You could say that this century so far has been the best of times and the worst of times for publishers. On the one hand, we have tremendous audience reach made possible by social media and digital content distribution. On the other hand, the traditional ad-based publishing model has not translated fluently to the online realm.
At the heart of the current challenge is the massive rise in adblocking. Consumers are actively avoiding digital ads, and publishers are returning to subscription models thought obsolete after everyone decided content online ought to be free.
So what’s the real status of digital publishing revenue in 2019?
“Display ads are still the most important digital revenue stream for news publishers worldwide this year, according to polling by the Reuters Institute for the Study of Journalism at the University of Oxford. But subscriptions were a close second,” writes Nicole Perrin in eMarketer. “Almost half of respondents indicated events were an importance source of revenues, and 31% pointed to ecommerce.”
It’s great to see digital subscription revenue right up there in importance; it represents an important shift in mindset for publishers, many of whom went all-in on the third-party distribution crapshoot. As Perrin notes, big media brands like The New York Times, the Washington Post and The Wall Street Journal are seeing significant revenue from paid digital content and other revenue streams like events and e-commerce, yet smaller publishers face a hurdle there.
“Certainly the tier one publishers with really strong brands will be able to [branch out into other revenue streams] successfully, for example by creating more of an events business, or creating more of a subscription business,” said Zack Dugow, founder and CEO of Insticator.
“But it’s really difficult for smaller publishers or mid-tier publishers to get people to subscribe to their content and have that become useful revenue for them,” he said.
I liken it to the OTT streaming TV experience; you might be okay subscribing to Hulu & Netflix, but then you’re faced with a plethora of options for additional niche streaming services that aren’t necessarily expensive, but you quickly hit a saturation point. Perrin points out that subscription fatigue is a real thing in the digital realm.
The answer might lie in a return to ads, with the qualifier that they are good ads.
“Consumers will accept advertising if it fits their interest and it’s good,” said Todd Loofbourrow, CEO and chairman of video ad tech provider ViralGains. “The consumption of video advertising is at an all-time high despite ad blocking and skip buttons. If the ads are good and they fit what someone’s interested in, there is an appetite for free services supported by ads. In fact, the appetite is much larger for that kind of service than it is for premium ones.”
It all harkens back to knowing your audience, and giving them quality content – including advertising – that is relevant to them. Online or off, that’s the first place to start.