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Engaging digital non-subscribers with micropayments, metrics

By Shelley Seale


Austin, Texas, United States


In a live INMA Readers First meet-up exclusively for members, Researcher-in-Residence Greg Piechota and guest speakers discussed how to monetise the 98% of online readers that don’t subscribe. Participants explored new models and learnings about micropayments, looking at how the model can fit into a digital subscriptions strategy. 

This INMA Readers First Meet-Up concentrated on micropayments and metrics.
This INMA Readers First Meet-Up concentrated on micropayments and metrics.

Micropayments and other pricing models

What is next in micropayments? After the most profitable segments, there is a place for pricing models other than subscriptions. After early victories with selling digital subscriptions, with fans and heavy users, news media companies need to move into the promotion seekers and occasional buyers.

“How do we monetise that?” Piechota asked the attendees. “That is the big question.”

Looking at other pricing models to bring less engaged readers into subscribers.
Looking at other pricing models to bring less engaged readers into subscribers.

In his research, Piechota has looked at what the drivers of lifetime value are. Based on the two drivers of lifetime value — frequency of purchase and preference for a direct channel — Piechota proposed pricing models that maximise value while fitting the customers’ behaviour.

“We can actually begin to prioritise different pricing models based on where buyers fall on this metrics dashboard,” he said. “We know that there are plenty of buyers who come to our Web sites for perhaps just one visit. Can we entice them with perhaps à la carte pricing? Can we model new ‘all-in-one’ bundles?”

Lifetime values drivers were used in segmenting the market for pricing models.
Lifetime values drivers were used in segmenting the market for pricing models.

Piechota then looked at data from Chartbeat and segmented the market of visitors to 50,000 news Web sites all over the world. “When we segment people by frequency of visitors, we see that 60% of people do one visit per week, and 40% of people do two or more visits per week. Just using these real market numbers, we can start to estimate the size of the opportunities.”

This leads to plenty of questions, Piechota said, such as:

  • When is the right time to pursue the customers with the lower lifetime value?
  • How do we make sure we don’t cannibalise the sales of digital subscriptions revenue with micropayments?
  • How should publishers evaluate whether to join the “all-in-one” bundles of the tech companies such as Apple?

Cosmin Ene, founder and CEO of German start-up LaterPay, discussed his company’s conversion funnel.

“It essentially onboards users into paying customers by deferring registration and payments to a later stage,” Ene said. “We hope to establish value with every click. We help publishers establish that value with every click to put out content and allowing users to say ‘I agree to pay later,’ and that’s the point when we start onboarding users into paying customers.”

The LaterPay model generates revenue from casual readers and converts mid-funnel readers to subscribers.
The LaterPay model generates revenue from casual readers and converts mid-funnel readers to subscribers.

The amount users agree to pay to access the content begins to accrue, and when that reaches five euros, they are asked to register. This gets them used to the notion of paid content. “Eighty-five percent of all users who we did not know at all before do register and pay,” Ene reported. “We just use micropayments to spearhead the conversion of users into paying customers. So we start in a very low-friction way and we lead users throughout this funnel.”

The model LaterPay has built is based on trust and choice, Ene said: “We make it very, very easy for them to engage in paid content, and by giving them that choice, they essentially feel in control. What we have seen is that we are driving users from the mid-funnel up into subscriptions or higher-priced content.”

The LaterPay model generates revenue from casual readers and converts mid-funnel readers into subscribers; 70% of all subscribers who came through LaterPay had previously bought a single article and Ene reported that no publishers saw a drop in their subscription models.

Member questions

Q: Have you seen any data on how much is “too much” for a micropayment?

Ene: What we’ve seen is that the price matters. If you’re pricing the content too high or too little, that has an implication on the numbers. But the amount of paid content has no negative effect.

Q: Once publishers have put on LaterPay, they did not see a decline in their actual subscriptions?

Ene: That is correct, to date. I would not exclude that this wouldn’t happen in the future, but to date that is what we’ve seen. Many publishers had started to see a plateau in their subscription models when they implemented LaterPay to capture new subscribers.

Piechota conducted a live poll amongst the meet-up attendees, asking if they had implemented micropayments and if they have been satisfied with that experience. Results were:

  • 9% of the participants reported trying micropayments and being satisfied.
  • 9% tried micropayments and were not satisfied with the experience.
  • 22% have not tried the micropayment model but are planning to try.
  • 60% said they have not tried it and have no plans to try it.

