Low CPM’s on News Gives Rise to New Revenue Opportunities for Smart Publishers

By Sarah Levitt

Matthew Goldstein and Operative’s Sarah Levitt dig into today’s hottest publisher issues using data from STAQ

The Quick Hits

Russia/Ukraine Started The Pain

What’s interesting in the news isn’t always good for business. The conflict between Ukraine and Russia had a negative effect on CPM prices on news sites last year, and we’re seeing CPM’s haven’t recovered since then. Publishers that focus on news find themselves in a difficult situation. Operative data finds that display CPMs on news content from Jan – April 2023 are down ~40% compared to 2022, creating a measurable squeeze for a number of publishers.

People need well-reported news, and reporting on current events is not only what many publishers were founded to do, it also attracts a large number of loyal readers. When prices are down, publishers must find new revenue streams, and the good news is that many of them are doing just that.

No News is Good News

Our data also shows that CPMs on non-news content can be a staggering 55% higher than CPMs on news-content . That major difference has led many publishers to branch out into a variety of content, from evergreen articles, how-to, product reviews, wellness, and more. This kind of content can give publishers flexibility to experiment with their presence across channels and screens, reach new audiences, and ultimately increase revenue.

Let’s Get Vertical

Publishers are also aware of the major difference between video and display CPMs, with video bringing 5x higher prices. The problem is that video impressions can be hard to come by, and so again, publishers are trying to get creative. One approach that has promise is vertical video which is formatted for the mobile phone and popular social apps. This gives publishers content that is more impactful and more relevant to younger audiences and high-volume platforms that can drive new traffic.

Smart publishers are not only trying new content types, they’re investing in new business approaches.

Smart Changes Drive Big Wins

These trends are all layered on top of a complex set of changes happening across the publisher landscape. The rise of digital media brought on a number of challenges, including decreased prices, increased competition and increased demand to reach customers across an ever-increasing number of channels.

Smart publishers are not only trying new content types, they’re investing in new business approaches:

Artificial Intelligence: Publishers are investing in artificial intelligence (AI), to help them create and distribute content. AI can be used to automate tasks, such as writing headlines and generating captions. It can also be used to personalize content for individual readers. AI can also help pubs create new verticals for content creation. AI is a fundamental change to the publisher industry as we know it and is a core focus in Q2 for most publishers. Publishers can potentially be paid by the LLM (Large Language Model) who used their content to build this intelligence. Publishers need more front door traffic, since Google traffic may be down 10-50% once AI is rolled out across Google Search.

Cloud technology: With ad revenue management based in the cloud, publisher sales teams can be more nimble and scalable, packaging complex multi-channel deals quickly and accurately. Investing in cloud also helps connect disparate technology so that campaigns and reporting across channels and platforms can be managed seamlessly to maximize performance and profit.

Subscription models: Some publishers are trying to counter the decline in advertising revenue by moving to subscription models. This allows them to generate revenue directly from readers, rather than from advertisers. However, subscription models can be difficult to implement, and they may not be sustainable for all publishers.

Building relationships with readers: Publishers are building relationships with their readers through social media, email newsletters, and other channels. They are also creating content that is relevant to their readers’ interests.

The future of the publishing industry is uncertain, but publishers are taking steps to adapt to the changing landscape. By investing in new technologies, creating new revenue streams, and building relationships with their readers, they are positioning themselves for success in the digital age.

At Operative, we have our eye on a profitable future for publishers, and create technology that supports the ever evolving revenue model that drives growth. We can work with publishers at any stage of maturity, and any level of technical complexity. You don’t need to rip out what you’re doing to get an immediate benefit.

We believe that progress should move at the pace of your business.

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