Revenue Opportunities
While traditional advertising units (display, banner, text, directory) continue to generate the main revenue stream for most news websites, fresh revenue opportunities are emerging as sites look for new ways to fund their operations.
Here are some of the non-advertising revenue opportunities we’ve identified, along with a few creative new ad units that look promising.
We’ll be adding to this list in the weeks ahead, so please send us any innovative revenue opportunities that you come across.
New Advertising Units
A good fit for: Everyone
Coupons & Deals of the Day
Twitter promises to transform delivery of coupons and deals, and while
the technology makes it much easier for advertisers to get messages directly to customers,
news organizations still provide value to advertisers by reaching a
wider audience. The Ann Arbor News, which closed this month and
reopened exclusively online as AnnArbor.com, now revolves entirely around deals. Minnesota’s not-for-profit news start up, MinnPost, recently launched a Twitter-like “Real Time Ads” service. Others are developing new classifieds businesses
around the 140 character messages. There’s a great opportunity for
geo-located advertising here, and the format is well-suited to
hyperlocal content, too.
Sponsor Posts
Sites like Paid Content
have begun using new advertising slots within the flow of posts. They
look like regular posts on the site, but they aren’t bylined and they
are written by the advertiser.
Video
A good fit for: Everyone.
An old advertising unit that is available to whole new class of news
organizations. As the cost of delivering video goes down, advertisers
are increasingly looking to place their own advertising videos on news
sites. A number of organizations are experimenting with pre-roll ads and advertising bugs that appear on news videos.
E-commerce
A good fit for: Metros
There are plenty of folks in the U.S. who’ve made some cash selling
branded items, like t-shirts and mugs. But, e-commerce hasn’t gone much
further than that here. Public radio, which seems to have done well
with its Amazon affiliate program, is the exception. That’s not the
case in the U.K. where the Telegraph has developed a contextual e-commerce store.
The system required a significant investment in the backend to pair
items mentioned in the content with appropriate goods for sale in the
e-commerce store. The Telegraph has also faced some challenges
selecting product partners. Ironically, the Telegraph has had the most
success selling off-the-wall items like hangars and Panama hats, but
e-commerce is now an important revenue stream for them.
Establishing a system for taking a cut on transactions made through the site has been a good deal easier. The Telegraph takes a cut on sports bets and mortgages arranged through its sports and personal finance sections. This is common on the U.S. new sites that sell tickets to sporting and cultural events, even The New York Times has gotten more heavily involved in this game.
Paid Content
A good fit for: Metros
As advertising revenues decline, newspapers around the country are
considering subscriptions for online content. While putting what used
to be free content behind a paywall certainly curtails readership,
publishers like Walter Hussman of the Arkansas Democrat-Gazette argue that subscriptions stave off erosion in print subscriptions (and help keep print advertising prices up) because they’re not giving everything away for free online.
New business models are on the way for newspapers and online publications that want to pair subscriptions with micropayments (essentially an iTunes for news that would allow readers to purchase individual stories for nominal prices). Big newspapers are also reportedly looking into a “metered” system, like that used by the Financial Times, which gives away 10 stories before readers hit the paywall.
Lists & Databases
A good fit for: Metros, Business and other verticals
Selling data has been a staple of metro newspapers and weekly business publications, like Crain’s,
for decades, and that market isn’t going away. Teaser lists in HTML can
be paired with advertising. Downloads of full lists for a fee, an
annual subscription for unlimited access.
A book of lists (top businesses by sector, top law firms by practice area, fastest growing neighborhoods, etc.) would make a great annual print edition to grab premium advertising and boost brand awareness.
This category also provides great opportunities for mobile applications. Basically, anything that you routinely sell from the lists and databases category, match it with geo-targeting technology, and it should make a great app.
Mobile
A good fit for: Everyone
Here’s the obvious opportunity: a fee for a mobile application carrying
the latest news or a subscription for daily news alerts via SMS. The success of Apple’s iPhone App store has proven that people will pay for mobile apps. As Mark Potts points out, even hyperlocals should consider getting into the game
because the cost to enter is relatively low. In addition to the
subscription or download fee, the app or message is a perfect spot for
advertising.
New and interesting developments are coming every day on the holy grail of mobile—geo-targeted advertising. Think about the possibilities of combining geo-locating technology with the databases you sell routinely databases.
Premium Products
A good fit for: Metros
Along with their e-commerce store, the UK’s Telegraph newspaper
has generated considerable revenues by selling subscriptions to its
puzzle site, CluedUp, and fantasy sports games. The fantasy sports ship
may have already sailed here in the States, but games and puzzles
remain a high-value segment that could draw significant numbers of
subscribers. In a hypothetical metro market of 5 million people drawing
a conservative 1 million unique visitors annually, convincing just two
percent of those readers to buy annual subscriptions would produce
significant, stable revenues.
Niche Websites
A good fit for: Metros
Metro publications should break off branded, targeted publications
aimed at specific communities that congregate around passions. So, a
high school sports site might work in some cities. In others (perhaps
in all), a comprehensive education site like New York’s Gotham Schools
might be a profitable spin-off. Obviously, in a decentralized new news
ecosystem, these niche sites might very well stand on their own as
independents as well. One interesting twist on this idea: The Voice of San Diego,
an investigative not-for-profit that has been around since 2004, says
it is looking to develop a premium service based around obituaries.
