Research shows how media companies can succeed with acquisition, retention during COVID

By Shelley Seale

INMA

Austin, Texas, USA

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Most news publishers around the world saw a bump in traffic when the COVID-19 pandemic hit full force in March — and for many of these publishers, that bump hasn’t gone away.

Greg Piechota, INMA’s Researcher-in-Residence, shared details of the ongoing traffic gains with INMA members during a Readers-First Meet-up on Wednesday. Global, regional, and local news brands are still enjoying huge spikes in traffic resulting from the pandemic, even more than six months later.

Other key findings from case studies during INMA’s current Digital Subscription Acquisition Master Class were:

  • Mature brands grow by engaging occasional readers, not by making heavy readers read more.
  • Big news events attract occasional readers, but you need to warm them up before trying to convert.
  • The Wave Strategy of The Wall Street Journal found if it can get occasional readers to its site five times per month, they are likely to subscribe.
  • The Growth Loop of The Washington Post has reorganised its customer growth journey to focus on the occasional readers who might not become heavy readers, but rather come and go to the site.

Another example is Dagens Nyheter in Sweden, which grew from 170,000 subscribers at the end of 2019 to 208,000 digital subscribers in September 2020. About 200,000 people signed up for a trial during the pandemic, of which 25-30% converted to the full rate. This and other initiatives at the Dagens Nyheter have led to an increase in operating profit by about 50% to about $20 million this year — the newspaper’s best result since 1990s, despite the fall in advertising revenues.

Representatives from Dagens Nyheter and Piano joined INMA for a Webinar on COVID digital subscriptions.
Representatives from Dagens Nyheter and Piano joined INMA for a Webinar on COVID digital subscriptions.

Case study: Dagens Nyheter

While March and April brought the largest traffic and subscription spikes to Dagens Nyheter, the last six weeks in September and October continued to see numbers higher than pre-COVID, explained Anna Åberg, head of digital at Dagens Nyheter. Many of these are converting as well.

Åberg attributed a lot of this to the COVID-19 campaign the publisher conducted during this time. The main components were:

  • All critical coronavirus coverage was free, resulting in an enormous traffic boost.
  • Columnists and other storytelling remained behind the paywall, resulting in a bump in conversions.
  • The company launched a new campaign giving everyone who had registered at the Web site free digital access until May 1.

New readers coming onto the site for coronavirus news were probably not ready to subscribe yet, Åberg explained, because they didn’t yet have a relationship with the Dagens Nyheter brand.

The campaign launched with the message that journalism is more important now than ever. Readers then saw the registration button, after which they had an account and could continue to read on the site. The free trial subscription ended automatically if they took no further action, though the user went through the normal onboarding message strategy.

Dagens Nyheter saw more than 200,000 people sign up during this campaign, which consisted of several different phases offering different trial periods. Åberg said 10 days before the user’s free trial period ended, they would receive an e-mail with a special subscription offer.

The free trial subscription offer from Dagens Nyheter resulted in a 25-35% renewal rate.
The free trial subscription offer from Dagens Nyheter resulted in a 25-35% renewal rate.

“A huge number of people decided to stay as a subscriber,” Åberg said. The renewal rate was between 25% and 30%.

Users who churned would still be recognised and logged in when they next visited the Web site because they had registered. At that time, they would see a special renewal offer via a pop-up, bottom bar, and/or notification.

“We just try and speak to them wherever we can and try to reach them in all ways that we can for a few weeks,” she said.

Results

These traffic and subscription numbers since March 2020 represents a significant increase from the previous year. Towards the end of 2019, Dagens Nyheter was struggling a bit, Åberg said.

Dagens Nyheter's digital subscription rates have grown tremendously since COVID-19.
Dagens Nyheter's digital subscription rates have grown tremendously since COVID-19.

“We weren’t growing as fast as we’d hoped for. In February and March, we did see an effect. It was in the paywall [numbers], but it was also churn going down. We had the biggest amount of digital subscribers in May, almost 240,000, before we started to go down again.”

