Media Companies Should Get Comfortable With Unique Monetization

Most discourse about media company monetization ultimately devolves into a debate about subscriptions vs. advertising. Most of us know by now that it’s not an either/or discussion and the best media businesses do both. A Media Operator has more than doubled in revenue year-over-year simply because I started running ads.

At the end of the day, though, advertising and subscriptions are the simplest ways to monetize a business. You’re either selling your content or you are hoping you can drive your audience to advertisers’ offers so they can sell goods and services.

Ultimately, I think publishers need to start getting comfortable experimenting with more unique and unusual monetization strategies.

But before we talk about that… This is not a formal announcement, but more of a soft announcement. I am holding an AMO event this year here in New York City. Obviously an event is not real until I have signed a venue contract, but I actually have one of those in my hands. On October 26th, I’ll be hosting ~100 people here in New York City for a full day discussion about media + great networking.

Don’t book anything yet (I need the ink to dry), but for those of you that want to come, I want to get it on your calendars now. I’ve met many of you sporadically over the years, but I am excited to bring the AMO community together. As an AMO Pro member, you’ll get first dibs on purchasing a ticket. So, stay tuned for more information. I’m also going to be looking for sponsors, so if that’s you, let me know!

Now let’s get back to the piece…

This thought comes to me as I continue thinking about Flying Magazine’s business. As I wrote above, the best operators do advertising and subscriptions. And that’s also the case with Flying. Because of the high net worth nature of its readers—and their proven intent by paying for a subscription—it can get the right advertisers as well.

This is where most media companies stop. Align the subscriptions and advertisers, make money two ways, and everyone’s happy. And there’s nothing inherently wrong with this. You can build a legitimately profitable business this way.

But what if there was more? Flying Magazine wants more. As I wrote on Tuesday, when I discussed their various acquisitions:

While most media companies focus on advertising and subscriptions to monetize, Flying Magazine is looking to get closer to where significant money exists: marketplace sales. By amalgamating audience from multiple publications, it can get more eyes on the marketplace.

It does this two ways.

First, there’s the new paper product that Preston and Craig both reference. If you knew that all Flying Mag and Plane & Pilot subscribers were automatically getting the listings newspaper, wouldn’t you want to advertise? Where else can you get this sort of scale attention of actual pilots?

And second, if you visit AircraftforSale.com today, it redirects to Flying Mag’s beta marketplace. Imagine a future where it takes a cut of every airplane sold. Considering many might sell for six figures, the fees could be significant.

But this makes perfect sense. A reader of a niche publication about flying is likely someone who wants to procure or sell planes. And so, if Flying truly has a relationship with those people, why wouldn’t it want to get in the middle of those deals and take a cut?

Hearst Autos announced in June 2020 that it had acquired Bring a Trailer, which is an auction site for vintage and classic cars. In the press release:

Hearst Autos will expand and support Bring a Trailer’s offerings, community and transactions through investments in robust technology and new products and features. In addition, Hearst Autos’ iconic brands Car and Driver, Road & Track and Autoweek will add collaborative benefits to Bring a Trailer, including editorial content and insights as well as business and sponsorship opportunities.

Hearst can start driving its audience across those brands down funnel to Bring a Trailer, where it earns upwards of $250 per listing from the seller and a 5% fee from the buyer, up to $5,000. By getting closer to the actual sale of the vehicle, it makes more money.

If we go back to Flying, it’s obviously not stopping there. While perusing the site, I landed on this article talking about The Fields.

Located in scenic Sequatchie Valley, in the heart of Southeast Tennessee, The Fields is an aviator’s dream, ideal for backcountry, sport, and seaplane pilots who want to explore with their airplanes. Just outside of Chattanooga, the development spans 1,500 acres and offers valley and mountain bluff residential properties with a private asphalt runway planned. The Fields’ runway will accommodate pistons, twin turbo airplanes, and more powerful aircraft. Hangars will connect directly to taxiways and allow for residents to park their airplanes at their homes.

If you dig into the full article, it talks about the luxury amenities it’s going to provide all centered around that “private asphalt runway.” Toto, we’re not in the land of normal monetization anymore. This is just another way that it can monetize the relationship with its reader in an ever deeper sort of way. I can only imagine how much a rental at The Fields will cost.

Speaking of real estate, let’s turn our attention to local media…

I’ve long believed that local media companies should consider getting into the real estate business; not as owner operators, but as brokers. Here in the United States, the typical commission on the sale of a house is 6%.

According to the Federal Reserve Economic Data (FRED) site, the average home in Q4 2020 cost $535,800. That means that a 6% commission is $32,000 split between the buying and selling agents. What if a media company represented one or both sides of that?

Let’s use a real media company and how they could deploy this. Boston Magazine is a lifestyle publication that serves the Boston area. It writes about city life, restaurants, wellness, and all sorts of other topics important to Boston and Boston-adjacent residents. It even has a section on the site called “Home & Property,” where you can find a real estate agent.

With this in mind, I’d start as the selling broker. Create a basic ad package where you’ll do the following:

1. Create a piece of sponsored content on the site that has all the listing information, pictures, etc.
2. Promote the “latest homes for sale” on the site and in the newsletter
3. Promote the home for sale on social media

There are obviously a ton of other things to do as a seller’s broker, including listing on Zillow, etc. But every broker uses Zillow. What makes Boston Magazine unique is it has a dedicated audience. This gives the magazine an advantage and every seller should want that. And frankly, it’s already doing it by writing about various homes. This time it’s just a type of sponsored content.

It doesn’t stop on the selling side, though. There’s a funnel on the buying side that, with the right data systems, can be very lucrative. Here’s how I’d tackle that:

1. Locate your local Internet Data Exchange (IDX), which allows agents to list properties from MLS on their site.
2. When users hit the listings page on your site, put a big call to action asking people to sign up for a real estate newsletter.
3. Track how many times a user clicks on a listing in that newsletter.
4. When they hit a specific number of clicks—that number being publication specific—send them a targeted email asking for more information about what types of homes they’re looking for.
5. Once they fill out that form, have an agent call them with a few listings to try and get them to become a client.

A CDP could do this for you because you can build rules that score leads. We do it in B2B all the time. But in this case, you’re scoring real estate interest. The more information they provide both behaviorally—what they click—and declaratively—what they tell you—the better.

Like I said above, this is atypical and it requires some legal work. The publication needs to become a broker—or partner with one—and it needs to hire a team of agents. Each state has its own rules and like anything, real estate is a cyclical market.

But the point is, Boston Magazine has a focused audience interested in living in Boston. And every piece of content it creates about restaurants, wellness, city life, etc., is promoting Boston. Therefore, people will want to live there. And who better than the experts on the city to sell a home in the city?

In the case of Flying Magazine, it’s going full funnel and introducing all sorts of interesting monetization opportunities. In the case of local news and real estate, I’ve only seen current agents launch publications to do this versus publications getting into the real estate game. But I think there’s opportunity there. It’s different, but the upside could be legitimately great.

Thanks for reading today’s AMO. I’d love to hear your thoughts, so either hit reply or join the AMO Slack. Have a great weekend!