Opinion: how publishers should rebalance their monetization approach

25 January 2016

Income from digital ads is still the main source of publisher’s revenue. However ad blocking tools is the reason why publisher became extra preoccupied in 2015. Which became the reason of constant search of new approaches to lifetime valuable user experience.  

Publishers are still focused mostly on cost per 1000 impressions (CPM) and revenue per visit. An approach like this leads to maximization of the number of ads served which can be interrupting for users and will make their experience irritating. In order to deal with this new reality effectively, it’s time for publishers to switch from traditional monetization to developing lifetime value from users. They need to change approach in how they monetize users and research new services they can provide.

Building long-term relationship

There’s no need to monetize first visit, this experience can push users away. These first impressions won’t bring as mush revenue as valuable retention can be. Much more effective way is to build long-term relationship and loyalty, it will bring much greater monetization opportunities as a result. Nonetheless it does not mean that publisher should switch off all the ads on the main page and it would fix the situation.

Publishers, advertisers and brands should be a team in this switch to efficient and effective monetization. We didn’t forget that communication channels such as email remain the most effective marketing tool. This way, users registration will lead to a greater database and helps collect the richest behavior data. And in its turn registrations and long-term relationship come from better user experience serving on the first visit.

And those smart approaches can’t be ignored with mobile. An amount of time spent on shopping, browsing and surfing on mobile phone is in the process of continuous growth. You can’t put all kind of ads on their small screens. Due to the fact that conversion rates are still higher that those on mobile web, ads should remain relevant and helpful.

Serving better

We’re not talking only about reducing the amount of ads abundance. We’re also talking about providing users with a value in a service. That’s why mobile apps are so much interesting for publishers. Its convenience leads to higher conversion. As a result, more and more publishers are focused on investing in mobile apps. The best way to build loyalty within users is to offer a reward as part of gamification form of interaction.

Rewards should highlight things that users value, which may include cash back, free shipping, exclusive offers or coupons.

A lot of sites offer cash back as a reward for users for their time and use of the site. As ad blocking becomes more popular, publishers should look for opportunities to diversify revenue – to offer valuable services in order to grow lifetime value which is not base on monetizing the first interaction.

Personalized Experiences

There are no doubts that personalized advertising experience will keep its development. Data analysis will lead to greater focus on location-based ads as form as “in-the moment” advertising. Especially for mobile users it will be easier to track exact location and behavior and build as effective and as relevant algorithms as possible.

Native mobile advertising can provide more natural experience for users and as a huge plus it’s also immune to ad blockers. Native ads conversion rate is significantly higher than traditional banner ads, thus native ads can be a true goldmine for publishers.

Although building user loyalty and long-term relationship is becoming more and more important, we can put aside for now our preoccupation caused by ad blocking, and not come back to it anytime soon.

Based on column by Phil Barrett, senior vice president at Purch.

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