How Do We Make Money?

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College media is a funny beast. It seems to lag about a year to three years behind the mainstream media. This applies web-first thinking, blogging, web site design, and monetization. So, this weekend, when the CoPress forum became an active discussion of CPM vs CPC vs CPD ad models, I couldn’t help but grin twice.

First, because this is a conversation that the rest of the media had a few years ago (and has never resolved), and second, because this struck on a particular passion of mine – monetizing online media. (Go figure, the Business Director is interested in monetization)

The following post is an expansion of my forum comments, and still worth a read if you’ve already been through the forum.

The Current System

There are really three ways for advertisers: by impression, by click, and by time period (usually day). Of course, there are hybrids of all three models, which the top ad networks utilize (FacebookGoogle). The issue, is that all of these models have some inherent flaw. CPM doesn’t reward for the effectiveness of an ad, CPC necessarily reward high traffic, and CPD, while it guarantees a nice minimum about you can make, has both of the same issues.

Take into account that college media has a monopoly over the vast majority of the 18-24 year-old US population. That’s demographic is the most desired by advertisers. And if my rough, non-scientific, survey is to be believed, less that one third of online college readership is actually students, it’s parents and alumni, who represent a middle-class, educated, demographic – precisely what any good advertiser wants.

Translation: you’re serving ads to a very valuable, niche, audience, that you have a monopoly over.

Analytics

One of the things that the forum conversation pointed out was the inaccuracy and the poor quality of the analytics available right now. Different software suites give different numbers, and non of them are really ‘correct.’

That’s a huge issue, because if you’re relying on those numbers to charge CPM, you stand to loose money.

Of course, as Bryan Murley points out, the holy grail of analytics right now is the ability to measure user engagement. Which would tell us how much a user was – using – the site. But, with such poor basic analytics, the challenge to create this data is compounded.

The moral of this story, is to have several different analytics suites measuring your audience. Know you can’t really trust any of them either.

Geography

The huge downside to these awesome demographics is that they’re usually not geographically similar. That means that you’re local adverts may not be your best market for online ads.

Take a look at your analytics, and I’m sure you’ll find that your pageviews mostly aren’t local. Try to serve ads that target all your audiences. Yes, an ad for a local pizza joint is good, but irrelevant if you don’t live near campus. Ads for Macy’s on the other hand, apply to everyone. Not to mention, national ads pay very well.

In the same vein, don’t forget that you’ll have a lot of alumni visiting the site. Go to your alumni office. Tell them you have a lot of alumni viewership. They may not know.

Alumni offices spend ridiculous amounts of money trying to contact alumni to get more money out of them. You can get a chunk of that money too! Make your case, and sell them a decent spot for a long-term contract. Then charge them a hefty amount – after-all, you’re a great way of reaching their market.

Concerned about relevancy for students? Go to the career center, and have them team up with alumni office. There’s gotta be alumni who want to hire interns and grads.

Crazy? I was Crazy Once!

Okay, normal, plain ideas out of the way. Let me present some crazier, more involved ones.

One suggestion of Revenue Two Point Zero, was to limit your ad inventory, therefore decreasing supply. This will allow you to drive up costs. Simple economics, right?

Even better, fewer ads means users aren’t nearly as annoyed by an assault of brightly colored, non-relevant content. A better UX means you’ll get more repeat users.

Another idea out of Rev2oh, was to sell only largermore eye catching ads. The idea is to help avoid ad blindness.

Our example from the forum, the Tulane Hullabaloo, has 3 display ads on the site, one of which ia Google AdWordsGoogle Ads, while convenient, don’t have great revenue, and you’ll make much more money from selling ads yourselves.

Of course, that means having a motivated and trained online ad sales team. Who, since they’re paid on commission, don’t stand to gain much by selling online ads. Increase the cost of online ads, and you actually stand to sell more.

The Better Plan

OK, with me so far? Now let’s get out-of-the-box:

Institute a rule that 60% of your ads must be either a coupon, or a notification of a sale/deal (that’s actually legit), with the intention of increasing this to 95%+ in the coming years. I base this off two facts: people describe online ads as annoying, and in my own observation, print ads, which are usually described as informative, are primarily coupons or notifications of sales.

Of course, coupons are really the way to go. They will not only make your users happier, but they’ll drive traffic to your site and to your advertiser’s site and store. It’s a win all around.

