More than 23 years have passed since the first banner ad appeared on Wired.com. In the time since, independent publishers have grappled with finding the best ways to generate revenue from their online properties. Subscription models eventually replaced traditional banner ads for many local publishers, but getting readers to pony up $5 per month to access content that was previously free was never an easy sell.
While banner advertising and reader subscriptions are still popular among some hyperlocal publishers, an advertiser-friendly membership model has started to pop up more frequently as a viable option for media companies looking to experiment with new revenue streams.
A membership model based on selling dedicated ad packages flips the role of the traditional reader subscription. With this model, publishers can charge brand advertisers a premium for sponsorship packages that may include various ad placements, email blasts, newsletter exclusives, social media shares, sponsored content posts, and even the first right of refusal on special sponsorships.
Although some niche publications have found success in selling reader subscriptions, general interest publications (which include hyperlocal websites) have largely struggled to attract enough paying subscribers. Even major publishers like Gannett, with more than 100 daily newspapers across the U.S. and the U.K., has just 250,000 digital-only subscribers. If a media company that large is struggling to attract paying subscribers, it’s no wonder smaller publishers are looking for alternatives to the traditional subscription model.
Creating New Opportunities
One of the hallmarks of the sponsored membership model is the exclusive right to advertise within a publisher’s daily newsletter.
Rather than featuring small ads from a dozen or more local businesses below the editorial content in their email newsletters, publishers are reaching out to top advertisers with the opportunity to become exclusive newsletter sponsors. This kind of exclusivity comes at a price, with some advertisers paying upwards of $10,000 for a single newsletter sponsorship package. At $5 per subscriber, per month, publishers would need to attract 2,000 subscribers to generate the same income as they could by charging a single brand $10,000 for a month-long sponsorship.
Although it’s most common for publishers to sell exclusive newsletter sponsorships for a period of time—usually one week or one month—these packages can also be sold around important events. For example, a costume store might be interested in purchasing the rights to become the exclusive advertiser on a hyperlocal publisher’s website during the weeks before Halloween.
In Mountain View, California, a site called The Mission sells one-week, two-week, and month-long newsletter sponsorships. The company also offers exclusive sponsorships and brand integrations within its new network of podcasts and video shows.
Scarcity, exclusivity, and alignment are all key when selling major packages to brand clients as part of the new wave of publishing membership models. Brands are willing to pay a premium when they don’t have to compete against other advertisers. The longer the sponsorship period, the more exclusive the sponsorship becomes.
Axios has found success selling one-week exclusives to advertisers who agree to sponsor the company’s e-newsletter. Having direct access to readers has allowed brands to take new creative tactics with the ads they promote, in some cases even telling mini stories within the ads themselves.
Charlotte Agenda—a hyperlocal publication with roughly 350,000 monthly unique visitors and 28,000 daily newsletter subscribers—has found success by selling custom brand partnerships, with partners like Bank of America, UNC Charlotte, and Carolinas HealthCare system. The Agenda also charges $10,000+ for custom campaigns that involve a combination of unique content, social influencer marketing, and exclusive brand events.
A membership model can open up the doors to new opportunities for business advertisers looking to flex their creative muscles, as well. Alignment comes into play when brands create ads that are tied to the content on certain webpages or in a specific edition of an email newsletter or podcast. Curated offers for readers might include links to download free ebooks from a book publisher or embedded coupons from local stores.
Sizing Up the Benefits of a Membership Model
Advertiser-focused membership models give publishers a predictable stream of revenue, which is always important when building a sustainable business. Rather than relying on click-throughs and impressions, which can vary month-to-month, publishers can sell monthly or years packages to advertisers.
The membership model also have the side benefit of driving up web traffic, since readers who would have otherwise been blocked by paywalls are once again welcomed into the publisher’s sphere with free content for all.