What marketer doesn’t need to come up with the next big idea to grow revenue? Recent Online Publishers Association (OPA) and comScore research shows online paid-content sales revenue has grown to an impressive $500 million per quarter. The increase is due primarily to more people buying, not more spending per buyer. A deeper look at the data reveals music and media downloads are driving this growth. Though this may not bode well for marketers looking to merchandise non-multimedia content, every site still has new, untapped revenue generating opportunities.
Of course, almost everyone is looking for a breakthrough product. Most are stumped when it comes to actually creating new profitable revenue streams, however. Here are my recommendations for brainstorming your way to the next revenue generator, with analysis as a key part of the process, as always:
- Assess current product offerings to determine where you’re making money. One simple way to increase revenue is to optimize current product pricing and merchandising. Avoid charging for your most popular free content or giveaways. Putting content behind a price barrier can affect ad revenue and limit your content’s search engine visibility.
- Analyze internal strengths and weaknesses for ideas to cost-effectively leverage your firm’s existing strengths and resources. You don’t want to create a new product requiring new capabilities you don’t have internally, such as a sales force. One big challenge may be the traditional corporate view of your firm’s capabilities. This can cause you to create products from within your traditional comfort zone rather than finding new angles from the consumer’s perspective. A reality check is to gather customer input using either online market research or solicited customer feedback.
- Perform a competitive assessment to determine what products other sites offer. This phase of analysis is critical. Use a matrix approach to gather this information efficiently. Consider the analysis to be a multistep process. Start by taking a well-defined approach to competitors. Look at companies that do the same thing you do in the same product space, with the same target customers and geographical area. Then broaden the analysis to include related products, segments, and markets. Marketers often take too narrow an approach to their competitors. Sometimes, selling to a totally different customer base may be applicable to your product or market.
- Examine similar products offered through offline channels. For many content sites, this could be a book product, such as crossword puzzle books from “The New York Times” or the “Fodor’s” travel guides. Though books by themselves may not yield large revenues, they may have potential for sponsor or corporate-related sales opportunities.
Many media companies are mature businesses. Assess how they’ve created revenue-generating, add-on products from their content. Remember, products offered online may be consumed or used offline. The Cartoon Bank from “The New Yorker” offers “New Yorker” cartoons in different formats, such as prints and licensed products. It’s extended this to include business-to-business (B2B) offerings, such as the use of “New Yorker” cartoons for third-party email advertising through Punchline Network, and acts as its cartoonists’ agent. It could take this idea a step further by creating an advertising-supported, cartoon email newsletter. That would have a great viral quality to promote “The New Yorker” and sell print subscriptions and other cartoon-related products.
- Determine which gaps in your product line can leverage your strengths. Consider what sets your firm apart in your target segment’s mind. Think of new product lines that will appeal to your existing customer base and reinforce your brand image. Also, examine other consumer markets that might be interested in your products. When assessing revenue potential, don’t overlook the possibility for related ad-generated revenue:
- Check current content and products for new revenue channels.“The New York Times’ Best-Seller Lists generates book sales for online and offline retailers. It’s promoted on both Amazon.com and barnesandnoble.com. These charts and related reviews could link to both retailers, facilitating purchasing and generating affiliate revenues. Economist.com allows readers to click through to purchase books reviewed on its site.
- Consider ways to extend your expertise into new fields. By developing a Frizzy Hair Indicator, AccuWeather.com leveraged its expertise in weather forecasting, creating a useful consumer indicator. It used the AccuWeather.com Frizz Index to snag a major new advertiser, John Frieda, which had never before advertised on weather sites.
- Examine other ways to leverage existing assets. This can include new ways to monetize your house file, such as co-registrations and email list rentals. Think about how you can create new ad opportunities that engage your users and provide real benefits, such as sponsored subscriptions and sponsored open houses.
- Constantly test marketing and pricing. You can cost-effectively test and build a product on your site by leveraging existing customer touch points. Use every communication channel to merchandise your new offering: Web site, email registrations, post-product upsells, product thank-you email, invoices, shipping tickets, newsletters, customer service communications, and RSS (define) feeds. Present the product in a way that makes sense to the consumer. All too often, clients are so entrenched in corporate perspectives, they sell all their new products using the same techniques as they used for their old products. New products often require a new marketing approach or an original product format to make them stand out.
Although every new product may not be a home run, stringing together a number of singles and doubles can still help you run up the score. Sometimes it’s easier to implement a number of smaller products that can generate ongoing revenue without detracting from existing products.
It’s difficult to keep selling more of the same stuff to the same target market. But if you take a careful look at your businesses’ products, strengths, and customers, you’ll usually find great opportunity.