Developing a Business Model

In this module, we discuss:

  • Types of revenue streams


KEY TERMS:

  • Native Advertising - online content that it is created for paid promotion of a business on a media site, which doesn't use a traditional ad format such as a banner ad, but includes editorial content such as a blog post or infographic
  • Native Publishing - content that matches the form and function of the specific platform or channel through which it is published


In addition to being a smarter, scalable, more systematic, more effective and less expensive form of digital marketing, The Business of Media is designed to recuperate a significant amount of money that your business invests in the execution of it, through multiple revenue streams.


Types of Revenue Streams


Nearly every successful media company has multiple ways of driving revenue, and The Business of Media is no different. These revenue streams may include:

  • Traditional advertising
  • Native advertising / sponsored content
  • Product placement
  • Affiliate marketing programs
  • Revenue sharing programs
  • Ecommerce
  • In-person experiences
  • Subscriptions
  • Production and distribution partnerships


In the module Expected Outcomes & Timeframe, we detail industry standard projections for these revenue streams, but for now, let's better understand what each entails.


TRADITIONAL ADVERTISING


Traditional advertising can be implemented within:

  • Websites, blogs and mobile apps (banner ads)
  • Audio programming (podcasts)
  • Live broadcasts, webinars and events
  • Email marketing
  • Partner programs


In terms of websites, blogs and mobile apps, this approach usually involves advertising networks like Google's AdSense (for websites and blogs) and AdMob (for mobile apps), or independently selling banner ads yourself (something Convince & Convert does with its blog).

For podcasts, live broadcasts (webcasts), webinars and events, ads are usually sold in one of two ways:

  • Presenting sponsor(s) of the entire program, broadcast or event
  • Individual sponsors that receive a specified number of ad placements; for podcasts and live broadcasts, these ads may be read by the host during the program or played as a pre-recorded voiceover, each typically ranging from 15 to 60 seconds


For email marketing and partner programs, check out how Social Media Examiner presents these advertising offerings.


NATIVE ADVERTISING


Also known as sponsored content, native advertising involves the paid promotion of a business, product or service through editorial or native publishing.

Native advertising can be content created by a business and submitted to a publisher (like in this example), or content that is created by the publisher on behalf of the business. In the latter case, the publisher can charge the business for production and distribution of the content, therefore increasing the value of this particular revenue stream.


PRODUCT PLACEMENT


Product placement — paid promotion of a business, product or service through subtle appearances in media — is most effective when content involves the recipe for successful content experiences, and product placement is used to offset some of the investment in producing and distributing the content, as opposed to starting with a product that needs to be included in a piece of content, and then figuring out how to create the content so that it involves the aforementioned recipe.


AFFILIATE MARKETING PROGRAMS


Affiliate marketing programs are a type of performance-based marketing in which a business pays commission to an affiliate for each visitor or customer brought by the affiliate's own marketing efforts. Within the context of The Business of Media, it has three core players: the seller, the affiliate (your business) and the customer.

Several businesses — particularly those in the eCommerce and SaaS spaces — offer their own affiliate programs, but there are also popular affiliate marketplaces, such as ShareASale and Commission Junction.


REVENUE SHARING PROGRAMS


Both YouTube and Facebook have revenue sharing programs in which a publisher can earn a certain percentage of the total revenue that each social media network accrues from running ads on and within the publisher's content.

YouTube offers a 45-55 split, in which publishers receives 55 percent of the total revenue; Facebook offers a 45-55 split on video content, and varying revenue sharing via Instant Articles.


ECOMMERCE


Selling products online can include:

  1. Physical products (example: Entrepreneur On Fire's Freedom Journal)
  2. Digital products (example: Entrepreneur Magazine's Business Plan Pro)
  3. Services (example: Houzz's Site Designer)
  4. Benefits (example: Freelancers Union's medical insurance)
  5. Platforms (examples: Percolate's Content Marketplace and Copyblogger's Rainmaker Platform)


IN-PERSON EXPERIENCES


There are countless examples of revenue-driving in-person experiences provided by media companies and everyday businesses that have adopted The Business of Media, including:


SUBSCRIPTIONS


While the Internet as we know it has set a precedent for free content, there are still several opportunities to sell premium content experiences in the form of:


PRODUCTION & DISTRIBUTION PARTNERSHIPS


A production partnership occurs when a publisher is paid to create content for a business, that is then distributed by this business, independent of the publisher.

On the other hand, a distribution partnership occurs when a business provides a publisher with ready-to-publish content and pays the publisher to distribute it through the publisher's channels and platforms (similar to native advertising).



The Business of Media is presented by yarn, a collective of talent across media, journalism, marketing and design that helps brands create, distribute and monetize memorable content experiences.

For more insights and observations about the future of marketing, check out our publication and podcast.