Ever hear of the YouTube channel Blu Toys Surprise Brinquedos Juegos? The anonymous person who runs the channel is not an Internet star; the channel’s specialty is opening, assembling, and reviewing a variety of kids’ toys. However, this YouTube partner can get 55% of any ad revenue that is a result of the posts from the channel.
With over 3 million subscribers and over 5 billion video views, according to the social media data site Social Blade, Blu Toys can earn anywhere between $669,500 and $10.7 million in estimated annual income.
Similarly, brands are monetizing their websites, content, and audience to engage those viewers unwilling to pay for articles, videos, and memes. In doing so, we’ve reached the emergence of a monetized world.
What’s Brought on This Transformation?
The emergence and improvement of tracking and audience metrics as well as the rise of digital and social mediums have led to this era of free media. Moreover, an uptick in usage rates for devices can be attributed to vastly improved broadband, affording greater mobility.
Those aren’t the only drivers at work.
Remember that viral video of a rat carrying a pizza through a New York City alley? If that snippet was behind a subscription wall, would Millennials still be interested?
At risk of generalizing… no.
The challenge for advertisers then is to engage this large audience that values frugality without compromising access to streaming, on-demand media.
Users’ need for inexpensive immediacy even extends to gaming. Because of obsession-inducing smartphones, mobile gamers are now actively treasured for their impressions and compulsive interactions. Gaming and in-app advertising have given rise to vast networks to monetize free game experiences.
Even publishers are buying advertising to attract new audiences to their sites through content monetization networks in hope that traffic increases will endear them to advertisers. Conceptually, this approach might seem very much like a snake eating its tail, but the media has always found the need to market itself.
The major monetization players are well-recognized. Google with its AdSense product and YouTube are easily the largest and most prolific networks. Facebook, Yahoo, and most traditional media harness their established audiences to drive ad dollars.
Digital marketers, however, are constantly looking for an advantage. That may be better-defined audiences. There’s room for smaller companies to develop and offer unique audience types that match the destination content.
1. Video Monetization
Monetization of video copies the format of TV programming; viewers watch commercials along with the programming. Digital video entertainment is « sponsored » through advertisers looking to target specific topics (e.g., cooking, parenting, movies, and music).
YouTube and Vimeo are the staples at the basic level.
The advanced level of video monetization now has multichannel content networks (MCNs) that provide nearly agency-level support to video creators. That support includes handling rights-management, helping to identify content partners, and even negotiating direct advertiser relationships.
Some growing video ad networks include Vungle, Sovrn, and YuMe. MCNs include Vevo, Machinima, Jukin Media (purveyors of the aforementioned pizza rat video), and Omnia Media. Also, MCNs are being acquired by traditional media companies like Disney (Maker Studios) and DreamWorks (AwesomenessTV).
Moreover, video channels that focus on gaming and gaming culture are some of the most widely monetized.
2. Game Monetization
Casual gaming on mobile devices has taken the world by storm, but people are reluctant to buy games, even at just 99 cents.
So, developers now do much more than only develop. They provide options to buy games outright, make in-app purchases, or show advertising. Game developers are essentially publishers, and rather than rely on individual relationships with potential advertisers, they work with monetization platforms like Tapjoy, Chartboost, and StartApp.
Because the game experience is so critical to successfully maintain an audience, developers often want a lot of control around every gaming element, including the ads, and these networks provide that added scope.
3. Content Monetization
By « content, » I mean a focus on articles. Content networks, such as Taboola, Outbrain, ZergNet, and Content.ad work with publishers to create areas of their site to promote articles to other sites. That feeds the audiences for both sites, makes the publisher site feel « fuller » in terms of content. It also fuels audience profiles for other ad networks. It’s a complex tapestry that takes a simple piece of content and increases its virality.
For advertisers, content monetization unites with content marketing to:
- Amplify results
- Drive early funnel engagement
- Showcase longer form ideas
4. Other Monetization
Online media continues to expand, and the types of networks do, too.
For example, Midroll Media provides an ad network for podcasts. Clippn builds a network of video clips, which it sells to stock video companies on behalf of videographers. Imonomy is a monetization network that enables ads within images. Infolinks offers multiple advertising products, including text ad links based on keywords on your site.
The Challenges That Monetization Networks Face
A monetization network is a business model that offers unique challenges in scalability, market position, freshness, and efficiency of operations.
All networks face a chicken and egg conundrum.
On one hand, they need enough quality creators/publishers to build a network. On the other hand, they need enough advertisers to make the network attractive enough for creators/publishers to join it.
Many emerging networks, during their growth period, take on either some technical solutions (e.g., analytics, controls, etc.) or take on qualities of an agency (e.g., negotiations, content guidance, signing bonuses) to build up the publisher base while they work with advertisers to determine fit.
Networks are also highly competitive as more networks spring up all the time. A publisher has limited space for advertising without it detracting from the audience experience. This has meant a greater focus on partnering with a large network of quality publishers and subsequently keeping them happy with repeatable, substantial revenue payments.
Moreover, MCNs are susceptible to acquisition by larger media companies looking to establish a beachhead in digital media and integration strategies for promoting their own content.
As media becomes more global and there are more publisher properties to feed ads to, operations that have an international frame of mind will also be required.
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As a society, what is the limit to our monetization? Social updates and shares are likely monetized (especially by those brands with large followings). Product reviews often have some level of monetization through affiliate programs. Technically, offering a discount for checking in at a business is a type of monetization. Even Google and Yahoo have programs to target email with ad traffic.
So, it’s highly unlikely we’ve reached peak monetization. If anything, the more digital media we consume and are introduced to, the more we will find ourselves audiences to advertisers.