Over the last few years, news organisations have experienced declining print advertising revenues and a maturing market in digital advertising. Those trends have accelerated, pushing advertising-led news organisations to seek a more diversified revenue model.
In the face of these new trends, news organisations must pivot from an advertising-led model to a consumer-centric model. This pivot is not simple and requires significant strategic, cultural, and operating model changes across an organisation.
As a consumer-centric model, publishers need to reevaluate what the organisation should look like, how success should be measured, alter editorial and content decisions, and decide where to invest limited resources in both people and technology. What does this mean for media leaders? What strategic changes need to be considered to evolve the business model?
Create content for audiences — not the brands that want to reach those audiences
As the model has shifted, so has the strategy behind content and the newsroom. While newsrooms do their best to maintain editorial independence, the need to generate digital volume was pervasive in the early stages of digital publishing. As a result, journalists were and continue to be measured on their ability to generate pageviews. Slideshows and clickbait gained priority over unique content, long-form editorial, and time-intensive investigative journalism.
Publishers with a consumer-led model need to think differently. Pageviews should not be disregarded, but, more importantly, content needs to effectively drive engagement and subscription conversion. Increase content that drives social shares, recirculation, newsletter sign-up, return visits, time on site, and, most importantly, subscriber acquisition.
FTI’s content quadrants help publishers understand how newsroom strategy can serve the needs of both advertising and consumer business models, while also maintaining a focus on mission-based journalism.
One approach publishers should consider is a premium content vertical strategy. By designating content that is premium and subscriber-only, publishers can establish the value of specific content while minimising impact to pageviews on less differentiated content.
Essentially, premium content trains readers to understand that all content is not equal and there is a benefit to becoming a subscriber. To execute a premium content strategy, publishers should use surveys and competitive research to determine what content can be differentiated (local news, opinion, content from journalists with loyal audiences) and what aligns with the highest willingness to pay.
Key content questions for media leaders to consider are:
- How does your editorial team think about spending newsroom resources across print and digital categories of content?
- What key performance indicators are leveraged in the newsroom? What behaviours are you incentivising?
- What content drives advertising revenues and what content drives subscriptions revenue?
Build a consumer-friendly user experience with an eye toward balancing advertising with content
The user experience can be the determining factor as to whether your site is optimised for consumer revenue. Prioritising the user experience across qualitative measurements like navigability, ad-experience, page speed, and checkout flow are critical for any consumer-led news business. A positive user experience can lead to increased engagement and conversion, while a negative experience can cause friction and frustration.
One consideration is how to prioritise limited real estate. In the past, much of this real estate has been used for advertising and affiliate engines rather than content recommendations and recirculation. However, a heavy advertising experience can have an adverse impact on the user experience, leading to lower subscriber conversion and retention as well as slow page speeds.
The user experience should be developed with the goal of keeping readers on site, driving habitual engagement, and ultimately converting them to subscribers. With these goals in mind, publishers will need to develop a mechanism for strategic decision making on often divergent user experience priorities between advertising and consumer revenue.
Key questions to consider include:
- Are we properly utilising the limited real estate to keep readers on our site?
- What is the impact of advertising on user experience? Is the advertising experience impacting subscriber retention?
- Is advertising-related, third-party code delivering a return on investment? Is it negatively impacting page speed?
Invest in consumer-centric technology, which may provide higher ROI than ad tech
As news publishers continue to move toward becoming consumer-led businesses, the technology stack of organisations needs to evolve as well. Historically, technology investments had been primarily centered around improvements to the company’s advertising technology stack. Organisations were constantly looking for ways to improve their targeting abilities, create new advertising formats, and drive ad visibility and click-through conversion on advertising.
A consumer-led business has different demands. Instead of ad tech, media leaders should consider reallocating those resources to identity management systems, dynamic paywalls, payment and subscriber management, and premium formats on higher-end content management systems. Identity management systems enable news organisations to better track, understand, and personalise experiences for their readers.
The dynamic paywall system uses data to determine when readers are most likely to subscribe and how much they are willing to pay and display the paywall to those specifications. These are powerful tools that can maximise the revenue potential of each reader, not just from a consumer perspective, but also improve the ad-targeting ability with stronger first-party data.
Key questions to consider include:
- How do you allocate resources between ad tech and consumer tech?
- How do you evaluate the technology stack and investment needs given limited resources?
- Are you effectively tracking the right data and using that data to create action?
Strategic direction starts at the top
Ultimately, scaled organisational change will require clear strategic direction and communication from the top. Investments must be made in the growth areas of the business. Those resource decisions need to be analysed and confirmed on a regular basis as the macro-environment continues to evolve.
The future of journalism is not only digital-centric, but also consumer- and audience-centric. Media leaders must understand and plan for this change to develop a sustainable model.