The FatChilli Playbook #2: The audience you're losing was never going to pay

Hi friend 👋

Welcome back to The FatChilli Playbook. One email a month, for publishers, editors, and product people who think about reader revenue more than is strictly healthy. No filler, no breathless takes, and a couple of jokes, because we all need a laugh.

This month: the Reuters Institute quietly made the business case for loyalty, a tiny sliver of ad inventory did something slightly ridiculous, and audience data keeps suggesting that this newsletter should be a TikTok video. Well, I tried, but got stuck choosing the right track to go with it.

Still, David here (audience revenue & engagement at FatChilli for Publishers). Let’s go.

Oh, and don’t forget to forward this newsletter to colleagues who might be interested.

Bye, bye, reach, it was fun while it lasted

For twenty years, the whole industry chased one number: reach. More unique users, more page views, more sessions. The platforms got bigger. Newsrooms got smaller. You know how this part goes.

The 2026 Digital News Report from the Reuters Institute, the biggest report in the media world, describes a sector that has, in its own words, “moved on from measuring audience reach as a key success metric, instead prioritizing the depth of engagement with a smaller, more loyal audience.”

Translation: Reach has been let go. Loyalty got the promotion.

If reach is the red pill in the Matrix scene and loyalty the blue pill, the analogy also works on what happens next.

Taking the red pill will get you to change nothing, live your life until the robots figure out how to survive without you.

Taking the blue pill, choosing loyalty, puts you in a whirlwind of changes, and you find out that humanity is actually much smaller, as the robots have taken over. But the fight is real and fulfilling. Plus, there are “weapons” you can use to win your fight (REMP and Beam+ being a couple of examples).

We wrote the long version of this argument up on the blog (link below), sadly without the Matrix analogy, as we were keeping it for this newsletter.

Two pieces on the same shift, from opposite ends

We published two companion pieces since the last issue, both circling the same story. The loyalty piece.

Our full read of the 2026 Digital News Report: while reach is failing as a metric, the durable audience is hiding inside your averages, and a loyalty metric can solve this issue (behavioural segmentation, loyalty scoring, traffic-quality detection).

The Google Zero piece. At I/O 2026, Google more or less confirmed the direction everyone feared: AI Mode now has over a billion monthly users, and the answer increasingly arrives without the click.

Google search referrals to publishers fell roughly a third in the year to November 2025, and smaller publishers took the worst of it (around 60% declines versus 22% for the largest). 

We’ve got four tips on turning shrinking, scarcer visits into known, returning readers.

Rewarded ads for web

Here’s a number that looks like a typo. At Techbox, one of Slovakia’s leading tech sites, 1.4% of ad impressions delivered nearly a third of programmatic ad revenue.

Techbox has no reader revenue and was watching ad income slide as search and social traffic softened.

FatChilli moved them off a generic Advanced Ads setup onto a properly managed Google Ad Manager configuration. 

Then we switched on rewarded ads, the format where an engaged reader watches a short ad in exchange for continuing with content they already want. No credit card needed; readers are paying with their time.

The first full month after the switch:

🌶️ Total ad revenue up 27.3% month over month

🌶️ eCPM up 25.5%

🌶️ Rewarded ads contributed almost a third of programmatic revenue from that 1.4% sliver of impressions

🌶️ Traffic was essentially flat, and bounce rate and time-on-site were unchanged

That last line is the point. The lift came from how the inventory was monetized, not from more of it, and readers didn’t flinch.

Rewarded ads convert loyal, returning audiences, the exact readers the Reuters Institute just told you to protect. Fewer ads, more revenue, same happy audience.

Fail of the month: Trust in the news keeps falling

Not sure who is at fault here, maybe we all are, maybe it’s the platforms, the vertical video feeds, the changing nature of consuming information in a bite-sized manner…

The Report was also trying to pinpoint the root of the cause: “It is difficult precisely to disentangle declining trust in news organisations from broader scepticism about political and social institutions, but there has been a long-term international trend of falling trust in representative institutions such as governments and political parties, with a notable decline in trust for parliaments following the 2008 financial crisis.”

The fact is that, according to the new 2026 Digital News Report, both interest in news and trust in news are at an all-time low. Trust in news has fallen in 29 of our 48 markets this year.

A touch of positivity

Mediahuis Ireland became the 53rd English-language news publisher to pass 100,000 online subscribers, according to Press Gazette’s 100k Club ranking.

The publisher behind the Belfast Telegraph, the Irish Independent and The Kerryman took five years to get there. Five years. In a market where the entire island has about five million people (fewer than Greater London).
That’s a genuinely impressive and useful reminder that audience revenue is a process that never ends and also does not happen overnight. Loyalty pays, but it pays slowly.

One more thing: We’re launching a newsletter course

We are putting together a practical, step-by-step course on newsletters by experts who worked on editorial newsletters in different newsrooms.

What can you expect:

🌶️ the strategy behind each send,

🌶️ the data worth watching,

🌶️ the tactics to retain and acquire paying subscribers,

🌶️ and also the technical foundations.

Not beginner-only, not expert-only. Even the 2026 Digital News Report cites newsletters and emails multiple times as the core strategy for news publishers.

The course is still in the oven. But now is the time to put your name down: register your interest and we will be in touch with all the details as soon as they are set.

That’s it for Issue 02. Subscribe here if a colleague forwarded this and you’re vaguely intrigued. Forward it if you’d like to be that colleague.