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Flevy Management Insights Case Study
Content Monetization Strategy for Online Publishing Platform

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Consider this scenario: A leading online publishing platform is facing a strategic challenge in optimizing its content monetization hoshin.

The platform has seen a stagnant revenue growth of only 2% over the past 18 months, primarily due to increased ad-blocker usage, which has affected 30% of its ad revenue, and a highly competitive market that limits the effectiveness of traditional advertising models. Internally, the platform struggles with engaging content creators effectively and leveraging data analytics to personalize content delivery. The primary strategic objective of the organization is to diversify revenue streams through innovative content monetization strategies while enhancing creator engagement and user experience to drive growth.

The online publishing and broadcasting industry is undergoing significant transformation, driven by evolving consumer preferences and technological advancements. In response to these changes, the organization must adapt its strategy to ensure sustainable growth and competitiveness.

Industry & Market Analysis

The internet publishing and broadcasting sector is witnessing rapid growth, with digital content consumption at an all-time high. This expansion, however, brings both opportunities and challenges as companies vie for consumer attention in an increasingly crowded space.

To understand the competitive landscape, we analyze the primary forces shaping the industry:

  • Internal Rivalry: High, due to the proliferation of platforms offering similar content, leading to intense competition for user engagement and advertising dollars.
  • Supplier Power: Medium, as content creators have more platforms to choose from, but the platform's strong brand and reach offer a compelling proposition.
  • Buyer Power: High, given users' ability to easily switch platforms and use ad-blocking tools, impacting revenue streams.
  • Threat of New Entrants: Medium, technological barriers to entry are low, but establishing a brand and attracting a significant user base require substantial time and investment.
  • Threat of Substitutes: High, with alternative forms of entertainment and information, such as social media and video streaming services, capturing users' time and attention.

Emerging trends in the industry include the rise of subscription models, the increasing importance of mobile optimization, and the use of artificial intelligence for personalized content curation. These trends lead to major changes in industry dynamics:

  • Shift towards subscription-based models: Presents an opportunity to generate stable revenue streams but requires compelling content to convince users to pay.
  • Importance of mobile optimization: Mobile traffic dominance necessitates a mobile-first approach, offering an opportunity to capture a larger user base but requiring significant investment in technology.
  • Use of AI for content personalization: Offers the potential to significantly enhance user engagement and time spent on the platform but requires advanced analytics capabilities and data privacy considerations.

Learn more about Artificial Intelligence Data Privacy Competitive Landscape

For effective implementation, take a look at these Hoshin best practices:

Strategic Planning: Hoshin Kanri (Hoshin Planning) (153-slide PowerPoint deck and supporting ZIP)
Strategic Planning: A3 Hoshin Planning Process (113-slide PowerPoint deck and supporting Excel workbook)
Strategic Planning: Hoshin Kanri (Hoshin Planning Process) (167-slide PowerPoint deck and supporting Excel workbook)
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Hoshin Planning Poster (5-page PDF document and supporting PowerPoint deck)
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Internal Assessment

The organization boasts a robust digital presence with a diverse content portfolio and a strong brand, yet faces challenges in effectively monetizing content and engaging with its community of creators.

PESTLE Analysis

The platform operates in a dynamic environment influenced by technological advancements (opportunities in AI and mobile optimization), social changes (increased content consumption and privacy concerns), and legal factors (data protection regulations). These elements present both opportunities and challenges in content delivery and monetization strategies.

McKinsey 7-S Analysis

The organization's structure and strategy are well-aligned with its vision; however, systems related to data analytics and creator engagement require enhancement. Skills in digital marketing and AI are crucial for future success, underscoring the need for targeted talent development and acquisition.

RBV Analysis

Key resources include a large user base and a diverse content creator community. The platform's brand and digital infrastructure are valuable, but its analytics capabilities and creator support systems are areas for improvement to maintain competitive advantage.

Learn more about Competitive Advantage Data Analytics Data Protection

Strategic Initiatives

Based on the insights derived from the industry and market analysis, and internal assessment, the leadership team has identified the following strategic initiatives over the next 24 months .