Metrics and dashboards

Piechota then moved the meet-up into the next topic, opening with a few key points:

  • It’s hard to manage what you don’t measure.
  • Metrics should be focused on driving the customer value and not the business’ output.
  • Metrics should be actionable so all people understand how to influence the metrics and drive value.
  • A North Star metric may be useful to align the entire company to its strategic objectives, driving value and the business.

Piechota used The Financial Times as an example of a company using a North Star metric — the Recency Frequency Volume (RFV) — to inform its editorial, marketing, and product decisions. The higher the engagement of the user, the higher the likelihood of subscribing and the lower propensity to churn.

The big questions for discussion in this segment of the meet-up were:

  • Is having a North Star metric a realistic goal for companies with several revenue models?
  • Is it better to share simple metrics (e.g. pageviews) or holistic scores (e.g. engagement) that are less actionable?
  • Should we focus on driving the metrics for all users or focus on a high value subset, such as subscribers?

Yves Van Dooren, manager of the digital traffic center at Mediahuis (the largest publisher in Belgium and The Netherlands), explained the company’s journey with metrics. In the “old days,” Mediahuis used Google Analytics — which was a great free tool that didn’t require a high level of technological expertise and was good for its campaign tracking capabilities.

However, the disadvantages were that it was not real-time, it was site-centric as opposed to article-centric, the campaign tracking was too complex for editors, and there was no dashboarding for external data.

What came on to replace that for Mediahuis was Chartbeat. “It was a very nice tool,” Van Dooren said.

Some of the benefits of Chartbeat included:

  • Nice real-time data.
  • Use of engagement and recirculation as quality indicators.
  • Excellent for optimising the homepage of the Web site, especially with A/B testing.

However, there were also some downsides at the time:

  • No insights over longer periods of time.
  • It was a black box, closed environment.
  • No campaign tracking was supported; it was a fixed referral detection.
  • There was no support for paywall systems.

“We don’t use Chartbeat or a competitor anymore, but it’s still a good tool in my eyes,” Van Dooren said. Instead, Mediahuis built its own metrics dashboard. This provided the company with:

  • A central place for all kinds of data and insights, with a single log-in.
  • Multiple data sources, including Google Analytics, market information such as CIM and Comscore, Facebook data, and video player events.
  • An easy, consistent interface for detecting trends.
Mediahuis created its own tracker to better suit its needs.
Mediahuis created its own tracker to better suit its needs.

Everyone in the company can view the dashboard data. “We like to be transparent,” Van Dooren said. “We also started our own tracker, because Google Analytics and Chartbeat had limitations. It makes a lot of things available to us, and it’s very specific also.”

The Mediahuis tracker built in features such as attention time tracking, real-time, page-centric, real referrer, and specific data layers. The results have been seen in the better understanding of traffic sources and paywall systems.

“It’s a very nice tool for our marketing department ... to have a look over longer periods of time,” Van Dooren said, pointing out that the tracker is mostly for operational data. But, he confided, the tracker probably “overdid it” for some of the team members; the complex screens and detailed explanations were a little overwhelming for some of the editors.

“So the main question was, how to leave no one behind,” he said. “What we tried was to re-think our dashboards. Instead of having a dashboard, we got a daily report that was sent to the people’s mailbox. Very simple, and what we really did was get back to basics.”

Piechota pointed out that this approach was very customer-centric, to the internal Mediahuis customers: the staff. They really listened to what their people needed and wanted.

At the same time, the team members (for instance, in publications) that are very interested in diving into the deep data are able to do that.

Member questions

Q: Is the attention time reported in the dashboard total minutes, or how is it tracked?

Van Dooren: We try to keep our metrics very basic. The attention time is really the time spent on the article from our tracker.

Q: Why did you decide on tracking attention time?

Van Dooren: To have a very operational metric, I think attention time is a good one. The editors like that, as opposed to pageviews.

Piechota put out another participant poll, asking if they have employed a North Star metric. Results were:

  • 5% said they have a North Star metric of RFV.
  • 25% agreed on some North Star metric, other than RFV (some of these include absolute number of subscribers and engagement).
  • Others plan for a North Star metric in the future, while others don’t plan to use one.

You can view all upcoming Webinars and meet-ups at the INMA Web site.

About Shelley Seale

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