Successful publishers understand the value of having an easy to follow and measure key metric
Simple ideas can go a long way. Look at Google’s initial concept: the web is growing quickly, people need to search for stuff – let’s build a search engine. Or Facebook: people online want to connect with friends and family – let’s build a social network using their real names and photos. Or Amazon: what if you could buy anything in one online “everything-store”.
Historically, multiple people have often stumbled onto the same idea at the same time. But only a handful managed to grow them into multi-billion dollar businesses, becoming industry leaders.
If you look closer at some of the drivers of those successes you will find very clear definitions of goals. When you listen to managers in those companies – they never stop talking about their North Star metrics and principles guiding their decisions.
In a recent interview, YouTube’s chief product officer Neal Mohan used the phrase “North Star” seven times. Basically, his answer to any hard question was by noting his teams are being guided by their North Star metrics and that’s why they are doing what we see as an end result.
Sure, he was hiding behind that in uncomfortable situations. Nonetheless, if you look at YouTube’s most recent results, revenue was at an all-time high, the platform is the second biggest search engine in the world and it is testing a lower priced subscription to get more paying subscribers.
Taking cues from technology companies
Good for them but what does it have to do with newsrooms?
I believe it is useful to look at technology companies for inputs in business strategies and I am not the only one in the media thinking this.
In 2015, when Katharine Viner became the editor in chief of The Guardian and David Pemsel its CEO the two started experimenting with OKRs – the objectives and key results framework invented in the 1970s by Intel and made famous by Google.
First, they experimented with the framework in smaller teams and later adopted them widely. In the Building the Agile Business through Digital Transformation book, Duncan Hammong, the delivery director of Guardian News and Media wrote that OKRs improved their focus and helped them deliver strategic priorities.
There are several blogs, white papers, studies and reports all over the internet on finding your North Star Metric. So many in fact that NSM is casually used as an acronym. As the term originates in Silicon Valley it has become a buzzword and as such drives demand which generates a steady stream of new blogs on the topic.
If you want to take a deeper dive I suggest starting with this piece by Chris Moran, The Guardian‘s editor for strategic projects and the former audience editor. Next, read this blog by an ex-Airbnb product manager. Finally, the Towards your North Star report by FT Strategies.
The term ‘North Star metric’ is nicely explained in the FT report as a single measure of how valuable a product is for subscribers: it is the reader-centric gauge that correlates best with their likelihood to subscribe.
Consider the following paragraphs as a summary of the most important points. If you are looking for more case studies, start with the links above.
North Star Metric: Key product metric over revenue
The Financial Times famously used their RFV (recency, frequency, volume) framework to hit one million digital subscribers. McKinley Hyden, the Financial Times’s Head of Insights, explained that with RFV they look over the last 90 days to see how recently a reader visited us, how many times they visited, and how much they read over the period.
More recently, FT also started using a more nuanced metric called Quality Reads. Hyden explained that Quality Reads is a consumption-based metric: how much of an article has someone actually read.
The need for such a metric arose as journalists in the newsroom started asking what subscribers actually think, and are they really reading.
The Independent, based in the United Kingdom, developed a metric called APV – combines active days, consumption of premium content, and volume.
In contrast, the Norwegian Aftenposten uses a variety of metrics. The newsroom looks at daily conversions to subscription with an average displayed below the daily number. Other key metrics include volume (how many articles users read in the last four weeks), frequency, how many articles a user finished and the percentage of page views by subscribers.
A while back I had an argument with a media manager on the topic of the right North Star metric. His view was that it should be revenue based, mine that a newsroom with a subscription business should prioritize subscriber growth.
In the aforementioned interview with YouTube’s chief product officer, Mohan said one of the North Star metrics was how satisfied were their viewers. That’s a broad description but it is definitely not a revenue based one.
Even experts who don’t agree a company should have a single North Star metric say that a product metric is better than a financial one. Jonathan Golden, a venture capitalist and former Director of Product at Airbnb, wrote that financial metrics are a derivative of a great product.
Another reason not to use financial metrics as a North Star are that they can hurt you in the long-term. The theory is that you will make the wrong product decisions (prioritize short-term financial gains). Also, it is hard for your teams to take action on such metrics, as it rarely means something substantial to them.
Optimize for satisfaction, sweeten the offer, growth will follow
One Scandinavian publisher I spoke to told me regarding the North Star metric they look only to subscription satisfaction. The newsroom sees only the page views of subscribers.
They have found there is a strong correlation between what drives retention and acquisition as the best performing articles among subscribers convert new ones very well.
Recently, The New York Times announced they are making a number of their existing newsletters subscribers only and adding new ones, as well only for subscribers. NYT’s goal of reaching 10 million subscribers has been communicated by the newsroom widely.
Having reached 8 million subscribers as of the second quarter of 2021 the bigger emphasis in order to reach the goal has to be on retaining existing subscribers. That’s why you hear NYT’s managers talking so much about retention with newsletters being a big part of it.
The recent move has been interpreted by some media analysts as The Times moving to sweeten the offer and raising the value of the subscription.
Again, with such a clear North Star it is easier to make decisions.
The same media manager I mentioned we disagreed on the North Star metric also couldn’t make up his mind on what other metrics should be key and his presentation included plenty of them spreading across multiple slides.
In contrast, whenever I have seen a successful newsroom presenting their key metrics, one slide was sufficient. Think about the whole organisation you have to bring onboard and explain it to.
With every added metric the chance of more people not getting it simply rises exponentially. I would rather use a simplified metric and tweak it in time than risking colleagues in the newsroom having different goals.
This piece was originally published in The Fix and is re-published with permission. The Fix is a solutions-oriented publication focusing on the European media scene. Subscribe to its weekly newsletter here.