How can publishers monetize content in 2019

How publishers can monetize their digital content

The monetization of digital content is still a problem for many media houses. Publishers are faced with a highly competitive advertising market.

While spending on digital advertising is increasing, platform giants like Google and Facebook combine almost 90 percent of this growth. Increasing mobile usage is also reducing advertising space and more and more consumers are reacting to aggressive ads with ad blockers. Refinancing digital content through advertising revenue therefore continues to be difficult.

The financing of digital content via paid offers, for example in the form of subscriptions or premium offers, has so far only become established to a limited extent. In Germany in particular, the willingness to pay seems to be low: In a study by the DCI Institute and the Hochschule Fresenius, only 15 percent of the Internet users surveyed stated that they had paid for digital content in 2017.

Publishers are therefore faced with the challenge of finding ways away from classic advertisements and subscription models in order to generate income with their online offer. We present three financing methods that are currently in vogue and give an outlook on what monetization in digital publishing could look like in the future.

Native advertising

One way of avoiding ad blockers and guaranteeing the most undisturbed customer experience possible is native advertising. Here, advertising content is designed in such a way that it fits into the editorial context of a medium, both externally and in terms of content. The aim is to avoid banner blindness and disruptive advertising and instead combine added value with an advertising message.

A typical example of a medium that works successfully with native ad campaigns is the American news platform Buzzfeed. The news site generates all of its advertising revenue through native advertising and viral marketing. But big names in journalism such as the New York Times are now also using native advertising campaigns. This form of advertising is therefore playing an increasingly important role: According to an AdsNative study, 92 percent of the publishers surveyed stated that their income had increased through native advertisements.

However, native advertising has repeatedly drawn criticism. Frequently the concern is expressed that media companies lose integrity through the placement of native ads and that consumers cannot differentiate between advertising and editorial content. In a survey by the Native Advertising Institute, 16 percent of publishers said that customers had complained about native ads. In order to maintain the trust of users and to prevent dissatisfaction, native advertising messages should therefore be marked as such as clearly as possible.

E-commerce

E-commerce offers another financing option, which is also enjoying growing popularity in the publishing environment. One way of integrating e-commerce into the editorial context is affiliate marketing. Product links from external providers are integrated into editorial content. Publishers earn commissions when a customer ends up with the retailer through their site, or a share of the profits when a product is sold. A common example of affiliate marketing is the Wirecutter product review site, which was purchased by the New York Times in 2015. Various products, from technical gadgets to baby goods, are presented and rated on the site.

Another way of integrating e-commerce into one's own digital publishing offer is through On Site Buys. Instead of linking to external retailers, portals like Buzzfeed have developed their own shopping site. There, customers can purchase various merchandise such as candles or cookbooks. But e-commerce, which is more in the publishing framework, is possible. With video tutorials, e-books, online workshops or insider emails, publishers can develop products that are close to their usual portfolio and still offer new sources of income.

Paid content

Paying for content has so far only become established to a limited extent. But the numbers also give reason to hope that this could change in the future. Digital content buyers are willing to spend more and more money on an ever more regular basis. The paid content study also shows that spending on content on news sites has grown the most in percentage terms over the past year. Forecasts continue to show that spending on paid content could rise to eight billion euros by 2019.

Financing models that generate profits from publishers' traditional media offerings should therefore not be neglected. Media companies have a wide range of options for making money with their content. For example, many opt for metered paywalls, which require a subscription to be made for a certain number of content consumed in order to continue using the site. News sites like Spiegel.de, in turn, work with so-called freemium models. The use of the site remains free of charge, but you have to pay for the use of particularly high-quality and complex content.

Publishers thus have various options for generating profits themselves through their content. So far, however, the willingness to pay for digital content has been low and the opportunities for income have been limited accordingly. It is often difficult to bind customers to a digital offer in the long term by subscription.

The outlook

The monetization of digital content still poses a variety of challenges for publishers. The introduction of paywalls and subscription models as well as the cooperation with advertising partners are usually not enough to refinance digital content.

The final word on monetization in digital publishing does not seem to have been said for a long time. The paid content study shows that customers' willingness to pay is increasing and new financing options are establishing themselves on the market through e-commerce or native ads. New technologies, such as the blockchain, also promise further innovations in the distribution and financing of digital content. Publishers therefore have to be flexible above all: For them it is important not to commit to one option, but to develop flexible financing models from a wide range of options that meet both their own needs and the demands of customers.

Further insights from the publishing industry can also be found here in our free whitepaper "Publishing in Transition - Digitization, Cross-Media and Technology in Publishing".