Content organizations must constantly consider how to better monetize traffic to diversify their revenue streams. Yes, online advertising is still growing at a good clip, but that won’t continue forever. Healthy ad growth is no reason to ignore opportunities to build a brand and increase revenues by broadening offerings. This is particularly important for online divisions of traditional media companies, which are losing more profitable audiences from older media formats, causing revenue shortfalls.
Online content providers have three ways to increase bottom-line revenues: expand ad sales, increase paid subscribers, and develop related paid products. In the current market, single-mindedly focusing on building an advertising base may seem like the way to go. Although this strategically positions you to take advantage of current market conditions, it’s shortsighted. The ad market could change at any time. It’s therefore important to have a mix of revenue streams.
Thirteen Ancillary Content Offerings
For content marketers, non-subscription products are often an afterthought. This is a mistake! With a little attention, these products can be grown into significant ongoing revenue streams. Offline publishers traditionally have expanded into conferences and other events, books, calendars/diaries, and content licensing.
There’s a broad array of content-related products online publishers can offer. Here are 13 ideas to think about:
- Books. Physical books can contain content that previously appeared in the publication or that was specially created for the book.
- Calendars/diaries. Both “The New Yorker” and “The Economist” continue to market beautifully bound calendars, despite the ubiquitous online calendar and contact lists.
- E-books. As with a physical book, assemble content on a specific topic users can download for a fee.
- Downloads and DVDs. Repackage content into downloads or DVDs. Do this for the contents of conferences and events as well.
- Mobile content. Repackage content for use on mobile phones and PDAs. Often, these offerings drive ongoing subscription revenues.
- Archives. With download capability, it’s easy to make past articles searchable and to charge for use. Consider how and why potential users will access your content.
- Conferences. Many business-to-business (B2B) publishers sponsor a wide range of conferences that drive attendee, sponsor, and ad revenue.
- Other offline events. These can run the gamut, including training sessions, tours, readings, luncheons, and other events.
- Online events. Extend your offering beyond conferences and offline events to include special paid or sponsored Webinars or Webcasts.
- Content licensing. This is an important revenue stream for some publishers. It includes the use of content as well as related branded product.
- Research. Offer your company’s repackaged or primary research.
- Niche products. Consider how your content serves unique markets and develop special products for them. Two online examples that stand out are Premium Crosswords from “The New York Times” with special online features and Cartoonbank.com from the “The New Yorker,” where it’s possible to buy cartoon prints as well as related products.
- Day pass. For subscription services, offer shorter use periods. When assessing the financial impact, consider that this could cannibalize full-year subscriptions and price appropriately.
Ancillary Content Products Extend Your Reach
When developing ancillary content products, consider how to extend your reach and sales by:
- Adding advertising sponsorship where appropriate. Sponsorships can complement other advertising sales by creating a special advertising venue.
- Building the house list. Enhance both e-mail and postal files with new purchasers. Be sure you’re CAN-SPAM compliant.
- Including a subscription offer. For relevant products, include a special subscription offer. At a minimum, let users sample your product.
- Cross-selling other products. Where it makes sense, promote other parts of your offering to new purchasers who may not be familiar with them.
- Enhancing branding. Broaden your brand’s reach through products that appear in environments other than the usual interactive one.
Measuring Product Success
To understand the effect of adding non-subscription products, think beyond short-term revenue and cost implications. I’ve worked with publishers who turned down creating innovative products because each product didn’t generate sufficient revenues. Had they taken a broader view, the related products would have helped their bottom lines and extended their brands to wider audiences.
Consider the following factors:
- Revenues. As with any online content product, revenues should be assessed in total, as well as per customer. Take into consideration what this product and related promotional copy can do to drive search and traffic for your main product offering.
- Costs. Assess total and incremental expenses both for the new product and on a per-customer-served basis.
- Lifetime value. Incorporate these product sales, costs, and related cross-promotional opportunities into your lifetime value calculations.
- Internal cross-promotional opportunities. Look beyond the accounting to determine whether new ancillary products have the ability to drive other revenues in terms of main content offering, sponsorships, advertising, and cross promotion for other products.
- Cannibalization. Consider the effect of each proposed offering on your current product set. Carefully determine whether there will be an impact on related products’ revenues. Often this occurs when offering a free trial or shorter term on a subscription product, since the target audience may only need short-term information access.
There are many opportunities to extend your content’s reach with creative add-on products. The problem is picking the right ones to push and paying attention to incremental benefits. These can improve your bottom line if implemented well. When assessing your options, map out the effect and plan for how these products can be used for internal cross promotion. This is one area where search’s long tail can be very useful.