Conservative revenue models for online publishers

Since the beginning of digitization, publishers have made their content available online on their own websites and portals. Internet users are used to getting "everything for free". Initially, they relied solely on advertising - still a suitable means, but not THE way to finance a digital project on its own. Nevertheless, conservative revenue models also offer opportunities to generate revenue.

1. ADVERTISING

Advertising has always been a tried and tested means for media companies to generate revenue. The same applies to online advertising. The study "Advertising on the Internet and Mobile Web" by Fittkau & Maaß Consulting shows that there are different user groups: Some actively use advertising to find out about products. Others are annoyed by the ads.

The latter group in particular uses ad blockers as browser extensions. These suppress advertising on websites. Then there are those users who have the AdBlocker "in their head": They do not notice what is shown to them, they also do not click on the ads.

Over the years, new trends and terms such as native advertising or lead generation have developed. Sponsoring also falls into this area. All broadly speaking, advertising - with the difference that these forms are much more likely to be accepted (provided they reach the right target group). In general, website operators always have to find new ways to finance themselves with advertising. The following applies here: avoid obvious advertising, minimize wastage and try to obtain user data for this purpose.

1.1 Native advertising

Wikipedia explains the term as follows: "Native advertising is disguised advertising on the Internet and in print media that attempts to attract the attention of Internet users by offering content. The advertising content is difficult to distinguish from the articles that Internet users recognize as content from the platform or print medium; it is therefore placed in such a way that it is not primarily perceived as advertising. The intention of advertisers is to design paid advertising in such a way that it is not directly recognizable and thus attracts the attention of users by deceiving them. When native advertising is misused, the consumer no longer recognizes the advertising intent by trusting a native advertising article and unconsciously consuming the advertising message conveyed."

Obvious advertising is therefore avoided, as is wastage, as the advertising is placed in a thematically appropriate way.

1.2 Advertorials and sponsorship

Advertorials go further than pure advertising. The background here is to reach the target group with expert knowledge. The fact that the content offers added value increases the chance that the provider or the product being advertised will be received positively. Articles are often also sponsored and clearly display the sponsor's logo. This also increases awareness of the advertiser.

This form of advertising can go as far as lead generation. An article with a call-2-action element that leads to the advertiser's website generates potential leads for the advertiser. However, there are many more ways to generate leads. More on this later.

2. SALES REVENUE MODELS

Publishers have developed different sales revenue models to avoid offering high-quality content, for which editors have to be paid, for free. They differ in terms of how much is paid and when. The best-known representatives are paywall models. These websites offer paid content so that the articles are only displayed against payment or registration of the registered user. There are various models:

2.1 Hard payment barrier: paid content models or so-called paywall models

When The Times of London introduced the paywall in 2010, the newspaper initially lost 90% of its readers and its market share shrank from 15% to 1%. But by 2013, the newspaper had already posted a profit of 1.7 million pounds. The first profit since 2001. In 2014, the share of total paid content circulation in the digital sector was 35%. According to Meedia, the Financial Times, Rheinzeitung and De Correspondent also use the paywall model.

This form of paywall is likely to meet with less acceptance among general interest publishers than among specialist publishers. This is why many of the major magazines use the less stringent paywall model. There are various paid content models. For example, many newspapers use paywalls as a payment model and only show a certain percentage of their articles. Subscribers can access this paid content by subscription.

2.2 Freemium

These are websites that offer a certain percentage of their content free of charge. However, individual, selected articles must be paid for. Meedia lists BILD, The Economist and The Wall Street Journal here.

This form is particularly useful for specialist publishers : they can arouse interest and disseminate basic information to a wide audience. However, the high-quality special information is then only available to the paying public. This way you avoid scaring off your readers by asking them to pay.

2.3 Metered model

With this model, the initially anonymous visitor has the opportunity to consume a certain number of articles (free budget). Some providers add the time factor so that use is limited in time. Once this limit has been exceeded, the user is first asked to register free of charge in order to be able to use further content. Often, a further budget is granted for free consumption before the user has to purchase premium access.

Publishers that use this model include The New York Times and Die WELT.

Consumer publishers will be more successful with this model than specialist publishers, as their content is often easier to consume than specialist reading.

2.4 Premium content

Handelsblatt offers premium content with the digital pass . Digital Pass holders can access premium content and use the Handelsblatt Live app, epaper and archive.

This model is suitable for publishers that serve a special user group who experience real added value through the additional content.

2.5 Voluntary payment by users

The TAZ offers the content free of charge, but the reader has the option of paying voluntarily.

2.6 Crowdfunding

The digital magazine Krautreporter is a crowdfunding project. All content is free, but the investors will soon be transformed into a cooperative. This will make the magazine independent and "live" digitalization.

Such projects must be aimed at an already advanced digitized target group that is familiar with the crowdfunding model.

2.7 Distribution of the models

Contiago reports that of 113 German publishing houses surveyed, 6 use the hard paywall, 66 the freemium model, 39 the metered model and 2 offer voluntary payment.

No matter how you do it: There are definitely paying readers and great potential: out of 1023 users surveyed, 36% pay regularly for subscriptions or individual articles. 61% do not pay or state that they do not read online news. This group of people gave the following reasons for not spending money on online content:

• There is enough free content (73%)
• The quality of the journalistic content does not justify payment (50%)
• The content is too expensive (32%)
• Paying online is too complicated for them (9%).

The latter can be remedied by a conversion-optimized shopping cart. But the second point (quality) is to be understood as meaning that you as a publisher must stand out in a world in which anyone can produce content, through quality and above all added value.

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The fact that offers are perceived as too expensive is due to the free nature of the Internet: As publishers, you have to get your customers used to paying money for (outstanding) information again. The app market has stimulated a new payment culture: micropayments can also generate revenue with a wide reach.

There is no one model that is equally suitable for all publishers and publishing products. Just as there is no one model that all (potential) customers will accept. You will therefore have to offer a combination of several sales revenue models and observe how your customers deal with these models.