Monetizing Content

In the category of overused words by the media industry, monetized might top the list. The word is usually used in reference to getting the money out of a creative product. Content gets monetized by ads, subscription revenue, archive sales, product placement, and countless other ways. Entertainment content can add DVD sales and other direct sources of revenue.

For the printed product, its mostly ads and subscription revenue. More or less, subscription revenue covers the cost of printing and distribution. So the quick analysis says that the revenue from ads needs to cover the cost of content production. Journalists oppose anything that resembles product placement. Archive sales are limited at best in the news business. The "new" in news is very important, thus limiting the archival value.

So we're left with ads. Ads have the problem of monetizing indirectly. If you buy an entertainment DVD, you've bought the content directly. The same is true of a music track, or watching a movie. It has been pretty we established that people don't think they should have to pay for news online. Ads are all that are left.

In the printed version, there could be 500 or more ads in a large metro paper per day. Each one of those advertisers paid for the people that picked it up. Just as with the articles, there's only so many ads that will be relevant, but if every person finds even one its still probably ROI positive for the advertiser. They key is that you are potentially exposed to all 500 ads. Advertisers are willing to deal with the inefficiency, especially since it's still likely ROI positive.

As the previous post stated, the internet is much closer to an a la carte system. Users only consume the content they deem valuable. This likely limits the ad exposure to perhaps 10-20 for a visit. If the ratio of interest is similar, the chance that a user will see a relevant ad is very low. (1/500 x 20 = 4% of the time).

Newspaper companies answer has been to jam more and more ads on to a page in the hope that something will be of value to the consumer. Most homepages have enough action to cause seizures in sensitive individuals. The ads are more obvious, and more obnoxious. Needless to say, the consumer experience suffers as a result.

It is my position that this is precisely the wrong approach. There are two things that these companies need to do. The first is to make darn sure that the ads displayed to a user are relevant to them. This is the principle of targeting and takes both technology and a sophisticated sales force. The proper model is most likely a share of transaction, to create the proper incentives for both the advertiser and the media company. Each action is far more valuable than a mere impression. Facilitating the right person to see an ad now becomes paramount, but can drive tremendous value for both parties.

The second thing newspaper need to do is understand the a la carte world. Each and every article needs to work to grab a potential readers attention. At the end of each an every article, there should be recommended, related articles to deepen usage. The home pages should encourage discovery and exploration, not make the user want to avert their eyes in horror. The ideal would be dynamic, profile based publishing. This would be the notion of displaying to a user the articles most likely to be relevant to them, based upon their past and stated interests.

Neither of these are very easy to accomplish, but its one of very few ways to compete on the internet.