2023 in review and expectations for 2024
2023 has been “the year of AI” as news media companies digested the impact of generative AI models and applications on the media business. Echoes of former disruptions were clear, and reactions to the unlicensed use of news media content to power these applications was immediate. What did we learn about AI and its effects on the media business?
- Generative AI models can help with productivity, particularly in the production of some forms of content. AI can also automate tasks that were done by high-value employees. Increased productivity lowers costs and enables more value creating output by publishers. Examples of these use cases include automation of print page layouts and the automation of the site curation.
- AI can improve business performance through optimization of customer experiences and user journeys. These applications of AI increase revenue by growing customer acquisition and reducing churn. Examples of these AI applications include intelligent paywall recommendations, personalized content recommendations and dynamic subscriber-only content recommendations.
- Mitigation of risk from use of AI is an important consideration. Including “Humans in the loop” (HITL) is one of the risk mitigation strategies often employed.
Important success factors for AI use cases are:
- Definition of the monetizable use case with success metrics.
- High quality data.
- Accurate modeling insights.
- Automated implementation with rigorous A/B testing.
These use cases require input from executive leadership, data engineering, data science and business operations.
Lessons learned in 2023 and expectations for 2024:
We would like to revisit our suggestions from the end of 2022 to see how these strategies and tactics evolved over 2023, and offer our perspective on what will happen in 2024.
2022 suggestions for 2023:
- Assess digital readiness for disruption to existing printing and delivery operations, particularly for national titles.
- 2023 experience: reduction in print days has continued for many companies, and the trend is likely to continue. A digital transition strategy can minimize lost profits from print subscribers when print day reductions occur.
- Explore value-adding product features, such as ad-free, network access to multiple titles, and product bundles to raise digital-only reader revenue.
- 2023 experience: many interesting case studies have been shared in 2023 of companies experimenting with ad-free access, network access and product bundles. Games have become a popular bundle addition this year with more options coming to market.
- Continue to improve user experience for digital products, such as speed to load, ad positions and article formats designed for platforms.
- 2023 experience: Publishers have experimented with different user experiences for visitors depending on their propensity to subscribe, their location and their content preferences. These tactics improve subscription acquisition and registrations.
- Invest in first-party data capabilities, either internally or with partners, to enable targeted customer acquisition and advertising.
- 2023 experience: Registration walls are growing in popularity as effective tools to grow publishers’ first-party data and to increase the propensity of readers to purchase subscriptions.
- Promote content to grow top-of-funnel sales opportunities and expand brand awareness.
- 2023 experience: Developing robust content distribution to promote content and increase top-of-funnel inflow has been a successful tactic for new publishers.
- Balance subscriber-only content designations with metered content settings to encourage engagement but maintain subscription sales attempts.
- 2023 experience: Combining subscriber-only content with metered content is proving to be the dominant monetization strategy for publishers. Benchmarks for conversion rates for publishers using combinations of registration walls, meters and premium content are available, and we find that having all three options on a site maximizes reader revenue.
- Revisit your organization’s core strengths and consider what functions and processes can be done more effectively and cheaply by partners.
- 2023 experience: The trend of leveraging partners for non-core business functions is growing as publishers seek to focus on their highest value-adding activities. Best practices are emerging as publishers gain experience in these partnership models.
What do we expect in 2024?
The suggested strategies and tactics from 2022 remain relevant for next year. We would like to propose publishers consider these additional topics in 2024:
Product bundling will continue to grow in importance — Digital products are recreating the print bundles of the past. National and local news are core content, but readers also value sports, opinion, lifestyle, games and commercial activity through advertisements and e-commerce. Artificial intelligence applications enable content creation, such as crosswords that link to content, article summaries in abbreviated formats and personalized newsletters. We expect greater collaboration across the industry in content sharing that enables regional and local news media to offer robust product bundles.
Content distribution optimization will be an emerging focus — Maximizing the economic return on content through a channel distribution strategy has become a topic of interest for many publishers. They seek to understand the strengths of channels in reaching certain audiences and realizing the targeted economic return for content distributed via the channel. Publishers are working to monetize the majority of their audience that will not subscribe to their products but interact with their content on a regular basis.
Leveraging automation for standard workflows is an opportunity for publishers to lower costs through increased productivity. AI-driven applications are increasingly powerful tools for automation of many current processes in the newsroom and other functions within a publisher. Greater automation and integration of the technology stack to remove manual processing of data can significantly reduce costs and improve effectiveness of these activities.
Please contact us with any questions on these or other topics. We offer innovative AI-driven tools from our new colleagues at Sophi that deliver the types of efficiency and effectiveness gains from AI discussed in this post.
Happy holidays from the team at Mather Economics!
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