Innovations in digital revenue-making
October 15, 2008 by marek.miller
As the new revenue sources emerge, making money requires multiple revenue streams and a flexible strategy. Some companies prove that profits from digital projects can really be achievable.
Martha Stone (left), Jose Antonio Ferris, and Matthew Buckland
“Treat your reader not as a king, but as an emperor – give him whatever he wants, wherever he wants it and at any time he might need it” – advised one of the speakers of the WAN’s World Digital Publishing Conference: Digital Revenue Gold Mine in Amsterdam in October 15-16, 2008. Jose Antonio Ferris, the head of strategy of Prisacom, Spain, Matthew Buckland, the General Manager for publishing and social media in Media24.com / Media 24 / Naspers in South Africa, and Martha Stone, the Director of Shaping the Future of the Newspapers project in the World Association of Newspapers explained how their companies have monetized citizen journalism, cross media advertising, Web TV and mobile channels.
Case study of Prisacom
Jose Antonio Ferris
Prisa group is the leader in the spanish speaking countries, it has global brands in 22 countries, and a 50 million people daily audience (readers, listeners, viewers, internet users). Prisacom is responsible for developing online products, brands and services. It reaches almost 2.000.000 unique users per day.
The main areas in which Prisacom exists are news & information (“EL Pais”), classifieds, entertainment and education (Prisacom has lately started with an innovative product Kalipedia, an encyclopedia for the Spanish secondary school students – 80% of the traffic came outside of Spain, from other Latin America countries).
Prisacom, thanks to its digital activity doubled its revenue in 4 years (from 17,5 million Euros in 2004 to 38,2 million Euros in 2008). The revenues came for Prisacom mostly from: advertising (56,5%), mobile services (17,1%), and eBusiness (23,4%).
What Prisacom mostly does is:
- Looking for strategic alliances with search engines. Some of their space is sold to Google. Under articles Google advertisements are published, and the company is actually making money of it.
- Developing vertical content. The company produces web pages, mostly vertical ones, which can get revenues from contextual advertising.
- Existing in the classifieds sector. Mr Ferris admits that the battle in that sector is lost already. Market is dominated by pure internet players. Media companies have arrived too late on that market. Media companies may catch up with those pure internet players by following 2 paths:
- Alliances with online leaders in traditional classifieds segments: real estate, employment and auto.
- Acquisitions and development of online niche-classified products.
By enhancing the multimedia products, Prisacom offers now products both for advertisers who look for broad or narrwowed audience (niche). Multimedia is crucial for the company, as they already display ads for a 24 million plus audience per month.
Another example of digital strategy by Prisacom is monetization by sponsorship. They reached an agreement with a ministry of traffic in Spain which produces social ads, but Prisacom makes them well visible. It is an innovation that called by Mr. Ferris as “user generated advertisement lifted to the 3rd power”.
The company is full of fresh ideas. It plans to bring innovations in ad formats, as well as look deep into possible development and commercialization of leads, databases, behavioral targetting and others. Cross platform sales (printed el-pais, website and mobile) is also very important for Prisacom – “Treat your reader not as a king, but as an emperor – give him whatever he wants, wherever he wants it and at any time he might need it” – said Jose Antonio Ferris.
Being smart with citizen journalism
Matthew Buckland
Naspers is a part of Media24.com and exists in the Internet, PayTV, Print and Technology sectors. It is 5th in page rank in South Africa. The business model of the company is based on three key stones: publishing, mobile, and social networking – it is all about attracting the audience. South Africa as a country is specific – it has the most expensive access to the Internet in the world, but in terms of mobile Internet, it is on the contrary.
Matthew Buckland spoke about Thought Leader as an example of innovative digital approach to gain audience. It is a platform for journalists, columnists, and bloggers to share their thoughts and opinions. As the speaker said, it is a blog hybrid: editorial blog, with closed and intelligent user generated content. All submissions to the platform are edited (even the comments). The contributors are not paid, they all create content for passion and peer recognition. Thought Leader managed to collect almost 6,3 million readers’ words, and almost 2,6 million contributor words.
There are 4 key principles the speaker gave the listeners:
1. Don’t abandon gatekeeping (wikipedia does not either). It is not about any content, medias are confused about blogs and comments on their pages.
2. “Not all readers are equal” – elevate expert users and selected members of the community should be elevated. Again, it is not about the money – it is prestige and peer recognition that play the most important role.
3. Media is about quality, and media companies should always keep this in minds.
4. Partnership. Media can do more by making readers a part of publishing process. They should be flexible about copyrights. Share ad revenue and and traffic with contributors.
Matthew Buckland finished with a statement that it is not the citizen journalism that has failed, it is the media implementation of it that was improper.
Naspers experiments with new revenue models, as traditional advertising was not enough. Mr. Buckland suggest trying a shared-revenue blog sponsorship (shared 50-50 to the blogger). Also “Bloggertorials” are considered as blogs for companies and CEO’s, as another way to get advertising message across the platform.
Learning from competitors.
Martha Stone gave an overview of WAN’s research that only underlines what previous speakers said. WAN recently studied a body they called GYM (Google, Yahoo, and Microsoft). What WAN learned is:
1. GYM wants to steal newspapers’ best assets:
- content
- relationship with advertisers
2. Newspaper business can no longer be a one product business – it is all about the long term strategy
3. GYM has excellent enabling technology.
The key potential areas in digital revenue making according to WAN, are:
1. Online / mobile advertising. Till 2012 key digital will be channels: search engines, online displays, and online videos as the channel with the biggest potential. There are new pricing models emerging: advertiser demand accountability – cost per click, and cost per action. The examples of prices that different newspapers charge for one-day display ad on their websites are:
- Aftonbladet.se (Swedish daily) – 30.000 Euros
- VG.no (Norwegian daily) – 35.000 Euros
- WSJ.com (Wall Street Journal) – 25.000 US Dollars
- NYTimes.com (New York Times) – 30.000 US Dollars
More and more accountability is also demanded for print. And mobile advertising will become a real business in few years.
2. Video advertising. News is now the most popular online video content in the US, news is also the main products that newspapers sell. Why not use that information?
3. User generated content.
Martha Stone finished her presentation with a simple model: the better the site is, the more traffic it receives. Next to be seen is the increased effect of ads, and therefore – increased revenue.
Tagged: business model, conference, innovation, internet, multi-media, WAN
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