Knowledge Bridge

//Kevin Anderson /July 13 / 2012

Biggest challenge for digital media? Monetising the masses

Raju Narisetti is a digital leader with an impressive resumé, working at both the Wall Street Journal and the Washington Post, two iconic publications. My friend Patrick Smith at The Media Briefing in the UK managed to sit down with Narisetti and ask him some questions about how to achieve digital media success. The interview is full of great insights, but one question jumped out at me. “What have the big mistakes been in the industry in the last decade?” Narisetti answered:

One mistake people have made – with the exception of people like the Wall Street Journal – is the idea that if you grow audiences and grow enough critical mass of audience that the advertising will come and the revenue will grow proportionally.

That hasn’t panned out at all. Even though some media companies have done well from that mass of eyeballs they’ve not been able to monetise it. That means that whatever you say about the print business it remains the majority of revenue and in some cases profits, or losses.

Many sites have learned how to bring a huge audience to their journalism, but as Narisetti points out, few have been able to translate those millions of readers into the kind of revenue they need to replace declining print revenue. As we’ve pointed out before, some of that is down to an oversupply of online advertising and also a decline in the response rate to display advertising. Click-through rates are now down to about 0.1%. That’s not to say that online advertising isn’t effective or profitable. Improved targeting is reversing the decline in online advertising response, and it’s important that both search and social advertising are really just forms of targeting. Google’s rising profits show that targeted advertising delivers results.

I’ll leave you to read the full interview with Narisetti, but it’s worth highlighting three bits of advice from this digital journalism leader:

• Newsrooms, not IT, should lead big change projects.
• “Content creation ought to be a single multiplatform group. But content management ought to be specialised.” Meaning: journalists should work across platforms, but it’s important that print, digital and mobile specialists adapt your journalism to take advantage of the strengths of each platform.
• Have an interesting cross-section of free content to attract people to your paid content products. “The idea is to have a funnel, with an interesting cross-section of free content that shows what WSJ provides, and the idea is to upsell people into subscribers.”

Article by Kevin Anderson