Audience is an important indicator for press groups.
In France, audience is the measure used for the ACPM digital ranking (formerly OJD), whether it is for media classification, or for the most widely consumed media brands. It is a monitored indicator, measured and analyzed for publishers in France, but the method used in Europe and internationally are similar.
The evolution unique visitors on a site or an application is an important indicator but does not fully reflect the interest of the readers for one title over another. Conversely, it is important for publishers to know precisely the monetary value of their audience and the degree of commitment of their users at the time, because these indicators are directly related to their sources of profits.
Measuring monetary value of audience
Measuring the monetary value its audience amounts to measuring its ARPU.
ARPU (Average Revenue Per User) is the average revenue generated by a reader. It is a combination of the revenues generated by advertising (which will depend on the number of pages per session and user, the remuneration of the different ad formats, the RPM by categories, …) and direct revenues (unit purchases, subscriptions, e-commerce, …) that will be generated by the publisher.
To fully understand, an example to calculate revenue generated by advertising is shown in the graph below. Monthly revenue per user generated by advertising will depend on the number of page views per content category and the RPM (revenue per mile) by category.
It is therefore immediately understood that ARPU is proportional to readers engagement. With the same content distribution within category for a reader, but 400 page views per month (instead of 200), an annual advertising revenue of $170.64 is obtained.
Direct revenues will depend on publishers’ strategy, but can be for example:
- Subscription (main title, secondary, …)
- Unit sale (article, newspaper, magazine, …)
- Product sales (e-commerce)
- The sale of annexe products
With these elements, and once the ARPU is calculated, it is important to analyze these figures by audience segment. The objective is to have an accurate view of the relationship between income and engagement level.
Analyze monetary value of audience
A study conducted by Scout Analytics with one US publisher determined how each segment of audience is generating revenues. Audience was split into 4 large families (fly by readers, occasional readers, regular readers and fans), depending on their level of engagement with the media.
In this example, we see that the audience is composed of more than 95% of volatile readers and less than 1% of fans out of a total of nearly 17M unique visitors. The figures are different from one publisher to another but the trends observed remain the same.
Compared to revenues, the fan segment generates more than one and a half times the income of more than 95% of volatile readers, thanks to an ARPU that is more than 400 times higher ($ 73.05 vs. $ 0.18). Even occasional readers have an ARPU almost 20 times higher than fly by readers.
The ARPU is proportional with readers’ commitment and it is therefore in the interest of the publishers to work with their existing audience to improve their ARPU rather than to increase the number of visitors on their site, which can be more expensive (creation of new content, traffic acquisition, …).
Subscription is often the Grail sought by publishers. But several intermediate steps of engagement can be conducted to increase the ARPU. The study also revealed that a mail-in for a newsletter increased ARPU by an average of $ 20 / year.
It is therefore in the interest of the media to create and track their own revenue indicator directly related to the overall profit generated by the site, as well as to determine the different segments that make up their audience and the average ARPU per segment. Once an accurate analysis of the situation has been completed, it will be possible to define strategies to improve the engagement and monetization of the audience.
Some questions need to be asked:
- How do I drive readers from one segment to another without compromising the user experience?
- How to increase ARPU on each segment without overwhelming its ads readers?
A case to look closely for publishers is that of paywalls. Only 1% of Internet users pay today to access blocked content from newspaper publishers. Either 99% of the audience who does not access premium content and leave the site frustrated. This is both a lack of commitment and monetization for the media.