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Despite some setbacks early in 2020, trust in news publishers has grown. And quite predictably, for many stores, this led to new direct and programmatic advertising partnerships that monetized their inventory primarily with display and video ads. As a result, the number of users who pay for ad-free news sites is also growing.
However, as the fourth quarter of 2021 begins, things are changing and it is time to regroup and regroup.
While shadow bans are no longer an issue, at least for large and well-known media, the growing news fatigue of readers is holding back the rise in subscriptions and in some cases even leading to their decline.
In addition, in view of the continuous fight against advertising fraudsters, especially in the programmatic ad segment, and many AdBlock users, the need to open up new monetization opportunities is becoming even more urgent in the news segment.
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Paid subscriptions are no longer a remedy, right?
News fatigue aside, the question remains: is it possible to run a successful news agency while keeping all of the content behind the paywall?
Like it or not, from what we've been tracking in 2021, this strategy isn't working for news publishers. Yes, there are a few valid exceptions, but these only prove the point.
The trick is that even if a reader is willing to pay for access to quality news, they rarely subscribe to multiple channels. Instead, users tend to resort to reprints. That means that a publisher who isn't in the top three news resources in their niche or region will inevitably face a gradual decline in paid subscriptions.
Offering a free trial to subscribed users rarely leads to an upgrade to premium. While it can help keep email newsletter subscription rates high, few people read or open such emails. And that leaves almost no room for these subscribers to monetize.
Again, there are some valid exceptions where the publisher's creative team manages to keep the newsletter open rate high enough to sell the relevant advertising space to brands and agencies. However, their share is too small to be perceived as a universally effective monetization strategy.
How to get ad-supported freemium strategies working
If subscribers are unwilling to pay for the news content they consume, there is only one alternative – advertisers should do it instead.
In the context of reader acquisition, the ad-supported freemium strategy can include a variety of options, but the two most common use cases are:
- Free access to article previews and full access to news content after free registration (with selected publications only available for premium subscribers)
- Free access to a limited number of publications per month and full access to content for subscribers (usually paid)
In terms of in-demand partner acquisition, while news agency advertising promotes customer trust in a brand (according to the IAB), there are several key aspects that publishers must ensure to ensure that their inventory remains valuable. This is a brand safe, branded content environment for display and video ads and the precision of the targeting features.
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In the programmatic ad segment, the focus is of course on checking the data from advertising campaigns by third parties, but the two factors mentioned above also remain decisive.
While a publisher's ownership of their digital properties can be checked via trust.txt and their inventory via (app) ads.txt, the targeting precision depends mainly on the first-party data of the readers.
The latter factor has forced many news publishers to develop full-fledged first-party data platforms that enable their demand partners to target their most valuable audience at the right time in the right context.
Indeed, in the new privacy-centric realities, accessing and using first-party data is not that straightforward – detailed, informative reader consent to its collection and use for promotional purposes is already a must in many jurisdictions – but the investment can be worthwhile.
Expansion into Ecommerce Niche: Advantages vs. Pitfalls
Aside from paid subscriptions and advertising partnerships, one of the most potentially effective monetization strategies for news publishers is to expand their business into e-commerce. This usually implies the introduction of separate lines of business that offer customers limited third-party offers, product discounts, vacation packages, and more.
On the positive side, the introduction of such an e-shopping department within the publisher's platform helps attract customers from new, non-targeted niches while also generating an additional source of income from third-party providers.
At the same time, the development and promotion of such an e-commerce platform requires considerable financial and operational expenditure. This can make the endeavor too risky for small and medium-sized publishers in the news niche.