Publishers Say Email is #1 Revenue-Driving Technology

When we talk about technology in the publishing industry, we often discuss what’s new and groundbreaking, like how publishers are using chatbots to deliver personalized newsfeeds or dipping their toes into voice assistant platforms like Alexa and Google Home. Although new technologies are exciting and certainly worth exploring, many publishers have a more pressing question: What publishing technologies are actually driving revenue? Publishing Executive asked this same question to industry executives and reported on our findings in the Special Report on Technology Adoption Strategies in Publishing. Publishing leaders identified technologies that drove the most revenue for their organizations in 2017. Overwhelmingly, these were not new technologies, but tried and true solutions that have been delivering for publishers for years, like email marketing and ad serving. Email Marketing a Top Revenue Driver for Publishers 34% of publishers indicated that email marketing drove substantial revenue for their businesses in 2017, the most of any technology listed in the report. Email is incredibly valuable to publishers because the email address has become the unique identifier and direct line of communication for online users. Email then becomes the lynchpin to track reader behavior across platforms and build a user profile from those insights, and then provide more targeted subscription offers and event invites, develop lead generation campaigns for clients, and deliver personalized content. Several publishers have upped their email efforts in recent years, particularly in regards to newsletters. For example, The New York Times currently operates 58 newsletters, and has nearly doubled its newsletters since 2015, adding new content verticals like “Cooking” and “Trump’s Agenda.” Since expanding its newsletter roster, the newspaper has grown newsletter subscribers to over 13 million. The fact that email ranked as the number one technology in terms of revenue is not entirely surprising. At the beginning of 2017, Publishing Executive conducted similar research and asked what technology publishers anticipated would drive the most revenue in 2017. Email ranked second, just behind marketing automation. Although most newsletter subscriptions are free, there is value in converting unknown site visitors to known audience and nurturing them towards a paid subscription. Increasingly email is becoming publishers primary tool to move users down a conversion funnel. And new features like personalization and interactive content are helping publishers capture higher user engagement and conversion on email. Ad Serving Captures the #2 Spot According to the technology adoption report, 24% of publishers said that ad serving was instrumental in driving revenue for their businesses in 2017, indicating the reliance publishers still have on digital advertising revenue, despite challenges of low CPMs and ad blocking. It’s unlikely that online advertising revenue will significantly decline for publishers any time soon, but some significant browser changes coming to Chrome and Safari may affect publishers’ digital advertising strategies. At the FUSE Media summit, 1105 Media VP of digital strategy and web Becky Nagel spoke about the ad and cookie blocking updates coming to Chrome and Safari. These updates will block certain ads -- and in the case of Safari prevent cookie tracking -- by default, which will significantly impact publisher ad revenue for the worse. It will be interesting to see if ad serving remains a top technology down the road, or if publishers will shift toward other technologies, like paywalls and subscription management tools to deliver new revenue. Alternative Revenue May Be on the Rise Of the top revenue-driving technologies, ecommerce (16%) and lead generation (18%) stand out as technologies that reflect publishers’ evolving business models. They suggest a shift away from a revenue strategy centered on eyeballs and ad impressions toward a service-driven one where publishers provide more direct solutions to advertisers’ and readers’ problems. Print declines have forced publishers to rethink their business models. Traditional revenue streams like advertising and circulation have been hit hardest by print magazine declines. According to the PwC, that trend will not change any time soon, which means diversification is an imperative for future growth. What Didn’t Make the List There’s been plenty of hype around the “pivot to video,” the explosion of podcasts, and the future dominance of virtual reality. Despite the buzz, all three of those technologies ranked low on the list of revenue-driving solutions. Only 1.6% of publishers indicated podcasts drove significant revenue for their business in 2017. Video captured slightly more at 8%. No publishers indicated revenue growth from virtual reality. The challenges around video and podcasts may relate to the difficulty of scaling production and the limited inventory publishers can sell against these assets. The popularity of podcasts and video continues to grow apace, but monetization seems to be lagging behind. New revenue streams may need to be explored to make these technologies more profitable, such as capturing revenue directly from the audience. Virtual reality has its own issues of scale. The processing power required to deploy a truly virtual environment is massive, making virtual reality too expensive for most publishers to execute. To learn more about how publishers are planning for new technologies read the full technology report here. The research explores publishers’ objectives for new technologies, what obstacles they face in terms of integration and adoption, and how they expect their budgets will grow or shrink in 2018.

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Publishers Say Email is #1 Revenue-Driving Technology

Ellen Harvey

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Ellen Harvey