Gawker Media Going to Engagement-based Pricing?

Posted by: Matt Shanahan

As my posts have pointed out, engagement is the unit of monetization in digital media. It is always interesting observe the models emerge to monetize engagement. In Felix Salmon’s post The new Gawker Media, he describes an interesting pivot for Gawker Media on the revenue model - charging advertisers for time.

Specifically, Felix points out that Gawker Media plans to package content together and promote distribution for certain hours and days of the week similar to TV/cable programming. The assumption must be that there is an audience that wants to “tune in” for the latest from Gawker and that the most engaged audience members would do so at the promoted timeslot. If Gawker Media can construct the audience and predict their engagement, the bet is that it will be more valuable than selling pageviews.

Updated: From a bit more digging, it looks like Gawker Media ARPU is in the range of $6.45. The $6.45 ARPU comes from data in the Feb. 2010 article entitled A Traffic Boast to End the Week stating that their monthly uniques are at 3.1M US people and today’s VentureBeat article where Nick Denton quotes a $20M revenue year ($20M/3.1M = $6.45 ARPU). As previously tracked in this blog, getting sustainable profits from digital usually requires a $10 minimum ARPU. The switch in advertising strategy is likely a reflection that growing audience at a faster pace than declining ad rates isn’t reasonable and that there is downward pressure on ARPU.