Monetization of Digital Content: The Greatest Possible Challenge

By: Gabriel E. Levy B.

Thanks to the consolidation of the Internet and the so-called information society, millions of digital media, content platforms, web portals and blogs have emerged in the world in the last two decades, causing an oversupply of information, news and content [1]. The same pace at which digital communication projects are born, a significant number of initiatives also collapse and die every year. Meanwhile, many reference media try to stay afloat with their traditional platforms, which now have to alternate with the emerging digital environment [2].

For all these reasons, the Internet has developed as an ecosystem in which media abound and audiences are scarce, unlike in the past, while the advertising market is increasingly atomized and fragmented [3].

Is it possible to survive economically in the digital media ecosystem?

As in any market economy, the main enemy of producers is oversupply, that is, when there are more suppliers than demanders and therefore, a high percentage of surpluses of the same product floods the market. This causes a collapse of prices and causes the producer to operate at a loss.

This same situation is revealed in the digital communication market, where audiences are scarce and the offer of platforms, blogs, websites and digital content abounds.

The panorama is complex and there are more uncertainties than certainties, but although the digital environment has proven not to be easy, the Internet is an almost infinite universe of opportunities. It is possible to successfully undertake projects on the web if you are flexible enough to adapt to a dynamic and in many cases unpredictable environment.

Convergence and Transmedia: articulating the use of content and platforms

When a detailed analysis of the major success stories of digital communication projects is carried out, including those that do not have an informative or journalistic origin, it is possible to identify a very revealing constant: most of them have achieved their identity by focusing on their own innovative content model[4], and have combined many monetization strategies by orderly articulating the use of multiple platforms. In other words, they have adequately exploited the phenomenon of convergence, using the transmedia strategy.

In the article: Understanding and Dimensioning Transmedia Storytelling, we explain what it is about.

Quality and reliability of the differential value

One of the greatest threats posed by the democratization and massification of media on the Internet is the lack of reliability of information. The possibility that any person has to publish information on the web carries the risk that untruthful or totally false content will be published and disseminated. This situation gave rise to the popularization of the term Fake News [5], which refers to the millions of inaccurate, false and imprecise news circulating on the web, producing uncertainty, discomfort and distrust in readers.

This is why journalistic objectivity takes on a higher value in the context of digital media, since many people are increasingly looking for reliable sites where they can be informed objectively and with the least amount of bias, incomplete information and lies possible.

Objectivity is not a sufficient variable to achieve the success of any media on the Internet, however, it is one of the necessary conditions to achieve it, unless it is intentionally a humorous portal of fictional satirical news or responds to other interests other than those of informing. This is what happened with the Cambridge Analytica scandal, where the political manipulation of citizens for electoral purposes was the real background

We extensively developed this issue in the article: “The Vindication of the Traditional Media”.

Advertising is still alive but not enough

The inclusion of advertising remains a valid modality for obtaining income from digital media. However, it is not enough and it must be carefully performed because there are many risks that could bring more problems than benefits.

Some of the ways advertising operates in digital media are:

Direct advertising sales: it is the one that manages the media directly and is incorporated into its platform, in the form of advertisements. In theory, this is the best modality, since there is direct contact with the client without intermediaries and filters can be applied. However, it is also the most difficult form, generally it must be accompanied by a large commercial or sales force.

Certified intermediation: refers to the model by which the marketing is entrusted to a trusted third party. This is the case of Google AdSense, which is in charge of marketing a banner, video or advertising content. This model works, but its main disadvantage is the low profitability rates, since the payment per user or per click is very low and does not solve the costs.

Toxic intermediation: it is about allowing the inclusion of toxic advertising, this is, a type of misleading advertising that generally tries to obtain money from people in exchange for non-existent or low quality products or services, which is exposed along with the content, paying far higher values than the certified one, but where there is a serious risk of losing the confidence of the audiences because of the damages that this advertising can cause.

Marketing Automation: This is perhaps the advertising strategy with the best results. It involves the use of market-focused artificial intelligence for the distribution of advertising content by virtue of the individual or group characteristics of the target audience. In this way, advertising is less invasive and more effective, but it requires the support of Big Data and artificial intelligence companies or sections.

