How News Startups Should Think About Ads
Falling CPMs and digital ad blockers are among the reasons that digital media firms can’t rely on ad revenue alone. But with the right sales tactics and product mix, ads can provide a crucial revenue stream to news startups, according to new research by Michele McLellan and Ashley Welch.
McLellan, a media consultant and Welch, an editor with CBS Interactive surveyed 22 news media startups to understand best practices and common mistakes when it comes to setting up an effective sales efforts and deciding which kinds of ads to offer.
McLellan’s Best Practices for Advertising Sales at Digital News Startups suggested that news startups need to quickly professionalize their sales operations instead of expecting founders to handle both sales and editorial tasks. She also found that companies that diversify their revenue model and don’t rely on methods like CPM (which she argues are more beneficial for larger companies) fare better.
Welch’s Advertising Product Best Practices for News Organizations counseled publishers to diversify their ad products — for example, by selling marketing services and social media distribution to local advertisers in addition to more standard offerings such as display ads.
The authors seem to agree that diversity is the key, but make some astute observations about it.
“Local news sites sell advertising primarily to local small businesses while niche sites can target larger advertisers,” McLellan says.
“Publishers should also work in the best interest of their audience and not provide products that undermine the site’s core values,” Welch adds.
Both papers on advertising sales and advertising products are presented for the benefit of new media start-ups. Though slightly different in their approach, they are both insightful about ways for startups to stay afloat.
McLellan’s and Welch’s work was funded by Tow-Knight.