by Matt Shanahan on April 11, 2012 in Advertising, ARPU, Audience Development, Behavioral Analytics, Digital Revenue Optimization, Loyalty, Revenue Optimization
Through 2015, much of the B2B media revenue growth forecasted by Veronis Suhler Stevenson shows a substantial portion will come from events — both live and virtual. Most notably, over 70% of clients are increasing investment in geographical events that can be replicated in multiple locations – geo-cloning, as one client called it. And because events require longer lead times, extensive production and marketing investment, optimizing event revenue becomes dependent on trade-offs – specifically, trade-offs between the revenue potential of various events. So how do you measure revenue potential of an event? Event revenue mainly comes from two sources: vendors and attendees. In the case of vendors, their revenue directly correlates to the number of attendees to which they gain [...]
by Matt Shanahan on March 19, 2012 in Advertising, ARPU, Digital Revenue Optimization, Loyalty, Metered Model, Paywall
From following the paywall hashtag on Twitter over the last 18 months, there has been a steady increase in the debate about paywalls, both pro and con, but mostly without any data or revenue models. Our previous research (http://blog.scoutanalytics.com/advertising/the-digital-drop-off/) showed that the move from print to digital significantly reduces the revenue capacity of a publisher. The reality is this: Without a fundamental change in digital ad units and their revenue production, publishers have no choice but to pursue alternate revenue streams. So where do publishers go when advertising revenue becomes unsustainable? Higher-margin marketing services and subscription revenues are quickly becoming the answer, also known as a metered paywall. Not all publishers will be able to implement a full subscription model. [...]
by Matt Shanahan on March 2, 2012 in Advertising, ARPU, Revenue Performance Indicators
Do publishers measure what matters for digital? If profit is the goal, then monthly unique visitors and page views are not relevant performance indicators. What matters most for profit is revenue capacity and contribution from the loyal, profitable audience. When a Fly-by is worth less than $0.20 and a Fan is worth 250 times more, it’s hard for publishers to make profitable revenue off Fly-bys. Unfortunately, few publishers put a monetary value on their audience members or develop strategies to build and reward loyalty that yields profits. The monetary value of an audience member is defined as the combination of advertising and direct revenue (e.g., subscriptions, events, e-commerce, etc.). However, analyzing the relationship between loyalty and advertising revenue demonstrates the [...]
by Matt Shanahan on February 3, 2012 in Advertising, Audience Development
The anonymous audience is a revenue anchor that pulls down business performance for media publishers. A behavioral analysis of fly-by visitors highlights just how much of a drag they are on the revenue model. A robust revenue model creates multiple streams of revenue from an audience member. The revenue potential of an audience member is defined by both the engagement behavior with media (i.e., advertising revenue) and the purchase behavior for events, daily deals, commerce, or subscriptions (i.e., direct revenue). To quantify the revenue drag of the anonymous audience, Scout Research analyzed the revenue potential of an anonymous visitor compared to a registered visitor at every level of loyalty (i.e., fly-bys, occasionals, regulars, and fans). The infographic to the right [...]
by Matt Shanahan on December 2, 2011 in Advertising, Revenue Performance Indicators
Engagement rate, the percentage of the audiences that consumes a particular piece of editorial content, creates the biggest squeeze on digital advertising profits. The advertising profit contribution of media is defined by the advertising revenue produced from page views minus the costs to create the content and sell the advertising. Unlike print media that uses circulation and pass-along rate to define sellable inventory of page views, digital media uses audience size and engagement rate. While pass-along rate acts as a page view multiplier on circulation, engagement rate is a page view filter on audience size. The consequence is that engagement rate puts a squeeze of advertising profit margins. To illustrate this point, the infographic below benchmarks advertising profit contribution of [...]
by Matt Shanahan on November 15, 2011 in Advertising
Debates are surfacing on the transition strategies to digital publishing such as paywalls and social media. Strategies are usually characterized as a response to the democratization of distribution that increased competition and lowered barriers to entry, but there is a more fundamental disruption that occurred – the basis of monetization has changed. Digital has shifted monetization from distribution of the media to consumption of the media, which is not only a disruption, but a drop-off. In the print revenue model, a publisher could monetize delivery of advertisements by sending them in the mail and claiming impressions based on circulation and pass-alongs. In the digital revenue model, a publisher can monetize delivery of advertisements only when a visitor consumes a page [...]
by Matt Shanahan on November 7, 2011 in Advertising, Audience Development, Behavioral Analytics
Building on our original findings in 2010 about audience loyalty, scout® research has been looking into what creates loyalty. Understanding the nature of loyalty, would obviously allow a publisher to nurture and grow the audience. For instance, is a fan a fan because she reads all the homepage articles? Or is she a fan because of a certain section of content? So what did we find out? Site-wide fans typically make up 20-30% of the visitors. Site-wide fans are the ones with a broad reading habit. Think of them as the cover-to-cover reader. In contrast when you analyze most fans’ behavior to figure out what they are a “fans of”, it is typical to find an individual fan has an [...]
