The Single Change That Will Get Publisher’s Digital Ad Revenues Flowing
“One reason people resist change is because they focus on what they have to give up, instead of what they have to gain.”
Most publishers make virtually no money from their digital editions, opting to give away their digital ads for free to those that buy print.
With every market research study on the planet showing readership and ad revenue moving (quickly) from print to digital, publishers can’t keep giving away digital and expect that there won’t soon be a day of reckoning.
Publishers instinctively know this, but are in a difficult position because a proven digital monetization model has yet to emerge.
(Except one has, we just didn’t realize it applied to magazines.)
The Biggest Advertising Success in Our Lifetime
In our lifetime, there has not been a bigger advertising success than Google. Today, roughly 1-in-every-12 ad dollars spent globally gets spent with Google. So why do advertisers love to spend their money with Google?
I believe this is because Google has popularized two things that have made them the darling of advertisers and the most valuable company in the world, they are:
- Pay-Per-Performance Advertising. Advertisers universally love that if someone doesn’t click on their ad, they don’t have to pay.
- Name Your Own Budget. It doesn’t matter if an advertiser only has $15 to spend, they can still advertise with Google. Let that same advertiser go to Time magazine with their $15 and let’s see what happens.
Google can afford to take these small advertisers because, unlike traditional publishers, they don’t give advertisers access to their entire audience for a flat per issue rate. Instead, they run the advertiser’s ad until their chosen budget is used up, then they dynamically pull the ad out and replace it with another paying customer.
How much money would publishers make, if they had the ability to do the same things as Google?
Here’s a scenario to illustrate:
Let’s look at CRM company Salesforce.com. Doing a little competitive intelligence, using keywordspy.com, we can see that they are likely paying in the range of $13.72 for their search engine text ads.
Now let’s imagine a magazine publisher, serving an audience interested in CRM software, would approach Salesforce.com and say something like this:
“…advertise in our digital edition and instead of having just a few words of text like with your search engine ads, we’ll give you full page ads(not just a few words of text) and you’ll only be charged if a reader clicks on your ad, or spends at least 10+ seconds reading it. And, when that does happen, we’re not going to charge you $13 like the search engines, the price will be only $1. Oh, and you can set your own budget, of any amount, and start/stop whenever you want.”
Beyond making advertising far easier to sell (price objections are virtually eliminated with this approach) the economics for the publisher, who up until this point is making near $0 from their digital editions, are transformational.
This monthly pro forma will allow you to see how much you would earn following this model. Just match the monthly # of reader session you could obtain across the top, against the average number of ads a reader would click on or view for 10+ seconds during their session.
The Single Change Needed For a Publisher to Realize a Financial Future With Significant Digital Revenues
This has not been a hypothetical thought experiment. The software that allows publishers the option to use the Google pay-per-performance method exists, it’s called MagTitan, and is available today for anyone to use…completely for free. (Disclaimer: I am the CEO at Of Eleven Media, the company that has worked for the past 2 1/2 years to build MagTitan.)
The only change you need to make, is to use it.
Once you do, everything about selling advertising gets easier. As an example, watch how Godspeed magazine is automating their selling process using this new ad sales video that does the heavy lifting of the selling process for them: bit.ly/godspeedad
One simple change, and you can start making money online, using the most proven advertising method in the world today…Google’s.
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Larry Genkin is founder and CEO at Of Eleven Media. He can be reached at: [email protected].