Total revenue optimisation strategy boosts pageviews, revenue for news companies

By Michael Silberman

Executive Vice President, Media Strategy

Piano

New York, New York, USA

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Talk with any news executive and you'll likely hear about challenges from declining traffic and revenue, primarily from pullbacks by social media companies and search engine algorithm updates. Despite these challenges, media companies have continued to thrive.

Their secret? A focus on a holistic, total revenue optimisation (TRO) strategy, facilitated by improved cross-team collaboration and comprehensive analytics.

After the past few years of focus on revenue diversification, this is an inevitable evolution for digital publishers. That trend has driven growth as media companies adopt digital subscriptions, affiliate e-commerce, and events to supplement traditional advertising and sponsorship revenue.

However, this multiplication of revenue sources has led to competition for site inventory and conflicts over revenue priorities. Publishers agree optimising for total revenue is the answer, as demonstrated in the recent State of Publisher Revenue Report by Digiday and Piano. According to the research, 98% of publishers said a TRO strategy is essential for their 2024 plans.

The past shapes the future

Why do publishers see urgency now?

One reason is the revenue volatility over the past few years, especially in digital advertising. While there has been steady growth in digital sectors overall, those gains have gone to digital pure-play platforms over traditional news publishers, which have seen ad revenue remain flat or decline, according to GroupM and Magna Global.

Another reason is the dramatic drop in traffic from Facebook and X/Twitter, which were once reliable audience engines for news sites. Piano data shows a median drop of 32% of traffic from Twitter between Q4 2022 and Q4 2023. Facebook traffic is down by a median of 10%, but sites that initially had a large audience from Facebook saw a decrease of 30%.

Google search and Google News traffic are flat, while traffic from Android, especially Google Discover, is up 47% from a much smaller base. Google search is still 20 times higher than X and three times higher than Facebook.

With audience down and revenue becoming more complex, maximising every pageview and user interaction becomes increasingly urgent. Publishers can't afford to waste pageviews and block ad impressions by showing paywalls to users who are unlikely to convert.

Piano data shows that sites newly implementing paywalls saw a decrease in pageviews by 13%-16% in the first 90 days post-launch. Conversely, last year, sites imposing paywalls on 10% or more of pageviews grew their subscriptions by 38.7% more than those imposing them less frequently.

Don't trade off; optimise

Ideally, companies should be focusing on optimising ads and subscriptions. Then, paywalls are only shown to users who are ready to buy, ensuring the paywall generates more revenue than an ad.

Additionally, news companies are well informed about audience subscription behaviours and which editorial topics contribute the most subscription revenue. However, they know less about how these behaviours and choices affect advertising revenue. Bridging this knowledge gap is essential.

TRO represents a strategic shift from managing isolated revenue streams to integrating them, reducing the risks associated with dependency on any single source. This requires digital analytics holistically tracking all revenue streams, providing insights at the page and user segment level, for example, which articles deliver the highest advertising revenue, and which generate the most subscription conversions.

Data from clients using Piano's ad revenue insights tool show those article lists are usually different. This analysis improves decisions on content strategy, advertising, and subscription tactics.

These insights must be shared across teams. Ninety-one percent of publishers surveyed for the State of Publisher Revenue Report said internal silos are a challenge for TRO. Teams from sales, subscriptions, marketing, editorial, and audience development must align their efforts toward a unified goal.

A common data set and shared KPIs - such as ad RPM (revenue per 1,000 pageviews), subscription RPM, and total RPM - are crucial for understanding the share of revenue from each type and the revenue contribution across audience segments. Piano data shows subscribers often deliver more advertising revenue per visitor than anonymous users.

Lastly, the goal of TRO - achieving that "perfect" paywall - is easier with tools dynamically optimising inventory and audience targeting.

By combining user and content subscription propensity, teams can work from a common dataset. By integrating user and content subscription propensity with advertising revenue data on a per page, per user basis, Piano's dynamic paywall targeting categorises audience and pageviews based on predicted advertising revenue versus predicted subscription revenue.

This allows news companies to manage what share of pageview inventory is devoted purely to advertising, what share is locked with the paywall, and what share is conditionally locked depending on goals or to test.

The DMG Media site iNews adopted this paywall model and saw 28% improvement in paywall efficiency - fewer paywall stops per pageview - while maintaining conversions and growing revenue by 9% in Q1 2024 compared with Q4 2023. It also improved collaboration between the subscriptions and advertising teams using a common set of metrics, improving decisions when introducing new ad placements for users unlikely to subscribe, assessing the impact of paywall display on ad impressions, and deciding on an "ads-only" revenue strategy for international markets.

A call to redefined strategies

With recent shifts in the publishing landscape, publishers must adopt a holistic revenue management strategy incorporating a breakdown of silos and using advanced analytics and AI insights. By doing so, they can develop strategies allowing them to integrate various revenue streams, fostering collaboration across teams.

This unified approach not only enhances content monetization but also ensures a balanced maximisation of existing assets and prepares for future growth. As the industry evolves, the ability to adapt and innovate will be crucial for sustaining success.

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About Michael Silberman

Michael Silberman is executive vice president of media strategy at Piano in New York. Michael can be reached at [email protected] or @msilberman.

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