By | Aug 19, 2020
CHANNEL: Content Marketing
Brands are constantly on the lookout for ways to optimize the revenue they generate from their content. This has led to a wide range of monetization strategies, and according to eMarketer, 44% of publishers are using subscriptions, 38% use display advertising, and 12% rely on affiliate sales.
Should brands use one or more of these content monetization methods? We’ve asked industry leaders about the various monetization strategies, the benefits of each, and some successful examples of these revenue models.
Subscriptions are a revenue model where brands charge a recurring fee for access to their content. “Not only do they provide organizations across any industry a stable source of recurring revenue,” explained JJ Xia, Director of Customer Strategy at Redwood City, C.A.-based Zuora, “but they offer access to rich customer data that provides a deep understanding of user preferences and behaviors.” These insights enable marketers to tailor the content they provide to their paying subscribers.
Subscriptions, however, can be a tough approach for startups. “It’s a barrier to adoption,” explained Raynor Mallory, Senior Performance Marketing Manager, Malta-based Binance, “so you need a fairly compelling value prop and consistent re-engagement.” People that are new to a brand and don’t trust that they provide high-quality content may not be ready to pay for a subscription right away, so the model works best when brands have a well-established audience.
The Seattle Times, for example, introduced a paywall in 2013 that encouraged readers to become subscribers to access quality content. “The shift to subscriptions freed the publication from commitments to advertisers and enabled it to focus on high-quality content creation,” Xia explained, “further engaging its audience and growing its base.”
Display ads are a common way to monetize content because they’re easy to add to a website or mobile app, and don’t create any barrier to accessing content. The problem is that “your service needs mass adoption for ads to be a significant revenue stream,” Mallory warned. He believes navigating ad exchanges and networks can be confusing. Moreover, each individual ad often generates little revenue, so an advertising revenue model that’s profitable can be time-consuming and frustrating to implement.
According to Xia, however, consumers are becoming increasingly distrustful of traditional advertising. “While long positioned as a staple in marketing playbooks,” he said, “advertising has been on a rapid decline for years and has been hit especially hard by the coronavirus pandemic.” Aggressive sales tactics and issues of consumer privacy have shined a bad light on ads in recent years, but that doesn’t mean some companies are seeing success with the strategy.
WebMD uses limited display ads throughout its website to generate revenue without overwhelming and annoying readers. These ads are also highly relevant to the audience, such as over-the-counter medicine and public service announcements from health-related foundations. Most of the advertisers WebMD works with are direct buyers, so the company has more control over ad placements and can ensure the ads are aligned with its brand.
Affiliate sales have been the primary strategy for niche blogs and commerce-related websites in the past, but larger publishers have started using the method more recently. By connecting their audience to relevant partner products or services, brands can earn a commission on each sale. Mallory explained that brands can generate revenue as they continue to grow with “little to no upfront investment to get a program off the ground.”
An affiliate program “requires constant monitoring and careful partner selection,” Mallory warned, because they “can be easy to manipulate and often attract unscrupulous ‘partners’ who will game your affiliate program to earn commissions without adding incremental value.” If brands are diligent with implementing an affiliate sales strategy, however, they can see enormous success.
BuzzFeed generates affiliate sales revenue with its articles that list gifts for particular demographics. Through these articles, such as 47 Amazing Gifts Under $20 That Anyone Will Want To Receive, the publisher is able to promote products its audience might be interested in and earn revenue without any upfront costs.
In the end, Xia said, “There are benefits and challenges to various monetization methods, but in reality, a company’s decision depends on its business goals.” In many cases, however, brands can see success by combining these revenue models to maximize the ROI of the content they publish. “[Brands] thrive on strong customer relationships,” Xia concluded, “created through the delivery of ongoing innovation and value.” Focus on providing value, and the right monetization strategy could fall into place.
Tags content strategy, cxm, dxm, marketing, marketing content
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