With ad revenues in decline, publishers are looking at alternative revenue streams, writes Ron Nussey. A recent forum at the AOP explored some of the options.
Has media grown over-reliant on advertising, and has the time come to rethink your business model?
On the buy side, agencies are themselves diversifying - WPP investing in TV formats and BMB said to be on the verge of buying a PR firm.
Last year’s Content Census of AOP members’ businesses showed us that charging for archives, apps and special reports all ranked highly for the 70 per cent of respondents who, at that time, were either already charging for content, or had plans to.
Is it any wonder that publishers are looking elsewhere for revenues, when even advertising stalwarts like Martin Sorrell suggesting gating content is a no-brainer?
At the AOP’s forum this month on diversifying revenues, we heard two sides of the argument from the Times and the Guardian, two mainstream publishers with different business models to achieve the same aim; who came together to discuss gated, paid-for content and Open Platform APIs.
Rupert Murdoch clearly believes consumers are willing to pay to be entertained and informed, and wants to put value on his publications’ content. The Times is aiming to build a close-knit and highly influential community; while The Guardian editor-in-chief, Alan Rusbridger is an advocate of open, or ‘mutualised’ journalism.
Both approaches have reader engagement at their heart.
Another, lesser known (but no less impressive) foray into non-ad-related revenue was also presented at the Forum: Incisive Media’s ITHound.com.
A vertical search engine for IT professionals, working on a cost per lead basis, not a million miles from Google’s AdWords model, ITHound has transformed editorial into a “profit centre”, with clients even commissioning extra content, then promoting Incisive’s brands to customers on their behalf.
As Incisive’s Data Group Publisher, Tom Wright pointed out at the event, “the lessons learned in B2B apply to B2C too”.
While the publishing world waits to see if the News International and Guardian models pay off, there is conviction that product innovation, audience understanding and premium content hold the key to the future.
Read more about this event: Diversified Revenues in 5 Simple Steps