A new AP report tells publishers how to capture digital ad revenue

Generating online ad revenue continues to be a big concern for news outlets as they focus more on online distribution.

A new report by the Associated Press dives into the current state of digital revenue for news publishers. Digital monetization for publishers: New ways to capture consumer revenue also looks at a few tactics that have been successful in recent years.

What kind of numbers are we talking about here?

Pew Research Center found that digital advertising grew to $90 billion in 2017 – a significant increase from $72 billion in 2016. Online marketing made up an estimated 44% of all ad revenue in 2017, up from 37% the year prior.

It’s all about the audience

In the past, news sites focused on advertiser preferences and spent little time considering audience experience. Still today, as readers and consumers, we’re all-too-familiar with cluttered sites and advertising pop-up interruptions.

That’s changing.

AP highlights a “common thread” that runs between all of the news orgs they profiled: It’s all about the audience.

After Jeff Bezos bought The Washington Post, the paper fine-tuned the load time of its webpages. It reduced the average time from 8 seconds to under a tenth of a second, reasoning that even something as small as a slow-loading page could turn off readers.

The Washington Post has leveraged its expertise with the Arc publishing platform – an online publishing tool that helps news organizations with every aspect of their online publishing.

The Post says the Arc platform has helped clients double the rate at which visitors click on other articles after finishing the first.

That tricky paywall

News sites have a complex relationship with paywalls.

Paywalls can effectively turn readers into paying customers, but they also can lead to readers completely abandoning a site.

Most news outlets consider metered paywalls to be the best option. This setup asks consumers to pay after they have read a set number of stories for free.

Hard paywalls restrict all access to content for non-paying users and are seen as being less effective. They’ve become less common as a result.

The AP report selects three salient points on firewalls from a 2017-2018 Media Insights Project survey of recent news subscribers:

• Publishers should set meters to stop about five percent to 10 percent of their readers; for publishers, that typically means about five or fewer free stories a month.
• Publishers should find a way to track what motivates readers to click subscribe, rather than deciding on what’s deemed worth paying for.
• Publishers should invest in content readers engage with most; there’s a strong positive correlation between how engaged a reader is and how long they stay on as paying subscribers.

New ideas to generate revenue

News organizations around the world are coming up with novel ways to garner advertising dollars.

Jim McKelvey, co-founder of payment processor Square, created a startup called Invisibly that functions as a digital wallet, following readers across multiple news sites and giving them credit for every ad they watch.

German company, LaterPay, functions as a system of “IOUs” that are tallied up and billed to customers after they read online news stories.

Brendan Eich, famed creator of JavaScript programming language, has been experimenting with a new form of digital currency called basic attention tokens (BAT).

These tokens would allow users, publishers, and advertisers to interact in a closed economy based on voluntary participation.

Larger platforms lend a hand

It’s no secret Google and Facebook take up a huge chunk of online ad revenue.

In 2017, Google and Facebook grabbed 87% of digital advertising dollars.

According to Bloomberg, the two tech giants recognize their impact on news sites, and they’re working to offset their massive influence.

Facebook has partnered with local news outlets to help them boost their online revenue with the Local News Subscriptions Accelerator, a three-month pilot journalism project that will focus on strategies to build digital customer acquisitions.

Google launched a similar initiative in March. The Google News Initiative seeks to bolster new subscriptions and elevate quality news.

While the online landscape continues to be hyper-competitive and complex, news publishers must do everything they can to maintain profit.

Finding out who their readers are and the stories they value will make all the difference in tomorrow’s news cycle.

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Julian Dossett is a Cision editor and black coffee enthusiast. He’s based in New Mexico.