So you want to know, how do online magazines generate revenue? The answer is clear: they go multiplatform.
If you’ve considered starting an online magazine, or are a legacy print magazine considering going digital, you’ve asked this question: How do online magazines generate revenue? And the answer is that the successful ones use a multiplatform approach. A single online magazine with no print counterpart, no website model, and no multiplatform ad package won’t last long.
Like a good investor, you need a diversified portfolio. You can’t bet on a single stock like you shouldn’t bet on a single platform of your product.
Online magazine business models can be broken into two main categories: conventional business models adapted to the Internet and Internet-specific business models.
There’s an array of conventional business models, ranging from direct sales to the brick and mortar business model. These businesses may have started in the physical realm, with many ending up online. These models did not develop on the Internet, although they have transitioned to this medium.
Internet-specific business models are ones that did not, or could not exist without the internet. Many of these revolutionized the way online businesses generated revenue as many traditional business models operating on the Internet also adopted some of these Internet-specific models.
The digital world offers an array of revenue models for online magazines, which in turn have their own subsets of revenue-generating models. This means revenue can be generated in many ways for online magazines. As you read on, the intricacies should become more understandable.
Multiplatform publishers are in a great position to sell sponsorship packages that combine traditional print ad placements, digital ad placements, and better opportunities for the sponsor to be part of the story.
This is a much different mindset than selling a set of ad placements on your homepage. Philosophically, we believe publishers are best served shifting the conversation away from things like impressions and more toward brand scarcity, exclusivity and alignment.
Multiplatform publishers can get the best sponsorship yield by selling multiplatform advertising packages that are built on the principles of scarcity, exclusivity, and alignment and take advantage of the publisher’s multiplatform content program.
How do online magazines generate revenue? Here are the elements of the most common and successful advertising packages we’ve seen:
- Sponsored content creation and distribution
- Portal and email extras
- Email newsletter sponsorship – banners and text ads
- Audited magazine display ads
- Native magazine sponsored articles
- Social media campaigns
- Lead generation opportunities
- Enhanced directory listings
You can learn more about each of those here.
Transitioning from online magazine to multiplatform magazine
Over the past two decades, my team and I have guided the transformation of more than 300 magazine and newsletter brands into niche media empires. In every case, we dramatically expanded the number of revenue generation systems in their media mix. While the process is complicated, it’s not rocket science. It simply requires a methodical approach to adding each new revenue generation system to the organization’s larger integrated business model.
Every time my team and I sit down with a new client, we review how each of the following revenue generation systems might be deployed for their organization.
We tend to divide them up between sponsor-driven revenue generation systems and user-driven revenue generation systems:
The 6 Multiplatform Sponsorship Revenue Generation Systems
- A Native Sponsorship Revenue Generation System generates revenue through native ads. A Native Sponsorship Revenue Generation System has existed since print, and can be created both online and offline.
- A Display Sponsorship Revenue Generation System generates revenue through display ads like those in print magazines. A Display Sponsorship Revenue Generation System has also existed since print, so while it can refer to full-page glossy ads, it can also refer to banner ads and sponsored pop-ups.
- A Directory Sponsorship Revenue Generation System generates revenue through paid directory listings like YP.com. A Directory Sponsorship Revenue Generation System had primarily included paid listings in directories, some as in disguise as business indexes, but now they exist online in the form of digital directories where you sign up to put listings on specific websites for a fee.
- A Classified Sponsorship Revenue Generation System generates revenue through paid classified ads like eBay, Craigslist, or job listings on Media Bistro. A Classified Sponsorship Revenue Generation System is one of the oldest forms of user-generated revenue, allowing customers to post classified ads for jobs, selling cars, and posting obituaries. Now this can all be done online, and many publishers offer the ability to publish on both platforms for a single price.
- A Webinar Sponsorship Revenue Generation System generates revenue through webinars. A Webinar Sponsorship Revenue Generation System exists only online, because webinars are digital products, so sponsors are typically also acquired online.
- An Event Sponsorship Revenue Generation System generates revenue through sponsored live events. An Event Sponsorship Revenue Generation System relies on sponsors, and sponsorship packages are sold in person, online, and through the phone, making this a very multiplatform product and revenue stream.
The 6 Multiplatform User Revenue Generation Systems
- A Magazine Marketing Revenue Generation System generates revenue through magazine subscription sales. A Magazine Marketing Revenue Generation System involves selling magazine subscriptions online and offline. Through newsstands and blow-in cards, but also through magazine subscription websites and digital newsstands.
- A Book Marketing Revenue Generation System generates revenue through book sales. A Book Marketing Revenue Generation System began with bookstores, but now people are so used to buying books online through Amazon that it’s no big step for them to buy books directly through publishers, including digital ebook downloads.
- An Advisory Marketing Revenue Generation System generates revenue through an advisory service, like you often find in investing publications. An Advisory Marketing Revenue Generation System could be sold in person, but we’re finding that many advisories make a name for themselves online, and only after initial sales online, may become in-person transactions. Some advisory services are, of course, 100% digital, which further improves digital revenue streams from this platform.
- A Membership Marketing Revenue Generation System generates revenue through a club membership. A Membership Marketing Revenue Generation System has traditionally been sold offline and online, but the convenience factor of online clubs makes this a hugely viable source of digital revenue.
- A Course Marketing Revenue Generation System generates revenue through e-learning courses. A Course Marketing Revenue Generation System is entirely online, creating a 100% online digital revenue stream, although it certainly can be marketed offline through other products like magazines.
- An Event Marketing Revenue Generation System generates revenue through user-supported, unsponsored, or only partially sponsored events. An Event Marketing Revenue Generation System can generate revenue online or offline, for digital events or in-person events. Tickets used to be sold at box offices, or by will call and mail to get tickets. Now they’re purchased online and printed on home computers.
If you’re thinking about expanding your legacy magazine business, we’d love to chat about the process of evaluating each of the above magazine media revenue generation systems for your organization. I’d also be happy to describe the process we developed for planning, developing, and optimizing a fully integrated, multiplatform niche media business.
This article was originally published in 2016 and has been updated.