It’s time to abandon the notion that newspapers are transitioning to digital publishing; it’s already happened. For the past several years, the industry has slowly but surely adjusted to the new digital direction like a boat that’s getting up to speed. Unfortunately, revenue has bobbed along behind it in a life raft that’s always in danger of up-ending.
Perhaps the most difficult challenge in this digital progression has been one major realization: the news ship was leaving the harbor, whether or not its most valuable cargo was on board. Publishers who had some success with new revenue-generating experiments stayed afloat. Others only treaded water or sunk altogether. The industry seas changed rapidly, but revenue didn’t. And that left a major imbalance.
There was no stopping the shift to digital because that’s what readers wanted. Publishers once steered the vessel where they decided it should go. Readers followed, along with revenue, because there were few other options. But that model is as outdated as the paddleboat. It works for some, but it’s mainly for nostalgia.
Publishers are in control of newspaper revenue campaigns, but readers control the actual revenue. There are too many choices online now, most of them free, for the audience to be perceived as even remotely captive. But this new era isn’t all gloom and doom. Far from it. With a brand new course, there are always brand new choices to be made, chances to take, and treasure that’s waiting to be found.
If You’re Thinking About Digital Publishing, You Might Already be Behind
Old habits die hard. That’s an unfortunate truth in newspaper publishing, and it’s affecting the way that much of the industry has approached revenue since the digital revolution began. The new direction was already underway before some of the biggest problems with online revenue were realized.
Since then, it’s been a game of catch-up that’s fraught with peril. The New York Times says that advertising for the web has “always been unpredictable,” and now it’s in “treacherous” waters territory.
Newspapers on the web didn’t wait around for the industry as a whole to get on board. They couldn’t. Readers demanded it, and the publishers provided it. Revenue was an afterthought because there wasn’t enough time to sort it out in advance. But who could have predicted that readers would also shape the revenue options that the industry had counted on?
Banner and static ads already permeated the web. But they couldn’t hold their own with newspaper readers. Unlike a hard-copy paper, these ads were easy to eliminate. Ad-blocking software wiped them out, and with it the revenue that might have come.
Some newspapers have fought against ad-blocking software, with varying degrees of success. In May, The Washington Post wrote that the Newspaper Association of America had filed a complaint with the FTC, asking the agency to investigate ad blockers and their “paid whitelisting” services. Many publishers view whitelisting as more of a scam.
But the more that the industry pushes, the more that readers push back. New and inventive ways to generate revenue have become vital. Fortunately, digital offers numerous options for publishers as well as readers.
Advertising Options that Work for Publishers
The first thing that publishers need to weigh are the facts that print still generates the largest portion of ad revenue and print is slowing down. It’s still incredibly profitable, and the largest portion of ad revenue is still generated the old-fashioned way. But digital is growing at least as fast as print is declining, if not faster.
The Pew Research Center explained in their State of the News Media 2016 report that “print circulation makes up 78 percent of weekday circulation and 86 percent of all Sunday circulation.” And only one in four revenue dollars came from digital in 2015. Of course, the tide is continually changing. Digital is improving, even with its ups and downs, while print only declines.
Sponsored content in the form of native advertising has gained a lot of attention in recent years. It provides what both newspapers and readers need: ad revenue and valuable content. And that touches on part of the reader-centric focus of this new generation in newspapers. Because the audience isn’t captive, they need a reason to stick around. The older “infomercial” style native ads won’t cut it for long, but the model might. That’s especially true when the advertiser has a following and a trusted name.
Programmatic advertising can give publishers a healthy revenue boost while taking some of the load off the ad sales department. When an advertiser uses the programmatic option for ad buys, their ads reach the most appropriate audience automatically.
This course helps large publishers, and it helps smaller ones with small and growing audiences stay more competitive with the big names in legacy media. AdExchanger says it can “bring in ad revenue for a new site quickly.”
