Monetizing underserved audience segments (part 1)
You probably have reader segments that you aren’t serving or monetizing well yet.
There’s huge potential in identifying them and serving them better.
In this two-part series, we’ll cover how to do that.
Audience segments
Every audience can be broken down into segments.
Segments are groups of people who read your content and share certain traits.
Segmentation example
Jacob Donnelly is the founder of A Media Operator, a publication covering the media industry. His audience consists of people working at media companies.
There are many ways you could slice and dice Jacob’s audience:
- By job function: journalists, business roles, audience roles, CEOs, …
- By format: print magazines, online media, events, newsletters, …
- By audience: B2B, consumer, special interests (e.g., model trains)
- By location: US, Canada, Europe, …
- By company size: small, medium, large, …
Similarly, your audience consists of lots of different segments.
Underserved audience segments
Given that there are so many different kinds of people reading a single publication, there are usually groups that you could
- provide a better experience to (= serving them better) and
- make more money from (= monetizing better).
If you identify your underserved and undermonetized readers, you can grow your business and your revenue.
(Upon digging into the data, it’s also common to discover new segments—groups of people that you didn’t even know were reading.)
Identifying underserved segments
The following assumes that you have data on what your audience does for work.
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It also helps you slice and dice your list and understand who is reading.
Identifying audience segments
In the best case, you already have audience breakdowns that show you your different audience segments and their sizes (as in the screenshot above). That’s a great starting point.
If you don’t, I’d spend two hours manually looking through subscriber profiles to see if you can spot patterns. Create a list of all audience segments that you find.
If you do have breakdowns, it can still be a great idea to spend an hour or two manually looking at profiles. You might discover new categories to include in your breakdowns.
Identifying underserved segments
Go through your audience segments one by one and ask yourself:
- Am I serving this segment in the best way possible?
- Am I monetizing this segment in the best way possible?
You will likely find segments that you can serve and monetize better.
Example: A Media Operator
For example, Jacob from A Media Operator (AMO) noticed that he has a large segment of readers in the events industry.
Thus, he decided to launch a second newsletter fully focused on events. This will allow him to both serve and monetize this audience segment better.
If it works out the way he wants it to (and given that it’s Jacob, it probably will), this expansion will grow his business significantly.
Easy first step: creating more content
I remember Jacob telling me a long time ago: “If I notice that people are reading my content despite me not creating content specifically for them, I’ll try to make more content for them to see if I can get more of them to read.”
The idea is:
- There is a segment that reads your content.
- You’re surprised that it exists because you never tried to acquire these readers.
- But obviously, they must be getting value. (Otherwise, they wouldn’t read.)
- Maybe you can grow that segment …
- So you write some articles with them in mind and see if it leads to more signups from that group.
The easiest first step is to adjust your regular content a bit and see if it drives results.
For example, if Jacob wants to grow his events audience, he can sprinkle in a few more articles about events and gauge the response. (He did this.)
If it grows your audience, continue making content for this segment. Write a few more articles for that group.
As revenue is linked to audience size, this is an easy way to grow both.
Caveat: Is serving a certain audience worth it?
Before you dive too deep into serving an audience segment, ask yourself if it is worth it.
First, consider where you can get the biggest return on your time and money:
- What is the opportunity cost of serving this segment?
- What would grow your business more: focusing on your existing initiatives or serving this segment better?
- Are there initiatives that would lead to a 10x higher ROI?
- How easily can you still grow? Is your business approaching its growth limit? Do you need to expand into adjacent audiences to grow further?
Second, consider the effects on your other audience segments:
- Will content for this segment also help your other audience segments?
- Is there value in staying focused on other groups and ignoring this segment?
- Will your product get worse for the rest of your audience if you serve this segment?
- Will your attention be spread too thin? Will the overall quality decrease as a result?
Sometimes, it might not be worth it.
Limiting the effects on other audience segments
There might be ways to limit the effects on other audience segments.
For example, at the bottom of each newsletter, Jacob links out to articles on the AMO website. If he increases the number of links from three to four, with the last one being about events, that won’t worsen the experience for the rest of his audience. They’ll simply skip the article.
Similarly, with Jacob’s decision to launch a separate newsletter, he can serve the events audience while keeping his original newsletter focused.
Serving a segment better also doesn’t mean you have to create content for it every week. You can dial the amount of content up and down based on how large the segment is and how much it contributes to your overall revenue.
Expanding to more publications
When creating new publications to serve certain reader segments better, there are two variations:
- Niching down
- Expanding to adjacent markets
1. Niching down
This can make sense when you’re in a large market where the niche itself is sufficiently large to be a sustainable business.
Example
Take CRE Daily as an example, a publication that covers commercial real estate.
It’s a huge market. The National Association of Realtors has 1.5 million members.
