With the growth of paywalls and subscriptions it seems that monetization would be relatively simple for digital publishers. The truth is that publishers have to face Big Tech in a battle for attention in order to make money.
Today, digital content is often locked behind paywalls or riddled with ads and affiliate links. More and more publishers are beginning to monetize their content and with good reason. It makes sense that the people who produce quality content that takes time and expertise want to be paid for their work.
With the growth of paywalls and subscriptions it seems that monetization would be relatively simple for digital publishers. The truth is that publishers have to face Big Tech in a battle for attention in order to make money. While Big Tech and publishers have had a tense relationship, things are changing. By harnessing the power of data, digital publishers can use Big Tech to their advantage to turn a profit.
The current state of publishing
Digital publications want to make money from the premium content they produce. The content comes at a cost because this type of content requires more time and resources in order to create it. Digital publishers currently monetize in a few different ways, but the most common are subscriptions and paywalls, digital ad revenue, and affiliates.
In essence, subscriptions and paywalls are the monetary exchange between publishers and their readership. That being said, not all paywalls require users to pay with money. Some encourage readers to whitelist or bookmark a page for further use. Digital publishers can even allow free access to a particular article if a user provides their email address. The purpose of this is to later send promotional emails to encourage a particular reader to come back for more content. Even more, the price of an article can be personal data exchange, and even free advertisement for the press.
Subscriptions are similar in that they have a user pay a given amount to receive access for a certain period of time before charging again. Many digital publishers have seen success with a subscription model. The NY Times reached 7.5 million subscribers in 2020. What’s more is that the NY Times jumped to 8.5 million subscribers in 2021 and brought in $50 million in revenue from digital subscribers alone.
Alongside paywalls, digital ad revenue has been a tried and true method for publishers. Digital publishers host advertisers for a fee. Advertisers are willing to pay a premium to reach their target audiences. They’re not just paying for display advertising, brands are also paying for sponsored content and native ads. The downside here is that digital publishers have more competition than ever. Publishers have to work harder than ever to reach a given audience which means making a profit from ad revenue is more difficult.
Affiliate marketing has been able to fill in some of the revenue gaps caused by the increased competition for digital ads. Most of us associate Instagram with affiliate marketing and for good reason. The social media app championed this type of marketing by having popular accounts, known as influencers, promote a product and provide an affiliate link to purchase it. Basically, affiliate marketing is a performance-based marketing channel. This means digital marketers pay their publisher partners based on their overall performance, not potential. Digital publishers use affiliate marketing to drive brand awareness, keep readers engaged and most importantly increase online and offline sales.
While different methods of monetization currently exist, competition for ads, affiliate marketers, and even readership is increasing making it more difficult for digital publishers to profit. Digital publishers lean on Big Tech giants like Google and Facebook, to expand their brand’s reach and drive new traffic.
Historically, Big Tech’s purpose has been to monopolize audience attention and time. Giants like Google and Facebook have been successful in doing so. They have been able to collect mass amounts of user data and use it to monopolize attention. This has established these companies as some of the most valuable in the world. Their success has caused others to struggle. Digital publisher monetization has suffered from losing audiences, engagement, and revenue in this global attention game.
Partnering with advertisers
Advertisers are catching on to the value of first party data and are beginning to favor it over third party cookies. First-party data is any user data that is provided directly by the user. It is considered more reliable than second and third party data that is filtered through many channels before reaching the advertiser.
With the appeal of first-party data on the rise, advertisers are also interested in investing in direct partnerships with publishers. This new push for better data and stronger business relations is addressing two crucial changes. The first is user relationships rooted in consent andAdvertisers want consented first-party data. The second change is a more personalized and respectful brand experience. Armed with user first-party data, advertisers and brands can tailor a user’s experience directly to them. This means personalized ads, recommended articles and more.
In 2020 alone, the digital publishing industry saw an increase in advertising spending on first-party data. . This is a huge indicator for digital publishers to bolster their data collection capabilities. This way they can drive more revenue through direct deals with advertisers.
With the value of first-party data on the rise, third-party cookies are becoming obsolete. Publishers can collect first-party data with consent and bank it. With this data they can attract advertisers who are looking for a specific audience. It also builds a more reliable brand identity for a publisher’s readership. Looking to the future, publishers will have to change how they monetize their content. Digital publishers first have to create more authentic and higher quality content. They also need to employ consent driven data collection in order to tap into first-party data and with this comes absolving paywalls so that content is more accessible.
While these changes might sound daunting, Invisibly can help digital publishers transition into the world of first-party data and paywalls. Invisibly allows readers to exchange their first-party data in order to unlock paywalls and access content. We make the exchange of data easy for publishers by offering it right on our platform. Invisibly can also help any digital publisher reach their target audience with personalized user feeds. Learn more about working with Invisibly on our website.