Companies see success with subscription, advertising business model transformations
Conference Blog | 15 August 2021
Significant trends in technology, content consumption habits, and data privacy are driving news media companies to reinvent their revenue models. During the South Asia News Media Summit on Friday, delegates heard how companies are building digital subscription and first-party data models to survive and thrive in the new media landscape.
Monetising digital reader relationships
Moving to a subscription model has proved to be a worthwhile challenge for The Hindu and Indian Express Online. Pradeep Gairola, vice president and business head of digital for The Hindu, and Sanjay Sindhwani, chief executive officer of Indian Express Online, said that though high print consumption differentiates India’s audience from many other countries, the journey into digital subscriptions is a driving goal.
Gairola and a significant lesson amid The Hindu’s digital transition is to have faith in the product. He reminded attendees that some people will pay for your product and some won't. If you focus on journalism first, he believes the revenue will follow.
“In the time of fake news and disinformation, trust is going to become a very very important currency,” Gairola said. “High quality content is the only way to gain subscribers.”
Like The Hindu, Sindhwani said Indian Express Online has also been experimenting heavily with reader-generated revenue, recognising the advertising model alone was not sustainable. This is especially true in a world where everyone acts as media and advertisers can go anywhere.
“The supply side keeps increasing, prices keep falling,” Sindhwani said. “Our belief is you will have multiple revenue streams, you need to diversify your revenue stream and subscription is one of them.”
Everything from content commerce to subscriptions and advertising are all based on what the customer wants. Sindhwani said data is important in this of course, but it’s only relevant if you can scale it.
Future of first-party data and advertising
The “cookie apocalypse” is underway, in which third-party cookies will be phased out. All digital platforms have pivoted to privacy protection, in some form. Some of that change may be self-serving, and should be a wake-up call for media organisations.
What media companies need to know about ad tech is that the story has not fully broken, as evidenced by the many open and long-running regulatory inquiries into the big tech platforms, Robert Whitehead, INMA’s Digital Platform Initiative lead, said, pointing to a recent report for those who wish to read more on the state of ad tech.
Since the transformation to digital, Whitehead said media companies have relied on third-party data to sell advertising and market to their audiences.
“We don’t own that data, we don’t have a relationship with the customer,” he said. “We own a little bit of first-party data where someone might have paid for something or registered for something in the digital environment, but it’s been really important thus far to link the first-party data with other data we could get on our consumers.”
That will no longer be possible in the cookie-less future. For Ekstra Bladet, Google’s decision to end third-party traffic created considerable challenges, said Thomas Lue Lytzen, director of ad sales and technology.
“We chose to be in control of data and stop sharing it with everyone. So we built our own first-party data platform.”
That platform, Relevance, has revolutionised operations. Using only first-party data, and only from users who have given consent, it uses AI and machine learning to categorise articles in real-time to reach the right users. It also gives them unlimited access to the data collected, which then lets them create audiences for which to target their campaigns.
“It has really resonated within the market. And it’s bought us time with advertisers,” Lytzen said. That will continue to be critical as the third-party cookie disappears: “If advertisers aren’t able to reach the right audience with their campaigns, they will switch to Facebook and other platforms.”