Digital publishing shouldn't rely on programmatic alone
Programmatic will always offer significant returns, but online publishers should be excited about exploring new revenue models, writes Sarah Innocenzi
In my experience, publishers want two things: they want to make great content, and they want to make money so that they can make more great content.
Most are comfortable with the first. Fewer feel good about their ability to accomplish the second. Advertising is the main source of income for online publishers, but as the recent Cairncross Review shows us, it’s not always sufficient. Great publishers entertain us, educate us, and inspire us: they deserve rewards that recognize that, and one revenue stream isn’t enough.
It’s no wonder that a full 83% of board members plan to make non-advertising revenues a priority this year. Similarly, digital leaders profiled in Reuters’ predictions point to subscriptions, native advertising, and commerce as priorities in 2019.
It’s also no wonder that publishers have a love-hate relationship with digital advertising—and, more specifically, with programmatic. It has incredible revenue impact, but also has the potential to negatively impact user experience. As the Cairncross review highlights, when we force publishers to maximise clicks, it comes at the cost of the quality and integrity of their content.
Add to that the opacity, seasonality, and convoluted supply chain of programmatic advertising, and you end up with an industry full of jaded publishers. They’re fed up with promises—say, unique demand—from partners who can’t deliver. They’re excited about new revenue streams but want trust and realism. Above all, they want opportunities that will drive value both for and from their readers.
Unfortunately, no single solution will work for everyone. For example, subscription programs are generally a better fit for larger publishers, such as The New York Times, Wired, and The Wall Street Journal. That said, we’re starting to see small-to-medium publishers explore paywalls as well. Micropayment solutions that allow readers to pay for individual pieces of content with a digital wallet, without committing to regular subscriptions, will be an interesting option in the future—but there’s no widely-utilized solution at the moment.
Sponsored content and native commerce are of particular interest to our publishers. The former lets publishers maintain editorial control across promotions, and many see a lot of immediate value in this type of branded content. However, they generally need significant bandwidth—and a significant audience—to make it work. Native commerce is less resource-heavy, but still drives both revenue and reader value: publishers can talk about (and link to) an on-brand, on-topic trend or product without outside influence, so that they maintain their independence while creating revenue.
In addition, publishers are becoming more aware of the data they hold, and are looking for strategic and creative ways to leverage that data to both enhance the user experience and drive revenue. Data regulations such as the General Data Protection Regulation and the California Consumer Privacy Act mean publishers have to be more careful about the collection, processing, and sharing of personal data, but there are revenue opportunities even so. Buyers are willing to pay more for ad impressions with a consent string, which means that publishers can drive long-term value just by implementing a consent management platform.
It’s not just personal data: publishers are starting to take an interest in leveraging reader engagement data as well. This goes beyond the standard analytics tracking that all publishers use: engagement tracking can show publishers how readers interact with content, where their attention is focused, and what does and does not resonate. They may even be able to use it to create adaptive, personalised experiences for their readers. Engagement data also offers incredible potential to advertisers: it offers the opportunity for the kind of deep, robust targeting that will always be valuable even as revenue streams diversify.
There’s always new technology on the horizon, but the best setup will always depend on the publisher. It’s clear the future of digital publishing doesn’t rely on programmatic alone. It can’t. Yes, programmatic is and will continue to be a significant revenue stream for online publications, but publishers should be excited about exploring new revenue models. And we should be excited, too—successful publishers aren’t just good for advertisers. They’re good for readers. And they’re good for the whole internet.
Sarah Innocenzi is GM, Publisher Services, at Sovrn