Engagement drives loyalty. Loyalty drives revenue.


This post was originally sent to our newsletter subscribers in May 2019. To be the first to receive exclusive trend forecasts from Glen Nelson Center, subscribe here.

There was a time when audience growth was almost certainly accompanied by revenue growth. Newspapers could practically print money selling the most basic of all advertisements - the now anachronistic “classified ad” - allowing them to staff newsrooms with hundreds of reporters. There was a time when holding the license for a radio frequency could mean millions of listeners, as well as advertisers willing to pay to reach those audiences.

What changed? A revolution we call the internet. For the first time ever, digital advertising has overtaken traditional media advertising revenue. By 2021, there will be 65% more advertiser dollars spent on digital ads than traditional media ads. In fact, traditional media ad revenue is projected to decrease by $10.5 billion between 2018 and 2021.*

One way traditional media organizations are weathering this storm is by taking a page from public media, and building a future based on loyalty along with advertising. You don’t have to look very far to see evidence of this phenomenon; visit NYTimes.com and you will be peppered with decidedly public-media sounding messaging: “Support the mission of The Times… The truth is worth it.” It almost sounds like a fund drive!

One of the best strategies to drive loyalty can be summed up in one word: engagement. Media organizations can no longer rely on the “one-to-many” broadcast model to sustain themselves. They have to listen as much as they tell and create relationships with their readers/viewers/listeners that are so valuable they are worth paying for through memberships or subscriptions. Consumer research shows that engaged consumers buy 90% more frequently, spend 60% more per transaction, and are five times more likely to be “brand loyal.” **

This is one of the reasons we’ve committed to invest in the seed round of Groundsource (also one of Glen Nelson Center’s Ventures in Residencecompanies.) Groundsource uses text messaging, web chat, and other technology to help companies build deep and authentic relationships with their customers and audiences in order to gain insights and drive revenue. Groundsource has already built a service that serves 45 organizations and processes nearly a million outbound and inbound text messages every month between news organizations and their audiences.

We are proud of the work Groundsource is already doing; we also believe they may play a key role in creating a new revenue model for  the media organizations our society will depend on in the future.

*eMarketer, 2019

**Rosetta Consulting, 2014