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The Star Tribune found a new revenue source by using underutilized distribution trucks to haul everything from soda to snowmobiles. Other publishers are creating digital advertising shops, tapping streaming video and drilling deeper into their readership data to drive additional business.
Now that mobile is rapidly surpassing desktop usage, publishers need to focus on helping their “second customers”—advertisers—connect to customers across all platforms, former Wall Street Journal executive Penelope Abernathy told mediaXchange 2016 attendees.
Now Knight Chair in journalism and digital media economics at the University of North Carolina at Chapel Hill, Abernathy stressed the importance of creating full-service digital shops for advertisers, even in small markets.
Noting that streaming media delivered to homes through video-delivery devices such as AppleTV or Roku is now rivaling cable penetration, Calkins Media’s Emily Dresslar called the shift “a tipping point.”
Calkins’ newspaper group has created a “six-figure business” by developing streaming content delivered through branded apps on streaming video devices, selling sponsorships as part of multiplatform packages, and “taking that skill to the businesses in their markets” by offering video production services, says Dresslar, head of strategic partnerships for Calkins Digital. The growing streaming-video audience is highly engaged, often logging average view times in the hours, not minutes, she added.
“All publishers must take a different stance about understanding the value of our data,” CasSelle said. “We’re seeing much higher CPMs when we’re able to understand audience and deliver it directly to [advertisers]… Cross-platform is a driver of growth, but understanding your audience is the key driver of that.”
Along with maximizing truck usage, Star Tribune is undertaking a broad range of other initiatives to diversify revenue, said Steve Yaeger, vice president and chief marketing officer. A growing digital subscriber base—expected to rise from 47,000 to 60,000 by year’s end—along with expanding commercial printing, entering the events space, and selling branded merchandise and photos are among the low-risk ventures the Star Tribune is experimenting with; a poster of a rainbow over the city’s baseball stadium that earned $70,000 from customers in all 50 states, according to Yaeger.
“We’re seeing what works and rapidly iterating,” Yaeger says. Together, such ventures accounted for 5 percent of the company’s total revenues a few years ago—a growing share expected to triple in coming years, he said.
Publishers must continue efforts to identify new revenue sources, speakers stressed. “Revenue is what sustained us for 200 years,” Abernathy said.