How Forbes and The Daily Beast are consolidating diverse revenue streams to create the highest value audience
This article is part of Digiday’s coverage of its Digiday Publishing Summit. More from the series →
Publishers have been trying to break out of the business-side silos for years, but not all have been able to effectively execute a reorganization strategy that’s led to meaningful change.
Now, with the increased importance around developing first-party data, some publishers are figuring out how to apply that data across the company. At the Digiday Publishing Summit in Vail, Colorado this week, Forbes and The Daily Beast shared an inside look into how they reorganized their revenue teams to make money more efficiently.
Forbes began its internal restructuring process at the end of 2022, when several revenue teams were moved under the leadership of chief product officer Nina Gould.
Now overseeing everything from product development and design to e-commerce to programmatic and direct advertising sales operations, Gould said during the Digiday Publishing Summit on Tuesday, March 28 that the term “Product Team” is a bit of a misnomer. That’s because underlying all of those different divisions is data insights, the team for which also reports into Gould and is tasked with using first-party data to give each team a better idea about how they can achieve their individual business goals.
“Part of the impetus behind the re-org [and the] continued evolution of my team really was about breaking down silos. And that isn’t just the physical proximity of people; it really is helping them have a more holistic view of the business. What that presents is opportunities,” said Gould.
Before its reorganization, the brands that Forbes would work with in both advertising and commerce capacities would often have different teams controlling different parts of their marketing budgets, so while the client’s affiliate marketing team might not have the budget to spend on commerce integrations, their counterparts could have a programmatic budget available.
“If [our commerce team] not only know who to talk to on [our] programmatic team, but have actually collaborated with them, brainstormed with them, looked at their client books and compared [notes]… a lot of opportunities [come] out of just talking to each other and hearing what other teams are working on,” Gould said.
It’s still early into the reorg, so Gould said there hasn’t been a ton sold through that scenario, but the teams are talking and that’s the most important thing.
Filling out the subscription funnel
The Daily Beast began a similar reorganization a few years ago aimed at breaking down silos between revenue teams, but rather than making lifetime value the central focus across all teams, Katie Pillich, svp of revenue operations, said during her DPS session on Wednesday, March 29 that understanding what a customer is worth on any given day increases her team’s ability to monetize them more thoroughly across all revenue streams.
The ultimate structure of the reorg became focusing on ways to create “known reader” cohorts, which are “consumers that have unique identifiers to them,” Pillich said, and allows the Beast’s team to find the best method for monetization based on how those users interact with content.
Because while a paid subscriber is 18 times more valuable than the site’s most loyal unknown user and is considered to be the “Holy Grail of our product funnel, we know that 100% of our consumers are not going to sign up for a paid product,” she continued.
Therefore, monetizing “the great middle” has been Pillich’s ongoing priority, which means her team is not going after a paid subscriber at all costs.
There are “other products that we want to convert them towards, whether it’s a newsletter specific to a certain vertical or an app download. And by creating this framework around our new user groups, we can actually put the value to what this consumer is worth today versus what their lifetime value is if we were to [eventually] move them down the funnel,” Pillich said.
This strategy, which is primarily executed through registration walls versus using hard paywalls, has been in effect for about a year, but it’s far from being a set-it and forget-it system.
The uniting metric that helped the Daily Beast’s revenue teams rally around the company’s new operational structure was average revenue per user (ARPU), which is calculated for each revenue stream and then at least once per quarter, stakeholders from each team come together to discuss what’s been contributing to their ARPU growth, or what’s been holding them back.
In those discussions, Pillich said that inventory across the site is evaluated to determine how well it does from an impressions standpoint for advertising, or a conversion standpoint for subscriptions, and if one is lacking over another, it can be exchanged to the other team.
“Every penny counts with the site and being able to optimize [means] having stronger performance across the board,” said Pillich.
Forbes’ internal reorg took place at what Gould considered to be an “inopportune” time. It was “crunch time” in the fourth quarter, but it was also a period in which other media companies were undergoing cost cutting efforts like layoffs and the affected staffers could be feeling fear and uncertainty with their reassignments.
“My biggest job was to make sure the new people who were coming to my team knew they had a home and why they were here and why it mattered. But also to shift their perspective away from [feeling] like things are going to be taken away from me to [realizing they] have a ton more opportunity within the product organization [which] sits at the crux,” said Gould.
The other way Gould worked to shift her team’s mindset was by finding a through-line that could “unify all of these seemingly disparate areas.” And that through-line ended up being moving away from trying to squeeze out the most value per pageview, but to focus on the lifetime value of every reader — known or unknown.
“If you think about it, [being focused on monetizing one-off pageviews] naturally sets teams up to feel territorial and compete with each other,” said Gould.
For example, the mindset becomes having only one shot to fill a page with either a subscription offer or an ad, but there simply isn’t enough real estate for each team to have a presence, asking readers for their attention or money.
That first page view has to instead be seen as “the first word in a long conversation” between the publisher and the customer, Gould explained, and hopefully by the end of the conversation, they feel connected enough to Forbes to spend their money in some capacity.
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