The general consensus among those who don’t know much about online publishing is that the business is a veritable cash cow when it comes to being successful. After all, the idea of online publishing is to get the attention of the general population throughout nation and hook them with interesting and need-to-know material. That alone makes it seem as though the industry would flourish no matter who was publishing the content. However, the truth is not quite as simple as all that. In fact, it is quite the opposite, as many online publishers find out the hard way that attracting the attention of the people is easy enough, it’s keeping it that becomes difficult.
Why Do Online Publishers Lose Money?
Take a moment to think about it. Online publishers live and breathe by the content they produce, and the ads that guide people to that content. Over the past several years ad blockers have been on the rise, and as such those publishing firms are beginning to lose out on the revenue that these tend to bring. Now it’s not such a disastrous thing to lose ad space, as word of mouth and other solutions can work just as well to stimulate the public’s awareness of such sites.
But then the other shoe drops
If people don’t pay attention to these sites then there is no buzz, there is no word of mouth, and as a result there is no market to pander to. Online publishers tend to empty their pockets in order to gain the needed attention from the general public to stimulate their business, and in doing so begin to lose vast amounts of money that cannot be adequately replaced without making certain sacrifices. You might have already guessed that these sacrifices come in the form of losing employees due to their inability to meet payroll needs, losing ad space due to the inability to pay for such services, and even losing their domain for the same reason.
Online publishers rely heavily on the notice of the public, and without this in place they do not far nearly as well. On a good day the number of subscribers and users on their sites should number in the millions if not tens of millions. This type of traffic can keep a publisher in the black quite easily, but depending on how big their brand is and how much overhead they have, they might still be just getting by. Their numbers need to remain high in order to pay their employees and to pay for the often exorbitant amount of ad space they require to get the attention they need and desire.
Ad blockers are, to the average person, a rather good thing when considering how many ads simply pop up out of nowhere each time you visit most sites. To an online publisher however they are tantamount to someone sticking hand in their face and tell them that their presence is not welcome. If a publisher can’t find a way to get their ads seen then they must spend even more money attempting to find different venues that will allow their content to get out to the public. In doing this they continually sacrifice a bit of their company a bit at a time in order to stay relevant within their industry.
The idea of losing money to make money is a very common notion in such an industry, as it is largely understood that a company has to, at times, take a noticeable loss to gain a bit of momentum. Sometimes however, that loss is so substantial that these companies will come to almost a dead stop rather than bounce back as they need to. When that happens they usually will have the option of selling what is left of their company to the highest bidder or tearing everything down only to start again.
No matter what happens, the truth of the matter is that online publishers exist in a feast or famine industry, where every ad they publish and every last line of content is crucial. Some companies have actually figured out the formula to success and are currently riding high, while others have felt the definite sting of defeat when having to fold up their laptops and move on.
Here are just a few.
Founded in 2009, this smart-talking blog spot is made up of a small number of employees that decided to create their own little space away from those they felt had abused and misused their talents. As of now the company is still a small, tightly-knit group but has increased its readership to roughly seven million and counting. It is a bit smaller than the average online publisher, but it has gained a following of roughly seven million readers since its inception and those numbers are still growing. It is a very profitable company at this time.
This company was founded in 2006 by HuffPost co-founder Jonah Peretti and has turned a nice profit during its tenure. The company has around 40 million subscribers and counting, and is primarily known for its always popular “Top Ten” lists and other such articles that generate a great deal of interest among readers.
Not Making Money:
The Huffington Post
Despite its 73 million subscribers this publisher has not been profitable since was acquired by AOL in 2011. It had a brief moment in 2010 when it was able to turn a profit, but ever since that it has been largely downhill. This is a bit surprising considering that most people know about this publication and use it quite extensively.
This is the perfect example of what can happen when a publishing site does not live up to its own hype. Founded in 2012 and fueled by Facebook, Elite Daily was set to become one of the hottest commodities around. But when it was bought by Daily Mail in 2015 the site went almost completely belly-up, generating a $31 million dollar loss that has been extremely trying for its new owner to deal with. Where once the Daily Mail believed they had a new and innovative publishing tool to reach millennials on their level, now they have little more than regret.
The next time anyone happens to blurt out that those online publishers that specialize in generating internet buzz are making bank on user-friendly content, remind them that this business is just as uncertain as anything. In an industry where getting people’s attention and keeping it is how you make a living, nothing is ever certain.