As the year ends, predictions for 2015 abound. Where will newspapers source revenue in 2015? Here are six hot bets:
Most believe that mobile advertising will grow dramatically over the next few years. eMarketer predicts it will grow from its current 10% to 28% of United States ad dollars by 2018, and in Canada it predicts mobile will grow to four times its current size over the same time period.
While everyone is using mobile more and more, remove tablets from the equation and the small screen becomes the issue. This also applies to wearables.
Both can deliver headlines, but the limited space is challenging for advertisers. Coupons via mobile present a consumer-friendly and usable option, as does location-based advertising, which could also be coupons, directions, or details of current offers.
Tablet usage (not sales) is still growing faster than other devices.
La Presse+ is a free app created by La Presse, a French-Canadian language multi-platform media company. It has a daily digital edition that leverages multi-function capabilities of iPad and Android tablets to deliver the most comprehensive news, information, and advertising experiences.
The app has been downloaded more than 600,000 times since its May 2013 launch and now accounts for 52% of the newspaper’s overall advertising revenue. This demonstrates the opportunity and power of the tablet to be an amazing revenue generator.
The NPD Group finds 55% of tablet users use them to leverage some sort of video feature.
eMarketer finds that, while video is still small, it has shown considerable growth. In the United States, it represents US$4.2 billion and is currently 9.8% of digital ad revenues; it is also expected to grow to 15% by 2017.
Video has seen double-digit growth in Canada. It is expected to garner US$360 million by 2015 and it will be the fastest growing digital format in Canada through 2017.
Top newspapers have indicated their interest in video. The New York Times noted that video has become more powerful than text when referencing its digital assets.
The Wall Street Journal introduced what it is calling one of the most important initiatives of 2015: “enabling viewers to click on elements within each video which link to articles, other videos, real-time data, and other content.”
Mediative, a digital marketing company part of the Yellow Pages Group, states: “For programmatic pre-roll video, 2015 will be about deal id and private exchanges.”
“I think programmatic direct (also known as direct deal and automated guaranteed) will be the largest trend in 2015. I don’t think it is even going to be close.”— Neil Sweeney, president and CEO at Juice Mobile.
Although “programmatic” suggests little human intervention, algorithmic optimisation can only do so much. Smart optimisation by analytical “traders” can increase performance.
Advertising and media planners are also turning toward private marketplaces (to help reduce fraud) and “programmatic direct” technologies, which allow them to work directly with publishers while automating processes such as RFPs and I/Os.
As fraud goes down and premium is valued, the opportunity for further revenue increases.
This is when custom editorial content is paired with advertising in print or digitally, or both. It allows the advertiser to get its message out in a deeper, richer way. It uses the long-copy format to its strength. It should not be overlooked.
“Apart from better margins, another benefit of native advertising is the format freedom … it offers publishers’ native advertising, whether in the newspaper or online, the same opportunity to innovate with size, shape, and formats.” – Megan Brownlow, executive director, PricewaterhouseCoopers.
The New York Times and Axel Springer have invested €3 million in Blendle. It is an online platform launched in 2014 that allows readers to choose their content and pay on a per-article basis.
They pay small amounts, as low as 10 cents per story. It includes a social element where users can follow each other and recommend a story. It is already successful in the Netherlands where almost all newspapers and magazines offer micro-payments through their sites.
There is an opportunity to reconsider the revenue model and charge small amounts for each article rather than an ongoing fee or nothing.