Thirteen steps in your journey to revenue diversification

Published: 14 Feb 2024

In the latest AOP survey, several facts came to light. One, the top priority for digital publishers is developing new revenue streams through product innovation. Two, publishers predict a continued shift towards direct deals over the next three years as the demise of third-party cookies destabilises the value of programmatic advertising. And three, publishers are continuing to enhance their first-party data in response to Google phasing out third-party cookies later this year.

To understand how digital publishers can take advantage of this tumultuous environment, we asked our Associate partners what they saw as the key to success when it came to developing new revenue streams. Here are thirteen ideas to help you adopt an innovative, entrepreneurial spirit and uncover new opportunities to open new avenues for revenue.

Fail fast, learn faster.

New revenue streams take time to develop in most cases. Prioritise your ideas, pick two or three, put a good team on them and don't be afraid to fail fast and improve. You've got to be entrepreneurial. Don't try to build something new from scratch. It's better to start small and extrapolate your results than go too big and run out of budget. Find vendors that have previous experience in the areas you want to grow into and are willing to invest time, effort and resources with you.

Alex Powell, CEO & Co-Founder, Pixels AI

Collaboration is key – but be honest and upfront.

Stay informed, and do your homework on new partners selecting ones that you have good dialogue with, communication and patience is going to be key this year given the volatility on many fronts. Building partnerships with a longer term view is preferential, bake in objectives to monitor progress and define success metrics up front.

We are entering a new frontier for Publishers and Ad-tech, so sharing insight with your peers regarding successful strategies, challenges encountered, and who they would recommend is advised. Collaboration will invariably increase revenue, and decrease costs shortcutting a lot of the painful due diligence process.

Finally, be wary of making rash decisions on small data sets, believing the hype, or jumping into partnerships without rigorous due diligence as the impact could be costly. Give split tests time, and commit to solid analysis of the data before making your next move.

James Hanslip, CEO, Content Ignite

Prioritise demonstrating value to advertisers to transition advertisers into long-term strategic partners.

The critical point for publishers, where new advertising revenues are concerned, is to provide evidence of the value they add. Prove to advertisers that their advertising investment is effective - that it lifts their brand, meets their KPIs, increases their bottom line, improves their understanding of their audience - and you break down any arguments against making it. If publishers can consistently measure the effect of these new initiatives and deliver simple, consistent effectiveness data to quantify their impact on advertiser’s brands, then these new revenue streams have the potential to become a longer-term, strategic contributor to the publisher’s ongoing business.

Sean Adams, Chief Marketing Officer, Brand Metrics

Closer collaboration with advertisers and ad tech partners.

Publishers should collaborate more closely with advertisers and Ad Tech partners to understand their objectives, preferences, and expectations when it comes to performance. By taking this path, publishers will be better informed about how to tailor their advertising formats to meet advertisers’ needs. In addition, publishers can leverage the expertise of their Ad Tech partners to access new advertising formats - ensuring new revenue streams - and innovative targeting technologies - that respect the privacy of their site and app users. By adopting a strategic approach that focuses on these key factors, publishers should be able to successfully diversify their revenue streams and unlock new growth opportunities in the ever-changing digital privacy-first advertising landscape.

Russel James, Senior Publisher Development Director Northern Europe, Ogury

Develop a clear customer-value strategy.

It's imperative to understand the value and profile of your users when making decisions for revenue diversification. Your customer value strategy should align with the user expectations and your brand profile. If you’re not a first-mover, It's also important to learn from the competition and understand the potential value and risks associated with a new revenue channel. When trying to diversify revenue streams, be prepared that what you’re doing may not resonate with your entire audience, so don't force them into one-size-fits all experiences. Try to segment your users into different experiences and keep testing to ensure data is guiding your decision-making. A good strategy will stand or fail with what the user data says.

Jason Iliou, Director, Publisher Account Management, UK, Taboola

Focus on developing addressable audiences.

Amidst challenges in addressability, publishers exploring new solutions should strategically enhance their primary advertising revenue stream through innovative technologies or third-party platforms.

Leveraging first-party data for both onsite and offsite monetisation not only mitigates risks but also unlocks valuable opportunities. Those who implement well-thought-out addressable solutions will emerge as early winners in the post-cookie landscape. Employing curated data-driven audience segments empowers publishers to provide premium, targeted advertising inventory, attracting advertisers seeking access to engaged and high-quality audiences, and presenting a compelling opportunity for revenue diversification.

