This blog post provides a helpful record of the collected wisdom of our industry in the area of audience revenue, particularly in the area of digital subscription revenue. As we enter a new year, we take this opportunity to reflect on what happened in 2018.
How has our knowledge of digital audiences evolved in 2018? And how has our ability to operationalise our understanding of customer preferences and willingness to pay for digital content progressed since we started the year?
A review of blog posts by month is a helpful reminder of what happened and what we learned.
In February, we wrote about mass personalisation and how it was observed to improve conversion rates, engagement, and customer retention.
A question from that blog post led to the article, “Overcoming the challenges of mass personalisation.” That post described the necessity of organisation alignment in the areas of strategy, data, messaging, and performance metrics to successfully implement a data-driven mass personalisation strategy.
The next month, the conversation moved to the lifetime value of a digital subscriber. We shared an example of customer lifetime value (CLV) metrics for three types of digital customers at a publisher. The findings were:
- Registered/non-paying US$6.50.
- Partial week print/digital access US$165.
- Digital-only subscribers US$650.
These values are from the incremental revenue and costs of adding digital access to these customers. The high CLV of a digital-only customer reflects the digital subscription and advertising revenue with the very low incremental costs of serving these customers.
Following the Media Subscriptions Summit in London, we wrote about two themes appearing in many presentations: acquisition strategies supported by predictive analytics (in particular machine-learning algorithms) and the evolution of product design to better suit subscriber preferences since they are driving a greater share of publisher revenue.
During the World Congress in Washington, D.C., in June, many speakers shared how they were developing alternative revenue streams to augment their traditional advertising and subscription businesses.
In the blog post following the conference, we covered the topic of new product development and the need to view your business from the perspective of the customers and their expected value proposition from your products.
We summarised the pros and cons — mostly cons — of using premium days to accelerate the recognition of print subscriber audience revenue. This topic has been important in recent years as publishers have added more premium days. We shared a case study from Newsday, when the company delivered premium products free of charge to customers who opted in. The company’s finding was that retention benefits from these products made them profitable even though they were free to the customers.
Our next blog post summarised the power of predictive analytics to identify customers at risk for stopping their subscriptions, so proactive retention campaigns could mitigate the churn risk. The article shared cost-effective retention strategies from several recent case studies. Since this post, several more publishers have adopted retention campaigns targeted using predictive analytics.
Mather Economics and INMA hosted the Reader Revenue Symposium in Amsterdam in September. This day-long conference had speakers from Schibsted, The New York Times, Bonnier, Gannett, Mediahuis, Politiken, Newsday, and Zeit Online.
Frederic Filloux of the Monday Note spoke to the audience about his work on quality scoring of content using machine learning. The core themes from the event were reader engagement, product value proposition, content economics, and growing reader revenue across platforms.
The following blog topic was total CLV, a metric measuring the aggregate expected operating margins from a publisher’s subscribers. We shared results from a case study where a publisher successfully increased its total CLV through a mix of acquisition, retention, and pricing strategies.
We covered the basics of a reader-revenue-supported business model in our next blog post. We were inspired by a recent visit to a U.S. publisher that was realising the benefits of its multi-year transformation to a digital-subscription revenue business model. Company representatives shared the framework it used to focus on the key success factors of the transformation: create content people want, maximise sales attempts, remove friction from the purchase transaction, and retain customers once you have them.
Looking back on these blog posts and 2018 in total, there is a sense the industry is making important strides toward the digital future. 2019 should be an important year for the industry and a good one for blogging.
Happy New Year to everyone. I hope to see you at an INMA conference soon.