18

May

By Dennis R. Mortensen
2 comments
Online News Reader Value: $0.58 per month

As I was traversing a set of data from Nielsen today, and with the recent indication of the New York Times metered solution in mind, I came to think about the worth of an online non-subscribed news reader per month. I wanted a sound bite, I could use when debating the topic of pay walls, with other folks in the Analytics and news media industry. Find below, a value indication, but be a bit lighthearted about it (this is no research conclusion – and it is probably a bit unfair to multiply Nielsen and Jeff Jarvis numbers out of context), nevertheless, here we go:

The worth of an online non-subscribed news reader per month: $0.58
(16.2 page views per month * 3 Ads per page * $12 CPM)

Which makes pay-wall conversion rate debates more fun. Envision a $12 per month pay-wall was erected today, in a world where the above is true. This would force you to do roughly 5% unique visitor to subscriber conversion rate, to be as well off as before (aka 1 in 20 people need to sign up for your paid service before you supersede advertising revenue).

Cheers :-)
/ Dennis (@dennismortensen)

Sources:

  • http://www.be2.com Bjoern

    The biggest problem with optimizing news-sites from a revenue perspective is that you have a multi-dimensional goal system.

    You want to
    - do a lot of page views
    – in areas of the site that have the highest eCPM on that particular day
    - increase the chance for every user of returning to your site
    – e.g. by signing them up for newsletters, feeds, sms-reminders, whatever
    - turning them into a print magazine subscriber
    - motivating the user to share articles/content virally with other users to gain additional traffic.

    The problem with that in my experience is that it gets really hard to exactly optimize on e.g. how pushy you want to convert users into print magazine subscribers – because that means leaving e.g. online advertising revenue on the table.

    Optimizing on multidimensions (especially if print and online are different profit centers within your company) is quite challenging. I haven’t yet seen a publisher that does this effectively.

    It’s much easier to optimize towards one funnel – e.g. at be2 on premium memberships.

  • http://visualrevenue.com/blog Dennis R. Mortensen

    >>Optimizing on multidimensions (especially if print and online are different profit centers within your company) is quite challenging.

    I couldn’t agree more Bjoern and you are spot on. BUT I also believe that those who master this, alas become data driven news media companies, will be the survivors of the industry shakeup, that we are going through.

    And it is rather funny actually, that you bring this subject up, as I was just in Madrid the other day, where I gave a keynote on exactly this – Analytics and setting your optimization goals: http://visualrevenue.com/blog/2010/05/choosing-optimization-goals.html

    cheers
    d. :-)