The Shorenstein Center and Lenfest Institute recently published a whitepaper, Digital Pay-Meter Playbook. The paper presents best practices for increasing and sustaining digital subscriptions culled from surveys of over 500 for-profit newsrooms.
The researchers note that there has been “a digital subscription renaissance in the news publishing industry” over the last five years. Publishers are observing a demand for high-quality content and working at developing premium, high-value brands that engage readers. According to FIPP’s 2019 Global Digital Subscription Snapshot Report, digital subscriptions are going to be the key revenue focus for publishers this year.
To take advantage of this “renaissance,” the report suggests that publishers “invest in capabilities to engage in constant testing and experimentation in digital — to build engagement among digital audiences and ultimately convert engaged readers into paying subscribers.”
Highlights from the whitepaper:
Publishers with over 6% stop rates have “thriving” digital subscriptions businesses
Stop rate is the percentage of all digital users who are “stopped” by a subscription prompt, a paywall, or a meter limit.
According to the whitepaper, a news organization’s stop rate often distinguishes high-performing publishers. But a majority of the publishers are stopping a limited percentage of their readers. It states, “among the more than 500 news organizations analyzed, the fiftieth percentile of publishers stops only 1.8% of their readership with a paywall or meter. Publishers with sustainable digital businesses report stop rates above 4.2% of their readers.
Even if the news organization is successful in converting their addressable audiences and unique visitors, publishers that are underperforming likely have limited opportunity to grow subscribers if they are failing to stop a significant enough portion of their overall readership.Digital Pay-Meter Playbook
“The publishers that reported more than 6% of unique visitors reaching their paywall had “thriving” digital subscription businesses – robust teams, and well-developed audience engagement strategies.”
The report suggests two key ways to increase the stop rate:
- tighten access rules, or
- increase engagement
The researchers state that there are no “hard and fast” rules for paywalls. They recommend evaluating data continuously to create different access control rules for different behavior. In general, the study found that focusing on a particular reader’s interests within a certain category of content, allowed publishers to drive them more efficiently towards subscribing.
For example, a sports reader stopped on a local sports story can be served a customized message tailored to that team’s coverage. The publishers in the study also leveraged geographic targeting, content targeting (lowering the meter rate for more editorially-intensive content), or behavioral targeting (incorporating factors about a user, including newsletter subscription, to increase their meter limit).
Some publishers like the Wall Street Journal, use propensity targeting. It involves scoring readers on their propensity to subscribe and targeting them with messages when they are most likely to do so based on their score.
Best performing digital publishers have 3x engagement rates
Research across publishers shows that the top decile of publishers have engagement rates that are nearly 3 times those at the bottom decile.
The best performing publishers studied for the whitepaper tended to leverage content strategy, social media engagement, offline events, video, email, newsletters, and site optimization to increase engagement among audiences and subscribers.
The paper offers the following best practices for building engagement:
- Substance over virality: The researchers note that while viral stories may appear promising, “articles with fewer social shares or lower page views might be more popular with subscribers than general audiences.”
- Keeping users on the site: In order to keep readers engaged publishers need to plan how to best drive a particular user to read the next article. One way to do it is to base article recommendations on a user’s reading history, rather than articles relevant to the previous article.
- Content that drives more subscriptions: Survey findings suggest that readers who view local news are 2-5 times more likely to subscribe than those who view national and wire-sourced stories.
The researchers comment, “High-performing editorial and business teams tended to clearly identify the unique value proposition of local news, incorporating editorial and coverage to improve readers’ lives within their communities.”
- Help readers live informed lives: Connected to the above, publishers who produce content that helps readers live more informed lives, tended to see greater subscription sales. This includes public transit and resource coverage and other information that does not require “reporting”.
- A distinctive value proposition: The researchers found that high-performing publishers tend to offer a “distinctive value proposition to the reader, incorporating reporting only that publication can provide.” For example, a metro newspaper in a major college football market found that the majority of pageviews of its football coverage was for the nationally recognized team in its market.
This was an audience for which it was competing heavily with national media like ESPN. The publisher also found that a smaller school in the area had higher engagement from paying subscribers. This prompted it to divert resources to enhance coverage of the smaller school. It led to an increase in subscriber engagement and greater number of new subscription starts.
- Building repeat audience attention: The study found that most engaged subscribers expect daily and often hourly content, rather than articles that merely resurface and repurpose content from the news organization’s print edition (if there’s one).
The researchers suggest that publishers should prioritize customized, frequent local coverage that address a community’s particular needs, concerns, and interests.
- Evaluating content performance: This helps publishers identify articles that over-perform relative to the norm, and map patterns that emerge. For example, publishers can calculate story viewership numbers by occasional readers, regular readers, and subscribers.
- Newsletter and emails for engagement and subscriptions: According to the study, high-performing publishers leverage email sign-ups for direct subscription marketing and promotion; direct marketing tends to increase a reader’s likelihood of subscribing.
Email newsletters can also play an important role following the subscription in increasing engagement and retention. High performing publishers track open rates, click-throughs and propensity through newsletters, and optimize to maximize engagement.
- Optimizing site for reader convenience: The paper states that page load times represent the largest difference between successful publishers in the top decile and fiftieth percentile of publishers studied. It recommends publishers to avoid advertising overload and encourage content discovery through customized recommendations and infinite scrolls.
- Targeted messaging: According to the study, “30% of onsite digital subscriptions originate from “welcome” messages that provide an introduction to new readers, and ”warn” messages that serve as reminders when the reader approaches the meter limit.”
Further, the paper states, “browser overlays and customized warnings have proven to be effective. particularly those that underscore meter limits for individual users and offer customized options for unique subscriptions based on the reader’s profile and viewing history.”
- Marketing and promotion: Effective marketing campaigns typically focus on all or a partial combination of the following:
- Quality of content, public interest messaging, or highlighting the impact of a particular news organization’s journalism
- Convenience and easy access to content
- Informing and improve the reader’s life
- Discounted rates and comparing cost of subscription with the cost of a commonly consumed item like say, a cup of coffee.
“Subscriber churn compounds over time”
The researchers comment, “retention rate is an important measure for publishers, as subscriber churn compounds over time and can lead to large changes in revenue with small drops in retention.”
Publishers that have been successful in reducing churn focus on understanding its source – from the reason for cancellation to the causes of payment lapses. They use research and operational teams to reach out to canceled subscribers to understand what went wrong. They also create cyclical processes of feedback and evaluation to improve services. Strategies like approaching a reader who canceled their subscription with reduced rates or a better deal have proven to work.
According to the researchers, “The highest-performing practitioners in our analysis investigate options with message testing, and ensure all subscription and retention efforts are data-driven and continuously optimized.”
Given operational constraints, not all publications can pursue the above audience development and engagement strategies concurrently, but several simple and low-cost approaches – modeled after best practices across the industry – might allow publishers to increase engagement, build a dedicated base of digital subscribers, and begin to reduce a reliance on advertising revenue.Digital Pay-Meter Playbook
Access the full whitepaper here:
Shorenstein Center and Lenfest Institute’s Digital Pay-Meter Playbook
Download WNIP’s comprehensive new report—50 Ways to Make Media Pay—an essential read for publishers looking at the multiple revenue opportunities available, whether it’s to reach new audiences or double down on existing super-users. The report is free and can be downloaded here.