Use your audience funnel to diversify revenue streams

Dependable revenue streams are both key to the sustainability of local media organizations and an ongoing challenge, which is why we focused on diversifying revenue streams as a strategic area in the Digital Transformation Guide from the American Press Institute. The guide curates strategies that news leaders can truly own and contextualizes them within the industry, provides bite-sized versions of case studies, and features worksheets and checklists that allow you to apply the strategies in your organization today. The strategies were tested and proven by participants in the Table Stakes Local News Transformation Program, a group that comprises more than 200 for-profit and nonprofit local and community news organizations, including newspapers, digital start-ups, public media and commercial TV.

The challenge of dependable revenue is especially acute 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 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.

Use audience funnel discipline

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.

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 two or three 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 and 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 it out

Anyone in any role of your organization can apply the audience funnel to their work. Thinking about how you serve different segments of your audience is another way of prioritizing your audiences and their needs. The topics and products that appeal to these audiences vary, and your success metrics for each segment are also different.

Using an audience funnel, news leaders can plan their approach for a specific product or platform, and reporters and line editors can understand how coverage decisions serve different audience segments:

• Top of funnel: Audiences who are new to our organization
• Middle of funnel: Regular but not yet loyal and/or paying audiences
• Bottom of funnel: Audiences who are loyal and/or paying subscribers/members/donors

Do you want to dive deeper on revenue strategies? API offers customized training on decision-making and buy-in, becoming a data-informed newsroom and creating innovative products, among many other topics.

Want to know more about the Digital Transformation Guide from API? Register for our virtual session at 1 p.m. ET on May 1. You’ll get the chance to talk to organizations featured in the guide and learn more about how you can bring these strategies to your organization.

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