At what point does churn rate inhibit growth and profit in a digital media business model? Both in the information services and SaaS industries, a churn rate over twenty percent is problematic for the business model. In both of these industries, sustainable profits exist at around ten percent churn. In controlled circulation of print media, a twenty percent churn rate would have been difficult to sustain. In digital media, the lifetime value of audience members is a key success factor to creating a profitable business model. This research note begins to explore the dynamics of the lifetime value of a digital audience. In September of 2011, Scout Research began tracking several audiences on B2B publisher sites to understand the lifetime value of the [...]
What is the Revenue Potential of an Event? Measure Your Audience
Through 2015, much of the B2B media revenue growth forecasted by Veronis Suhler Stevenson shows a substantial portion will come from events — both live and virtual. Most notably, over 70% of clients are increasing investment in geographical events that can be replicated in multiple locations – geo-cloning, as one client called it. And because events require longer lead times, extensive production and marketing investment, optimizing event revenue becomes dependent on trade-offs – specifically, trade-offs between the revenue potential of various events. So how do you measure revenue potential of an event? Event revenue mainly comes from two sources: vendors and attendees. In the case of vendors, their revenue directly correlates to the number of attendees to which they gain [...]
Click-through rates: the metric for missed expectations
Click-through rate (CTR) is often used to describe the advertising performance on a publisher’s site. CTR for an ad is defined as the number of clicks on an ad divided by the number of times the ad is shown (impressions), expressed as a percentage. If the ad sales team for a publisher claims 1 million monthly unique visitors with 4 million page views and a CTR of 0.2% (or 8,000 click-throughs), the buyer might think those click-throughs are all distributed across the million unique users to yield 8,000 unique conversions. The buyer and the seller are wrong. Here’s the problem: CTR doesn’t take into account audience engagement, not to mention the fact that other advertisers are competing for the click-through [...]
SEO is for Suckers
Richard Tofel’s post this week about how digital news will be better when publishers move beyond SEO was an interesting op-ed, but most of the debate seemed philosophical as opposed to factual. Our advice to publishers: SEO is for audience development, not revenue (that could have been a softer title for this post). Here are the facts behind that recommendation. Fact: Loyal audience members do not use search as a means to engage with publishers. The striking difference between fans and fly-bys is the percentage of visits that are based on direct vs. search. Upwards of 95 percent of fly-by visits are generated from a search whereas upwards of 70 percent of fan visits are direct. Of the fan visits [...]
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