Advertising continues to be the most effective way through which publishers can monetize their websites. The ad tech industry has evolved swiftly in the past few years and its scope has now increased beyond the initial text and display advertisements. Today, publishers are able to deploy video, native, in-app, in-game, and mobile advertising for increasing revenue generation.
But for advertising to thrive, publishers must opt for a lucrative business model.
After much research, we have compiled a list of 9 business models that publishers can use. All these models differ greatly from each and use various kinds of ad monetization strategies for gaining profit.
1. Publishers in E-Commerce Industry
This business model largely depends on the services/products portfolio of the company. In most cases, publishers in this business model are inclined towards serving the needs of consumers in a niche market. Because of this, the content needs to be able to cater to this audience in a unique way.
It is the uniqueness of such sites which captures the interest of advertisers. The swift growth of the e-commerce industry is not news to anyone, and this is the major factor that is driving the interest of publishers towards this business model. While the business model is highly scalable, the focus on user intent is important.
Industry Leaders: BuyaCar.co.uk, net-a-porter.com, and Dennis Publishing
2. User-generated Content
When it comes to recurring ad revenues and growing traffic, user-generated content is among the most scalable business models. A moderation policy that balances the user-generated content is important for this business model to keep advertisers satisfied. Social media platforms, online classifieds, video posting sites, online forums, and content farms are a few examples of user-generated content sites.
Some of the beneficial traits of this business model include
- High-profit margins,
- High ad revenue optimization potential,
- Strong and engaged communities,
- Consistently increasing website traffic
Despite such positives, the number of risks is high for this business model. For example, the publisher needs to be wary of inappropriate content, such as duplicate content and stolen content.
Industry leaders: Reddit.com, FunnyorDie.com, Kijiji.ca
3. Curated and Aggregated Content
Curated content sites find the best available content on the web and provide it all at one place. Aggregated content sites provide all the user-generated content, which may be spread across a number of sources, on one site. Curated deals, curated media, curated news, aggregated product listings, aggregated reviews, and aggregated online classifieds are some examples of curated and aggregated content sites.
Websites like these take advantage of already-created content that has gained some popularity. By using this business model, publishers can also benefit largely from trending topics. The business model however is not free of any cons. Advertisers can be skeptical of running advertisements on such websites, since search traffic and unique content is nearly absent. The growth potential for curated and aggregated sites, though high initially, may become saturated after a while.
Industry leaders: Oodle.com and Mashable.com
4. Organic In-house Media
These websites produce high-quality content, which further encourages loyalty of communities. If such sites become successful, they get high RPMs, increased attention from premium advertisers, and benefit from strong brands. A few types of organic in-house media sites are online magazines, news columns, podcasts, vlogs, and blogs.
In-house content creators are the backbone of this business model, but that also leads to a high percentage of staff costs. Sites like these also face delayed content quantity and high overhead costs. Furthermore, these sites often need to protect some brands. While this business model may witness increased success, it may not be as profitable as other business models.
Industry leaders: DesignSponge.com, Jpost.com, and NewYorkTimes.com
5. Social Viral Sites
Social viral sites have been immensely successful. These sites thrive on producing content in the form of listicles (articles that list out the top X). Since users engage widely in sharing listicle content, social media sites have been primarily responsible for the success of this business model. Some examples of social viral site content are quizzes, listicles, personality tests, and top X videos.
Social viral sites basically aim to have high CTRs after the content is shared on social media websites and a high shares per visit percentage. The success of this business model depend in the achievement of these goals. Moreover, social viral sites are highly beneficial if they are able to build loyalty, which is not an easy task. In order to build loyalty, publishers must ensure that the content on their sites is engaging, unique, and authentic. Once publishers are able to get past the hurdle of building loyalty, social viral sites can be highly profitable.
Industry leaders: Boredpanda.com and Buzzfeed.com
Also Read: 5 Questions with Justina Palinavičiūtė, Head of Ad Ops at Bored Panda
6. Selling Branded Content
In this business model, publishers provide branding services to creative agencies, something which is out of the domain of advertisers. Publishers are responsible for creating advertising pieces for an audience that cannot be reached by advertisement companies.
These companies have efficient editorial teams that provide branded content and design marketing campaigns for advertisers. This business model has gained considerable popularity in recent times, since the number of digital advertising companies has increased. The main job of publishers in this business model is to provide their customers with innovative solutions that go beyond conventional ad agencies. Cost-efficiency is the major parameter that needs to be considered in this business model.
Industry Leaders: Conde Nast, CNBC Catalyst, and Remezcla
7. Online Applications & Games
One of the most scalable business models, online games & applications sites are like a one-time-investment venture. After the application or game is developed, the publisher only needs to take care of upgrades and maintenance. The site will witness organic growth after the right kind of audience has been found.
High profit margins, audience loyalty, high return traffic, and shareability are some of the positive attributes of such sites. The initial stages of building audience loyalty though is crucial for gaining profits from this business model. The app or game needs to be unique and must have high value for keeping the audience engaged.
Industry Leaders: MrPoll.com and Bored.com
8. Social Monetization Platforms
By using this business model, publishers can grow revenues and traffic quickly. Social monetization platforms work with influencers on social media sites such as Youtube, Twitter, Instagram, Facebook, Pinterest, and Reddit. These sites partner with influencers who have a following of over 1 million subscribers for getting traffic sent from influencers to social monetization platforms. The content produced by these websites is similar to that of social viral sites.
While the potential for growth using social monetization platform business model is incredibly high, the field is highly competitive. Social media influencers choose social monetization platforms that provide them with the highest payouts. Due to this, the success and survival is only ensured for the best and most reliable social monetization platform. Paid traffic along with traffic generated from social influencers are used for gaining profits by social monetization platforms.
Industry Leaders: ChaCha.com and ViralNova.com
9. Downloadable Content
This is another business model that showcases great potential. Huge levels of search traffic can be generated if the downloadable content is of high quality and unique. Furthermore, user-generated content can help these sites grow quickly. However, the publishers has to be wary of content with copyright issues and needs to review content for viruses or malware. If any inappropriate content is detected by Google Ad Manager, the site can be suspended or banned.
It cannot be stressed enough that quality is the top-most priority for downloadable content sites. Without high-quality and quality content, the publisher may find it hard to generate traffic and revenue. Other than this, a strong moderation policy is an indispensable part of the downloadable content business model.
Industry Leaders: Download.com and FileHippo.com
So, a number of business models have been found to be successful by using different kinds of strategies. Each business model has its ups and downs and publishers have to deal with varying kinds of hurdles to get ahead.
While the idea of opting for a business model that is highly scalable may be appealing to publishers, it is also important that they take their skillset into consideration. Without having the potential to deliver the required content for any business model, things can go south easily for anyone. Therefore, publishers who are aware of their strengths and flaws have a higher chance of succeeding.