Hyper-local strategies can help news publishers accelerate subscription growth

By John DeFriest

FTI Consulting

Washington, DC, USA

By Justin Eisenband

FTI Consulting

Washington, DC, USA


In a recent INMA blog post, we discussed the potential benefits of incorporating customer segmentation into marketing strategies. Many subscription-focused publishers have already built out customised engagement and acquisition strategies for different customer segments to maximise their conversion potential.

Most of these strategies involve tailoring specific messaging, introduction discounts and terms, and other offer tweaks to address the profile of each segment. Some of the most common segmentation approaches used by publishers globally today include:

  • Engagement levels: Visit frequency, site depth, etc.
  • Content type: Politics, sports, investigative reporting, opinion, etc.
  • Channel: On-site, e-mail, social media, search, direct mail, etc.
  • Subscription history: Net new user, card abandon, recent churn win-back, etc.

Metered paywalls, for example, offer different customer journeys based on users’ engagement level. Low engagement user segments are permitted to sample content for free, while high engagement user segments that exceed the metre threshold are encouraged to subscribe through paywall modals and other on-site assets.

Premium content paywalls incorporate segmentation as well: targeting users engaging with specific content types (typically in-depth investigative and opinion articles or valued journalists) with subscription nudges. Many publishers even offer different offers depending on the channel (for example, on-site vs. e-mail) and subscription history (card abandon vs. win-back).

Expanding customer segmentation to include geographic location

Another form of customer segmentation we’ve seen publishers experiment with more frequently (and see success from) is geographic location.

News media companies have been using geography to guide content and marketing strategies since their inception — targeting coverage and allocating out-of-home, direct mail, and kiosk marketing spend toward population-dense areas.

However, digital content distribution, advanced digital advertising channels, and access to next-gen tools and publicly available data have allowed publishers to add more sophisticated geographic customer segmentation strategies.

Strategy No. 1: population

Local news publishers are inherently focused on specific metro areas. However, being able to further segment at the county, city, and ZIP code level can guide targeted, high ROI editorial content and consumer marketing tactics.

For example, auditing historical content produced by ZIP code and comparing against the most population dense areas can signal which areas are over- or under-served from a news gathering perspective. And, targeting local news content production in population-dense areas can help ensure the entire audience is addressed and sees value in purchasing subscriptions.

Using New York City as an example, Exhibit A shows the relative population density at the ZIP code level for the core metro area.

Exhibit A: New York, New York, 2021. Population by ZIP code.
Exhibit A: New York, New York, 2021. Population by ZIP code.

Interestingly, although midtown Manhattan and the Wall Street/Financial District are frequently talked about as the focal points of New York City, they are actually less population dense relative to other neighborhoods. Therefore, they may be less relevant targets for local politics, education, crime, and other localised content.

On the flip side, sections of the Bronx, Queens, Brooklyn, and Staten Island have ZIP codes with larger audiences bases, and, thus, larger subscriber conversion opportunities.

Strategy No. 2: age

Let’s take the geographic segmentation another step further. Where target audience segments are located can allow the newsroom to create more hyper-local content to address their demand and encourage more engagement and conversions.

Younger audiences, for example, are historically more difficult for news publishers to reach and build deeper relationships with. Because of this, publishers are constantly searching for opportunities to engage with them, whether it’s on specific social media platforms or through video or interactive content. Geographic segmentation can support these goals as well.

In New York City, the median age of ZIP codes in the Bronx and Brooklyn specifically is significantly lower than other parts of Manhattan and Queens (see Exhibit B). Select ZIP codes have median ages below 30 — highly desirable, difficult to reach segments — compared to neighbouring areas with median ages greater than 50, which typically have stronger, longer-standing relationships with newspapers.

Exhibit B: New York, New York, 2021. Median age by ZIP code.
Exhibit B: New York, New York, 2021. Median age by ZIP code.

Focusing editorial efforts on addressing these younger segments can build habitual engagement patterns and foster more subscriber conversion performance over the long term. Other potential newsroom strategies to capture these high-demand segments include creating hyper-local newsletters and expanding coverage on neighbourhood-specific verticals (like economy, industries, and leisure).

Strategy No. 3: education

On the marketing side, targeting paid advertising spend in ZIP codes with high propensity to subscribe can drive significantly higher ROI than casting a wider net or attempting to use generalized segments. This is an important consideration as publishers continue to push toward profitability and balance the higher interest rate environment.

Based on past regression analysis, we’ve found the education level of a particular geography is the variable most correlated with high propensity to subscribe. Focusing on paid marketing channels that offer geographic segmentation capabilities, allocating ad spend to markets with high education rates can accelerate acquisition performance.

For New York City, many of the ZIP codes with high education rates are located within Manhattan, but there are also clusters of highly educated — and therefore likely high propensity to subscribe — ZIP codes in downtown Brooklyn/Brooklyn Heights, Williamsburg/Greenpoint, Astoria/Flushing, and Jersey City/Hoboken/Englewood (see Exhibit C). These markets could be valuable segments for targeted paid subscriber acquisition spend.

Exhibit C: New York, New York, 2021. Percentage with a bachelor’s degree or higher by ZIP code.
Exhibit C: New York, New York, 2021. Percentage with a bachelor’s degree or higher by ZIP code.

Similarly, but at a more macro level, international, national, and even vertical-specific publishers can apply these same theories at the county, state, and city level to target coverage and marketing activity to support digital subscription growth.

Focusing on high population density geographies is a basic segmentation application. Taking the analytics further to consider age, education, and other market-specific variables can support subscription strategies.

Where do we go from here?

Population density, age, and education levels are relatively basic applications of geographic customer segmentation. There is a wide swath of data points available to collect similar insights, ranging from other demographic segments (income, commuting habits, geographic mobility, home ownership, etc.) to publisher performance attributes (print penetration rates, Web site audience engagement, etc.).

Publishers are getting more creative and sophisticated as they collect more experience scaling digital subscription operations, and we’re excited to see similar use cases across the industry.

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