Now, how do you serve them? Offer some sort of hybrid: charge for a run time, but make a deal with your advertiser that if you get a spike in traffic, they’ll be charged for the additional views. It’s your market, control it. This clause will allow you to ensure that when high traffic comes, you’re not out of inventory.

But… don’t be evil, if your advertiser wants to opt-out of the deal, then let them. With no hassle. Just be sure to sell enough ads to have an inventory ready if you do spike.

No One Really Knows

The single biggest issue with online media is monetization. I’ve noticed college media becoming more interested in the topic over the last year or so. That’s a good thing, because the mainstream haven’t cracked this nut yet, and it’s very possible that the niche, high-value demographic, monopolistic market of college media will be the one to solve it.

8 comments

  1. Andrew says:

    Nice post Joey. I think I agree with aodell in the forums about how college media needs to do more than just ads. I think that rethinking ads is great and does a lot to answer the “how do we make money?” question, but ultimately I think it’s only a small part.

    Here’s what I’m thinking that could make for even more revenue:
    - stream sporting events and charge a small amount to parents/community/students abroad (sure, Syracuse probably won’t let you stream a basketball game, but you might be able to do it with smaller events)
    - tape lectures given by big speakers, combine it with an interview, and release it for a small fee (we had Salman Rushdie come and speak and I’m sure that decent number of those who were abroad or just generally interested would pay something for it)
    - create a classifieds section: free for students but small fee for community members

    Anyway, some of those probably would require the cooperation of others (a guest speaker would have to be okay with you taping, etc.) but I think they could potentially be more beneficial to a college paper than advertising.

    One other thing, how would these coupons be redeemed in a physical store? Would it be a code? If so, could this be expanded so that the codes redeemed could tell the store owner something about where their customers are coming from? (wow, that was a long comment. sorry bout that)

  2. Good post, Joey. @Andrew I’m not sold on the idea that you can sell content, though. People will always find a way to circumvent your desire to lock up your content. It’s better to think about how you can sell a service or convenient access to content. Student news organizations could definitely improve their brand by livestreaming or making podcasts out of lectures, though. If there’s enough interest, you might even be able to sell advertising or sponsorships against it.

    It’s funny that you mention the idea too. When I was at Whitman, I started a club called the Multimedia Production Club and pitched the idea of making podcasts out of lectures and classes to Bridges. He thought I was crazy, of course.

  3. Joey Baker says:

    @andrew, You’re first two ideas are good, but run into NCAA rules and regs, and the speaker’s/prof wishes like you say.

    There is something to be said for all the quality content being produced by lectures everyday, but I sorta see that as the domain of the school more than the news org.

    Classifieds should exist in most papers, right? Not they don’t need to be redone.

    Coupons are for a physical store. Could be printed, QR code displayed on a mobile phone screen, attached to your phone number, IDK. Tons of ways of doing it :)

    And, hell yea. Store owners should totally be able to track where their (new) customers are coming from.

  4. Andrew says:

    @Daniel It’s funny that you started that project while at Whitman because that’s one of my goals for the Pio next semester is helping reporters do more audio and video to supplement their articles. I’ll let you know what Bridges says if I have to run it by him.

    @Joey In an ideal world I guess there wouldn’t be NCAA regs. It’s also a little more open at smaller schools where the NCAA rules are quite so strictly adhered to (at least I think). And to the classifieds thing, not all papers have them (we still don’t…I’m working on it).

  5. Joey Baker says:

    @Andrew… yea, getting classifieds like sites up is a lot of hard work that no one has figured out yet. Not trying to shoot you down at all, just sayin’ that there’s a lot involved.

  6. Andrew says:

    @Joey Agreed, it’d be a lot of work, but I’m hoping that if the Pio could get a decent online classifieds going then it would remove some of the clutter from the campus list-serve emails. We’ll see how it goes.

  7. Hi all, good post & comments. As a former business manager (U of Miami Hurricane), online junkie and all around geek I think the monetization is in classified ads. With your WP platform, work with a Craiglist’s theme or create your own.

    Follow the same roadmap as Craigslist. Some categories are free, some you have to pay. With the proper SEO by category, a college newspaper could dominate the local market.

    Maybe you guys can work with
    http://www.sitemile.com/p/classifiedTheme
    or
    http://wpclassipress.com/

    Good luck, Julio

  8. Joey Baker says:

    @Julio–

    Got your recommendation for for wpclassipress earlier – thanks for bring this up again. You’re jogged some neurons in my brain.

    I’m not sure that classifieds are the onlye solution, but they are a good one.

    I’m gonna have a good think on this – thanks!

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