digital natives, many publishers with millennials as their target audience has seen to be facing some issues.
Such stats are forcing the legacy publishers to reevaluate their existing paywalls and subscription offerings in an effort to drive up new subscribers. Likewise, digital-native publishers that have historically shied away from paywalls are now considering alternative pay-for-content models like micropayments, user-data exchanges, and membership programs that could attract millennials.
However, there are publishers like Financial Times, that nailed paywall and subscription model. And this is what they did to win the battle against paywalls
- FT focused on creating non-commodified content.
- Leverage user’s online behaviour – what time of the day do people read the most, how they browse, which content consistently surfaces and why
- Bundle additional services
- Tilt the ad revenue balance towards content from advertising
- Access to live events – TED style forums, celebrity talks, music concerts, etc.
Affiliate marketing is now viewed as a powerful channel for consumer discovery that leads to brand engagement and incremental sales at compelling ROIs. Simply put, it is now a tried and tested method of generating ad revenue. The majority of publishers revealed that affiliate partnerships drove more than 20% of annual revenue.
Despite the numerous reasons that are contributing towards the success of affiliate marketing, there are still some hurdles that publishers are struggling to overcome. In most of the cases the challenge still remains to be technology and resources. Besides that affiliate marketing is often perceived as fraudulent; luckily, this association is becoming a thing of the past, but the negative image is hard to shake completely. Some industry experts advice to provide a disclaimer beneath your posts for readers to know that some of your links are an affiliate, to maintain the trust of your readers.
A publisher’s struggle takes another shape and goes to another level with Softwares like adblockers. An ad found on the side of a website is part of the unspoken deal between publishers and users, where users have to view online advertisements in exchange for free content. It’s through this arrangement that consumers have been able to enjoy free content for the last decade. However, with the advent of adblocking software, which allows users to bypass viewing ads, this unspoken deal is at risk – and it will end up hurting both publishers and users. If consumers want to continue to enjoy free content, something needs to change – and fast.
If I speak on behalf of the readers then I’d definitely put an emphasis on the usage of ad-blockers to simply read and view the content without as interruption of digital ads.However, It is one of the biggest online publishing challenges because these ads help them generate ad revenue. Adblockers have the potential to make a business lose 23 to 30% of their revenue while the cost of their goods remains the same. A study from Princeton showed that websites which publish content and are dependent on ad revenue use trackers the most.
According to a study by conducted by PageFair, India alone has more than 122 million users using ad blockers. About 25% of Indians in a study said that they were somewhat aware that their mobile bills are increasing due to ads and upset by the brands consuming data through video adverts.
And in order to overcome this struggle some of the leading publishers like Times of India, Economic Times, Live Hindustan and Hindustan Times are now asking users to turn off their ad blockers to read their stories on their websites.
In 2016, 70 million people in US started to use ad blockers which is a 34% increase from 2015. By 2020, its is estimated that websites worldwide would lose more than $27 billion on ad revenue! According to PageFair – an analytics platform that publishes annual reports on ad-blocking, India has the second-highest number of people who actively use ad-blockers on mobile web (122 million) lagging only next to China’s 159 million. While across the globe, 22% (419 million out of 1.9 billion smartphone users) block ads while browsing through web.
How some publishers are dealing with adblockers
- Deploying anti-adblocking software on their website
- Publishers, such as Forbes, have banned users from using adblocking software. Last December, the business news site greeted desktop browser blocker users with a message on the welcome screen, asking them to disable their adblocker before visiting the site.
- Charging a subscription fee to combat lost ad revenue is another method to overcome the loss made by adbllockers.
The bottom line is that finding the perfect blend for revenue generation is tedious and difficult but it it surely the best possible way for digital publishers to rake in as revenue.
Read the next part addresing page load time as a SERP challenge for publishers and how AMP can help deal with it.