No Silver Bullets: A Playbook for Digital Publishers
Publishers today face a paradoxical challenge. Revenue and profitability outlooks for the industry are shaky – even as it reaches record audiences and creates unprecedented cultural impact. There is impressive audience growth in digital, but online ad-revenues and CPMs are too low for sustaining large-scale journalism.
Most publishers have not yet found the key to being sustainable in a digital environment. A number of silver-bullet solutions have been proposed in the recent past — Facebook Instant Articles, iPad apps, distributed publishing, and the pivot-to-video, to name a few. But as the ecosystem matures, publishers need a hard pivot to reality to stay sustainable.
With this in view, this post seeks to identify the factors that differentiate publishers who have made successful digital transitions from those that have not. Each of these factors is then discussed in greater detail in independent posts.
Factors that separate successful and unsuccessful digital publishers
Factor 1: Building great Owned-and-Operated Properties to reduce reliance on third-party platforms
Don’t ever tether your business to the benevolence of a third party.
– Jim VandeHei, Co-Founder of Axios and Politico
Publishers that have focused on creating phenomenal owned-and-operated properties have outperformed those that rode on the coattails of platforms.
Owning a direct relationship with users is absolutely critical for publishers. More on this here.
Factor 2: Using utility as a bridge-head to loyalty
Publishers that provide daily utility to users have (on the whole) done better than those that do not. This is particularly true for Asian publishers who serve users that do not have the buying power to support publishers through subscriptions.
For example, the Times of India drives repeat visits to the local news section of its app by providing high-utility, frequently-updated information like live Air Quality and fuel prices. Additionally, it also creates datahubs for elections and for the budget to allow super-users interested in these issues to dig deeper.
Similarly, Rappler in The Phillipines has built loyalty amongst its users — even in the face of threats from President Duterte’s government— in party by providing utility to them. For instance, its Project Agos allows users and non-profits to collaborate rapidly and effectively during typhoons.
A detailed overview of how publishers can provide utility to users and the benefits this drives will be published soon.
Factor 3: Words are not enough — tell stories with better visuals
Desk editors and storytellers of the past must evolve or perish. Publishers have historically focused on the written word, and have been constrained by column inches in print newspapers. In a digital medium that has almost infinite scope for media-forms (text, images, videos, sounds, interactives) and range (280 character tweets to 20,000 word articles), old hands must learn new tricks.
The most poorly read stories, it turns out, are often the most “dutiful” — incremental pieces, typically with minimal added context, without visuals and largely undifferentiated from the competition.
— New York Times Report of the 2020 Group
Become more competent (creating great visual stories) and efficient (doing so cheaply and on time) with visual storytelling is going to become a key competency for publishers — particularly as mediums like video continue to become more popular than the written word.
Factor 4: Diversify revenue streams
Publishers that rely exclusively on revenue from display ads will find it increasingly more difficult to survive. Successful publishers now use a mixture of display ads, native ads, subscriptions, events, and intelligence to sustain their businesses. Some examples of such businesses are below:
- The Economist (Subscriptions, Intelligence, Events)
- Digiday (Subscriptions, Advertising, Events)
- Ziff Davis (Subscriptions — Humble Bundle, Advertising — IGN, Intelligence — Ookla/Speedtest)
A detailed overview of how publishers can diversify revenue streams will be published soon.
Factor 5: Use context-driven commerce to shorten the path to purchase
Using context-driven commerce is a sub-set of Factor 4, but is important enough to warrant a discussion on its own. In the digital world, everything is is shoppable — Instagram and Facebook have started to experiment with ways to let consumers shop directly on their platform. Publishers are letting low-hanging fruits slide by not doing the same.
Context-driven commerce for events, fitness, nutrition, beauty, fashion, pollution monitoring, and more is an enormous opportunity for publishers. If they can let advertise sell products right next to a relevant article, they will provide significant value to both advertisers and users — while also gaining the resources to do more ambitious journalism.
Wirecutter (owned by the New York Times) is a successful example of this. While it does not (yet) let customers shop directly on its website, it does get significant revenue through affiliate marketing (directing users to sites like Amazon, and getting a cut of the revenue if the user makes a purchase). In India, NDTV’s Gadgets 360 and Times Internet’s Gadgets Now are both successful, growing companies that operate on a similar model.
A detailed overview of how publishers can use context-driven commerce will be published soon.
—
I’m a tech startup founder, human-optimisation junkie, and machine learning enthusiast living in Singapore. Hope you found this post useful. Do leave a note on Twitter (rishdotblog) or email me at rishabh@loki.ai to give feedback, or just say hi! :)
