Getting smart about digital revenue

Successfully increasing digital revenues really boils down to understanding audience behaviors and delivering content (and advertising) to the segments of the audience that provide the most value in return.

Today, Scout Analytics is announcing the formation of a new research division to address this challenge by helping publishers predict online revenue opportunities based on the size and activities of their audience. Scout Research plans to develop behavioral models that give publishers a better understanding of the elements that drive digital revenues and profits.

The first Scout Research “alert” – free to users with registration – will examine the differences between print and digital revenue models.

“In the print world, monetization is based on distribution of media,” Matt Shanahan, senior VP of strategy for Scout Analytics, said in a phone interview. “In the digital world, it’s based on consumption of media. No one has documented the details behind this.” [Disclosure: Shanahan also guest blogs for eMediaVitals.]

Scout’s analysis concludes that the shift from media distribution to media consumption “dramatically lowers monetizable impressions and revenue capacity.” To illustrate, Scout compares a publication with a 100,000 print circulation vs. a 100,000 online audience. Print distribution generates 273 million ad impressions (based on pass-along, ads per issue, etc.), while the digital audience generates 155 million impressions (calculated by ads per page view and consumption patterns of the audience). That’s a 47% “digital drop-off” – which publishers must backfill with other revenue streams such as subscriptions, e-commerce or events.

Future research will cover a broad range of topics, including:

• the impact of “fly-by” visitors on revenue
• content consumption patterns of different visitor types (e.g., fans vs. fly-bys)
• revenue/profit potential of traffic driven by search, social and email
• audience members that can be monetized through events or subscriptions
• the average revenue per user required to reach profitability

Scout Research is leveraging the insights it has gained from working with the publishers that use what Scout is now calling its “revenue intelligence” platform. Shanahan emphasized that the research group won’t disclose any customer data; instead, it will use the data sets it collects to make correlations that form the foundation of new methodologies for optimizing digital revenue.

More options for optimizing content

Scout is one of a handful of vendors offering technology to analyze user behaviors and website activity as a way to help publishers maximize online advertising revenues. These solutions are evolving as vendors integrate more functionality and expand the reach of their products to accommodate paid content models, social media and multi-platform publishing strategies.

For example, Perfect Market is expanding the functionality of its eponymous platform, which was originally launched to help publishers better monetize content for search traffic. Now, the company wants to help publishers optimize their content across multiple channels, including social and mobile.

“People behave differently depending on how they’re coming into content,” Perfect Market CEO Julie Schoenfeld said in a phone interview. “Publishers should be taking advantage of what they know about their readers to arrange and display content for each of those different use cases.

“Search was a wonderful place for us to start,” she added, “and now we’re applying the same discipline and algorithms to social media to find ways to make content more shareable.”

The same concept applies to mobile devices, and Perfect Market is developing ways to optimize content (editorial and ads) that appear on different types and sizes of displays, as well as the user’s location.   

“We start with the content at the center, and look for ways to increase and improve the user experience by addressing whatever need they present,” said Schoenfeld.

Improving the user experience across all channels will give publishers more opportunities for monetizing their content with advertising or paid models – and take another step toward closing the gap between print and digital revenue.