  • Implement a Hybrid Monetization Model: Introduce a subscription service alongside the existing ad-supported model to create a diversified revenue stream. This initiative aims to reduce dependency on advertising by providing users with an ad-free experience for a premium, enhancing user satisfaction and loyalty. The source of value creation lies in the ability to attract and retain users seeking high-quality, exclusive content, expected to increase overall revenue and reduce volatility. This will require investment in content acquisition, technology for subscription management, and marketing.
  • Enhance Creator Engagement Program: Strengthen support for content creators through improved analytics, monetization options, and community-building tools. This initiative seeks to attract and retain top content creators, thereby enhancing the platform's content quality and diversity. The value creation comes from leveraging creators' loyal followings and unique content, which can drive user engagement and support subscription and ad revenues. Resources needed include technology development for new tools and platforms, as well as community management and support staff.
  • Advance Personalization and Recommendation Algorithms: Utilize AI and machine learning to refine content curation and recommendations, aiming to increase user engagement and time spent on the platform. This initiative expects to improve user experience by delivering more relevant and engaging content, leading to higher ad views and subscription conversion rates. The source of value creation lies in enhanced user satisfaction and retention. Significant investment in AI technology and data analytics capabilities is required.

Learn more about Machine Learning Value Creation User Experience

Hoshin Implementation KPIs

KPIS are crucial throughout the implementation process. They provide quantifiable checkpoints to validate the alignment of operational activities with our strategic goals, ensuring that execution is not just activity-driven, but results-oriented. Further, these KPIs act as early indicators of progress or deviation, enabling agile decision-making and course correction if needed.

What gets measured gets managed.
     – Peter Drucker

  • Subscription Revenue Growth: Tracks the success of the hybrid monetization model in generating stable, recurring revenue.
  • Creator Retention Rate: Measures the effectiveness of the enhanced engagement program in retaining top content creators.
  • User Engagement Metrics (Time Spent, Page Views): Gauges the impact of personalized content recommendations on user engagement.

Monitoring these KPIs will provide insights into the effectiveness of the strategic initiatives, enabling timely adjustments to strategies and tactics. Understanding user and creator responses to changes will be critical in optimizing the platform's content and monetization strategies for sustained growth.

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Learn more about Flevy KPI Library KPI Management Performance Management Balanced Scorecard

Hoshin Best Practices

To improve the effectiveness of implementation, we can leverage best practice documents in Hoshin. These resources below were developed by management consulting firms and Hoshin subject matter experts.

Hoshin Deliverables

These are a selection of deliverables across all the strategic initiatives.

  • Hybrid Monetization Strategy Plan (PPT)
  • Creator Engagement Program Framework (PPT)
  • Personalization and Recommendation Algorithm Development Roadmap (PPT)
  • Subscription Revenue Forecast Model (Excel)

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Implement a Hybrid Monetization Model

The implementation team utilized the Ansoff Matrix to explore and evaluate growth strategies for the hybrid monetization model. The Ansoff Matrix is a strategic planning tool that provides a framework for analyzing and planning business growth strategies. It was particularly useful for this strategic initiative as it helped the organization to systematically assess the risk of different growth strategies, including market penetration, market development, product development, and diversification. The team followed this process:

  • Evaluated the current market penetration of the ad-supported model and identified opportunities to increase market share within existing user segments.
  • Explored new market segments that could be targeted with the subscription service, assessing their potential profitability and accessibility.
  • Developed a new subscription-based product offering, designed to complement the existing ad-supported model, focusing on unique content and features to attract subscribers.
  • Assessed the potential for diversification by considering related products or services that could be offered to existing and new markets.

Additionally, the Value Proposition Canvas was applied to ensure that the new subscription service would effectively meet the needs and wants of the target customer segments. This framework helped the team to create a detailed profile of the customer segments and to design the subscription service in a way that would provide significant value to these customers. The implementation process included:

  • Identifying the jobs-to-be-done, pains, and gains of the target customer segments for the subscription service.
  • Mapping out how the subscription service's features and benefits would relieve customer pains and create gains.
  • Iteratively testing and refining the value proposition of the subscription service with potential users to ensure alignment with customer needs.

The implementation of these frameworks resulted in a well-defined hybrid monetization model that strategically balanced the existing ad-supported model with the new subscription service. The Ansoff Matrix allowed the organization to carefully plan its growth strategy with a clear understanding of the associated risks, while the Value Proposition Canvas ensured the subscription service was highly tailored to the needs of the target market. This strategic approach led to an initial successful launch of the subscription service, with early signs of strong adoption rates and positive user feedback, indicating a promising new revenue stream for the organization.

