By
James Breiner
So much innovation is occurring on the
revenue side of new digital media that it's time to review, update and
aggregate. Let's start with the basics.
An audience is just a group of
observers. A community shares values and a deep interest in a topic or geographic
area. It often has a bias toward action. That is where value comes in.
Connecting these people and creating value for them is the beginning of a
community. Only when you have connected them can you begin to get their
financial support.
I was reminded of the power of
community, as opposed to audience, when reading Martin Langeveld's post
for Nieman Lab
on what was ahead for journalism in 2013.
As Michael Skoler suggested a couple of
years ago in Nieman Reports, when paywall
thinking gives way to membership thinking, the business model becomes community
rather than audience. “To harness this model,” Skoler wrote, “news
organizations need to think of themselves first as gathering, supporting, and
empowering people to be active in a community with shared values, and not
primarily as creators of news that people will consume.”
- Engage the community where they live and spend their time -- in their physical (if possible) and virtual communities (social networks). This is how PolicyMic has built up a monthly audience of 14 million users in 2 1/2 years.
- Think like a community organizer. That is how Robert Niles recommends journalists get started. His book is How to Make Money Publishing Community News Online.
Texas Tribune, a digital news
organization focused on government and education, embodies this way of thinking.
It offers six levels of membership and a sliding scale
of benefits, from $10 to $500 a year.
Think about that. By offering not just
a product but access, privileges and opportunities to mix with the community,
Texas Tribune is able to charge far more for a membership than it might get
from a subscription.
MinnPost does the same. On its membership
page, we learn that "membership means that you are part of the MinnPost
family, helping us achieve our mission through ongoing financial support."
Membership brings privileges, discounts and networking opportunities. The
asking price is higher than most paywall subscriptions, $120 to $600 a year.
LaSillaVacia, a Colombian website
focused on investigative journalism about power and politics, has a membership
group of 550 "Super Amigos" that in 2013 contributed US
$32,000.
Their appeal is to people who want to support independent journalism. That is
almost enough money to finance their operations for a month.
Premium pricing for sponsorships: Texas
Tribune offers three sponsorship levels that run from $1,000
to $5,000 a year. Sponsorship benefits include more than just the opportunity
to put a message on the website. They include a more intimate relationship with
the brand at events.
Leo Prieto, the co-founder of BetaZeta
in Chile, which has a monthly audience of 10 million users, is turning away
from traditional advertising toward sponsorships, which now make up
40 percent of its revenues.
Prieto prefers sponsor relationships
with brands as opposed to the highly cyclical business of selling impressions
and clicks to digital advertisers. Among other reasons, the price Betazeta can
charge for traditional advertising continues to fall because of increasingly
sophisticated ad-targeting software and automated ad buying. In addition, web
titans like Google, Amazon, Microsoft, Apple and Facebook are gobbling up all this
advertising.
"The advertising business model is
dead for everybody," Prieto said. "For television, for magazines, for
radio, for everybody. We've started approaching brands about aligning our
audience with the audience they want to reach. It continues to be an
advertising relationship but a different kind of advertising."
"A sponsor is a brand that stays
with you in a longer-term relationship and is a close partner." He
emphasizes that the partner has no say over editorial content but can have a
space on Betazeta's site to tell its own story.
Takeaway: A digital media outlet
that has a reputation for credibility, strong ethical standards and community
service will appeal to many advertisers who want to align their brands with
those values. You can still sell the magic of the relationship.
This is old-fashioned brand-based advertising. It still works on a community
level, despite all the naysaying by data-driven sales organizations.
When you
think of community rather than audience, you no longer have to fall into the
pricing trap of advertising contracts based on CPMs (rapidly falling, by the
way), page views, unique users or clicks.
Betazeta, mentioned above, is
generating about 10 percent of its revenue from content marketing, which means
creating editorial content for brands to use on their own sites. It is like the
service of an advertising or public relations agency.
Brands have suddenly discovered the
value of blogs, Prieto says, and are now clamoring for experienced editors and
writers to create content for them.
The content is not a direct sales pitch
but shows the audience useful information, such as how to get the most out of a
manufacturer's smartphone, how to strap a child into a car seat properly, how
to recycle a company's product and so on. Prieto sees this trend as a growth
opportunity for his business.
A similar revenue strategy is also
being used by MedCity News, a U.S. site with 10 employees that
focuses on innovation and research in health care. Founder Chris Seper uses
dozens of contractors to produce content not only for its own
website but for websites of third parties. They also do contracted research --
white papers.
Is all of this talk about offering
services like an advertising or PR agency making you uncomfortable? Are you
wondering about the ethics of it all? Maybe you should take time out right now
and read these posts:
- Five dirty words journalists need to say without blushing
- How News Organizations Can Sell Sponsored Content Without Lowering Standards
- Rules of the Road: Navigating the New Ethics of Local Journalism
I'll share even more alternative
revenue streams in my next post.
This post is an excerpt from the
original which appeared on the blog News Entrepreneurs. It is published on
IJNet with the author's permission.
James Breiner is a consultant in online
journalism and leadership. He is a former co-director of the Global Business Journalism
Program at Tsinghua University and a former ICFJ Knight International Journalism Fellow who launched and
directed the Center for Digital
Journalism
at the University of Guadalajara. He is bilingual in
Spanish and English. You can follow him on Twitter here.
Image CC-licensed on Flickr via Graham Holliday
Source: www.Ijnet.org
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