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 August 11, 2011 in Revenue Optimization, Value Rating
Not all page views have the same value. For that matter, some page views have no monetary value. To illustrate this dynamic, consider the following: would a subscriber be willing to pay the list price of $26 a year to search for product reviews on ConsumerReports.org but not allowed to actually see the reviews? The most common answer will be no. The monetary value of a “search” page view with no results is worth zero. Page views can be placed into one of two buckets, a “unit-of-value” or a “path-to-value.” Unit-of-value – A page view that enables a visitor to make a decision, complete a task, or fulfill a need (e.g., entertainment) delivers value. Path-to-value – A page view supporting [...]
by Matt Shanahan on April 6, 2011 in Paywall, Pricing, Revenue Optimization
A digital subscription to the New York Times (NYT) is now a minimum of $195/year ($3.75 per week times 52 weeks). Chatter about the possibility of low subscribership and why $40M was too much to pay is everywhere. The primary logic used by the naysayers of the NYT paywall is that not enough people will pay the minimum $195/year. Whether the paywall will succeed or not, only time will tell, however predictions of revenue based on consumer payment is simply wrong. The logic goes something like this. For consumers, digital news has an anchor price of $0.00 created by years of free access. If a consumer has to pay more, they will take their page views elsewhere. The consequence is [...]
by Matt Shanahan on November 19, 2010 in ARPU, Revenue Optimization
Posted by: Matt Shanahan In the previous blog post on unit cost of engagement, the Demand Map™ was used to correlate subscriber engagement with subscription fees. Using minimum and maximum unit costs of engagement, the Demand Map™ segments subscribers into those that are overpaying and underpaying for the service. Aligning actual subscriber engagement to be within the minimum and maximum unit costs of engagement is the revenue uplift potential for a publisher. How can a publisher quantify the uplift potential? Well, the Demand Map™ can answer that question. The chart on the right is a sample of what an actual Demand Map™ looks like. Let me explain the what you will see in the DemandMap™ The horizontal axis is the [...]
by Matt Shanahan on October 25, 2010 in Attention Economics, Revenue Optimization
Posted by: Matt Shanahan The digital world has changed the revenue dynamics for publishers. In the print world, a publisher’s shipment of physical media was the basis for generating revenue. In the digital world, availability of media is insufficient to generate revenue. In the digital world, consumption of media is the basis for revenue generation both in advertising and subscription models. In other words, engagement is the unit of monetization. For me, the most striking example of this move to engagement as the unit of monetization can be found in high profile companies like Demand Media relying on algorithms and SEO to generate engagement. Another example is how some publishers chop up their content into smaller fragments to generate more [...]
by Matt Shanahan on August 9, 2010 in Metered Model, Revenue Optimization
Posted by: Matt Shanahan The New York Times reported their second-quarter results on July 22nd. One topic of conversation on the analyst call was the metered model under development. Another topic was Internet revenues — specifically advertising. It sparked a question for me, about what the conference call might sound like in July 2011 with a metered model in place. How would the ad and subscription revenue compare? I decided to do some of my own analysis. The goal here is not to replace Alexia at J.P. Morgan, rather to examine the impact of a combined subscription and ad revenue model. To model the New York Times metering, I needed to develop some assumptions: number of readers, revenue per reader, and subscription revenue per reader. With [...]
by Matt Shanahan on July 30, 2010 in Revenue Optimization, Subscriptions
Posted by: Matt Shanahan This week, Marion Maneker wrote a thoughtful piece called “The Case Against the Case Against Paywalls.” In it, he examines the economics of abundance and scarcity in the media space. Well worth the read.