Donations
A good fit for: Not-for-Profits, Investigative, Niche and Watchdog outfits
An excellent source of funding for news gathering, donations fit best
with not-for-profit models because individuals can then use them as tax
write-offs. However, for-profits have been known to put up a tip jar,
too. Indeed, DavidsonNews.net, a hyperlocal run by David Boraks in Davidson, NC, has been quite successful collecting what he calls “voluntary subscription payments.”
Spot.Us has recently taken the donation concept one step further. This Knight Foundation-funded start up allows readers to pay for stories they want to read by making small donations. Spot.Us recently gained national attention by helping a reporter pay travel expenses for a story on the Great Pacific Garbage Patch that may be picked up by The New York Times.
Print Editions
A good fit for: Metros, Hyperlocals, For-profits, Not-for-profits
Weekly or monthly print editions could provide healthy revenues still
open to some print publishers. Many advertisers, especially at the
local level, are still more comfortable seeing their ad in a printed
newspaper. Even Politico.com, poster child for the new online news
generation, derives a sizeable chunk of its revenues from a semi-regular print edition. Hyperlocals could follow the model of MyHeimat in Germany,
which uses a reverse publishing model to produce a weekly freesheet. A
print product, even one based around an annual event, helps increase
brand awareness and can lead to higher ad rates. Regular printings
could tap into the free standing insert business, which remains
lucrative.
Metro-level organizations could produce themed issues (more likely on a monthly basis) to provide a sales hook. Hyperlocals should also be looking at weekly printed editions, too, says Lisa Williams, head of Placeblogger.com. Indeed, she says that starting a weekly shopper is the simplest way for struggling hyperlocal bloggers out there to pay the bills. On the relative cheap, she estimates at 50% what it costs for existing print publications in most areas, bloggers could expand their reach and advertising base with a weekly print edition. New resources like printcasting.com could provide a way to reduce printing costs and increase profits even further. Still, Williams says nothing comes easy.
“The hassle is you do everything yourself, you do your own layout. And that’s a lot of work, it’s persnickety,” Williams says.
Special Reports
A good fit for: Not-for-profits, Investigative
The Voice of San Diego told us that they are looking to produce customized reports to clients on a fee for service basis.
Although they haven’t yet done any special reports, they are hopeful it
will be one way to diversify their revenues. A similar approach could
work for other not-for-profits with a strong focus on investigations
and research.
Specialized Advertising Services
A good fit for: Metros, Hyperlocals
For metro organizations, online advertising training and tutorials.
Opportunities include a subscription to online tutorials developed (or
sponsored) by the news organization and a one-time fee for in-person
training sessions.
The potential here is perhaps even greater for hyperlocals, some of whom are already training local businesses. The idea is to provide advertising consulting services. For a premium on top of an ad buy, the hyperlocal coordinates the businesses entire web presence.
There might also be a market for digital direct marketing campaign service to local businesses. The organization would charge a flat fee to develop the campaign or a charge per email tied to performance.
Business Marketplace
A good fit for: Metros, Business publications
This would be a one-stop service for local businesses to post and
respond to requests for proposals. RFPs from local governments would
also be available. A fee or subscription-based system would apply to
businesses wanting to post or respond. Sites like this do exist, but a local angle might prove profitable, especially to niche publication built around the business community.
The marketplace would also list businesses for sale and provide a space for businesses to request funding.
Memberships
A good fit for: Everyone
Public radio has made the membership model work for decades, handing
out tote bags, caps, and umbrellas in exchange for listener support.
Now reports indicate that The New York Times may offer memberships, too.
News organizations don’t necessarily have to stop at swag. The Times may include personal access to reporters in its membership plan. A similar membership/“freemium” model can work for niche websites that could provide extra attention to members’ interests and content, access to specialized content, and events.
Events Hosting & Promotion
A good fit for: Everyone
If a key to online success is developing and speaking to a community of
readers, bringing that community together in the real world is one way
for online news sites to profit from that community. The Voice of San Diego believes
that events are a new way of delivering their content to readers,
whether through a post-election analysis event or a forum on the
economy.
Brooklyn has been a hotbed for this sort of activity by blogs. Brooklyn Based hosts and promotes events for which it takes a portion of the admission fee. Revenues from those events far outstrip the amount the site makes from advertising. In a notable example, the Brooklyn real estate blog, Brownstoner.com, founded a highly successful weekend flea market, the Brooklyn Flea. Brownstoner founder, Jonathan Butler, has said that expanding his brand in his hometown through the flea market was far more appealing than opening outlets of his site in other cities.
Café
A good fit for: Metros
Here’s an extreme variation on the community building idea: news
organizations that own a coffee house. Rather than erecting soaring
office towers that “blur the boundary between inside and out, between the life of the newspaper and the life of the street,” some have argued that new news organizations should put their newsrooms in coffeeshops,
the public square of the Internet age. A coffee shop would help build
the brand (assuming the coffee is decent) and provide a ready-made
venue for all of those events you’ll be hosting.
This is actually happening in the Czech Republic, where Futuroom, a project that “aims to reconnect newspapers with readers and advertisers by focusing on neighborhood concerns,” has launched.
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