• Brett Matson

How to Generate Revenue from Content... and Why It's Not Working

In the previous post we looked at the stresses facing the digital publishing industry. This time we’ll look at how business models are adapting to the challenge.


At its simplest, publishing has always been about connecting content with people who want to read it. Traditionally this meant charging a fee per content item like a newspaper, book, or magazine. But this model never made sense in a digital, on-demand world where readers intermittently consume bite-sized content.


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So digital publishers had to get creative about generating revenue from the content they produce. Many methods have emerged, but none have come without pitfalls.

Let’s take a look at them.

Ad-Supported Content

Ad networks provide an easy way to generate revenue from content. The downside is that not all ad networks are equal. If your site analytics metrics fail to meet eligibility thresholds, you’ll generate little revenue and your content will be surrounded by ads for ear wax removal.


Ad for ear wax

The upside is that consumers reluctantly prefer ad-supported content, so it can be a worthwhile option when used with other methods.

Sponsored/Paid Content

Having a third-party brand sponsor your content can be a way of achieving more substantial revenue, but nothing comes without strings attached.

The downsides of sponsored content can be:

However, appropriately labelled sponsored content that makes credible claims with cited sources can be an effective way to augment revenue.

Content Distribution Platforms

Content distribution platforms pay publishers to place links to third-party content on their site. You can recognise these articles from the enticing images and titles like “Tattoo fails” and “Wardrobe malfunctions that actors regret to this day”.

Example of content recommendation

If you were to click on one of these articles, you’d be taken off site and usually to an article with a different and even less appealing title. Publishers like CNN use these platforms because clicks on the ad links can generate meaningful revenue.

Affiliate Links

Inserting affiliate links to Amazon products into your articles can sound like money for jam, but in addition to enthusiastically sending your audience off site, affiliate revenue tends to be insufficient as a business model. It’s for this reason, more publishers are incorporating on-site native e-commerce into their business model.

Native E-commerce

Designing content that has tie-ins to related products in an on-site e-commerce store is an increasingly common way to generate revenue. This has several advantages over affiliate links:

  1. The audience stays on-site.

  2. The publisher controls the checkout experience.

  3. The publisher earns a higher margin on each product sale.

The drawback of native e-commerce is the effort and logistics involved in maintaining an e-commerce operation with sufficient inventory to generate meaningful revenue.

This is why Canadian start-up company Bonsai provides an end-to-end e-commerce solution, including order management and fulfilment, for publishers. I haven’t had direct experience with Bonsai, but it’s an interesting idea and I hope they take off.

Bonsai company logo

Paywalls

Finally, the paywall has become either a temptation or reality for many digital publishers. This is a risky move because results vary between publishers, with one study showing results ranging from a 24 percent increase to a 12 percent decrease in total sales.


As a publisher with significant brand, The New York Times is often cited as a successful example of a paywall, but one of the significant advantages for them was to arrest the decline of their associated print subscriptions.

So which model is best?

Typically digital publishers will employ a suite of methods that works optimally for their circumstance. For example, Eat.Live.Escape (aka ele) uses a combination of display ads, affiliate links, and a native e-commerce store with products that tie in to their travel and lifestyle content.

However, this industry-wide problem doesn't lie with any of the business models, it's in audience engagement. In the next post, we’ll focus on the techniques involved in optimising content recirculation for maximum revenue generation, why they're not working, and how to fix it.


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