Thanks to mobile content, we can now check the NASDAQ halfway up Kilimanjaro or read an op-ed on Belgian foreign policy in a Milan pizza queue. In terms of distribution, the ability to deliver content to personal devices was an unprecedented achievement. But in the race to get content into every device, a key step was ignored: how to pay for it.
It’s no secret that the rise of digital and mobile (free) content had a sudden and dramatic impact on the traditional revenue sources of our news organizations. As well as people no longer buying print newspapers, the ad value of these pages fell in a heart-stopping decline.
Mobile technology took off so quickly that publishers didn’t have the mobile monetization strategies in place to make up for this shortfall in print revenue. Publishers weren’t positioned to build this technology in-house. They were set up to create content and user experiences.
Fortunately, there is now a global industry of mobile monetization technology that are helping publishers turn their mobile sites into profitable assets.
- Direct advertising
- Programmatic advertising
- Sponsored content
- Voluntary subscriptions
- Lead generation for partnered companies
2020 Mobile monetization strategiesAs mobile becomes the default medium for consuming news and entertainment, new monetization strategies have been developed specifically for mobile publishers. We're reviewing all the mobile monetization options available to digital publishers and the pros and cons of each.
Programmatic advertisingProgrammatic advertising will automatically buy space for digital campaigns for networks of advertisers rather than buying directly from publishers. Real-time auctions enable ad space to be bought at the same as a visitor loads a website, based on their profile.
Here you can see a Marfeel ad on the Vogue website. We have no deal with Vogue but we purchase inventory from a network that will serve our ad if our bid for an impression is highest for that visit, no matter the site.
The advantages of programmaticWith programmatic and real-time bidding, multiple advertisers can bid on the same impression. Knowing that a cat food advert might be more relevant to a certain audience demographic, programmatic aims to connect audiences with the right advertisers. The bidding process should help publishers generate higher revenue than traditional campaigns as specific advertisers and networks will bid up the prices for hyper-relevant impressions.
It’s this integration of unique data and personalization that saw programmatic advertising rise from 10% of digital ad spend in 2012 to 69% in 2020. Programmatic also has the advantage of replacing face to face negotiations for ad space. We might have lost some of the MadMen style romanticization of the ad industry but we gained the ability to optimize live campaigns with machine learning and AI.
The disadvantages of programmaticThe drawbacks are that the access to this valuable user data is subject to change. With browsers such as Chrome reducing the ability to track third-party cookies, technology has to adapt to keep up the same level of value.
In addition, programmatic is not entirely hands-free. It requires technical monetization teams to work with. Publishers that were able to cut sales roles suddenly found themselves needing to hire for much more technical, specified job positions. Many programmatic exchanges also have minimum traffic requirements, pulling up the ladder
Finally, the biggest criticism leveled at programmatic is that is can be opaque. Publishers deliver traffic, serve the ads, and then receive revenue. Big exchanges don’t offer much more granularity than that.
In our recent survey of publisher monetization strategies, 40% said that a lack of transparency
over the process was their biggest barrier to adopting programmatic.
Direct advertisingAnother monetization strategy that relies on digital advertising is direct. Direct advertising is the old school, face to face that we just talked about being replaced by programmatic.
The advantages of direct Advertisers agree to pay a set price CPM and the publisher will generate the impressions until the agreed contract is reached. This gives the publisher a guarantee of revenue they can expect. It's a clear and simple transaction.
Direct advertising also gives advertisers control over where their ads appear. With direct, they can work with a media group that compliments their image, and create maximum engagement with custom placements and formats. Direct deals are also a good chance for brands to occupy multiple placements on the same page to create an immersive experience. Compared to programmatic, this is total security from having your ads appearing on some low-rent junk site.
The downsides to direct
Direct can be a long laborious manual process. Anyone that has worked...anywhere... knows that getting things done is always harder than it seems. Agreeing on fees, organizing meetings, setting tracking, working out budgets means that organizing just a single campaign needs a team of people and weeks to execute.
In addition, you need connections. This means a sales team. For a smaller publisher looking to start monetizing their mobile site, trying to create direct sales connections can be a daunting place to start.
Next comes supply volume. When publishers agree to deliver a certain amount of impressions, they have to deliver them. Unpredictability in traffic and impression criteria can mean that publishers struggle to plan or get stuck with a single campaign for longer than they anticipated.
Advertising that’s not advertising. Sponsored content allows publishers to monetize while still offering content they think their users might find relevant.
Sponsored content is where a brand or company will pay to write or feature in an article that appears alongside the regular content of the publication. Also known as ‘native advertising’ publishers now have to label that this has been paid for.
The advantages of Sponsored ContentWhat this strategy offers publishers is the sense of giving their readers a little more than just unleavened ads. No-one likes ads, and to be honest, people don't love sponsored content in the same was a regular article, but a CollectiveBias report showed that 37% agreed that useful and high-quality posts negate the content's branded nature.
They can also be more tempting than a traditional ad, a whitepaper from the SSP AppNexus, showed that they saw a 9X higher click-through rate on sponsored display ads compared with typical display ads.
