Few newspaper ads have performed exactly as anyone hoped since the digital transition. The fact that people still talk about digital as if it’s some kind of upstart shows that there’s still a lot of work to do.
Small local and major national publishers continue to rely on ads, both digital and print, for the bulk of their revenue. And that’s great because it’s working. Digital ad performance, while sometimes rocky, keeps getting better.
Over the past year, patterns have started to emerge and the trends are promising. Even if the payoff isn’t mind-blowing (yet), the path ahead looks a lot clearer than it did a few years ago.
Which Advertising Medium Generates the Most Revenue?
Digital ads account for 1/3 of all newspaper publisher ad spend, regardless of platform, says Pew Research Center. That’s up from 2014 when the total digital ad spend was about 28 percent.
Digital splits into mobile and desktop. According to Pew, last year was pivotal. That’s when mobile came out in front. Mobile takes the greater share of ad spend, at 53 percent or $31.6 billion now. Compare that to $28 billion for desktop. Pew says mobile only amounted to about $1.45 billion in 2011.
Display ads bring in the most revenue of all digital options, with video and mobile display in that group. Mobile is growing quickly.
You’ll see some familiar faces in the overall better performers.
- Display ads: kings of the digital ad realm
- Recruitment advertising: building a new and different kind of ad revenue stream
- Video: users love it for mobile and desktop
- Native advertising: slowing down, but still loaded with possibilities
Video is a perennial hit. Although banner ads remain an important element in desktop and mobile digital ad spend, video is growing much faster.
News Media Alliance says while users love video, some hiccups still persist. But with short videos and muted sound, people respond better. Eliminate the need for sound by adding captions (with un-muting the sound as an option), and you’ve got a less invasive ad in a medium that users like.
Recruitment advertising taps into another market. Programmatic technology makes it simpler. It can be complicated, but there’s an easier way. When newspaper publishers work with a job board partner, this strategy minimizes costs, drives in unique traffic, reduces effort and monetizes job seekers.
How do Advertisers Drive the Right Ads to the Right People?
Ad revenue and performance, especially in the long term, depends on getting the right ads in front of the right eyes. Leverage big data, and you can accomplish it with all ad mediums.
Publishers shouldn’t let big data feel intimidating. Technology improves and big data becomes more approachable. As users have started to understand the value in big data, they’ve sent out a call for better tools to take advantage of it. Tableau says “self-serve” analytics are the way of the future.
“Business users want to further reduce the time and complexity of preparing data for analysis, which is especially important when dealing with a variety of data types and formats.”
From its inception, big data helped create targeted advertising. But according to Sqream, it was mainly used for targeting a broader market. As ad strategies drill down and get more personal in the future, big data sources the information needed to make targeting as personal as it gets.
Why does that level of targeting matter? Better engagement. The 2015 Teradata Global Data-Driven Marketing Survey shows the majority of marketers predict one-on-one personalization as the future of advertising.
This is great news for all digital advertising, but it’s especially great for mobile. And that’s handy since mobile is still growing. News Media Alliance says publishers have more targeting options with mobile.
“The data cache is almost unlimited: age, gender, location. However, the focus should not stray from creating good, non-disruptive ads for the mobile platform.”
What’s Happening With Paywalls?
Is anyone having luck generating revenue through paywalls? If so, it’s probably not because the audience loves them.
According to TechDirt, paywalls are counterintuitive for the average newspaper. With so much competition, a paywall is another layer between news and its intended audience.
“The competitive landscape for community and attention has changed (massively) thanks to the internet. And putting up a paywall makes it worse. In most cases, it’s limiting the ability of these newspapers to build communities or get attention, and actively pushing people away.”
Paywalls might work for legendary names in news media. But for everyone else, there is no built-in, generations-long loyalty and reputation that drives in readers.
Using the work login to read a non work related news article behind a paywall……. ethical? Discuss.
— mampersand (@mampersandb) December 9, 2016
People everywhere dislike the paywall model.
Not entirely sure if more Scottish newspapers going behind a paywall is going to solve their circulation and decline issues.
— Pete Wishart (@PeteWishart) December 12, 2016
With the fake news issue circulating lately, paywalls bring up another problem. Fake news is never paid news. It’s free, easily accessible and spreads like wildfire. So perhaps one of the best ways to win the fight is by breaking down the paywall and making authentic, fact-based content available to the masses.
Revenue is the evergreen problem. And advertising is the way most profitable news organizations get it. Thankfully, digital advertising is coming into sharper focus. Print ads might generate the most revenue, but it’s on a steady decline. Meanwhile, digital is still growing up. It’s full of promise. And many of the puzzle pieces have found a place to fit.
The future might bear little resemblance to what anyone predicted at the digital news inception, but that’s OK. What matters is that digital is generating revenue. The digital trend is shifting mobile, and that’s growing even faster.
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