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When advertising goes… DIS focus on alternative revenue streams

With both the dream of monetising reach and the digital advertising model going up in smoke for publishers, several speakers at this year’s Digital Innovators’ Summit in Berlin turned their focus to alternative revenue streams. Apart from subscription models, ecommerce received special attention.


ecommerce ()


Juan Señor of Innovation Media Consulting set the scene. He told delegates at the 2018 Digital Innovators’ Summit (DIS) in Berlin that it has become blatantly clear that digital advertising is not going to pay the bills. The implication is that if publishers are not going to make consumers pay for content in either data or dollars, they should simply not be in publishing. 

Launching the 2018 edition of the Innovation in Media World Report, a FIPP publication that highlights the top innovations and future trends publishers are paying attention to, Señor added that publishers need to find redemption from “the original sin” - thinking that giving away content free today would monetise tomorrow. “You will need to migrate from advertising revenue to reader revenue.”

In this new environment publishers needs to decide if they are going to be paid in data or dollars. There are no other options. In this new world subscription and paywalls will replace digital advertising revenue dreams. The emergence of dynamic paywalls will be very important for effective implementation because these paywalls can measure demand and adjust price. 


Download Juan Señor's DIS speaker presentation.


Losing the advertising battle

According to Señor modern consumer trends support his conviction. A recent survey by Deloitte suggests that 50 per cent of adults in the Western world will have at least two subscriptions by the end of 2018 and four by 2020. A publication like The New Yorker already receives 65 per cent of its revenue from subscriptions.

Harvesting data as a revenue stream was one of the focus areas of Pauli Aalto-Setälä’s presentation. As CEO at Aller Media in Finland, he has been part of the traditional publisher’s  transformation from a legacy magazine publisher to modern media company with diversified revenue streams. 

He said around four years ago they were faced with the reality that they would lose the digital advertising race to Google and Facebook. They sold their monthly ad based magazines and focused on weekly subscriber based magazines. At the same time they realised that their data, about their subscribers for instance, could be further monetised. 

Along with partners they now utilise various forms of data, like customer relationship management data, to target consumer groups effectively. Refined data is sellable and useable and has led to the establishment of a highly successful company called the Data Refinery. 


Download Pauli's DIS speaker presentation.


When you plug algorithms in

Ecommerce emerged as one the most important alternative revenue streams for many publishers during the past couple of years and insight into this trend was well represented during DIS. 

Julian March, MD of Media, Games, Video and Entertainment at Future, said ecommerce is not a “dirty word” in journalism any more. Nor is it bad or evil. At Future they provide honest and impartial advice about products answering the questions readers need answered. When good impartial content engaged audiences it provides e-commerce opportunities with converse rally well.  Journalists have adapted to write good content which is searchable and marketable, yet still independent. 


Download Julian's DIS speaker presentation.


At Ebner Media in Germany, explained Dominik Grau, chief innovation officer, they use real time algorithms linked to product widgets to manage ecommerce options to website visitors. The real time algorithm predicts a product’s conversion probability, firstly based on existing knowledge of metrics (A), and secondly on probability of what might be related to conversion success (B). 

When the the algorithm is plugged into one of their websites and a user clicks on a product or subject, based on the algorithm and prior data about the user’s search history, they firstly know how much knowledge that person has about the product or subject, and secondly, based on the prior knowledge (A), can tailor the next offering or suggestion (B). 

The example Grau used is of someone visiting a website about guitar playing. Should the prior knowledge of search history reveal no knowledge of guitar playing (A), the algorithm will offer a ten minute course to learn how to play guitar. The second offering, probability (B), will always vary based on A.

By utilising these real time algorithms, on average 17 per cent of people who click on a widget will buy the product offering. 


Download Dominik's DIS speaker presentation. 


Visual search

Jenny Griffiths, founder and software engineer at Snap Tech, UK, explained how her visual search tools enables publishers to add ecommerce platforms to the content. An embeddable toolkit enables readers to use a visual search tool to source products, mostly in the fashion industry, and is instantly shop-able. 

As one example, any part of an outfit worn by a celebrity on a red carpet photo shoot can not only be instantly been found from a publisher website, but similar, or more affordable, alternatives will also be discoverable and shop-able. 

Their visual search tool draws upon a product database sourced from around 300 retailers and 16,000 brands, achieving a successful click through conversion rate from search to transaction of between 1.5 to 3.6 per cent and 100 per cent more time spent on site. 


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