Building an Awards Business
Trust is one of the major byproducts of good media. Although we live in an era where trust in the media is at an all-time low, when it comes to individual publications, my suspicion is people trust what they read. If you consistently deliver valuable information to people, over time, they are going to inherently trust the brand.
That trust is an asset even if it doesn’t directly show on the balance sheet. One major strategy media companies have used to monetize that asset is through awards. At the core, an award is simply a brand passing some of its trust to another company.
Think about it… J.D. Power is a market research company. They rate cars and those car companies are desperate for those awards because they believe potential customers care about it. J.D. Power built the trust and the car companies pay for that trust. It’s a good business. And we see it in so many different industries, both for b2b and b2c companies.
What’s important to understand about these businesses is that not every media company can do it today. I believe every media company can do it at some point in their growth, but it takes time. Here’s why… trust is not something consumers give overnight. It builds after you consistently deliver value to your audience. So, on day one, you’re a new brand that is reporting. On day 1,000, you’re a well known brand that continues to report.
Therefore, before we can endeavor to launch an awards business, we need to determine whether our brand is strong enough to sustain this business. I’ve talked with operators who have launched event brands too early and they’ve fizzled out. Unless people trust you, companies are not going to seek out the award from you. That’s the basic math.
But how do you measure trust?
There are people that would say you can quantify it through things like net promoter scores and surveys. And to some extent, that might be true. In my opinion, though, trust is something that is analyzed through a variety of different vectors. You can do the quantifiable stuff, but you should also be looking at less obvious things.
For example, what’s the quality of sources that contributes to your reporting? If early on, it was mostly small startups offering quotes, but now it’s larger companies, that’s a good sign. The larger companies tend to have robust communication departments, so if they’re greenlighting executive participation, you may be onto something.
Another possibility is the reader tells you without realizing it. One of the reasons I love newsletters so much is people can reply. I felt A Media Operator had reached the point where I could start charging because I was getting a lot of people engaging with my pieces. I felt I was onto something.
Before we move into how these things make money, I want to spend a little time discussing the high-level points that go into executing an award product.
The very first thing you need to do is identify what the various awards are going to be. You could take a very large approach as Inc. does or you can go much more micro. I’m looking at Digiday’s website while I write this and for the Digiday Video and TV Awards, it has examples including Best Brand Film – Single, Best Brand Film – Series, Best Ad, TV Executive of the Year, and the list goes on. Each of those will have its own entrants and warrant an award.
Once that’s done, you need to determine the judging criteria. What are you looking for? Why would someone win? For your entrants to know what to submit and your judges to know how to judge, you need to be crystal clear with your criteria.
Along with the criteria, you also need to identify the judges. Will this be done all in-house by your reporting staff or are you going to bring in independent people from the industry to participate? Getting outside participation could help elevate the experience and reduce the concern of “bias” from the inevitable losers.
Or perhaps it’s a community award. Rather than having independent judges determine the winner, have your audience participate in the decision. Whoever receives the most votes wins? A third option could be to give the community one or two votes and then have judges as well. Suffice it to say, how you judge from a criteria and participation perspective is important.
From there, you need to launch. You’ve got the awards, the criteria, and the judges, so the goal is to get as many people as possible to participate.
Now let’s talk about the business model of awards. As I think about it, there are three ways to make money from awards. Publishers can opt to do one, two, or all three. It’s entirely up to them, though I have my inherent biases.
Charge for entry
One of the most well-known monetization tactics is to simply charge for every person or company that is entered into the award. Take the Inc. 5,000, for example. As the name implies, there are 5,000 companies that are going to be included on this insanely large list. I have friends that have made #1 and they’re thrilled about it.
Inc., though, charges $195 per entrant. As Inc. says on its website, “the processing fee covers only a portion of the operational costs of this undertaking.” I can appreciate that.
But let’s do something math. At $195 per company (and that’s the early bird rate) and 5,000 companies listed, that’s $975,000 in revenue. But that’s just the 5,000 companies that are listed. How many submit? Suddenly, the entry price can turn into a very lucrative revenue stream when you’re talking about tens of thousands of entrants.
There are two schools of thought here…
On one hand, charging for entry does help cover some of the administrative costs. However, I am skeptical that it costs Inc. that much considering it is just ranking based on revenue and year-over-year growth. But for smaller media companies, processing and judging so many entrants can be a massive time suck.
On the other hand, awards are an extension of our trust. Part of that comes from an understanding that our journalists and writers are being unbiased in their awards. Therefore, are we truly representing the most innovative companies or the best executive if we’re requiring payment for entry? Isn’t this just another type of pay-to-play?
Many of the smartest people I know are on both sides of the debate. I go back and forth on it. In some respects, I like the idea of a truly independent award where there is no pay-to-play. On the other hand, awards are not cheap, so charging a nominal fee can help offset the costs to run this business.
Depending on the type of award, you could decide to get a company to sponsor it. I was on a railway site last night (don’t ask) and they were promoting their Railroader of the Year award, sponsored by two different companies.
The promotion is broken into two parts. Before the event, you’re trying to get as many entrants as possible. And after the event, you want to promote the winners because that gets people excited for next year. People enter into these because they want to look good, so you’ve got to promote it.
In this case, it’s like any other media product. You estimate how much promotion you’re going to do and then charge them based on that.
Now, you can take it one step farther. What I’ve described above is a basic sponsorship. What if you created a more brand integrated sponsorship? Here’s a random idea that I could one day do here.
Let’s say Piano (a registration software company) decided to sponsor an AMO award: Best Subscription Registration Flow. Rather than it being the AMO award sponsored by Piano, it could be the AMO x Piano Award for Best Subscription Registration Flow. It’s subtle, but now Piano is part of the exercise.
We can get creative with these sponsorship packages.
The final way is one that I’ve always been most interested in. Our brands have value. And the reason people want to win awards is because they want to use our brand value to validate themselves. That’s really what it boils down to.
But if a company wants to use your brand, they should have to pay for it.
This is where licensing comes in. Once you’ve selected the winners for the awards, if they want to use your logo and branding to promote that fact, they have to pay for it. Being a winner doesn’t mean they can plaster your branding on their websites and marketing materials. That costs money.
If we use Inc. as an example again, they have a great self-serve product where a winner can select how they want to use the branding and pay for it with their credit card.
Let’s take the Custom Rank Logo product. If I want to use this in print, digital marketing, and advertising and I was part of the Inc. 5,000 in the year 2020, it would cost me $2,095 to use that logo for a single year. Let’s extrapolate… 5,000 winners with a cost of $2,095 and that’s a $10.4m business. Now, not everyone is going to buy the logo, but even if 20% do, it’s still a nearly $2.1m business.
Ultimately, this is how you monetize your brand. The entry fees are great and the sponsorship is an additional advertising product you can sell. But the licensing is the truest determinant that your brand is in demand. If a lot of companies want the logo, it means your brand is respected. It’s really that simple.
Running an awards business is a lot of work. And a single essay on the topic certainly doesn’t do it justice. However, I believe it’s something most media companies should keep in their arsenal. As brands continue to develop, there is the possibility for them to generate good revenue for the publisher.