Media is facing a money problem. In 2016, the total ad revenue for the newspaper industry was $18 billion, nearly a third of what it was just ten years ago. In 2017, the media industry collectively cut thousands of jobs in response to financial losses – Condé Nast, for example, laid off 200 employees after losing $100 million.
That same year, digital superstars Buzzfeed and Vice both missed their target revenues by 20%, amounting to a collective loss of hundreds of millions of dollars. Mashable, a tech blog that gained notoriety as an early example of profitable digital media, sold for a quarter of its former value after running out of funds.
Despite general hardships, publishers are persisting. Media companies across the world are seeking new opportunities for revenue, with many choosing to invest in technological advances in reporting and storytelling. One of those advances is chatbots.
In this blog post, we have laid out the ways that media companies and publishers can use chatbots to grow their revenue.
Chatbots tap into mobile advertising funds
Mobile advertising is growing. This year, mobile ad spending in the U.S. will grow 20% to over $70 billion and will make up 75% of digital advertising spending. As Forbes reports, “That is an incredible 21,775% growth from a short decade ago, when U.S. mobile ad spending totaled just $320 million dollars.”
By placing chatbots on mobile platforms such as messaging apps, companies can tap into the growing pool of mobile advertising funds, and increase their income.
…And achieve better cost-per-mile
By advertising to users over popular messaging platforms, chatbots can achieve better cost-per-mille, or CPM (otherwise known as “cost-per-thousand impressions”), than traditional advertising mechanisms.
One example of a company that has achieved an attractive CPM with its chatbot is Quartz.
Quartz’s 2016 app based on conversational content boasts attractive levels of engagement and a solid ROI (return on investment). How did Quartz achieve this? Company data shows that advertising sales have been doing a good job of monetizing Quartz’s 300,000 active users.
According to Politico, “Quartz says that single display unit within the app – which has featured BMW and SoFi recently – generates more than six times the industry average. Further, it says the click-through rate for the sponsor message is well above the standard – at 7.5%. Those ads fetch $60+ cost-per-thousand rates, parallel to Quartz overall, given the company’s success at selling its audience of ‘influentials.’”
Quartz’s chatbot has also helped the company grow. “While we can mark that growth in the company’s digital audience and revenue, one other indicator stands out in this news landscape: Quartz will hire 68 new staffers this year, moving to a total of more than 250. Of those 68, ‘about 45% will be journalists, 40% business people, and the remaining 15% would be engineering and product.’” Politico writes. “As part of its growth, Quartz has doubled the size of its London office, to 30, and established an office in Hong Kong of less than a dozen.”
Here are some of the best ways to monetize chatbots via advertising:
- Branded content – Using specific data from users’ profiles, media companies can introduce relevant branded messaging into their conversations with users. This dialogue will promote user engagement with the brand, which is important for any advertiser.
- Native ads – Companies can pay media companies to publish native content in using their chatbot. In this advertising model, the paid content follows the natural form and function of the chatbot’s normal user experience. This typically successful approach works well for the publisher, the brand, and the user.
- In-content ads – Facebook is currently exploring revenue models related to instant articles, or articles from a publisher’s website that are hosted on Facebook. (Remember that the CPM of content consumed directly in messaging apps can be upwards of $60, but when a user is redirected to a website, CPM is reduced to $10 on average.)
- Banner ads – This is the least recommended option out of the three, as banner ads can hurt the user experience. Still, a well-placed banner ad in a chatbot interface can be a solid approach to monetization.
Chatbots increase opportunities for paid subscriptions and m
According to The Reuters Institute’s 2018 Digital Report, paid subscriptions are on the rise in countries such as the United States. Chatbots offer publishers increased opportunities to create and monetize subscription-based services.
Here are some of the ways that publishers can monetize chatbots through paid subscriptions:
- Subscriptions to premium content – Once publishers have collected information about the interests of chatbot users, they can begin to offer extra content that is accessible for a price. This content might include high-quality articles, case studies, research reports, books, and more. For example, if a user has asked for more information about the War in Syria (and always reads the complete story in the chatbot about the conflict), this user might be interested in more detailed content on the
subject,and might consider paying for it. Since the offer is specific, the user will not feel it is an intrusive ask.
- Subscriptions to follow relevant columnists and influencers’ opinions – Users who want access to the opinions of specific columnists or influencers can pay to subscribe to a specific bot. This is a good option for journalists who are interested in monetizing their brands.
(Before you turn your chatbot into a subscription-based service, remember to give your users time to fall in love with your chatbot experience first. Even then, it’s advisable to always have some free content, so as not to drive users away – which could hurt your advertising revenue.)
Media companies with chatbots may also request voluntary contributions from users in the form of paid memberships, a strategy that is gaining popularity in Spain, the U.K., and the U.S. One example of a company that successfully uses this payment model is the team behind Spanish chatbot, Politibot.
Politibot’s chatbot was created for Telegram in 2016 to cover the Spanish elections. Since its creation, Politibot has grown to adopt a global membership model where users can contribute anywhere between $1 and $100 for a monthly membership. Each payment option gives users fun quips about how the money will be used, and what the user can expect to receive in return.
Chatbots enable publishers to sell products directly in-bot
Chatbots support online payments, which means that media companies can use them to sell products to their readers. Because many messaging platforms offer in-app payments, customers can purchase products directly with the chatbot, without ever having to leave the app.
When choosing a product to sell in-bot, consider your organization’s brand, and sell products that are relevant to both your brand and your user. Since chatbots are great tools for collecting user information, they facilitate personalized sales and grow conversion rates. Products could be introduced or promoted in the form of a story for a natural selling experience.
Here are some ideas of products you might consider selling in-bot:
- Event tickets – If it fits with your chatbot’s purpose, consider partnering up with a venue to sell tickets to concerts, movies, museums, food festivals, art shows, and more. These kinds of cultural events are a great way to tune your users into fun things happening near them while selling products.
- Original products – Consider your audience base and their interests. Are there any original products that your media organization can sell using your chatbot? This might include branded apparel, books, entertainment kits, and more.
- Sponsored products – Turn sponsored products into chatbot stories. For example, if your sponsored product is a home security system, your chatbot might send users a story about home intrusions. At the end of the story, your bot might suggest some steps and products for heightening home security. Remember that sponsored content should be on
brand,and should be brought up naturally. Don’t push sponsored products too frequently, or it may impact the user experience.
… And offer a new way to host c
Radio and TV shows often propose competitions to their audience to promote interaction and engagement. In this setup, brands might sponsor contests in exchange for awareness and advertising.
Chatbots offer a new way for audiences to participate in competitions. They provide a more direct interaction with thousands of users, and can collect powerful data that will be relevant for the advertiser.
Chatbots on messaging platforms such as Telegram are also sharable, which means that competitions are a great way to grow awareness of your chatbot and build followership. And the more people who are using your chatbot, the more money you can make from advertisers.
Chatbots are an evolving technology, and new possibilities for revenue are constantly coming to light.
As publishers like Quartz continue to experience growth thanks to chatbots, more and more media companies will begin to explore chatbots as a monetization strategy.
For more information on how to get your own chatbot, check out our blog post, Publishers Want Chatbots. Here’s How to Get One.
This blog post can be found in our eBook, Streamlining Content Delivery with Messaging Bots. For a free download of this eBook, click here.
Sections of this blog post are also included in our article, 5 Undeniable Reasons Why Publishers Need Chatbots on Messaging Apps.