Every year at this time we take a look downstream- revenue stream, that is. Nearly a decade ago when I started writing these annual forecasts of money-making propositions that looked to be promising in the months ahead, most publishers were looking to wring what they could from the desktop experience. But the story of 2011-2012 is content's migration to a host of new platforms and devices, each of which holds the promise (the promise, mind you) of altering the free-content models that bedeviled the web. Whether on or off the traditional web browser, many of the revenue-generating ideas are being influenced by a new age of apps.
The art of the upsell. A recent study of app revenues shows a dramatic shift toward in-app payment. According to Distimo, only 28% of app revenues were generated by in-app purchases in July 2010, but that share ballooned to 72% a year later. As both the Android and Apple operating systems have made it easier for consumers to buy upgrades and extra access from within an app, the freemium model has taken off and will be the key driver of applications, not only on smartphones and tablets but also on social networks. The new disciplines of freemium are packaging, paywall positioning, and identifying the real value proposition behind your brand. You are merchandisers now.
The return of the sponsor. A welcome byproduct of content "appification" is the ability of a single sponsor to have uncluttered, full share of voice alongside content. Ralph Lauren Media, LLC recently underwrote a full month of free access to select areas of The New York Times' iPad app, which included a live feed of its Fashion Week runway show. Intel and Dell co-sponsored free access to otherwise paid content in The Wall Street Journal's elaborate new Facebook app. The compact design of apps, the long hang times they invite, and the clear exchange of value a sponsor is underwriting in these experiences all help to restore the phrase "brought to you by ..." Sponsorships such as this not only add directly to revenues but also help reinforce the value of your content. When the readers know a brand marketer is paying to give content to them for free, it underscores the idea that media comes at a cost ... to someone.
Marketing/integrated services. Publishers such as The Meredith National Media Group, International Data Group, and Condé Nast have all embraced the idea that in order to recapture ad dollars that are fragmenting across platforms, they need to create consultative units that help clients become publishers. Branded content, whether through custom publishing, apps, or social network presence, will be stoking growth for the leading media companies. But in order to capture that market, publishers need to cultivate their own skill sets. Why do you need to invest in staff that understands social networking, app development, mobile channels, and search? You need that expertise not only to service your own content brands but also to resell that expertise to clients who need it for their own brands.
From publisher to developer. Appification encourages publishers to think like software developers. The same tools you use to build your content apps can be directed toward making mobile tools people can use. Condé Nast, for instance, developed an iPad app internally that helped staff share and collaborate on presentations across tablets. Now it is the iPad Idea Flight app that has a premium version for the enterprise user. Games, calculators, GPS-enabled travel guides, shopping companions-all of these and more are now readily accessible realms for a content provider to approach.
Facing up to demand. The Demand Side Platform (DSP) model of selling audiences rather than content and context was the talk of 2009-2010. In 2011, many publishers will have to figure out how their site-specific ad sales will relate to this emerging model. The ad agencies responsible for much of the display ad buying online not only invest in the process of real-time bidding and ad exchanges, but also now have a vested interest in seeing them succeed. Almost all of the major advertising holding companies run trading desks and DSPs of their own. None of these platforms will ever beat the value of selling premium placements to major clients on your own, but the relentless growth of unsold inventory on the web requires that most publishers find a way to leverage the ad exchange space in their favor.
The app ecosystem has revived interest in paid content models. If we are lucky, some of those user habits will migrate from mobile back to the web.