Diversifying revenue

Illustration by Sylvia Asuncion-Crabb

 

Dependable revenue streams are both key to the sustainability of local media organizations and an ongoing challenge.

That is especially true for newspapers, whose print circulation and ad revenues have been dropping for two decades. In 2022, U.S. newspaper ad revenue was estimated at $9.8 billion by Pew Research, down 5% from 2021, and down 52% from an estimated $20.3 billion in 2015, the year the Table Stakes program began.

Table Stakes alumni organizations of all media types found success by diversifying their revenue. They did this by developing strategies based on the audience funnel, moving from ad-supported journalism to subscriber- or member-supported journalism, and seeking philanthropic funding.

Audience funnel

What it means

Generally speaking, the funnel approach guides potential and existing readers through a series of stages: awareness, experience, preference, purchase/loyalty and advocacy/promotion. These stages represent an audience member’s journey from simply knowing about a news brand and visiting it occasionally to habitually engaging with the site and promoting its content. The goal of funnel discipline is to move people through these stages and create an engaged, paying audience.

Funnel discipline requires a strategic shift toward audience-centered journalism. All staff should have the tools, and the shared vocabulary, to measure how well they are reaching, retaining and engaging readers. By setting measurable, metrics-based goals at each stage of the funnel and monitoring the results, news organizations can adjust their strategies and develop an approach that best serves their audiences.

What it looks like in practice

• Knox News, based in Knoxville, Tennessee, and a two-time alumnus of the UNC Table Stakes Program, focused on the top of its funnel — attracting audiences new to them and raising brand awareness — through Knoxpedia, a free digital guide to all things Knoxville. Partnerships, promotion and an intense focus on SEO trends were key to this top-of-funnel strategy, which was connected to dozens of new subscriptions though the stories are always free to read. The main guide, responsible for 10 of those subscriptions, also had nearly 8,000 pageviews in that period.
• The Henrico (Virginia) Citizen, an alumnus of the UNC Table Stakes Program, added more than 9,000 email subscribers and generated $34,000 in reader revenue in one year by focusing on the audience funnel. The Citizen used pop-ups to attract subscribers to its free newsletter, sent 37 fundraising emails to those subscribers and sought coverage suggestions from its 15-member Citizen Advisory Board that contributed to making meaningful connections with the community. Publisher Tom Lappas also analyzed the newsletter subscribers to better understand reader behavior and the makeup of the Citizen’s funnel. This led to an important takeaway, according to Lappas: “For every 100 new email subscribers we add, I now know that I can expect about 40 to become consistent readers, 26 to become almost-daily readers and about 2 or 3 to donate.”
• Newsday, an alumnus of the Poynter and Major Market Table Stakes programs, has a hard paywall, meaning its content is accessible only to subscribers. Therefore, their audience funnel strategy is different. Their headlines and story topics must grab potential subscribers immediately and make them want to pay to access the stories. They’ve found nostalgic content to be a surprising source of new subscriptions, a driver of traffic from social media during a time when those numbers were falling for many news organizations. In 2023, entertainment-related nostalgia stories had up to 40% higher engagement and triple the paths to conversions.

Try this

• Use this worksheet to map tactics for different stages of the funnel. This exercise will help news leaders plan their funnel approach for a specific product or platform.
• Use this worksheet to map coverage along stages of the funnel. This exercise will help reporters and line editors understand how coverage decisions serve different audience segments.
• Map your audiences’ journeys to find gaps and opportunities to drive loyalty with this guide from API.

Subscriber and membership models

What it means

Many news organizations shifted their revenue efforts to attract paying members and digital subscribers to offset the decline in advertising dollars. A genuine focus on audiences — producing journalism essential to people’s lives, improving their experiences with your products, and making it easy for them to subscribe or donate — is key to increasing subscriber and member numbers.

Multiple strategies are necessary to achieve success in consumer revenue. For example, The Post and Courier in Charleston, South Carolina, increased its digital subscribers by 250% in two years by focusing on specific content areas of interest to its audiences. The newspaper used many techniques in the audience funnel and product-thinking disciplines.

This section focuses on tactics specific to retaining a strong paying customer base. Churn has become a considerable challenge for news organizations as they struggle to engage their existing subscribers. Attacking this problem can include ensuring your tech stack supports your subscriber and membership goals, re-engaging members and “zombie” subscribers (digital-only subscribers who didn’t visit the site at least once a month), and creating journalism that reinforces the value of the subscription or membership.

