Last November I attended the INMA Consumer Engagement Summit held in Miami. Attendees came from a wide cross section of the publishing industry, from small news brands to well-known brands like USA Today and The New York Times.
As I sat through the conference, I heard jargon: “acquisition,” “retention,” “average revenue per user,” “lifetime user value,” “churn reduction,” “propensity modelling.”
Clearly the focus for these news brands is to build their own audience platform with subscription as the core.
This brought me back to my days in the telecommunications industry, where jargon was, and still is, the bread and butter of the marketing department. In the mid-2000s, the telecommunications industry underwent sweeping changes to its subscription-based pricing models. User value and propensity modelling became key performance metrics.
Telecommunication services have traditionally been based on a subscription model, with customers paying on a per-use basis. Telecom service providers had sophisticated methods of metering usage in place — whether minutes of voice, data usage (bytes), number of messages, or a combination of these. But, in an increasingly competitive landscape, telecom service providers soon realised they needed to provide premium services with compelling customer value propositions.
Like telecom providers, publishers are also looking to understand where in the value chain each user resides to retain or grow revenue.
Customised content offerings enhances subscription
News brands’ content offerings are often perceived as limited compared to those of industries in the telecom or financial sectors. This idea is based on the misconception that printed news content is simply copied to fit the digital edition. Rather, most news brands curate content for each medium.
Also, consumers prefer a subscription model, allowing them the flexibility to access content in their own way — in print, digitally, and on a variety of platforms.
Consumer preferences are diverse, with mobile access becoming increasing popular; 49% of weekly readers access content on their mobile.
In addition, differences in format offer different experiences to the user. Therefore, marketing to the diverse preferences of users is difficult.
While this seems like a challenge for many news brands, it is actually an opportunity to understand the user experience. First, there is a need to identify and truly know each audience segment by leveraging data — demographic and behavioural — and then providing a value proposition to the potential subscriber within each.
Print subscriptions remain relevant
Despite the rapid increase in digital audiences, print remains an important platform for news brands. Approximately 65% of weekday users access print only or both print and digital content, with 76% of weekend users accessing either print only or print and digital.
The commitment continuum
Approximately 50% of print readers are non-subscribers. Conversion strategies targeted at them could reap enormous benefits.
How users obtain their printed copy appears to follow a commitment continuum, from complimentary access (e.g. in a public library, coffee shop, or shared office) to a subscription for home delivery.
Although this is a simplistic view of the commitment path, understanding a user’s commitment can allow marketers to move users along this continuum, from low to high commitment.
The commitment continuum highlighted above applies to print, but a similar approach can be adopted to digital using behavioural data.
Understanding audience engagement helps determine the path to subscription
Subscription models all have one thing in common: The sole objective is to receive multiple payments from the same user. This requires the establishment of a long-term relationship with that user.
This long-term relationship is directly related to engagement. Therefore, maximising audience engagement is one of the key objectives for marketers. But engagement is hard to define, and its definition also varies by products and services. Time spent reading and frequency of access are two metrics that can be used to determine engagement levels for news content. Using both metrics, one can create an audience engagement quadrant to determine where each user fits.
Each segment or box represents an opportunity and/or a risk for news brands. The sweet spot is the top right box (heavy/high frequency) and represents users who are highly engaged. Users in this group are more likely to subscribe to the right offer.
Those in the bottom left box (light/low frequency) exhibit low engagement and are more likely to show less commitment to the brand with low conversion. A tailored approach to users in the top left box (heavy/low frequency) and the bottom right box (light/high frequency) will have a high conversion rate.
Tying it all together
Publishers are transitioning to a business model that is increasingly focused on audience revenue from subscriptions. Many news brands are adopting similar subscription models and analytics approaches used in other industries.
The approaches outlined above are just some of the many options available to publishers as they seek to shift the reliance on advertising to subscription revenue.