The Virtuous Cycle

:
Maximizing Revenues Beyond Ads
By Dorian Benkoil April 23, 2009

Print Revenues are Falling

The Virtuous Cycle ©

Internet Revenue is Growing
US Online Ad Spending As a Percent of Total Media Ad Spending
16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2007 2008 2009 2010 2011 2012 2013

Source: eMarketer.com

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Newspaper Websites Often Lead
• 44% of all U.S. Internet users visited a newspaper website in January. • Newspaper website growth outpaces many other categories. • Newspaper websites are consistently among the top-ranking nationally and locally
Sources: Comscore, Poynter Institute, Follow the Media

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So Why Isn’t That Great News For Newspapers, Online?

Source: IAB

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Ads Are Not Enough
• Ad growth is declining. Growth went down some 50% from 2007 - 2008. “After years of soaring growth, online advertisers have started pumping the brakes.” eMarketer • • -

For many newspapers, ad revenues are down. NY Times revenues slid 5.6 percent to $78.2 million from $82.9 million. There is constant downward pressure on prices. “The supply [of advertising] is just growing so fast that the value of the inventory is going down.” - Stephen Brill

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So What Can You Do?
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Create a Virtuous Cycle
Advertising Memberships Community Your publication is the BRAND at the center Services

Events
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Subscription Products

Optimize Advertising
(and everything else)

• • • • • •

Display sold directly Networks Remnant Email E-Commerce: Worth more than ads? Use the “cascade”

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Optimization in Action
• Create a Cascade of Networks
– High Value Vertical (IDG, Glam, etc.) – Moderate Value Horizontal (Burst, Adsdaq, etc.) – Auction-based, remnant (Ads.com, Google.) – E-Commerce in the mix

The Virtuous Cycle ©

Sample Ad Network Data
RECENT AD PLACEMENT REVENUE DATA FOR ONE SITE SECTION One Month (Late '08) Placement 300*250 Network Network A Network B Network C Network D House Ads Revenue Fill Rate Avg CPM CTR $ 603.92 27.18 1.00 $ 653.11 33.63 1.00 $ 70.93 28.7 0.72 N/A N/A 10.49 <-- Imputed revenue $ $ $ $ N/A 1,327.96 659.70 665.63 29.04 15.97 100 30.93 21.77 20.2 17.1 10 1.25 0.28 0.20

Total Rev for placement 160*600 Network A Network B Network C Network D House Ads

Total Rev for placement 728*90 Network A Network B Network C Network D House Ads

$ $ $ $ $

1,370.34 650.09 910.87 109.23 126.99 N/A 1,797.17 4,495.46

100 17.76 10.43 50.2 11.1 10.51 100 1.00 1.25 0.53 0.58

Total Rev for placement $ Total Network Revenue $

The Virtuous Cycle ©

NY Convergence Example

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Services and Subscriptions
• What can you provide?
– Email – Web services (local businesses)
• Free level • Paid level

– Seminars, Webinars, Courses – Combine with events (win for all) – Data, Stats, Information

• Jobs • Classifieds

The Virtuous Cycle ©

Higher Value

Entice Visitors Toward Value
Behavior
Purchase Repeat
- Direct - Referred - From Search - More Frequent - More Recent - Membership - Subscription - Product

Register
- Membership - Email

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Visitor Type

First Time
- Referred - From Search

Interact
-Inquired -Clicked Off -On Site

View
- More Time Spent - More Pages Viewed

Value of Paid Members
Feature Feature Feature Feature Feature Feature Feature
2500 2000 1500 1000

1 2 3 4 5 6 7

PVs Mmbrs Paid Visitors 2015 638 283 982 955 190 503 262 968 197 268 503 1206 286 470 450 1042 199 409 434 1805 432 583 790 1,134 213 553 368

500

0 Feature 1 Feature 2 Feature 3 Feature 4 Feature 5 Feature 6 Feature 7

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Events
• • • • • Marketing for the brand Sponsorship New member opportunities Sales, ancillary Ear to the community
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The Brand At The Center
Your publication is a trusted brand with a ready community that you can serve and sell to in multiple ways through digital media, creating: • • • • • • • • Multiple, Offsetting Revenue Streams Perform Differently in Opposing Conditions Separate and Improved Cashflows Increased Marketing at Low Cost Brand Luster Added Service to Community New Outreach Opportunities Mix Will Improve Your DSO and Other Financial Measures Beyond Just Ads • Cost of Sales Will Go Down As Profitability Rises
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TeemingMedia.com
    

Consulting: Strategic, Publishing and Financial Training: Editorial and Business Video Seminars: ‘Finance for Media Professionals’ Show: Naked Media (NakedMedia.org) Reports: “Content Management Systems, How to Build, Buy or Improve the One You Have”

Dorian@TeemingMedia.com 646-258-7879
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