In 2018, publishers realized that they need to own their audiences. They watched their organic reach plummet in the wake of Facebook algorithm changes and they struggled to make sense of data constrained to the walled gardens of search and social platforms.
As a result, many turned their attention to the subscription model.
A long list of digital publishers, including New York Media, Yahoo! Finance, and Quartz, added paywalls for subscribers in 2018. The New York Times announced that subscriptions now drive over 50% of its total revenue. And a report from the Reuters Institute for the Study of Journalism found that over half of publishers say subscriptions are their main revenue focus for 2019.
Still, publishers face challenges with this strategy. They know they need to use a subscriber model, but they’re not always sure how to build, optimize, or measure it effectively.
In order to get a handle on how publishers can build a more effective subscription strategy, we spoke with our VP of R&D in LA, Ning-Ning Yu.
“When these three pillars come together, only then do publishers have what they need to monetize effectively, as well as still be able to engage subscribers and increase conversions. Without each pillar, you could be wasting precious time and resources on the wrong kind of traffic for you.” – Ning-Ning Yu
The problem: Building an effective subscription strategy
Publishers experience a few major obstacles when building their subscription strategies:
- Calculating the return – They invest in subscriptions but they don’t know how to measure their return on that investment.
- High churn rates – Readers pay for the first month and then back out of their subscriptions. Publishers are learning that conversion is hard and retention is even harder.
- Choosing the right model – There’s no one-size-fits-all way to drive subscriptions for all publications and audiences. Publishers have a choice of options, such as hard paywalls, metered paywalls, premium content for subscriptions, ten free articles before subscribing, or a mix of these. Even when they know all their options, they’re not sure why they would choose one subscription format over another.
These issues are the result of publishers not seeing the bigger picture. They’re not looking at their subscription model within the entire ecosystem of their publication.
The solution: Create three distinct pillars
Here’s what publishers must understand when building or rewiring their subscription strategy:
Content that generates revenue, content that generates new audiences, and content that generates subscriptions are three completely different types of content.
Let’s break down these three categories across audiences:
- New audiences: Readers with a high propensity to subscribe will start engaging with content more frequently, but not if you don’t know who they are. When new users visit your site, you need to know who they are and what are their interests and behaviors. Where did they come from? What do they want to see? What can you give them to keep them engaged and motivate them to eventually subscribe? Remember, it can take up to five visits for new readers to convert.
- Subscribers: They already pay. You just want to make sure they don’t churn. You know which content will attract them. You just need to keep delivering more relevant premium content, free content, and sponsored content.
- People who will never convert: Their biggest value proposition is monetization through sponsored content. You need to feed them more personalized sponsored content so you can generate impressions and drive revenue from ads.
The question now is: How can publishers distinguish between these three audiences, collect data about them, and use this to deliver the most profitable content?
The tools: Tracking the right metrics
In order to identify these unique audiences, publishers must track these metrics:
- Conversions or subscriptions
- Conversions based on content type, topic, and author
- Lifetime value per article
With this data at their fingertips, publishers can figure out which pieces of content drive conversions. They can then optimize their strategies to double down on what’s working for each audience and peel back on what isn’t.
Taboola’s client, Bloomberg, for example, turned on its paywall last May and it started tracking articles that drove subscriptions. Bloomberg quickly saw that content types weren’t influencing conversions. Rather, content topics were – and content about China and a potential trade war drove the most conversions.
Taboola Newsroom helps you track all of these metrics and more, it provides the information you need to understand your audience and drive subscriptions. Contact us today to gather these insights for your publication.