Learn more about Growth Strategy Strategic Planning Value Proposition

Enhance Creator Engagement Program

For this strategic initiative, the team employed the Balanced Scorecard framework to align the creator engagement program with the organization's overarching strategic objectives. The Balanced Scorecard is a strategic planning and management system used to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. It was instrumental in ensuring that the enhanced creator engagement program supported the broader goals of increasing user engagement and content quality. The steps taken included:

  • Defining clear objectives for the creator engagement program within the perspectives of the Balanced Scorecard: Financial, Customer, Internal Process, and Learning & Growth.
  • Developing specific, measurable, achievable, relevant, and time-bound (SMART) goals for each objective, such as increasing creator revenue share options, providing better analytics tools, and offering educational resources for content improvement.
  • Implementing a dashboard to track and measure the performance of the creator engagement program against the established goals.

The application of the Balanced Scorecard framework ensured that the enhanced creator engagement program was closely aligned with the organization's strategic objectives, leading to a more cohesive and effective approach to creator support and engagement. As a result, the organization observed a significant improvement in creator satisfaction and retention rates, as well as an increase in the quality and diversity of content on the platform. These outcomes have contributed to higher user engagement levels and set a solid foundation for sustained growth and competitiveness in the online publishing landscape.

Learn more about Balanced Scorecard

Advance Personalization and Recommendation Algorithms

The implementation of advanced personalization and recommendation algorithms was guided by the Customer Journey Mapping framework. This framework helps organizations to visualize the path a customer takes with a product or service, identifying key interactions and touchpoints. It was particularly useful for this strategic initiative as it enabled the team to understand how users interacted with content on the platform and where personalized recommendations could enhance the user experience. The team followed this process:

  • Mapped out the typical user journey on the platform, from discovery to consumption of content.
  • Identified key touchpoints where personalized recommendations could significantly enhance the user experience and engagement.
  • Developed algorithms to deliver personalized content recommendations at these critical touchpoints, based on user behavior and preferences.

The implementation of the Customer Journey Mapping framework allowed the organization to take a user-centered approach to developing its personalization and recommendation algorithms. By focusing on enhancing the user experience at key touchpoints, the platform was able to significantly increase user engagement metrics, such as time spent on the platform and the number of pages viewed. This strategic focus on personalization has not only improved user satisfaction but also contributed to increased ad views and subscription conversions, demonstrating the value of aligning technology development with user needs and behaviors.

Learn more about Customer Journey Customer Journey Mapping

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Key Findings and Results

Here is a summary of the key results of this case study:

  • Introduced a hybrid monetization model, leading to a 15% increase in overall revenue, with subscription services contributing to 30% of the new revenue streams.
  • Enhanced creator engagement program resulted in a 20% increase in creator retention rate and a noticeable improvement in content quality and diversity.
  • Advanced personalization and recommendation algorithms boosted user engagement metrics, with a 25% increase in time spent on the platform and a 18% rise in page views.
  • Early adoption rates of the subscription service indicated strong market acceptance, with positive user feedback highlighting the value of an ad-free experience.

The strategic initiatives undertaken by the organization have yielded notable successes, particularly in diversifying revenue streams and enhancing user and creator engagement. The introduction of a hybrid monetization model has proven effective, with subscription services emerging as a significant contributor to revenue growth. This shift not only addresses the challenge posed by ad-blocker usage but also aligns with industry trends towards subscription models. The focus on creator engagement has paid dividends in retaining top content creators, which in turn has improved content quality and diversity, vital for sustaining user engagement and supporting the new subscription model. Moreover, the investment in advanced personalization and recommendation algorithms has markedly enhanced user experience, as evidenced by increased engagement metrics.

However, the results also highlight areas for improvement. The reliance on early adoption rates for the subscription service as a measure of success may overlook long-term sustainability and user retention challenges. Additionally, while creator retention has improved, further efforts are needed to expand the creator base and ensure a broader content offering to support the subscription model. An alternative strategy could have included a more aggressive expansion into untapped market segments or leveraging partnerships to enhance content offerings and distribution channels.

Given the results and analysis, the recommended next steps include focusing on long-term user retention strategies for the subscription service, such as loyalty programs or tiered subscription options. Expanding the creator base, possibly through partnerships or talent scouting programs, would ensure a diverse and engaging content offering. Additionally, exploring strategic partnerships with other platforms or content distributors could enhance market reach and content variety, further supporting revenue growth and platform competitiveness.

Source: Content Monetization Strategy for Online Publishing Platform, Flevy Management Insights, 2024

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