Posted by: Matt Shanahan In the debate about business models for digital publishers, the cost of audience impressions is often underestimated. The expense to create a sellable inventory of impressions requires more than content production, it also includes the cost of audience development, which can greatly exceed the cost of content production. The classic example of this content vs. audience cost dynamic is “The Blair Witch Project” movie. “The Blair Witch Project,” whose final production budget was somewhere between $500,000 and $750,000, cost over $25,000,000 to market. As the competition for audience impressions increases, the sophistication and cost of acquiring audience impressions is also increasing. This leads publishers to decide whether the return on investment from acquiring more fly-by impressions is greater than the […]
Archive | November, 2010
Demand Map™: A Quantitative Lens for Revenue Optimization in Paid Content
Posted by: Matt Shanahan In the book Super Crunchers, Ian Ayres looked at hundreds of tests evaluating how data-based decision making (i.e., quantitative) fares in comparison with experience- and intuition-based decisions (i.e., qualitative). We were interested in doing the same thing regarding license revenue optimization in paid content. When a publisher designs a license for paid content (i.e., packaging and pricing of access to media and information), they do so with an expectation of how much media or information will be consumed (i.e., the level of engagement). Typically, the license is defined in terms of sections, volume, numbers of users and usage rights. When a new license is introduced, the initial price is usually based on previous experience and intuition of […]