During the CEO Panel at the March 2018 Super Niche conference, Ted Williams, CEO of the Charlotte Agenda, mentioned that reader revenue is what “keeps [him] up at night.”
Don’t toss and turn over this issue – protect your future by generating reader revenue now.
Digital reader revenue comes from charging money to access premium content behind a paywall on your website. The most famous example is the New York Times’s digital subscription. According to our 2016 research study, only 16% of publishers have a content behind paywall. This represents a multiple billion–dollar opportunity for the industry at large!
Let’s face it, selling digital advertising isn’t getting any easier. Digital advertising will increase by 16% this year, but you won’t see your fair share. That’s because Google and Facebook will take the vast majority of digital ad spend – as much as 80% of the pie. The tens of thousands of other media companies are fighting over that little remaining slice. Imagine being at a Thanksgiving dinner with 10,000 people and two people ate 80% of the pumpkin pie – that leaves just a few morsels for everyone else.
So how can you compete with the two hungry hippos named Google and Facebook? Native advertising is a good start, but ultimately you’ll want to think about generating revenue directly from your digital readers.
Clark Gilbert, a Harvard Business School professor turned media executive, led the digital transformation at Deseret Media. He proved that for publishers to survive, at least 33% of total company revenues must come from digital, no more than half of your digital revenues should come from display ads, and all media companies should be growing the digital part of their business by at least 10% per year.
An important note on expectations: don’t count on 100% of your visitors subscribing. Set a realistic vision. My experience shows that if you can eventfully get 10-20% of your monthly unique visitors to pay, you’re going to be in good shape.
I call this top 10-20% of your readers your “whales.” Talk to them, figure out why they love your brand, and how they use your publications to solve real problems. Use this insight to determine what premium content will be placed behind the paywall. Usually this is longer-form, richer, more advanced material.
If you successfully implement a digital reader revenue program, there is a halo effect with traffic. You will increase your overall traffic, and thus overall ad revenue. Why? Because you are going to give your “whales” exactly what they want. And they will reward you with not only reader revenue, but also favorable word of mouth, social sharing, and ideas on topics to write about and products to launch.
What are you waiting for? Start planning your reader revenue streams before Google and Facebook steal all your ad dollars, and it’s too late.
Rob Ristagno is the CEO and Founder of The Sterling Woods Group, a firm that builds new revenue streams for media companies and publishers. He is an expert in direct monetization of content. Prior to creating The Sterling Woods Group, Rob served as a senior executive for several niche media and e-commerce companies. He most recently was the Chief Operating Officer of America’s Test Kitchen, considered to be the gold standard in the niche media world for building diversified – and often digital – revenue streams.
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