Digital media companies make money through a combination of business models, including digital advertising, subscriptions, affiliate linking, and ecommerce sales. A growing number of publishers are also generating revenue by hosting live events, either virtually or in-person.
The biggest difference in how traditional media companies and digital media companies make money is that digital media companies tend to have more streams of revenue. Whereas the majority of a print newspaper’s profits might be coming from advertising and subscription sales, digital publishers have more opportunities available.
As the digital media industry matures, it’s becoming easier for publishers to reach the point of profitability. Readers are more accustomed to paying for access to their favorite publications, and advertisers are more comfortable paying to reach consumers online.
Millennials are much more used to accessing news online than via print or television. That’s good news for digital media companies, and it’s causing advertisers to invest more heavily in digital platforms than print.
Advertisers are willing to pay top dollar to reach the exact audience that digital media companies are courting. They’re not just paying for display advertising, either. Thanks to innovations in the world of digital media, brands are also paying for sponsored content and native ads.
The flip side, of course, is that digital media companies today have much more competition than they did a decade ago. Publishers are fighting tooth and nail for advertising dollars, and they’re working harder than ever to reach readers online. Ranking in the first or second position for popular keywords in Google search is getting harder as more publishers get savvy on the latest search engine optimization tactics. Fake ad clicks and increased news aggregation on social media platforms like Facebook and Twitter are throwing wrenches in the system, as well.
Regardless, digital media companies that are thoughtful about their revenue strategies can make money in a number of different ways.
At Web Publisher PRO, we guide media companies through their digital transformations. Along the way, we’ve helped strategize monetization opportunities and worked to identify the most effective starting points for publishers who are interested in making money online.
Here are the most common strategies digital media companies are using to make money in 2020.
5 Ways for Digital Media Companies to Make Money Online
1. Display Advertising
By far, the most common way for digital media companies to generate revenue is by selling display advertising on their websites and email newsletters. Some publishers sell advertising in-house, with dedicated sales teams working with local businesses. Other publishers utilize platforms for running programmatic advertising on their websites. Entire books have been written about making the most out of display advertising and selling digital advertising to local businesses. What’s most important to know about this strategy is that it’s very common, it’s very effective, and it’s highly versatile. Publishers who have the largest audiences stand to gain the most by selling display advertising, but publishers of any size can jump on board with the right tools in place.
2. Subscriptions and Memberships
A holdover from legacy media, subscription sales are still an important revenue generator for media companies. Achieving profitability through subscription sales alone is challenging for online publishers, but not impossible. Publishers tend to have the most success with this strategy when they give readers a clear reason to subscribe. For example, many publishers put articles behind paywalls, so only paying subscribers can see their content. Publishers are also finding new and innovative ways to promote their subscription programs, such as by using pop up or overlays on their websites.
3. Sponsored Content
Sponsored content, or native advertising, is a relatively new stream of revenue for digital media companies. Advertisers pay for content that runs alongside traditional articles on the publisher’s website, social media channels, or in email newsletters. Sometimes the content is written by the publisher’s editorial staff and other times the content is submitted by the advertiser directly. Sponsored content should always be clearly marked, so readers are not confused about which articles on the website have been paid for and which have not.
4. Events
Before the coronavirus pandemic, digital media companies were making money by hosting live events. As live events around the world were postponed this spring, many of those events moved online. For the remainder of 2020, and possibly beyond, digital media companies will be hosting virtual events instead. While virtual events are not as lucrative as live events from a revenue standpoint, there is still money to be made. Publishers can sell tickets to their virtual conferences and webinars. While the attendee lists may be shorter, the overhead costs are lower, as well. Both live events and virtual events are an excellent strategy for publishers looking to diversify their revenue streams.
5. Affiliate Linking
Social media influencers are known for generating revenue by inserting affiliate links into their content, but digital media companies can take advantage of this strategy, too. The New York Times has been a pioneer through its product review website, Wirecutter. In order to keep their journalistic integrity intact, digital media companies should clearly mark any affiliate links they include in their articles. To learn more about how digital publishers generate revenue through Amazon, click here.
Which Strategy Is Best?
The most successful digital media companies employ a combination of these five strategies. Some publishers find the most success selling display advertising, while others have hit home runs with subscriptions and membership programs. Finding the winning combination takes a bit of trial and error. Publishers should be willing to explore new monetization strategies, even if some of those efforts don’t work out in the end.
At Web Publisher PRO, we believe that digital advertising and subscriptions are the heart of a strong online publishing business. To learn more about how our publishing partners have achieved financial profitability, reach out today.
