The past decade has seen drastic changes in the publishing industry in terms of web structure, monetization formats, ad stack evolution, mobile connectivity of users, and content consumption.

Ten years ago, to succeed it would suffice to have some basic knowledge of SEO and web development, set up the AdSense account, and generate content that users want. Now publishers have to juggle many more aspects, such as GDPR compliance, consent management policies, CDN, site speed, adaptive website design, etc., as well as choose from exponentially more traffic sources and monetization formats.

Even though the key strategic questions may remain the same – how readers find your website, what content do they consume, and how should the audience be monetized, – there are many more options available today. Also, these choices become more and more interlaced with each other; for example, users from certain traffic sources or reading certain types of content are more likely to respond to particular ad formats.

Despite the growing complexity of the online world, traffic remains to be the key to unlocking publishers’ monetization potential. In this article, we will discuss the average profitability of audiences that come from different sources and how publishers can strategize their traffic mix.

Traffic sources and their average revenue potential

Direct traffic shows the most loyal audience; these are the users who visit the website by clicking on a bookmark or typing in a URL. These users view several pages and stay on-site the longest, for 5.3 minutes on average. Also, direct traffic generates 17% of revenue while accounting only for 14% of ad impressions. In contrast, app traffic accounts for 34% of ad impressions but generates also 17% of revenues.

On average, users referred to a publisher through other sites are the most responsive to ads: this traffic source accounts for 31% of ad impressions and 45% of revenues. Organic visitors are more driven by their intent to find relevant information, so it makes sense that they stay for a while on the website. Organic traffic accounts for 16% of ad impressions and publishers’ revenues.

Source: MGID platform; aggregated data of U.S. publishers, April-September 2020
Source: MGID platform; aggregated data of U.S. publishers, April-September 2020

Balancing audience development and acquisition

From the marketing perspective, you would want to compare acquisition costs from different sources with their lifetime value. For some traffic sources (especially social and paid advertising) it can be a feasible task to do, and in this case, audience acquisition costs should be lesser than their LTV.

Alternatively, you can also focus on the well-balanced mixing of different traffic sources and user acquisition channels. Publishers’ rates change over time and also depend on how users respond to advertisements they see. To increase website earnings, publishers have to diversify traffic sources by adding ones that generate more responsive visitors and try to convert them to direct traffic, the most loyal audience segment.

To retain users, the best strategy would be to know the core reader persona that comes from the most converting traffic sources and regularly produce content which this audience appreciates. Combined with other inbound approaches, such as email marketing, SEO optimization, internal content recirculation and content promotion, etc., websites can achieve outstanding results on the way to building their most profitable audiences.

Final thought

Publishers have to be more thoughtful about their acquisition and monetization models, as these strategic decisions not only have to be effective on their own but also aligned with each other. Nurturing a loyal audience base increases the ad inventory value of a publishing platform, but requires more strategic content planning and additional retention marketing activities.