Publishers across the world have been increasingly favoring direct reader revenue models because of the continued decline in ad revenues. The COVID-19 pandemic has accelerated this process. Now many publishers are finding themselves facing challenging questions around building a subscription based business model.
The publishers who are proving to be the most resilient as the coronavirus pandemic lumbers on are largely those who had already shifted their business models to ones that prioritised reader revenues over advertising revenues. Now, more than ever, having a strong reader revenue stream is becoming vital for survival for news publishers.Cecilia Campbell, CMO, United Robots
“Post-COVID, digital subscriptions are suddenly the prime driver of growth,” adds Nick Tjaardstra, Executive Director for WAN-IFRA’s Digital Revenue Network. “If you have no idea what your subscribers are reading, simply because the systems are not in place, then it’s going to be very difficult to retain those readers going forward.”
“A look under the hood”
WAN-IFRA has published a new report, “The building blocks of a reader revenue tech stack,” which looks into the strategy and technology used by various publishers as they build their subscription business models.
“Many publishers are at different stages and trajectories with their reader revenue strategies,” writes Cecilia Campbell, the author of the report. “And many, particularly those starting out, have questions about the tech associated with reader revenue. But even the most advanced at this confess to the complex nature of it all.”
The report contains practical insights and advice from publishers who have been successful with their reader revenue strategies. They include the Financial Times, The Economist, Schibsted in Norway, the Swedish regional news group Mittmedia, Nordjyske Medier and Politiken (both of Denmark), and Switzerland’s Tamedia.
“With this report, we take a look under the hood, so to speak,” says Campbell. “At the array of internal logistical and strategic issues that news publishers need to address within their infrastructure to make their reader revenue ecosystem function as effectively and seamlessly as possible – for both their staff and the readers they want to convert into paying subscribers.”
“Backbone of any digital subscription strategy”
“There is no single right way to implement a technology and data strategy associated with a publisher’s reader revenue strategy,” writes Campbell. However there is a common thread and that is data.
“While there are thousands of individual company scenarios, there seems to be at least one universal truth: Future-proofing your digital subscription business begins with getting your data in order,” she adds.
What we’ve discovered is that data helps unify our priorities. It helps us to recognise and identify what matters to our readers, to our customers. Those are things that ultimately unify editorial and commercial. Because if we can please our customers, if we can make them engaged, then ultimately they’re having a positive experience, [and we] achieve commercial success.Tom Betts, Chief Data Officer, Financial Times Group
“Clean, easily accessible and actionable first-party data can serve as a backbone of any digital subscription strategy,” elaborates Campbell. “The scope and objectives of a data strategy may vary, but whatever strategy is adopted, it should form the basis of all subsequent tech stack decisions.”
“How your technologies are talking to each other seamlessly”
Seamless integration of the technology/tools being used is also critical. “It is not so much about which technologies or tools you use, or even how you implement them,” explains Campbell. “It’s more about how your technologies are talking to each other seamlessly, i.e. integrated.”
“If you look at how we’re getting customers in, it’s increasingly reliant on data and technology,” says Tor Jacobsen, Senior VP of Consumer Business for Schibsted Media. “It’s more about getting a dynamic paywall and tools that maximise the possibility for a paid article to convert. It’s about showing predictions, about buying propensity scores and the like.
“To integrate our platform is also important for us to get one customer view – to be able to easily follow our customer across all our brands and offer them the most relevant experience and product portfolio.”
For example, if a publisher has built a propensity-to-churn model, a flag is “attached” to any customer that falls in this category. This flag needs to appear in all customer contexts – apps, websites, newsletters, KPIs, metrics, customer service – and must signify the same thing across all.
The Financial Times uses an analytics tool called Lantern. It helps the data team identify correlations among data points such as time spent on a page, number of articles read, and so on, in order to determine a user’s propensity to pay.
According to Tom Betts, the FT’s Chief Data Officer, the true value of Lantern lies in how it communicates to the newsroom those metrics that affect engagement. For example, it alerts journalists when an article has a notable gender imbalance – which has been shown to limit successful conversions.
“Building a sustainable digital subscription business”
The report goes on to present the pros and cons of the different technological solutions available for publishers. It also discusses the benefits and challenges of building solutions in-house vs buying them off-the-shelf.
Campbell says that most publishers emphasize that business strategy must come before tech.
“When building a sustainable digital subscription business, it pays to take a long view on how you shape your technology. What appears to be a shortcut now may result in limiting your flexibility in the future,” she writes.
“The aim should be that newsroom and business professionals can test and execute on new ideas without running into technical constraints. The closer you can get to that state of affairs, the more successful your reader revenue business is likely to be.
“Once those are in place, a number of key aspects related purely to the deployment of actual technology should be considered. How tech is implemented will affect the company’s ability to execute on business goals long into the future.”
The full report is available at WAN-IFRA:
The building blocks of a reader revenue tech stack