Is Non-Ad Based Monetization the Future of Digital Publishing?

Is Non-Ad Based Monetization the Future of Digital Publishing?

In 2018 and beyond, it’s becoming increasingly important for digital publishers to monetize in creative ways. Advertisements may remain a strong backbone for many publishers – particularly branded content – but other methods are serving as fine complements. Or, in some cases, whole revenue models on their own.

Here are several non-advertisement monetization methods that are proving to be viable opportunities for publishers.

Digital Subscriptions
Initially met with skepticism,¹ digital subscriptions and paywalls are fast becoming a powerful tool to generate revenue from publishers’ websites.

The Guardian, which grew its digital subscription base from 15,000 to 200,000 in 2016², uses a three-tier subscription model to drive readers to sign up.

The three tiers include: “Supporters,” “Partners” and “Patrons.” Supporters pay £5 per month, essentially to remove ads. Partners and Patrons pay larger monthly fees in exchange for ad-free content and other perks like subscriber-only event tickets or free books.³

Learn how The Guardian is also leading the industry in visual journalism, using it to engage users and turn them into loyal audiences.

“Guardian Membership is part of our focus on finding new, meaningful ways to monetize our huge audience while protecting and affirming our commitment to open journalism without building walls around our content,” said David Pemsel, deputy chief executive of Guardian News & Media.⁴

Premium Niche Subscriptions
Other publishers, like Politico, are driving digital subscriptions by creating gated premium content for niche audiences.

Politico, a politics publisher, offers a paid edition called Political Pro – premium content laser-focused on providing unique content for government workers, lobbyists and policy analysts.⁵

A five-account Politico Pro subscription costs roughly $8,000 per year, up from $2,495 in 2010.⁶ Politico Pro drives nearly half of the publisher’s revenues despite only 20,000 of its 30 million unique monthly visitors subscribing.⁷

“There’s so much growth at the higher end that it makes more sense for us to target those customers,” said Bobby Moran, Politico’s VP and GM. “That’s not to say there isn’t a long tail. But we’re more focused on the narrow, niche audience.”⁸

E-Commerce Affiliate Marketing
E-commerce, too, has become an important tool to generate website revenue for many premium publishers.

In 2015, The New York Times acquired Wirecutter,⁹ a product review website that was initially focused on tech gadgets, but has since expanded to other areas like health, fitness and baby products. It generated $150 million for the newspaper that year.¹⁰

Wirecutter makes money by including links in its reviews to e-commerce websites like Amazon, L. L. Bean, and Rei. Each time a Wirecutter reader purchases a product through one of the linked sites, the Times takes up to a 10 percent cut, depending on the retailer. If a user navigates to a linked site, but does not make a purchase, The New York Times does not make any money.¹¹

The publisher’s aim is to maintain readers’ trust by providing quality guides linking to quality products.

“We’re helping readers navigate a really complicated thing and you don’t really know who to trust,” said Karron Skog, an editor who coordinates between the Times and Wirecutter.

Buy-On-Site
In addition to using affiliate links, like The New York Times, BuzzFeed has expanded its e-commerce business to include its own proprietary products, which are available on a BuzzFeed-owned website.¹²

“We wanted to have full control to experiment and figure out what worked best for our company and customers so as a result we felt that building our own site on Shopify best fitted our needs,” said Tessa Gould, a former head of commerce at BuzzFeed.¹³ “That’s not to say we won’t sell elsewhere in the future; we’re always looking into selling on other platforms and re-evaluating our strategy as we build it out.”

Gould describes the e-commerce initiatives as a “proactive” commerce strategy, rather than a “passive one,” which relies solely on affiliate links.¹⁴

However, using e-commerce to generate revenue for websites isn’t the easiest undertaking.

For one, it faces platform dependency issues – for some publishers, Amazon represents 80 percent of affiliate revenue, according to Max Willens, platforms reporter at Digiday.¹⁵ Additionally, increased mobile web use means that a user could originally find a product through a publisher’s link, but complete the purchase on desktop – without navigating through the publisher.¹⁶

Still, when executed well, it can certainly be a lucrative revenue stream,¹⁷ making it another monetization opportunity that looks beyond the banner ad.

1. Greenslade, Roy. “Stop Taking the ‘paywall Pill’ by Pioneering New Forms of Online Revenue.” The Guardian. Guardian News and Media, 03 Nov. 2011. Web. 05 Jan. 2018.
2. Greenslade, Roy. “Stop Taking the ‘paywall Pill’ by Pioneering New Forms of Online Revenue.” The Guardian. Guardian News and Media, 03 Nov. 2011. Web. 05 Jan. 2018.
3. “Guardian Members | The Guardian Members.” The Guardian, Guardian News and Media.
4. 10, 2014 Arif Durrani September, et al. “Guardian Launches Three-Tier Membership Scheme.” Campaign: Marketing, Advertising and Media News & Analysis
5. IBID
6. Willens, Max. “Politico now has 20,000 paid subscribers that account for half of its revenue.” Digiday. Digiday, 17 July. 2017.
7. IBID
8. IBID
9. Sutcliffe, Chris. “Land of the Giants: Where Do Publishers Fit in the Ecommerce Ecosystem?” TheMediaBriefing, The Media Briefing, 24 May 2017.
10. Kludt, Tom. “New York Times Buying The Wirecutter, and a New Revenue Stream.”CNNMoney, Cable News Network, 24 Oct. 2016.
11. Patel, April 26 2017by Sahil. “In the shadow of the duopoly, media rivals are becoming allies.” Digiday. N.p., 21 May 2017. Web. 28 June 2017.
12. Rey, Jason Del. “BuzzFeed Is Building a Team of Writers to Sell You Stuff You Didn’t Know You Wanted.” Recode, Recode, 24 Apr. 2017.
13. Sutcliffe, Chris. “Land of the Giants: Where Do Publishers Fit in the Ecommerce Ecosystem?” TheMediaBriefing, The Media Briefing, 24 May 2017.
14. McAlone, Nathan. “BuzzFeed Has a New Plan for Making Money: Selling You Clothes.” Business Insider, Business Insider, 12 Oct. 2016.
15. Willens, Max. “How Publishers Are Trying to Amazon-Proof Their e-Commerce Strategies.”Digiday, 29 Sept. 2017.
16. Moses, Lucia. “The Newest Rainmaker at Publishers: E-Commerce Editors.” Digiday, Digiday, 12 Apr. 2016.
17. Blank, Sebastien. “The E-Commerce Battle: Why Comtent Should Be Your Priority in 2017.”Fourth Source, 13 Mar. 2017.