This slight decline after May was expected, as users reached the end of their free trial. Åberg noted that for those who signed up as a subscriber from the free trial, churn rates are no different than their previous subscribers without the offer.

Due to the expected losses in free trial subscribers who did not convert, Dagens Nyheter expected to see declining numbers until the first of 2021. However, Åberg reported that as of mid-October, they are actually already growing the digital subscriber base.

Different offers were presented for different types of users, she explained. No offers were given to existing customers, while loyal users were given a subscription discount but no trial period. Returning users would be offered the free trial period at the paywall, and new users were targeted with a leads campaign.

“If you will get them just to try your service, then many of them will understand why they should pay for it,” Åberg concluded.

Insights from Piano Benchmarks

Echoing what Åberg and other news media executives have reported, Patrick Appel, director of research at Piano, said benchmarking insights show news publishers continue to enjoy new subscription starts due to COVID.

News publishers continue to see new subscription starts, even more than six months into the pandemic.
News publishers continue to see new subscription starts, even more than six months into the pandemic.

“In the beginning, COVID was clearly the story that was organically driving this. But in the latter months of this chart, there have been many other news events,” Appel said.

From elections to Black Lives Matter and protests, big news stories around the world have continued to drive the elevated numbers seen since the pandemic struck.

“Though COVID was the start of this, looking at the data we don’t see that as the whole story,” Appel said.

Exposures to paid offers have also increased.

“Arguably, the biggest change the media has made in the course of the pandemic is asking more readers to pay,” Appel said. “The additional paid offers, at least in the beginning, could be attributed to higher user engagement. But the biggest increases in paid offers have come in the latter months, at which time the pageview increase from COVID had largely dissipated. Most of this is being driven by the choices publishers are making.”

With advertising revenues declining, publishers have focused more on reader revenue. Median conversion rates have also remained steady. Many subscribers convert very quickly, Appel added. Piano has found a 51% paid conversion rate on the first active day of the month.

“These are often impulse purchases made at a time when the value of that news proposition is clear and compelling. That means we need to be able to effectively communicate value from the first time someone visits.”

On the flip side, cancellations also happen quickly, Appel said.

  • 68.3% share of auto-renew disablements within the first 60 days.
  • 21.8% share of auto-renew disablements on the first day.

However, cancellations rates are lower for monthly subscribers who converted during the pandemic. Piano found a 6.5% decrease in active churn rates during this time.

One driver of this has been the reduction in free trial offers. “Free trials became possibly less necessary during COVID, when people were more willing to pay.”

More paid subscription trials convert to full price than free trials, Appel shared.

  • 86.3% average first-month retention for monthly offers without trials.
  • 81.4% for paid trials converting to full price.
  • 70% for free trials converting to full price.

This is even more dramatic when looking at a full year, he added. More than half of monthly subscriptions are lost by the one-year mark: “Often that free trial is not worth it when you’re comparing it to other acquisition tactics.”

Annual subscriptions, on the other hand, are a very different — and better — story.

Annual subscriptions offer better retention rates for news publishers.
Annual subscriptions offer better retention rates for news publishers.

“We really encourage our customers to think about longer-term offers,” Appel said. “You’re keeping about 75% through that first renewal. Almost everyone who pays on an annual subscription is staying that whole year, unless you have a free trial.”

When thinking about trials, he said that there is a big range. Piano sees anywhere between a 20% and 150% trial offer conversion uplift. When they boost conversion rate enough, they can outweigh the retention hit.

Trial offers are also strongly linked to increased cancellation risk. The most predictive indicator for cancellation overall is the number of times a subscriber has paid.

“Widely we’ve often seen trial status and other metrics related to how many times people paid,” Appel said. Some of these important metrics related to cancellation are:

  • Subscription age.
  • Non-trial payments.
  • Total amount paid.
  • Time until next payment.

Engagement metrics are more important when it comes to getting visitors through the trial period. The common important metrics for conversion to a full-price subscription are:

  • Number of visits during the first two weeks.
  • Recirculated pageviews.
  • Visit frequency pre-conversion.
  • Subscription age.

The most important consideration, according to Appel: Lifetime value.

About Shelley Seale

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