Tim Willcox, RVP UK, PubMatic

Turn unknown audiences into known audiences.

I'm really bullish on the outlook for big online publishers. Ad tracking challenges will drive advertisers to refocus their display budgets on top-tier publishers (and away from the long tail) as programmatic media buying will continue to become more curated. But publishers should not rely on a prediction, and should be more proactive. So on a mission to diversify revenues, publishers are looking at subscription-based models and retail propositions. Key to all three of these monetisation strategies is one thing: turning unknown audiences into known audiences through first party data.

Investing in robust first-party data strategies is crucial for publishers with diversification ambitions.

To improve their first party data strategies, publishers need to prioritize collecting more consented user data, integrate various data sets, and implement identity resolution to create unified customer profiles. This will allow them to build detailed audience segments that can be activated across advertising, content personalization and ecommerce.

George Paton-Williams, Senior Marketing Manager, mediarithmics

Implement first-party data solutions that support clients in meeting their own objectives.

With Google pressing on with their plan to depreciate third-party cookies in the second half of 2024, publishers will face increasing pressure to diversify their revenues. Those offering advertisers a range of advertising solutions will be best placed to navigate this disruption.

For example, more brands are evolving their media buying strategies to leverage their own first party data. These budgets have historically flowed into the Walled Gardens, but there is a great opportunity for premium publishers to start capturing this revenue. Unfortunately, many still lack the technical infrastructure to take their fair share.

Publishers need to move quickly to implement solutions that will allow buyers to target their own first party data. From there, sales teams need to be educated on how to discuss “people-based marketing” campaigns with their agency and advertiser partners.

Reza Garroussi, Head of Connectivity and Ecosystem UK, LiveRamp

Invest in ad sales capacity and tools to support direct deals.

When talking about revenue diversification, publishers often focus on subscriptions and affiliates to complement their advertising-based revenue engine. But diversification also applies to ads: excessive reliance on programmatic revenues can really hurt publishers, especially with the uncertainty caused by TPC deprecation. The rapid growth of curation and direct deals based on first-party data suggests that premium publishers can diversify by investing in efficient, long-term ad sales capacity and tools.

Mattia Fosci, Founder & CEO, Anonymised

Test and package new revenue streams alongside your direct deals with brands.

Direct advertising is seeing a resurgence thanks to cookie deprecation, but that direct relationship can also improve your revenue diversification. These direct deals offer a doorway to pitch your merchandising, subscription or content marketing strategies to brands in ways that they can get involved. Whatever your diversification strategy is, engaging your advertising partners in this way positions you as an innovative publisher that can offer more than just ad slots. This not only allows you to test how successful these strategies may be, but also improve your direct advertising relationships in the long run.

Anya Libova, Director, Publisher Development, DoubleVerify

Know your pain points.

Diversification through new SSPs, ad formats, and header bidding served publishers well in the past, however this year is different. With cookie deprecation, the monetisation of your authenticated core audience is unlikely to suffer, but your long-tail will face challenges. Success will demand transparency about your strengths and weaknesses, exploring ways to increase addressability on page and building strategic partnerships.

Diversification truly begins with understanding where you need to diversify—knowing your business model and uncovering blind spots, such as understanding what contributes to a user bouncing. Knowing your pain points can help you to maintain revenue streams, strengthen audience engagement and future-proof your business.

Fraser Fruhauf, Senior Product Manager, Captify

Enhance your audience insights to identify prospective opportunities for monetisation.

Understand your existing and potential audience. Why do they visit your website, how often do they visit and how long do they stay for? Think about the wider market place your brand operates within (on and offline) and understand how your audience behaves outside of your websites. Monitor competition to look for trends, talk to your key advertisers and also the existing and potential partners you work with to get insight on what’s going on in the wider ecosystem. Then set realistic goals and consider if you have the resources to do it yourself or do you need partners to support you.

Amelia Parsons, Head of UK Supply, ShowHeroes Group

Innovate - with a clear focus on online privacy.

The diversification of online revenues has become more crucial than ever before. The key to success in developing new revenue streams lies in adaptability and innovation. Due to the massive change in online privacy awareness and legislation a lot of publishers see their advertising income is under pressure. Embracing consentless inventory and exploring alternative revenue models is essential for sustainable growth. By prioritising online privacy as a choice and swiftly embracing emerging trends, publishers can position themselves to thrive in an evolving digital ecosystem.

Tom van Bentheim, CEO, Opt Out Advertising