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 September 9, 2011 in Advertising, Audience Selling, Loyalty
Click-through rate (CTR) is often used to describe the advertising performance on a publisher’s site. CTR for an ad is defined as the number of clicks on an ad divided by the number of times the ad is shown (impressions), expressed as a percentage. If the ad sales team for a publisher claims 1 million monthly unique visitors with 4 million page views and a CTR of 0.2% (or 8,000 click-throughs), the buyer might think those click-throughs are all distributed across the million unique users to yield 8,000 unique conversions. The buyer and the seller are wrong. Here’s the problem: CTR doesn’t take into account audience engagement, not to mention the fact that other advertisers are competing for the click-through [...]
by Matt Shanahan on March 11, 2011 in Attention Economics, Audience Development, Loyalty
Richard Tofel’s post this week about how digital news will be better when publishers move beyond SEO was an interesting op-ed, but most of the debate seemed philosophical as opposed to factual. Our advice to publishers: SEO is for audience development, not revenue (that could have been a softer title for this post). Here are the facts behind that recommendation. Fact: Loyal audience members do not use search as a means to engage with publishers. The striking difference between fans and fly-bys is the percentage of visits that are based on direct vs. search. Upwards of 95 percent of fly-by visits are generated from a search whereas upwards of 70 percent of fan visits are direct. Of the fan visits [...]
by Matt Shanahan on November 15, 2010 in Advertising, Loyalty
Posted by: Matt Shanahan In the debate about business models for digital publishers, the cost of audience impressions is often underestimated. The expense to create a sellable inventory of impressions requires more than content production, it also includes the cost of audience development, which can greatly exceed the cost of content production. The classic example of this content vs. audience cost dynamic is “The Blair Witch Project” movie. “The Blair Witch Project,” whose final production budget was somewhere between $500,000 and $750,000, cost over $25,000,000 to market. As the competition for audience impressions increases, the sophistication and cost of acquiring audience impressions is also increasing. This leads publishers to decide whether the return on investment from acquiring more fly-by impressions is greater than the [...]
by Matt Shanahan on September 17, 2010 in ARPU, Loyalty
Posted by: Matt Shanahan The ARPU equation has two sources of revenue: the advertiser and the audience. A lot is known and discussed about what advertisers want (e.g., quality, targeting, re-targeting, etc.), but there is a dearth of conversation around value propositions for the audience. What conversation does exist focuses mainly on convenience and ubiquity of access to media and information rather than the value of its consumption. To expand ARPU beyond advertiser revenue, a publisher has to create a differentiated value proposition of consumption for audience members. Surprisingly, few publishers have a good grasp on their differentiated value proposition, and even fewer have the data to prove it. The publishers with which we work normally discover some of their [...]
by Matt Shanahan on March 31, 2010 in Advertising, Audience Development, Loyalty
Posted by: Matt Shanahan In Chris Anderson’s The Long Tail, the theme was how low demand products could generate substantial revenue by rethinking sales and distribution. The argument is that selling less quantity but more products a company yields as much as selling more quantity but fewer products. Does the long tail apply to digital publishing? If so, how? As the mantra goes, publishers sell audiences. In every website monitored by Scout Analytics, we find an audience defined by a long tail of visitors that looks like the graphic below. From this picture the long-tail rule may be focus on the short tail. In other words, selling more frequency from fewer visitors can yield as much as selling more visitors [...]
