Take a look at the chart above. It is a chilling comparison of three media brands, each of which represent a different online strategy to engage a broad audience, and monetize that attention.
- The New York Times
- Wall Street Journal
Digg’s CEO explains their focus as not being worried so much about profitability, and that their focus is "how to innovate, how to be important, how to be on the top of people’s minds."
But for brands like the NY Times and WSJ, whose credibility and brand value are already off the charts, they are focused not only on the issue of relevance in the online world, but revenue & profit. Go figure.
From what I gather, none of these brands have found a sustainable digital revenue model – one that isn’t using venture capital or other avenues (*cough* PRINT *uncough*) to sustain their digital strategy.
As I look at metrics like those shown above – HUGE audience numbers with each brand seeking these metrics to go higher, I can’t help but ask:
- How big of an audience is big enough to support an ad-based revenue model?
- Why aren’t these brands able to create ancillary products & services that create the scale in revenue that they need?
- Why is everyone still so focused on growth of attention and audience size?
And while discussion in the media seems to center on linking, I wonder: is Google really the problem here? Or, is it the fact that the media distribution model from the 20th century no longer works in the 21st century, and these brands aren’t moving aggressively enough to rethink their business at the very core?
If you can’t properly monetize 18 million unique visitors a month,
how will another 5 million help clarify the way forward?
David Cushman recently shared a presention on a similar topics, explaining how we have moved from a distribution model (which favored traditional publishers), to a social model. Among the topics he covers:
- Why the internet-powered long tail of demand is a disaster for traditional broad mass media models but a huge opportunity for specialists.
- How fragmentation means you can never hope to target all emerging niche communities – and what you can do to counter that.
- Why the control of content production, distribution and user experience is now in the hands of everyone – and what that means for publishers.
- Why we need to think of specialist content as ‘social objects’ to discover where the ROI will come from when nobody wants to pay for content and no one clicks on the ads.
Tactics Without a Strategy
This is part of the reason why I am so enamored with B2B media… where the goal is not so much scale for the sake of scale, but on connecting a very select group of experts with highly useful solutions. It’s about building the markets, businesses and careers that drive our economy.
Assuming you work in B2B media (I always start with this assumption!), how do you provide solutions to those in the market you serve? Do you offer direct solutions (such as a service that directly enables cost savings or revenue generation for your customer), or are they a step removed, such as providing information that could be used to make a decision that shapes the industry, but requires a few extra steps on the part of your audience.
How do you take that step closer? How do you directly provide solutions to common and simple problems that those in your industry have? If you are a content creator, do you just keep doing what you have always done, waiting for someone else in ad sales to monetize your content?
One thing to consider is that if you don’t step forward and offer those solutions, that your advertisers, industry organizations and consultants will. They will create events, training sessions, software, data services and the like, because it serves the goals of all involved. Likely, it will also drive revenue.
What Problems Do Those in Your Industry Have?
Hint: they don’t know. Analyze their day, their process, their goals, and identify the one step out of 40 that is broken. Defy their expectations for how things need to work. For every innovative solution, there was likely an expert telling you why it couldn’t work that way. That is, until someone makes it happen. Be that person.
You should constantly be collecting research, looking at data, talking to people. Every time you have an assumption, you should challenge it – not to slow down progress, but to find that gap that your competitors might be missing.
Focus on the basics. On simple things. Be really specific.
Be wary of broad generalizations, and break down each process in your audience’s daily workflow into tiny steps. Which of those steps is broken? Which steps can you eliminate? Therein lies potential revenue.
Look in odd places, don’t just go right for the areas that you or your competition already focus on. You will delight people when you identify a solution to a problem that they didn’t know how to address before. So many people assume the little barriers in life are just to be accepted. Challenge that concept by focusing intently on your customer’s goals, and finding ways to help them achieve those goals.
B2B Media is Not Just About Creating Interest, it is About Providing Solutions.
All of these conversations about "charging for the news" or "charging for journalism" are absurd, not because of the idea of charging, but because no one is defining the many components of news & journalism, how they are used, and where to focus effort. Will the NY Times be profitable if it charged for news about a Dell product release? How about a car bombing in Iraq – how much would they charge for that? Or what about sports commentary – how are they differentiating themselves enough to charge for that when ESPN, Sports Illustrated, and thousands of other sports news sources remain free?
Even in the cases where pay walls will work, it is not a complete solution, it is just one revenue stream. And in all likelihood, it is not one that will restore revenue and profits to the levels being lost by print.
Ads & Sponsorships are one model, but getting customers to pay you is another. If you rely solely on ads & sponsorships, how many page views is enough for your market? How many webinar sign-ups? How much growth can you garner year after year?
To differentiate your revenue streams, you may want to consider developing products that provide direct solutions. What service do you provide – could you provide- that people couldn’t live without?
If your brand doesn’t have the capabilities to create direct solutions, can you partner with existing industry groups, vendors, consultants to help develop these solutions?
You have to start not by thinking about your capabilities, but in identifying a need that your customers have.
Optimization vs Invention
While you are looking for those gaps, you can also be optimizing your existing products, ensuring they are evolving to serve the changing needs of your audience, and building a sustainable business, even if the scale of revenue is not yet ideal.
A brand can’t just focus on BIG ideas – those great new things that might be cool, but require tons of development time and coordination between multiple internal and external groups. What starts out as a bold new idea can often slip into mediocrity by the time it launches.
Constantly be optimizing your producs. How can you make simple small changes to your product each month? How can you measure the affects these changes have on your customers, not just the affects they have on your impression of its value.
If you can refine things 5% or 10% each month, think of how much better your product will be in 6 months.
"We’re much more about building things small-business owners can use and understand quickly. It’s not about bells and whistles. It’s about actually getting things done."
Isn’t this – exactly – the mission of serving niche markets – of enabling businesses and careers? As one 37signals customer describes them:
"We didn’t realize we had a need until we started using [37signal’s product.] By starting to use it, we realized how backwards [we operated before.] There was no learning curve, everything just totally made sense. It pushes everything else out of the way and allows us to work really productively."
What solutions are your customers desperately waiting for, but unable to identify? What processes are holding them back? What opportunities are right under their noses?