This is an excerpt from Owning Your Audience is the New Black, a brand new white paper, available to download now for deeper analysis, including more data points, market research and relevant case studies.
We have all been following the coverage about the latest Facebook bombshell related to the data leak with Cambridge Analytica this week. But let’s face it, if you’re a media company, the bigger scandal of the year has been Facebook’s abrupt change to their algorithm which has deprioritized publisher content in its News Feed and put publishers like Little Things out of business overnight.
So why did publishers rely so heavily on Facebook? It’s simple. Facebook and other social platforms offered a simple proposition: they aggregate audience across devices so media brands could focus on publishing great content. It was a win-win and worked in everybody’s favor, for a time. In the process, publishers gave away long term audience growth to 3rd party aggregators like Facebook, in exchange for unsustainable boosts in short term revenue.
Like any new source of revenue that explodes over a short period of time, the music has stopped, and there were 3 major consequences for publishers.
1. Gave Up Leverage to Grow Audience
By relying on third party platforms, publishers quickly scaled their digital content production capacity to grow traffic across many device types. However, brands gave up the ability to grow a meaningful audience. Pubs are renting the audience, not owning it. So once Facebook changes the algorithm, POOF! traffic and revenue can disappear overnight.
2. Lost Control of How Your Brand is Presented to Your Audience
A hallmark of great publications lay in their editorial. Beyond the content, the layout, the visual aesthetic and the curation were all key components to the value of the product. With AMP and social media feeds, content loses its brand identifiers. Suddenly, users consider Twitter as the premiere destination to read the latest sports analysis, not ESPN, Sports Illustrated or The Sporting News.
3. Monetization on Social was Always Half Baked
Social media pushes a ton of impressions for your content, but social engagement struggles to convert traffic and yield meaningful revenue growth. With average CTRs at under 1% and social video products a complete flop, publishers have had to eke out margins on timeline content and instant articles. Meanwhile, Facebook and Google have captured the lion’s share of advertising growth.
The media industry is now hungry to take back its audience from technology companies. Here is the current traffic funnel as it exists now for most media brands:
And yet the actual user monetization funnel is the inverse:
Social and web remain important traffic ecosystems to monetize through advertising, but should be treated as important brand discovery channels. When a user signs up for email and/or downloads the mobile application, he or she becomes a member of the brand’s core audience. Converting prospects to audience is just the beginning. Now, the publisher has created a direct relationship with the end user and should move that audience to the top of a monetization funnel.
By converting as much traffic to core audience, media brands can continue to grow its most valuable segment to unlock higher Average Revenue Per User, Lifetime Value and predictable revenue.
People Will Pay For Premium Content
The most famous recent examples are both the New York Times and Washington Post, who are having gangbuster years of digital subscriber growth. However, other brands are showing that they can curate a premium content experience and build a core audience within an ad supported business model.
NPR’s This American Life offers its episodes for free over terrestrial radio, live streaming on its site and via podcast apps. And yet, the brand recently launched its own mobile application featuring all of the episodes and bonus content for $2.99. Business Insider integrates its Prime articles natively to its main feed, designating relevant in-depth coverage as for subscribers only.
Finally, Bloomberg Businessweek offers a twist on article metering in its mobile app. After users have run through their allotment of 2 free articles, they can submit their email or social credentials to extend the preview for another 2 free articles. Offering a direct incentive for registration not only grows the brand’s core audience, but significantly improves in-app conversion rates to the tune of over 30%. Since the majority of prospects purchase an annual subscription, this is a high leverage LTV booster.
1. Impress Your Traffic So They Buy into Your Brand
As exemplified by Little Things, too much social puts your brand at risk. Third party aggregators will give your publication access to tremendous scale, and the goal is to present an enticing value proposition and convert a % to your owned & operated ecosystem (site, email, apps, OTT, etc.) So start building that content conveyor belt to get in front of your prospects. Then, it’s as easy as ABC: Always Be Converting.
2. Create a Plan to Distribute Everywhere
Smartphones will remain the primary touchpoint for most consumers into the near future, but device fragmentation will continue to escalate, as will the volume of content and advertising fighting for user attention.
You have to future proof your brand, and your insurance policy is platform flexibility. Alexa will not be an ROI channel for all pubs, but your organization should have the capability to test & learn if you have a meaningful opportunity. The same holds true for VR, AR, Wearables, Connected Cars, and what’s beyond.
3. Continually Monetize Your Core Audience
Finally, continually grow that core audience and develop a replicable monetization flywheel of premium products and experiences for which users will pay out of pocket. Every strategic decision you make should fall into one of two categories:
The Facebooks of the world will come and go, but your core audience represents the sustainable lifeblood of your business and margin. It may sound simple, but this is the key to building a sustainable media brand in the multi-device economy.
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Download your Owning Your Audience is the New Black white paper now for a deeper analysis, including more data points, market research and relevant case studies.
If you prefer to watch video during your next lunch break, check out MAZ’s Chief Revenue Officer, Shouvik Paul giving this presentation at the March 2018 Digipublish conference below.