Your fan base and its revenue potential

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A closer look at audiences and advertising sales models can lead to new digital revenue opportunities, said Matt Shanahan, senior VP-strategy for Scout Analytics. An industry emphasis on unique users and placement-based ad sales may be obscuring revenue opportunities driven by loyal readers, “fans” who may make up a small percentage of overall audience but who can contribute more than 70% of a publication's page views, according to recent Scout Analytics research.

Scout Analytics, which specializes in online revenue analysis, looked at Web traffic at eight media properties, including five b-to-b companies, in the fourth quarter of last year. Shanahan spoke with Digital Directions about the upside of understanding a publication's biggest fans.

Digital Directions: What kind of strategic shift did the study support?

Shanahan: Today, even though pricing is CPM or impression-based, publishers still sell based on placement. Are you on the home page or in a specific section? Here's the CPM rate within that. When you do that, you're not paying attention to [whether or not] you are frequency-capping your fans. If fans come in and use a certain section, then rather than selling one advertiser that placement, you may sell it to 10 advertisers and split up the same impressions more accurately and get a higher yield from that fan traffic. It's really a change from understanding the inventory of placements to an inventory of impressions. How many impressions do I get, from whom, what are those demographics and how do I more effectively sell that?

Digital Directions: How does understanding audience engagement help maximize revenue?

Shanahan: Say you're a life sciences publisher, and there are certain advertisers that want to go after biotech or pharmaceutical. You're able to identify on a monthly basis the size of your audience in biotech or pharma, the companies and [the content that] they read. That targeting allows you to charge higher rates. We've typically seen a 20%-to-30% [revenue] increase potential, and people are able to quickly get 10% to15%.

But it also allows people to start imagining new things: Some people look at their fans, the areas of the site that they're going after and start thinking about pay walls and other revenue streams. For example, [publishers] can better target event revenue if [they] understand who is most likely to convert to conferences. They're using their own ad units to drive attendance or upsell opportunities around other parts of the publication. Event revenue for a lot of b-to-b publishers is very lucrative, and it may be more valuable to promote your own event than to pop up an ad for an advertiser. Now you can make a decision about the best use of space.

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