Four Ways to Directly Monetize Digital Content
Are you on advertising life support? It’s time to start thinking about additional revenue streams. If you’re focused on print advertising, be aware that 35% of ad spend in print has evaporated over the past five years. If you’re thinking you can make it up on the web, take note that pricing has declined by an average of 8 percent each year for the last five years and shows no signs of flattening out. And mobile? Consider the impact of over 200 million people who use ad blockers on their phones.
But have no fear; there are many models to directly monetize your content with your audience. To absorb the decline in advertising, direct monetization has become an imperative. If you’re already weaning yourself off the advertising IV-drip by launching some direct monetization products, have you considered all of the options?
Research has shown there are certain types of content that consumers are more willing to pay for:
- Content that supports a job or career (e.g., premium memberships like Business Insider or Statista) – Think: can they write it off?
- Material that helps enthusiasts to invest in and become better at their hobbies
- Content with high entertainment value (e.g., blockbuster games, music, and film)
- Content with value added through the user experience (e.g., instead of a PDF version of the magazine archive, there is a searchable repository with intelligent recommendations to the user)
Here are some specific digital product ideas that fit one or more of the above criteria.
All content companies should start here. Who are the most enthusiastic customers in your audience, and what are they willing to pay for? What problem can your content solve for them? How can you create an outstanding user experience, so they can discover and consume your material when they need to, how they need to, across any device? This goes beyond copying and pasting past issues behind a paywall. Companies that do this the best add services as well – ability to call for help, special discounts, free shipping, etc.
Think about how much value Amazon has added to their Prime membership: it started with free shipping, and now there’s music, movies, storage space, and more.
Statista charges about $5,000 per year to access to research reports behind a paywall. Their content is searchable. It’s also organized in a way to make discovery easy and intuitive. Don’t see what you want? Their analysts will do further research for you, to see if additional or updated data is available, for no extra charge.
The Wall Street Journal also adds a lot of value to justify a premium membership. There are well-curated daily emails tailored to your preferences, effective content recommendation engines, special offers, and discounts on unique products and events. Content is easy to discover and read on a desktop, tablet, or phone.
The global self-paced e-learning market is a $50 billion industry with an almost 10% annual growth rate over the past five years. Content businesses have the material and authority to produce valuable learning products to sell to existing customers and attract new ones. Consumers are more likely to pay for content if they feel they are getting something specific out of it (i.e., a particular skill). A few examples to check are:
- Content Marketing University (marketing): http://www.contentmarketinguniversity.com
- TrackMan University (golf instruction): http://trackmanuniversity.com
- Annie’s (crafts): http://www.anniescatalog.com/onlineclasses
Marketers across industries spend over $40 billion per year on content marketing, that is, using valuable information to attract and convert customers. You have content! You have an audience who you know is enthusiastic about a certain category! Why not use the content marketing model in reverse and sell products related to your category?
There are three flavors of e-commerce to consider. The first is selling products related to your brand (or as I like to say, the tchotchke business). Unfortunately, I don’t know of many content businesses that have made more than some spare change with this model.
A second, more profitable, model is to embed affiliate marketing offers in your content. Reviewing a telescope that’s for sale on Amazon? Add an affiliate link and earn up to 8% commission. Consumers will actually view this as a positive experience, because you saved them the hassle of figuring out where to buy the product. Here is an example from Cook’s Illustrated: http://www.cooksillustrated.com/equipment_reviews/1532-microwave-pasta-cookers
A third model, once you have a good understanding of your audience, is to build an actual e-commerce site that sells a portfolio of products. Check out http://www.equine.com/ from the folks at Active Interest Media.
You collect a lot of digital information about your category that has commercial value to other businesses in your category. Say you have a regional magazine targeted at high net worth individuals in your area. You can watch their behavior (e.g., which emails are they opening, which articles are they reading) to predict who is likely to be in the market for a high-ticket item, such as a new home, car, or a financial advisor. You can then sell these leads (for a premium) or otherwise nudge these qualified buyers toward your advertisers who have relevant offers. You are doing your readers a favor by helping them make an important decision.
You also have the ability to provide useful data to help businesses with their marketing, sales, and forecasting needs. My favorite use of data from a content company is how The Weather Channel and WalMart partner to use weather data to forecast sales. Looks like it’s going to be rainy in Philadelphia – better stock more umbrellas.