Digital publishers are adjusting their definitions of “audience” as it becomes clear that traffic has less bearing on their ability to generate revenue than they once thought.
As the challenges facing ad-supported media mount, many publishers are placing direct audience revenue at the center of their business models instead. This shift is driving publishers to fundamentally rethink the metrics and key performance indicators they use to guide their businesses – and ultimately to acknowledge that their genuinely engaged “audiences” may be much smaller than they’ve previously chosen to believe.
Monthly visitors was never a good proxy for “audience” but it made some sense in a world where the ability to rack up pageviews and ad impressions was integral to publishers’ business models. The more traffic they could generate, the more money that could be extracted from advertisers, the theory went.
Any media business requires some level of scale to be viable, but the preoccupation with volume that has characterized digital publishing over the past 20 years has distorted the concept of “audience” beyond recognition. As publishers like Daily Mail, CNN, BuzzFeed, Vice, and countless others emphasized size, “audience” quickly became synonymous with “monthly unique visitors, as measured by Comscore”. (Although publishers were usually quick to point out that “internal data” logged far bigger numbers than Comscore.)
Now, as audience revenue emerges as their new revenue priority, publishers are thinking less about high-level metrics such as uniques and visits and are focusing instead on yardsticks that provide a more useful snapshot of the size and value of their audiences.
Last week, Business Insider CEO Barbara Peng told staff in an internal note that the company is reorienting around a new “north star” metric that counts people visiting its properties two or more times per week. That number will be significantly smaller than the 104 million monthly uniques touted in BI’s media kit but it’s a more meaningful way to measure the health of its audience.
“While traffic (visits) remains important to us, we needed to find a new metric to help guide us to better serve Disruptive Go-Getters, focusing our efforts on becoming a daily routine for more and more of them,” Peng wrote. “2+Days on Site per week is a critical inflection point. When people come to us 2 days a week, they are nearly 200% more likely to return the following week. If we can positively impact this number, it means we’re better serving our audience and becoming a routine for more people.”
Other publishers are taking a similar approach, arriving at their own “north star” metrics and definitions to quantify the size and commercial value of their specific audiences more accurately. Those metrics are primarily for internal purposes, of course. Media kits and sales staff will continue to cherry-pick numbers they believe place them in the best light.
A more realistic view
More accurate and meaningful metrics will help publishers manage expectations and judge the success of monetization efforts more realistically.
Inflated audience numbers might attract attention but they also help explain why some publishers’ subscription efforts are falling short of their expectations. Basing forecasts on assumptions such as “X% of our audience will convert to paid” is all well and good, but it requires an honest appraisal of “audience”. Publishers with commoditized content expecting 10% of unique visitors to fork out for a subscription might be sorely disappointed.
Vague definitions of audience also explain why industry benchmarks around subscription conversion rates vary so wildly. For instance, Google says that 2% of users will convert to a paid subscription when presented with a paywall on a publisher’s site, but paywall tech provider Piano says it sees conversion rates ranging from 0.5% to over 12% for publishers using its tools. Some other publishers say they convert upwards of 40% of their audiences to paid subscribers, but “audience” in that context is often defined as users regularly opening email newsletters rather than unintentional drive-by traffic. Definitions matter.
Large tech companies have made similar adjustments in the past two decades, albeit for different reasons. Facebook once used monthly active users to boast about its size, for example, until realizing until it realized it was selling itself short. What’s cooler than 2 billion people using their services every month? 2 billion people using their platforms every day.
Tech platforms went on to win the scale game, of course, and overwhelmingly dominate the online advertising market. Now, as many publishers look beyond advertising revenue and the need for scale diminishes, it might be in their best interests to stop the pretense and start thinking about their audiences in terms that will help them keep the lights on.