Have you heard people say revenue diversification has never been more important? They’re correct. Digital publishers can’t afford to rely on any single stream of revenue. At least not now.
It’s not that there is a problem with any particular revenue strategy, per se. Plenty of digital news and magazine publishers are still bringing in significant income from display advertising. The same is true for native advertising and sponsored content. Subscription programs seem to be growing, as well. So what’s the problem?
If we’ve learned anything in 2020, it’s that the world can shift on a dime. Whether it’s because of a global pandemic or any other type of crisis, publishers who are working on building sustainable businesses can’t afford to rely solely on any single strategy or stream of revenue. Instead, digital publishers who hope to find lasting success in the industry need to start thinking about how they can broaden their revenue sources and diversify their incomes.
What does that mean? Advertising is still a primary source of revenue for digital publishers, but the Covid-19 crisis led to a drop in display advertising and sponsored campaigns in the first half of the year. Some experts have estimated that global ad budgets could be down by as much as 31% by the end of the year, due primarily to the pandemic.
Publishers who relied too heavily on live events and ticket sales were also rocked by the global lockdown. With the vast majority of live events cancelled or postponed in 2020, publishers have had to look beyond ticket sales. In place of in-person events, some publishers have found success hosting virtual events or summits held via Zoom. When live events do return, these publishers will have an entirely new stream of revenue to fall back on. Rather than sticking solely to in-person events, they will be able to generate revenue through virtual events, as well. If live events must be cancelled once again, these publishers will be well positioned to quickly pivot. That’s revenue diversification at its finest.
Revenue diversification doesn’t stop at display advertising and live events. If we’ve learned anything in 2020, it’s that subscription programs can really work. If there was any doubt before the pandemic, it should be squashed now. People will pay for content that they can’t access anywhere else, especially when they are sheltering in place inside their homes. Investing in a subscription program means prioritizing long-term strategy over immediate sales gains. As a publisher, it takes time to build a successful subscription program. While there are certainly tools and platforms that can help along the way, building a subscription program is about fostering a sense of loyalty among regular readers.
In 2020 and beyond, it will be important that digital publishers prioritize their subscription programs and that they find ways to diversify the programs they offer. In the past, it might have been OK to throw up a hard paywall and expect people to pay $10 a month for access. With revenue diversification in mind, today’s publishers are taking a more nuanced approach. Many publishers are introducing various pricing tiers. They are also launching add-ons, like ad-free podcasts and VIP email newsletters, as a way to encourage people to sign up.
Thinking outside the box means moving further into commerce. We were seeing publishers using affiliate links and even launching their own small ecommerce stores even before the pandemic took hold, but native commerce—which is when publishers earn commission by referring readers to external ecommerce websites—could take off even more in the next six months or so.
Ecommerce sales have been projected to increase by 18% this year, thanks in large part to changes in consumer shopping habits. It’s likely that consumer shopping habits will be forever altered, and that the trends we see in online shopping today will remain even after Covid-19 fears have passed. If that’s the case, then native commerce could help publishers play a more complete role in the customer journey and keep pace with evolving situations.
To learn even more about all the latest revenue strategies for digital publishers, reach out to Web Publisher PRO today!