The anonymous audience is a revenue anchor that pulls down business performance for media publishers. A behavioral analysis of fly-by visitors highlights just how much of a drag they are on the revenue model. A robust revenue model creates multiple streams of revenue from an audience member. The revenue potential of an audience member is defined by both the engagement behavior with media (i.e., advertising revenue) and the purchase behavior for events, daily deals, commerce, or subscriptions (i.e., direct revenue). To quantify the revenue drag of the anonymous audience, Scout Research analyzed the revenue potential of an anonymous visitor compared to a registered visitor at every level of loyalty (i.e., fly-bys, occasionals, regulars, and fans). The infographic to the right [...]
Engagement Rate is the Margin Squeeze in Digital Advertising
Engagement rate, the percentage of the audiences that consumes a particular piece of editorial content, creates the biggest squeeze on digital advertising profits. The advertising profit contribution of media is defined by the advertising revenue produced from page views minus the costs to create the content and sell the advertising. Unlike print media that uses circulation and pass-along rate to define sellable inventory of page views, digital media uses audience size and engagement rate. While pass-along rate acts as a page view multiplier on circulation, engagement rate is a page view filter on audience size. The consequence is that engagement rate puts a squeeze of advertising profit margins. To illustrate this point, the infographic below benchmarks advertising profit contribution of [...]
The Digital Drop-off
Debates are surfacing on the transition strategies to digital publishing such as paywalls and social media. Strategies are usually characterized as a response to the democratization of distribution that increased competition and lowered barriers to entry, but there is a more fundamental disruption that occurred – the basis of monetization has changed. Digital has shifted monetization from distribution of the media to consumption of the media, which is not only a disruption, but a drop-off. In the print revenue model, a publisher could monetize delivery of advertisements by sending them in the mail and claiming impressions based on circulation and pass-alongs. In the digital revenue model, a publisher can monetize delivery of advertisements only when a visitor consumes a page [...]
How Many Audiences Can You Measure?
Building on our original findings in 2010 about audience loyalty, scout® research has been looking into what creates loyalty. Understanding the nature of loyalty, would obviously allow a publisher to nurture and grow the audience. For instance, is a fan a fan because she reads all the homepage articles? Or is she a fan because of a certain section of content? So what did we find out? Site-wide fans typically make up 20-30% of the visitors. Site-wide fans are the ones with a broad reading habit. Think of them as the cover-to-cover reader. In contrast when you analyze most fans’ behavior to figure out what they are a “fans of”, it is typical to find an individual fan has an [...]
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