Independent balances needs of ad model with reader engagement through segmentation

By Shelley Seale

INMA

Austin, Texas, USA

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The Independent Digital News and Media in the United Kingdom faced a challenge: How could it balance the needs of its ad model with its reader revenue strategy.

The team asked itself: Was the company’s proportion of free-to-paid content optimised to increase user engagement?

At the European Media Subscriptions Town Hall on Thursday, the Independent Chief Data Officer Jo Holdaway told INMA members her team was dedicated to balancing the content and ad model in a way that optimised reader engagement and revenue.

“It does work if we focus on our readers with the highest propensity to subscribe,” Holdaway said. “How do we know who they are? Engagement is the best indicator.”

Choosing the right engagement metric was critical, she continued. As the first British newspaper to go completely digital, in 2016, the model had to lineup with the paywall.

“We had to create an engagement model that placed a greater value on the content behind the paywall,” Holdaway said.

The solution was to segment and target the Independent’s audience based on their propensity to subscribe.

 Independent Chief Data Officer Jo Holdaway explained how the publisher segmented its audience.
Independent Chief Data Officer Jo Holdaway explained how the publisher segmented its audience.

While the team considered the RFV metric, they created a different model, APV, as a more useful metric because it tracks behaviour. APV creates an engagement score for each reader based on:

  • Active days on the Web site.

  • Premium article mix.

  • Volume.

The system updates every reader’s APV score daily, and they hope to advance that reporting to real-time.

“We know that premium content and the paywall prompt is the biggest driver of conversion,” Holdaway said. “Once we had a formula we were happy with, we wanted to see if there was a correlation between APV value and conversion rate. We did find that the higher the APV, the higher the conversion.”

The team tested the APV scoring system using historic data and found its audience could be segmented into three groups:

  • Fly-bys: represent 90% of readers, APV score of 0-0.4, conversion rate of 17%.

  • Fans: represent 9.5% of readers, APV score of 0.5-9.9, conversion rate of 57% (x33).

  • Super fans: represent 0.5% of readers, APV score of 10-100+, conversion rate of 26% (x366).

In short, the Independent found 80% of its conversions came from just 10% of its readers.

“We knew we were onto the right thing here,” Holdaway said. “What we’ve done since is develop specific segmentation strategies.”

Fly-bys haven’t been sufficiently engaged enough to subscribe, so the team focuses on introducing them to the Independent through free newsletters and other benefits, increasing their APV score, engaging them further, and moving them down the line towards becoming a subscriber.

By understanding its readers, The Independent could better grow the number who were highly engaged.
By understanding its readers, The Independent could better grow the number who were highly engaged.

“We’ve just started this journey,” Holdaway told INMA members. The next step for the team is to create strategies that grow the size of their engaged audience.

When it comes to developing an engagement metric for retention, Holdaway said they don’t think APV is the right way to track that: “We will probably move more towards an RFV model for that.”

About Shelley Seale

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