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What McDonald’s & Coca Cola Can Teach Content Owners

Mar 25, 2014
Industry trends

Imagine for a second that you run a business that is dependent on a single revenue stream and that single revenue stream is both in chronic decline and is increasingly being gobbled up by global, multi-billion dollar competitors – see below.  What would you do?

Online Advertising
CPM
Top 50 Sites Command 89% of Online Advertising Market
2014-03-25_18-41-18
Source: Interactive Advertising Bureau

Well, according to David Carr’s column in this past Sunday’s New York Times – see http://tinyp.as/DavidCarr – for many online publishers the answer is more of the same – doubling down on the broken business model of chasing pageviews, which, by the way, further depresses their lone source of revenue.

We’ve written about this issue previously – both here http://tinyp.as/1elTPhC and here http://tinyp.as/1kyrc5E.  What’s a publisher to do?  For starters, online publishers would be well advised to take a page out of the “monetization strategy” of the fast food and consumer packaged goods industries.

What do Big Macs and Diet Cokes have to do with content you ask?  Long ago, both McDonald’s and Coca Cola recognized that not all of their customers were alike, and furthermore, that a minority of their customers drove the bulk of their revenues, i.e. the 80/20 Rule.  With this one customer insight, companies were able to begin tailoring offers in an effort to maximize revenue.  This approach has worked wonders in all sorts of industries yet curiously the world of online media treats everyone – from the most engaged audience member to a passersby – the same, i.e. they show them an advertisement.

With the Web turning 25 this month, it’s high time for content owners to adopt more sophisticated business models, business models that Tinypass enables.  (See the below chart.)

user engagement levels
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