• by Greg Mason , September 19, 2013

For publishers, scale matters. Audience size is the key to unlocking advertising revenue, with larger audiences translating to greater marketing dollars.

Still, scale isn’t everything. It’s just the starting point.

Today, everyone has scale, albeit with subtle differences. The key, then, becomes what you’re scaling, and understanding how to use those assets in innovative ways. By doing so, publishers carve out value beyond audience size and offer real differentiation to advertisers. It’s these unique areas that attract them and encourage investment.

Publishers must go beyond scale to monetize and think like marketers.

There are three assets, in particular, that publishers can use to succeed. 

Content

While content is a publisher’s most abundant asset, many tend to under-monetize it.

With rare exceptions, paywalls don’t work — 85% believe that all online content should be free — so marketing and advertising dollars are even more critical for publishers, with most focusing on display ads. But display, like gated content, isn’t a long-term answer.

While display spend is up to $1 billion, with  double-digit growth , those dollars are mainly bucketed for Google, Facebook, Yahoo, Microsoft and AOL. It’s tough to claim a large piece of the pie, and, display is evolving quickly into programmatic. Bottom line, publishers can’t live by display alone. If it’s your only form of revenue, you’re at risk.

The good news is the potential for multiple content-based revenue streams, allowing publishers to create more effective client packages, while limiting dependence on any one form of ad revenue.

An obvious example is native advertising . This is a key area for publishers to exploit moving forward — and more plan to, with native spend expected to climb to $4.57 billion in 2017.

While there are reasonable concerns around native’s scalability, for publishers, incorporating it into their content strategy will only deepen interest from advertisers and marketers.

Community

When I refer to community, I don’t mean size or scale. I mean on-site engagement — a valuable asset for advertisers looking to enter brand-relevant dialogue. Think of engagement as another content stream.

Marketers have already started leveraging community via social, but for the most part, a site’s users haven’t interacted with brands in their comments section — until recently. 

Gawker has launched a new commenting system that lets brands penetrate and own part of the dialogue. They’re also allowing readers to compete with Gawker’s own editorial team, submitting user-generated articles. This could evolve into a “reader-first” approach to native advertising, with content and community strengthening one another.

It’s an exciting development, but like other monetization strategies, it hinges on a powerful and passionate community. That’s what makes an online community unique and necessary.

Commerce

There’s an ongoing debate  on whether or not publishers can also be e-commerce destinations. Everyone from Conde Nast to Demand Media to Thrillist has announced investments in e-commerce, and with good reason. The global e-commerce market topped $1 trillion in 2012, and commerce-driven content is growing faster while even performing better than traditional content. The two, then —content and commerce — work together, not separately. But striking a balance can be challenging.

Thrillist’s Ben Lerer highlights the key issue.:“Understanding editorial and merchandising curation is not the same. Most of these media companies don’t have a single merchandiser in the building.” Meaning, it’s difficult for publishers to find a profitable e-tail model without a long-term merchandising program or dedicated team in place. This, though, requires huge investment. So there are other alternative commerce strategies that publishers  can use.

The answer for many is as simple as driving commerce-based revenue through affiliate marketing, integrating buy links into content and earning referral fees as they drives sales online for advertisers and partners. It’s effective for premium publishers, as well as niche/long-tail.

Quality content, a passionate community and relevant commerce integrations may be individual assets for publishers, but they work together as a “secret sauce” for monetization. It’s that 1+1+1=5 that generates revenue opportunities over the long term.