How media companies can boost ad revenues
Publishers can package their insights about their site visitors and deliver them as hot leads to advertisers.
- February 2013
- Michael Lamb and Shawn Lankton
Digital may be the future when it comes to publishing, but the problem today is that online publishing — and advertising specifically — doesn’t make enough money. Newspapers and magazines have spent years trying to find a business model to turn digital dimes into dollars from their web traffic.
We see an opportunity to as much as double the value media companies get from display advertising by creating an effective lead-generation machine. Publishers could package their insights about the people who visit their site and then deliver hot leads to advertisers at the point when customers are ready to buy.
Take a recent example. Among visitors to one US media site, 25 percent made an online fashion purchase within three months — twice the average for a typical online consumer. Their spending added up to a 13 percent share of total online fashion expenditures, worth some $4 billion out of a $34 billion market. If that media company could capture typical affiliate rates of 5 to 10 percent on the purchases it influenced, it could make at least $200 million a year from lead generation — roughly the same as it makes from banner ads under its current business model.
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