Programmatic recruitment advertising is also the perfect companion for publishers who operate an online job board. The additional revenue generated by recruitment classifieds is almost effortless. Advertisers make an ad buy, and the programmatic technology automatically places it in the best location. Publishers don’t have to worry about direct sales.
Ad revenue is increasingly automated because it’s more cost effective, helps spread the wealth more evenly, even with smaller publishers, and it saves the advertisers money, too. Within the next four years, it’s expected to account for the majority of online recruitment advertising. It’s an all-around win.
The Relentless Paywall Problem
In the face of a battle over advertising, many newspapers took off like a speedboat toward the next big thing. And that was the paywall model. It made perfect sense, too.
Readers had subscribed to print copies for generations, so they might have been just as likely to take an online paid subscription. But the rooster tail that arced behind in the water nearly sank a lot of revenue hopes. People don’t always want to pay, and they often resent being forced to.
The problem with paywalls is that people who use the Internet are accustomed to getting content for free. It’s everywhere. What’s free might not always be accurate, thorough or generally considered good reporting. But it’s always available, and it’s always generating more and more for readers who are hungry to consume the news.
Some newspapers have gotten clever with paywalls. Readers might get part of a story, then be asked to subscribe to get the story in full. Or they might get a small number of articles for free each month before the paywall blocks access. Another model gives readers access to only certain content, while the rest of the site is tucked neatly away for only paid subscribers to view.
It’s a work in progress, but it has merit. Digiday says metered paywalls, including mobile, based on the volume and type of site visits are working for some newspapers in France. Libération’s head of digital marketing explained that while some readers did drop off, they weren’t the loyal readers that they wanted to target anyway.
Techdirt takes a harsher stance against paywalls, relying heavily on the fact that readers resent it, and will go elsewhere for news. Which they largely do. Thing is, quality of content can sway the type of readers who will pay for access.
Content Quality and Adaptability are Worthy Cargo in Ad Revenue’s New Journey
Warren Buffett has stressed again and again that quality will bring the readers and quality will make them loyal. Whether it’s a national publication or a small-town paper, there is valuable content to be written and readers who want it. Cutting back on the quality of editorial staff and writers help some newspapers cut corners while figuring out the revenue problem. But it will also diminish the publication’s value. The less that you offer, the less likely readers will be to pay for it.
Revenue is the predominant issue in the rough and churning waters of the newspaper industry. Everything has changed, or nearly so. Except, of course, the public’s need and desire for relevant, high-quality content.
This shift into digital publishing doesn’t equal fewer opportunities. If anything, it means more. But the publishers who resist change are much more likely to succumb to red ink on the books. Just consider Gawker Media.
The Times says that in 2014, Gawker’s founder, Nick Denton, scolded his staff about “giving in too fully to the influence of platforms.” Facebook, meanwhile, had been growing its relationship with the industry in new and inventive ways. In 2015, Denton decided that perhaps progress wasn’t all bad. But perhaps it was too little too late. In August of this year, the company was sold in bankruptcy to Univision.
Voluminous ad revenue is going to Google and Facebook now, and Facebook is working diligently to keep its social media users from clicking through. Zuckerberg and his team want publishers to post directly on the social media site. And that opens up the opportunity for revenue share.
The possibilities are growing, and there’s a vast expanse ahead. Who will stay afloat and who won’t largely depends on the ability of publishers to stay flexible and adapt to the ever-changing waters where the readers are.
Publishing is a tech industry now. And if there’s anything constant about technology, it’s that it always changes. So the days of running tried-and-true print ads might be slowly coming to an eventual close. The good news is that there is a much larger potential for growth than ever before.
In years past, publishers could sell more ads. Today, you can develop entirely new revenue streams that revolve around what readers genuinely value and will pay for. The future isn’t a problem. It’s an opportunity to sail on to better and better destinations.
If you’re interested in making the most out of this interesting age in publishing, you’re in the right place.