Native Advertising: This is the model through which advertising disguised as information is introduced, in the style of traditional advertising reports. This scheme has been consolidated as an important lifesaver for many media, especially when it comes to official advertising. However, it is a long-term harakiri as it is delivering the most valuable asset in exchange for money: credibility.

Product placement: This model is similar to native advertising, but with a notable difference: it does not compromise the informative independence or the editorial line, since it introduces advertising elements and accessories that complement the informative process. It is even applied very frequently in entertainment schemes such as cinema. An example of product placement is when the main character of a series or the journalist of a media appears in the content consuming a soft drink that clearly shows the brand, or when he or she travels in a specific vehicle, or on a specific airline, or wears a type of clothing. This exposes the brand in exchange for money without compromising independence or credibility.

The Phenomenon of Influencers

Influencers have been the subject of much debate and controversy [6], as this form of web-based money-making has been abused and is the subject of much speculation, especially when it comes to youtubers or instagrammers. However, in some cases it has proven to be a commercially effective and profitable scheme, so many media have chosen to turn the problem around, taking on the role of influencers in a more responsible way.

The specialized media use experts to promote a product or service under this model; for example, they search for a chef or a gourmet critic to recommend a type of food, or car experts to talk about a type of vehicle. In theory, this way they guarantee the public reliable information from an expert, without compromising objectivity, and the brand is charged for this type of reference, although there are still abundant cases of influencers who recommend things of any quality just for money. This model can be extended to travel, stores, products and services in general.

The power of stories

A strategy that has proven its effectiveness in obtaining results and resources is the use of transmedia itself as a scheme for the dissemination of a commercial message, that is, to tell interesting and attractive stories that involve a commercial intention in a transparent and clear way to the public. Thus, a transmedia project can trigger the creation of an organic fandom and actively involve audiences. But while this is one of the most effective forms and with the best results in long-term, it is also one of the most difficult ones to achieve, as it demands intense pre-production work, a coordinated strategy and, above all, a lot of creativity and innovation.

Combining advertising with other monetization mechanisms

As the Internet has evolved, one of the factors that various analysts have identified is that there is no financing model that is profitable enough on its own for a quality digital media to survive [7]. However, if various models are combined in an articulated way and the content meets the sufficient quality expected by the public [8], it is possible to achieve effective monetization [9].

Although it may sound very simple to incorporate multiple forms of monetization, this is only possible if it is accompanied by a multiplatform content creation and distribution strategy [10], which in turn is materializable if an adequate convergent and transmedia strategy is applied [11].

When a digital media or even a digital content creator has managed to adequately articulate multiple screens and platforms from a transmedia perspective, it has created sufficient conditions to make the next leap, which we will call convergent monetization.

Convergent Monetization

It is the application of diverse monetization mechanisms to each of the sub-products, derived from the transmedia franchise, in order to obtain resources from the individual characteristics and forms of consumption derived from each of the worlds that constitute the corresponding universe.

Thus, once the franchise is strengthened, the monetization mechanisms begin to be implemented.

At present, there are many possible models of monetization alternative to the advertising pattern. One of them is direct user charges, which can be made through multiple systems either 1) directly through a credit card payment gateway, 2) payment through meta systems such as Paypal, 3) bitcoin payment, or through the most recommended form: 4) smartphone stores, i.e. Google Play or Apple Store, in which case there must be an app version for Android and another for IOS within the transmedia component.

For this last modality: the collection through the IOS and Android Store platforms, there are many possibilities of monetization, which include the following:

Freemium, a model that combines limited access to free content and is complemented by a premium paid version, which can include Free Trial, Functionality and Excludable Advertising; pay per download, which is the model by which the user pays to download the APP; paidmium, refers to a very popular modality where the user can buy additional services within the APP in order to obtain certain advantages or benefits; subscription, which is the scheme that allows a recurrent payment for access to the service or platform; affiliate marketing, consisting of allowing users to download applications or services from other providers by receiving a commission per click or download; and sponsorship, a strategy that allows developers to join forces through sponsorship in order to grow together.

In conclusion, although it is not easy to learn how to monetize digital content, it is possible to achieve good results. This requires an orderly planning, a clear strategy, a lot of ethics and above all, high quality content. This is a long road that traditional and emerging media have yet to travel, especially in Latin America.