Posted by: Matt Shanahan The digital world has changed the revenue dynamics for publishers. In the print world, a publisher’s shipment of physical media was the basis for generating revenue. In the digital world, availability of media is insufficient to generate revenue. In the digital world, consumption of media is the basis for revenue generation both in advertising and subscription models. In other words, engagement is the unit of monetization. For me, the most striking example of this move to engagement as the unit of monetization can be found in high profile companies like Demand Media relying on algorithms and SEO to generate engagement. Another example is how some publishers chop up their content into smaller fragments to generate more […]
About Matt ShanahanMatthew Shanahan brings Scout Analytics nearly 25 years of experience in the execution of business transformation. His specialties include business model innovation and new market development.
Posted by: Matt Shanahan AdExhanger ran an op-ed piece today why to price advertising in cost per second of engagement (CPS). But how can a publisher make practical use of this metric right now given the entire market is CPM based. We have several B2B media companies taking advantage of engagement data to drive up CPMs by using the concept of CPS very simply. For the sake of this post, I’ll refer to a fictitious publisher called Acme Online. In a similar circumstance to our real customers, Acme Online is an established publisher in their market segment. Any strategies that focus on growing advertising revenue by increasing unique audience members would have payback but step function growth is unlikely. Their […]
Posted by: Matt Shanahan Increasing ARPU with a paywall is a strategy being pursued by an increasing number of publishers, however different paywalls have different revenue dynamics. What and how to charge have big implications. Specifically, a mandatory vs. an opt-in paywall have very different revenue dynamics and risks. Let’s look at the math. Assume a publisher has identified a monetizable value proposition (see methdology) and a fan base of 10,000 with an average daily consumption of 10 page views. Further, let’s assume the publisher averages $10 RPM. Under these assumptions, the ARPU of a fan is $36.40 (i.e., 10 page views/day X 7 days/week X 52 weeks/year X $10 RPM ÷ 1000). The revenue of the fan base is $364,000. Now […]
Posted by: Matt Shanahan Increasingly, Scout Analytics is performing paywall analysis for publishers – specifically paywall opportunity analysis. The trick pursuing a paywall (audience-based revenue) strategy is to find a unique value proposition (see previous post), a monetization opportunity. Unique value propositions allow publishers to create revenue streams beyond advertising, but rarely does one value proposition apply to the audience as a whole. Consequently, a paywall strategy also relies on packaging that value proposition and targeting the right segment. Paywall opportunity analysis is critical as it helps the publisher move away from debates on philosophical merits to actual identification of value positions and targets using the existing data from their audience. At a high level, the analysis has 4 simple […]