Peter Doucette, managing director of telecom, media & technology at FTI Consulting, opened his workshop session by asking which members of the audience currently have a digital subscription model. About half of the audience said they did.
Doucette, who presented a workshop today at the INMA Media Subscriptions Week in New York, explained the objective of the workshop: To discuss 10 key metrics that significantly impact digital subscription performance. These metrics were delivered during the Google News Initiative North America Subs Lab, with 10 North American publishers attempting to scale digital subscriptions and revenue.
The impact of applying these metrics for the 10 publishers included a 55% increase in digital subscribers year-over-year, a 43% increase in monthly consumer revenue, and a 59% increase in average monthly subscriber starts.
“If you think of the conceptual subscription funnel, there are seven stages of that customer journey,” Doucette said. These include going wide with your audience, monitoring visit frequency, registration, conversion, and retention.
He led the attending INMA members through details of the 10 metrics covered.
1. Visits per unique visitor monthly
Visit frequency is the most critical metric for establishing customer stickiness, Doucette said. Publishers should seek an average of 2.0x visits per UV.
How do publishers address this? It can be improved through:
- Push notifications.
- AM and PM editions.
“Push done well cuts through some of the clutter,” Doucette said. “That’s a really effective way [to drive visits].”
2. Percentage of known visitors out of total UVs monthly
Increasing the known audience allows for more effective marketing, as well as an optimised user experience. The target is a known audience of 5%. Publishers can address this through newsletter sign-ups and registration.
“This is going to become a bigger and bigger part of a publisher’s toolkit,” Doucette said.
3. Article count distribution — percentage per article monthly
This guides paywall strategy to optimise the intercept rate. Roughly 70% of traffic reflects from one article — in other words, “fly-by” traffic, Doucette explained.
How do you influence this metric? Recirculation, content recommendation, widgets, and article design can all play a role, Doucette said. Newsletters can also influence that.
“I think it’s pretty informative when you’re thinking about your pay model strategy. Recognizing that most of your visitors are reading one article per month, what do you do with that piece of information? Do you get them to sign up for a newsletter? Do you think about your paywall or registration settings?”
4. Intercept rate
“Fundamentally, what we’re trying to assess is how tight or loose your paywall is,” Doucette said. This is a critical measure. “It’s really hard to have one universal metric across all these.”
Most publishers' intercept rates are too low, given their digital subscription objectives. The goal is to have around a 7% intercept rate.
Publishers can adjust their paywall settings to improve this, using a meter, premium content, and archives for example.
5. Starts per unique visitor
“This is the ultimate measure of subscription conversion effectiveness of your current audience. I look at this metric as the culmination of all of your paywall and conversion tactics,” Doucette said.
He asked the audience, “What is your effectiveness at converting your audience into digital subscribers?” The stats of the Subs Lab showed that publishers are converting less than 0.10% of UVs per month.
Publishers can address this by maximising their subscription funnels, and improving their e-mail marketing efforts.
6. Newsletter subscriber percentage
“We’re huge believers in newsletters as a subscriber conversion and engagement mechanism,” Doucette said. “I would say one of the biggest gaps we see is focusing on developing the [e-mail] list, and converting the list.”
To address this, publishers can increase the number of newsletter sign-up options (inline, modal, exit intent, purchase flow, etc.).
7. Monthly churn rate (cancellations from subscribers per month)
Subscriber retention is critical to maintain a growth trajectory. While typical churn ranges between 3 and 4% per month, publishers should minimise churn via a two-pronged approach, for both voluntary and involuntary churn.
”This is a hugely important metric,” Doucette said. “It ties into lifetime value. Slight improvements in these numbers make a huge difference in your long-term growth.”
Publishers can improve this metric through:
- Subscriber nurture practices.
- Engagement practices.
- Automatic credit card update services and management.
“I think you want to have a conversation when someone wants to cancel, and find out why,” Doucette said. “If you’re keeping people because you’re making it hard [to cancel], it might give better numbers in the short term, but not necessarily in the long term.”
If a customer has a negative experience when trying to cancel, they will likely never come back. Retaining the customer through a difficult cancellation process might keep them in the short term, but it’s generally bad for lifetime value.
8. Effective ARPU — average revenue per user
ARPU may be more important for driving sustainability than both conversion and penetration.
“This is the net of it all,” Doucette said. “In the end, this is the number that drives revenue.”
Industry price leaders exceed $20 per month for digital-only subscribers.
Publishers can address ARPU improvement through price testing and experimenting with tiered and premium models. “You have to find the right mix for your audience,” Doucette advised.
9. Page speed (home page measurement)
If a Web site doesn’t load fully within three seconds, 50% of visitors (or more) will bounce. Yet, few publishers prioritise page speed, particularly on mobile where it is slow overall.
Doucette recommended that publishers use Google Page Insights to analyse the speed of their Web sites and receive detailed information on improvements they can make for their sites to load faster.
10. Subscriber penetration
This is the overall measure of digital subscription success, according to Doucette. The target is 1.5 to 2.0% in the immediate term, and 2.5% or more in the long term.
“Most publishers need to get to 2.5% or above to be sustainable,” Doucette said.
The best way to address this is to make digital subscriptions a priority across the organisation, he stressed. It should be the North Star metric.