Their “Advertise with Us” page lists 65,000 subscribers across the following audience segments:
- 58% Owners, developers, investors
- 22% Leasing & sales brokers
- 15% Lenders, capital providers
- 10% Professional services
Let’s take lenders as an example. CRE Daily must be very useful to them as is. Otherwise, there wouldn’t be thousands of them.
However, Jordan Berger, CRE Daily’s CEO, might decide that they can serve lenders (a deep-pocketed audience) even better by creating a newsletter just for real estate lenders.
The bet would be that they could grow their audience of lenders significantly if they had a newsletter just for them.
They’d start with thousands of existing subscribers. There are also existing media companies in the space that prove that it is a valuable market.
If the bet played out, CRE Daily would see both audience and revenue growth.
A larger audience would naturally lead to more revenue. However, they would also be able to go after a different type of advertiser. A company that only wants to reach lenders might not advertise in CRE Daily’s main newsletter because lenders are only 15% of the audience, but they might want to appear in a newsletter that only goes out to lenders.
Is this a good idea?
The further you niche down, the less competition you have. (Audience Doctor is very niche. I’m not aware of any other newsletters focusing solely on the same topic.) However, this can be a double-edged sword.
First, you should consider whether to expand to a second publication at all:
- How much overhead would it add to the business?
- Would you get further by focusing all your energy on your core business instead of expanding to more publications? → If yes, hold off on expanding.
You should also think about whether to enter this market in particular.
This includes the usual questions when doing market research:
- How large is the market?
- Is it growing/expanding?
- How many existing players are there?
- How profitable are they?
- How much demand is there from advertisers?
- …
A danger with niching down is that you might end up with a market that is too small. Make sure the niche is large enough to still be a sustainable business.
More examples
Arizent has built its strategy around creating niche products for all the different job roles in the financial services industry. It’s a large industry with buying power, so that’s a great strategy.
One could imagine Jacob Donnelly creating a specialized newsletter only for B2B media companies. I don’t think that would make sense. His niche is already very small. Plus, many of the people at B2B media companies already read his content. AMO serves them well. He wouldn’t grow his audience or revenue by much.
2. Expanding to adjacent markets
This makes more sense for Jacob.
If you are in a small niche, there is a limit to how much money you can make from it. (In large niches, too. You just hit it later.)
Then it can make sense to enter a second (third, fourth, …) market. You take what’s working in the first market and apply it to the second.
Example
Here is Jacob’s announcement of his events newsletter:
We are going to launch a second newsletter. You can’t talk to a media operator without hearing about events. Everyone is thinking about how to do them, and there are a ton of events-only companies that don’t have a great resource out there for coverage. We’re going to fix that. We’ve already got a freelancer who will contribute regularly, and we’ll look to make a full-time hire by the end of the year.
When Jacob looks at his existing audience, he can find:
- Companies whose primary focus is events
- Media companies whose events make up a large part of their revenue
- Media companies that want to lean more into events
Readers from these companies will be interested in the new newsletter.
For example, at the last AMO Summit, I talked to a large delegation from Questex. Questex is a company that owns over 125 different events and trade shows. They will love the newsletter.
At the same time, he will be able to bring many new readers into his ecosystem. As Jacob said, there are many events-only companies that don’t have a media arm. (Just think of all the big trade shows in the world.) Those don’t have a good publication to turn to. Jacob identified a gap in the market and he plans to fill it.
To make it even better, the events industry has been growing post-COVID.
Jacob’s current niche of media companies is rather small. Moving to an adjacent market is a great way for him to grow. Because it’s adjacent, he can start with a large existing audience and monetize it from day one.
This is a great move for Jacob. He gets to serve existing audience segments better while also growing his audience.
He will be able to monetize better, too:
- He will grow his audience and ad inventory.
- He will be able to approach new kinds of advertisers—those that target event companies.
- He will be able to sell paid subscriptions to more people (and companies).
- He will be able to start an event for event professionals. (His event for media companies, the AMO Summit, brings in about half of his revenue.)
Footnote: Jacob first shared this plan in 2024. He even shared what segment he wants to get into after events. Read it on AMO. You’ll learn something.
When does it make sense?
Expanding to adjacent markets is great if you are in a small niche and have already captured a large portion of it. That said, it can work for companies in large markets, too.
Just don’t expand too early or you might lose your focus. Make sure you know the opportunity costs of the expansion. It might make sense to stay focused on your existing publication for a while. You will still be able to expand later.
The need to hire
Keep in mind that you might need to hire more people if you start more publications. The same applies if you decide to serve audience segments better in other ways.
Jacob, for example, is hiring a reporter for his second newsletter right now.
More ways to monetize audience segments
In two weeks, I’ll publish the second part of this article series.
We’ll dive into more ways to better serve and monetize audience segments (besides creating more content).
Sign up for the newsletter below to receive it in your inbox as soon as I hit publish.
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