Audience segmentation is a key publisher tactic that nearly all publishers do in some capacity.
Perhaps the most common form of segmentation is around engagement levels. Audience engagement segmentation often comes in the form of looking at sessions per month, time on article/site, scroll depth, pageviews per session, and grouping users into different segments, such as heavy users/loyalists, casual readers, and fly-bys.
This segmentation is quite valuable when leveraged appropriately. It can be utilised to determine paywall settings for a dynamic paywall, initial offers to subscribe, or pricing strategy.
While this type of segmentation is quite valuable, we question whether publishers could utilise additional audience segmentation methods to better understand users and provide dynamic and personalised experiences that maximise subscriber conversion, retention, and revenue per user. To that end, we will explore a few other ways publishers can segment audience and examples of how that is done.
Referral sources and device types: two ways to segment anonymous audiences
One key challenge related to segmentation is the lack of data about the audience. How can publishers segment one visitor from another if not much is known about that user? In those cases, one way to begin segmenting audience starts with referral sources and device types.
When it comes to referral sources, direct and e-mail-initiated sessions likely have a vastly different type of user than someone arriving via search or social. News publishers should also look at consistent referrals from news aggregators like Yahoo! or Apple News to understand which particular segments come from certain channels. These referral channels can be indicative types of content, willingness to register or subscribe, or clicks on ads.
Once publishers can segment these audiences by behaviour type, the optimal user experience can be developed that drives the highest revenue per page.
Developing personas to predict responsiveness
Publishers often use engagement to establish value-based pricing in determining offers and/or pricing increases. Generally, that has made sense. The more a user or subscriber engages with content (both from a frequency and depth perspective), the greater inelasticity we see in the response to price increases.
However, are there are opportunities to expand that profile to better determine both willingness to subscribe and willingness to pay more.
In a recent study, FTI found the single-most correlating factor to subscriber penetration is the education level of that market. That is, the higher the share of households in a given market with college degrees, the more subscribers we’d expect to see. If we know more about our audience and our subscribers, we may be able to better predict responsiveness to offers and pricing beyond engagement-based segmentation.
Importance of zero- and first-party data
Zero-party data, or information users voluntarily provide, is often utilised to drive personalised experiences. For example, this may be a customised home page that prioritises areas of interest or AI-driven newsletters automates content a specific user is most interested in.
Publishers can also leverage zero-party data to improve audience segmentation and better understand how certain audience types correlate with certain behaviours. Even if an audience doesn’t directly provide the data, publishers can leverage logged-in audiences’ behaviours to develop insights around specific segments and their likelihood to take certain actions.
For example, for certain markets, sports may not be a significant driver of paid subscriptions, but the core audience that follows sports may act as an attractive audience subset to drive affiliate revenues to sports-betting sites.
Better understanding the size, nature, and desires of an audience subset allows publishers to understand how best to monetise and build the user experience that drives maximised revenues — regardless of whether that comes in the form of subscriptions, display advertising, affiliate click-thru rates, or simply just more recirculation throughout the digital site.
Audience segmentation: not just an investment in data, but also capability and know-how
In a drive to build better capabilities around segmentation, publishers often prioritise investments in data and technology.
However, building a powerful data engine is only as valuable as the capability that drives the engine. Publishers of all levels of sophistication should be considering the different ways to leverage the sizable portfolio of data being gathered and determine how best to test and develop the varied approaches to segmentation that will drive revenues.