The Virtuous Cycle: Making Money From Media
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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
The Virtuous Cycle ©
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
The Virtuous Cycle ©
So Why Isn’t That Great News For Newspapers, Online?
Source: IAB
The Virtuous Cycle ©
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
The Virtuous Cycle ©
So What Can You Do? The Virtuous Cycle ©
Create a Virtuous Cycle Advertising
Memberships Community Your publication is the BRAND at the center
Events The Virtuous Cycle ©
Services
Subscription Products
Optimize Advertising (and everything else)
• • • • • •
Display sold directly Networks Remnant Email E-Commerce: Worth more than ads? Use the “cascade”
The Virtuous Cycle ©
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
Total Rev for placement 160*600
Network A Network B Network C Network D House Ads
Total Rev for placement
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 $
1,327.96
$ $ $
659.70 665.63 29.04 15.97 N/A
100 30.93 21.77 20.2 17.1 10
$
1,370.34
$ $ $ $
650.09 910.87 109.23 126.99
17.76 10.43 50.2 11.1 10.51
Total Rev for placement $
1,797.17
100
Total Network Revenue $
4,495.46
728*90
The Virtuous Cycle ©
Network A Network B Network C Network D House Ads
N/A
1.25 0.28 0.20
100 1.00 1.25 0.53 0.58
NY Convergence Example
The Virtuous Cycle ©
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 ©
Entice Visitors Toward Value
Higher Value
Behavior Purchase
Repeat - Direct - Referred - From Search
- More Frequent
- Membership - Subscription - Product
- More Recent
Register
Visitor Type
- Membership - Email
First Time - Referred - From Search
Interact -Inquired -Clicked Off -On Site
View - More Time Spent - More Pages Viewed
The Virtuous Cycle ©
Value of Paid Members Feature Feature Feature Feature Feature Feature Feature
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
2500
2000 1500 1000
500
0 Feature 1
The Virtuous Cycle ©
Feature 2
Feature 3
Feature 4
Feature 5
Feature 6
Feature 7
Events • • • • •
Marketing for the brand Sponsorship New member opportunities Sales, ancillary Ear to the community
QuickTimeª and a decompressor are needed to see this picture.
QuickTimeª and a decompressor are needed to see this picture.
The Virtuous Cycle ©
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 The Virtuous Cycle ©
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”
[email protected] 646-258-7879 The Virtuous Cycle ©
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
The Virtuous Cycle ©
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
The Virtuous Cycle ©
So Why Isn’t That Great News For Newspapers, Online?
Source: IAB
The Virtuous Cycle ©
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
The Virtuous Cycle ©
So What Can You Do? The Virtuous Cycle ©
Create a Virtuous Cycle Advertising
Memberships Community Your publication is the BRAND at the center
Events The Virtuous Cycle ©
Services
Subscription Products
Optimize Advertising (and everything else)
• • • • • •
Display sold directly Networks Remnant Email E-Commerce: Worth more than ads? Use the “cascade”
The Virtuous Cycle ©
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
Total Rev for placement 160*600
Network A Network B Network C Network D House Ads
Total Rev for placement
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 $
1,327.96
$ $ $
659.70 665.63 29.04 15.97 N/A
100 30.93 21.77 20.2 17.1 10
$
1,370.34
$ $ $ $
650.09 910.87 109.23 126.99
17.76 10.43 50.2 11.1 10.51
Total Rev for placement $
1,797.17
100
Total Network Revenue $
4,495.46
728*90
The Virtuous Cycle ©
Network A Network B Network C Network D House Ads
N/A
1.25 0.28 0.20
100 1.00 1.25 0.53 0.58
NY Convergence Example
The Virtuous Cycle ©
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 ©
Entice Visitors Toward Value
Higher Value
Behavior Purchase
Repeat - Direct - Referred - From Search
- More Frequent
- Membership - Subscription - Product
- More Recent
Register
Visitor Type
- Membership - Email
First Time - Referred - From Search
Interact -Inquired -Clicked Off -On Site
View - More Time Spent - More Pages Viewed
The Virtuous Cycle ©
Value of Paid Members Feature Feature Feature Feature Feature Feature Feature
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
2500
2000 1500 1000
500
0 Feature 1
The Virtuous Cycle ©
Feature 2
Feature 3
Feature 4
Feature 5
Feature 6
Feature 7
Events • • • • •
Marketing for the brand Sponsorship New member opportunities Sales, ancillary Ear to the community
QuickTimeª and a decompressor are needed to see this picture.
QuickTimeª and a decompressor are needed to see this picture.
The Virtuous Cycle ©
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 The Virtuous Cycle ©
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”
[email protected] 646-258-7879 The Virtuous Cycle ©
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