People’s increased passion for special interest activities and brands, specialist content and transformation strategies to diversify income streams are all part of growing revenue directly from audiences, says top media CEO’s.
In a panel discussion, hosted by James Hewes, president and CEO of FIPP on the first day of the 41st FIPP World Congress in London, contributors Marcus Rich, CEO of Time Inc. UK, Andria Vidler, CEO at Centaur Media UK and Kevin Costello, CEO of Haymarket UK shared their thoughts on how to draw revenue directly from audiences.
The panel of chief executives made the overwhelming point that in a competitive advertising climate, drawing revenues directly from audiences has seen their brands grow. However, their strategies for success differ.
Rich said at Time Inc the role of audience revenue played a significant role in growing income over the past couple of years. Part of this success is because Time Inc. UK has built its business on audience passion. The Time Inc. titles serve customers who are “incredibly passionate about subjects beyond work”, whether this be cycling or sailing. Over time, especially with the rise of social media, people have become even more passionate about a variety of special interest activities for which they publish brands.
“The basis of our business is a deep understanding of those people and their passions and (for us) to work out where we have permission to extend our relationship with that customer, whether this stretches into events or e-commerce.”
Vidler said Centaur - a B2B media and marketing services business helping professionals improve their business performance with insight, information and events - proved that by focussing on what the customer need is, not only extended its revenues but also transformed the income model. “Centaur was wholly reliant on advertising and sponsorships but will head into 2018 with about 80 per cent of revenues directly levied against products and services to the audience.”
Similarly, Haymarket’s entire recent transformation strategy was driven by the belief that the company needed to diversify its income streams, explained Costello. With a focus on both B2B and the consumer, only 37 per cent of income these days are derived from advertising, proving that the strategies embarked on around seven years ago to derive income from digital and other models like events have been successful.
Despite these successes barriers to transformation remain huge. Vidler said that at Centaur the entire business organisation was focused on monetising the audience reach. “We had to change that orientation by creating content that was highly valued by our readers and users. It had to become vital enough for people to be prepared to pay for it.” This has not only been challenging but also different for each brand within the Centaur business.
Costello said creating the plan and having a fresh vision for changing monetisation models is easy. “Transforming the culture is the really challenging difficulty…It’s resulted in us having to bring in a whole bunch of folks with a very different mixed set of skills.” He said of the new skills being employed now, at least 50 per cent of people have job titles that did not exist three years ago. It speaks to the reality that new talent within the company are challenged to fulfill new roles in a data driven analytical world. “As media owners and as an industry our single biggest challenge is that these people are very rare, pretty expensive and they need to see the media as an destination of choice - where they can thrive, survive and build out a future.”
Costello added that the key is not only vision, faith and belief but getting talent excited about it. “They work in an industry that is not a steady state. It is at the forefront of change. If you are excited about change and there are things you are going to do that even we don’t know we are going to do in six months from now, then it is an exciting place to be.”
According to Vidler, this state of flux and uncertainty does have its positives for talented people ready for change and challenge. “If you understand what your customers want and you move to a place where content can be delivered in any format, they will also trial things. And that is what you need because you don’t know where you are going to end up. It is not about moving into one new revenue stream, it is about moving from one format to another and continuing the ongoing conversation with the community you are talking to. You need teams to embrace these opportunities.”
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