The Downsides to Sponsored ContentIf you thought getting a display campaign was tough, the process for sponsored content can be entering the labyrinth. High-quality, brand-friendly content has to be created and approved by both parties. This means ideas meetings, cross-company collaboration, reviews, edits, and feedback.
Then, once you navigate that, they can be incredibly hard to measure for ROI. You can show clicks but can you show sales? How often do users go directly from an article to a purchase? Mapping the journey from sponsored content can like searching for salt in soup, you know it’s in there, but you can’t see it.
Then finally, there is a risk to the publisher’s reputation. Even with labeling, not everyone realizes that these posts are paid for. No reader wants to think they were reading clean, impartial news and then realize the Pulitzer-winner behind the story was actually Anheuser-Busch. It reduces credibility in the publisher.
A paradox for publishers is that they need to charge people in order to survive, but no journalist wants to deny anyone access to their work. Some publishers feel it is required of them to give access to all and ask those that are most able to contribute financially. This monetization strategy is basically a paywall that readers can choose to engage with.
The advantages of voluntary subscriptions
Accepting recurring or one-off contributions, voluntary subscriptions, or donation requests are an appealing mobile monetization strategy because they enable publishers to remain independent.
And this isn't just reserved for small-scale niche publishers with a die-hard following. Major UK newspaper, The Guardian switched to a voluntary support model with 655,000 regular monthly supporters across both print and digital, with a further 300,000 people making one-off contributions in the last year alone. In 2019, they recorded an operating profit for the first time in 20 years and compared with a £57m loss three years previously.
The Downsides to Voluntary subscriptions
Although an encouraging example of the power of an audience, the success of this strategy is remarkable. While independent publications may be able to generate revenue— without sophisticated systems too, it’s worth adding— voluntary subscriptions require extreme loyalty and time.
For publishers looking to monetize traffic today, there are also no guarantees. And while it allows publications maximum access to their content, it also excludes them from other more certain revenue streams such as regular paywalls.
In addition to programmatic, paywalls are one of the most widely-adopted mobile monetization strategies. According to a Reuters Institute for the Study of Journalism report, (69%) of leading newspapers across the EU and US now have a paywall, in some form.
The different types of paywalls
This is a paywall that prevents you from reading any content without first becoming a paid subscriber. This is a bold move that will turn away 99% of readers.
More than just a monetization strategy, a hard paywall is a new business model that can help cement a loyal audience in a time where every other publication is striving for ever-increasing viewing figures. Alan Hunter, head of digital, The Times and Sunday Times explained some of the benefits of this model:
‘’Print is holding its own—It amazes me that people give away everything digitally and still expect people to pay for the newspaper...The journalists are not obligated to write headlines for SEO where it risks compromising the journalistic value of a story.’
A metered paywall will allow readers a set limit of free stories per month before blocking access with a paywall. This gives every reader a way into the content, but the access is whipped away when they start to rely on it.
Soft paywalls are a freemium model that splits free content and ‘premium’ articles that require a sign-up. There are no limits on the free content but users often have to at least create an account to access the premium stories.
Each of these paywalls can create a guaranteed, recurring source of revenue that comes directly from readers, not advertisers which makes them very appealing mobile monetization strategies.
The downsides of paywalls
The biggest downside is adoption. News and entertainment content is everywhere. So, faced with a paywall, 98-99% of readers are just going to look elsewhere. It also prevents the sharing of stories. Why send a link you know others won’t be able to access. Publications thriving with a hard paywall now may suffer a shrinking audience as new readers don’t get used to viewing their content. Aside from the soft paywall approach, it can take an audience of millions and an uptake rate of between 5-10% to make paywalls profitable.
Lastly, they are difficult to implement. They require recurring billing and the handling of user payment data. They need tracking tech to identify the users and the number of stories they have read. Paywalls are no small undertaking both in terms of development and the repercussions they will have on your audience.
Lead generation for partnered companies
Last up in our list of mobile monetization strategies is company lead generation or affiliate marketing. This monetization strategy used to be the domain of high-fashion or lifestyle magazines but with news and lifestyle lending, newspapers are now able to earn revenue through brand partnerships.
The advantages of Lead generation
Newspapers' role as arbiters of taste naturally lends itself to recommending the products they talked about. In this model, they would earn a commission from the traffic they pushed to these companies' sites.
With a lot of online content producers starting to include more lifestyle and consumer-based content, news organizations can now use this lead gen model as a revenue stream.
The New York Times actually purchased
a product recommendation company to lend weight to their recommendations. This means they can collect revenue from their linking program but also maintain their standards of offering expert, researched advice, leading to revenue-generating articles like this one
The downsides of Lead generation
Once again, it comes down to trust. Readers want publications to be about the story. When they are presented with content that paid to appear, it can make readers question if they are really getting the best information out there, or just a nod to the highest bidder.
Choosing a mobile monetization strategy
Blurring the lines between content and monetization is a high-risk strategy as it can render ads useless and cost them their audience.
If you’d like to know more about implementing some of the mobile monetization strategies on your own site, we recently partnered with Admonsters to create a monetization playbook. It has everything you need to turn your mobile website into a profit-generation engine.