What it looks like in practice

• The Seattle Times, an alumnus of the Major Market Table Stakes Program, focused on reducing churn while participating in the Facebook Journalism Project Accelerator retention program. The Times deployed several retention tactics — an extended grace period, retrying charging failed credit cards, additional email notifications to readers about credit card expiration and targeted on-site messaging about updating payment information — resulting in an initial 21% decline in non-payment stops. In 2021, unintentional churn was at its lowest point in their history of digital subscriptions at 9.72% annually.
• Reducing churn was also the focus of the Arizona Republic when it participated in the Gannett-McClatchy Table Stakes Program. The Republic’s efforts focused on increasing the on-site engagement of existing subscribers. The Republic mapped its coverage to stages of the funnel and tracked which stories were engaging “zombie” subscribers.  They made sure reporters had access to this information and that stories engaging zombies were widely celebrated with a weekly award. The newsroom also adjusted its posting schedule to better align with site traffic and reorganized or expanded its beats while also rethinking beats and coverage. At the start of those efforts, about 42% of the Republic’s digital-only subscribers were zombies and 26% were loyalists — those who visit the site at least once every three days. In a year, the Republic flipped those two numbers, increased its subscriber pool by 63% and reduced its overall churn rate by more than a percentage point.
• NorthJersey.com, an alum of the Gannett-McClatchy Table Stakes Program, prioritized digital subscription conversions over pageviews, which led to identifying key topic areas that were especially important to existing subscribers and also helped gain new subscribers. They used a flowchart to share the decision-making process for whether a story should be metered or locked down for only paying subscribers to access. As a result, NorthJersey.com was the fastest-growing site in Gannett for digital subscriptions in 2019, growing 118% year over year.

Try this

• Adapt subscriber retention strategies deployed by the 16 major metropolitan U.S. news organizations in the Facebook Journalism Project’s Retention Accelerator program.
• Try this audience assumptions exercise from the Membership Guide to better understand your audiences and any gaps in your assumptions and their actual needs.
• Learn more about strategies for reaching Millennials and Gen Z willing to pay for news, from the Media Insight Project, a collaboration of The Associated Press-NORC Center for Public Affairs Research and the American Press Institute.

Donations and philanthropic funding

What it means

Nonprofit journalism organizations, such as public media, have always relied on individual donations and larger grants as part of their revenue model. In recent years, there’s been an explosion of media types of all business models seeking philanthropic funding. From 2018 to 2022, the top 25 journalism funders gave more than $1 billion to journalism grantees, according to Media Impact Funders’ Snapshot of Global Journalism Funding report. In 2023, Press Forward, a national coalition of funders, formed to invest at least $500 million to strengthen local journalism and bring awareness to the needs of local news.

If your organization is new to fundraising, there is much to learn about how to find grants, write successful proposals and deliver on the grant’s requirements. Fortunately, with the increased interest in philanthropic funding in the local news industry, there are many guides and tipsheets, including this guidebook on getting grants created by then-managing editor Jane Elizabeth and her team at the Raleigh News & Observer as part of its work in the Gannett-McClatchy Table Stakes Program.

To increase individual, small-amount donations, ask your audiences directly and often and ensure your technology makes it easy for them to donate.

What it looks like in practice

• The Post and Courier, a Poynter Table Stakes alumnus, raised more than $1 million to pay for its investigative work and a statewide Education Lab. The newspaper found that an editor’s column drove donations, as did timing the fundraising drive with the publication of a big investigation. For larger donations and repeat donations, small-group events were more successful than bigger gatherings, but one-on-one meetings with direct asks for specific amounts were best for bringing in larger gifts. They also hired a development director.
• A low-lift way to increase individual donations can involve just making a clear ask and making the donation process easier. LAist, a public radio station in Southern California that participated in the Poynter Table Stakes Program, added a giving portal directly to its homepage. This technique, which they first deployed in the fall and year-end fundraisers in 2019, increased their donor numbers dramatically, drawing 1,000 more donors than the previous two campaigns combined.
• The Duke Chronicle and Daily Tar Heel, UNC Table Stakes Program alumni, in 2019 launched an annual fundraising campaign that capitalizes on the schools’ men’s basketball rivalry. It includes special online content and a print edition available on both campuses and mailed to donors, many of whom are alumni. During that first Rivalry Challenge, the two newsrooms split about $20,000 in advertising revenue and raised nearly $55,000 between them. In 2024, each newspaper raised about $64,000 through fundraising.

Try this

• Check out these tips for navigating common misconceptions around philanthropic funding, from media consultant Jane Elizabeth (who is also a former API employee).
• Search this database of local journalism funding opportunities, maintained by the Local Media Association and built off the work started by Jane Elizabeth when she was at the Raleigh News & Observer.
• Study these tips for overcoming funder objections, created by the Local Media Association based on its training of more than 100 news organizations on best practices for seeking philanthropic funding.
• Find inspiration on securing funding for opinion content, in this report by Kevin Loker, API’s senior director of program operations and partnerships.
• Use this pitch deck and accompanying guide, created by media consultant Michael Grant for the American Press Institute, to make your case to potential funders.

Caitlin Dewey of API’s Better News contributed to this section.