Once debated but now ubiquitous in the media industry, paywalls are used to limit access to a publisher’s online content to paying customers. The nature of the limitations to content can vary. But in most cases, paywalls permit some sampling of content to non-paying readers before presenting a subscription offer. The sampling of content can be metered, or the content can be categorised as free or premium algorithmically or by the publisher.

A “hard” paywall permitting very little sampling limits the nurturing of non-paying readers’ engagement with a publication. This ultimately leads to fewer digital subscriptions for publishers in the long run as they restrict new readers from entering the top of the subscription funnel.

Hard paywalls also reduce digital advertising inventory that still provides significant revenue for digital publishers. The loss of pageviews can cost publishers more lost advertising revenue than they earn from new subscribers. The tradeoff can be difficult to measure since subscriber revenue is recurring while advertising revenue is not.

What are the paywall strategies and tactics that maximise total digital revenue in the long term? This question is central to publishers’ emerging digital transformation, and we are beginning to have case studies illustrating success.

A common finding across these case studies is that successful paywalls do not treat all readers the same. Paywalls can give engaged readers a different experience than readers that still need nurturing or are on the site only to read a single story. In summary, paywalls need to be “intelligent.”

Where the future lies

After years of gradually decreasing the amount of free content on their sites, publishers are reaching the level of free access where the loss of advertising revenue and nurturing of reader engagement make further across-the-board tightening of paywalls unprofitable.

The path to continued performance improvement is to move away from one-size-fits-all access rules to targeted paywalls that adjust the level of access for individual readers based on their existing relationship and observed behaviours.

The Wall Street Journal and other large global and national brands have implemented this type of paywall strategy. This strategy is moving through the industry as the tools and knowledge of the approach are advancing.

Mather Economics works with several publishers to implement targeted paywall strategies using their existing tech stacks, including many home-grown paywall applications as well as common paywall products such as Piano and MG2.

The important elements of this strategy are the ability to target customers appropriately and communicate that targeting to the different applications interfacing with the customer.

Information on a reader’s propensity to subscribe and other segmentation data can be passed to paywalls using local storage in a browser. The propensity-to-subscribe algorithm can reside in a location where the paywall can “talk” to the algorithm when it needs information on a reader. The technology is also available to provide “instant targeting” to the paywall via the browser using attributes observable for readers on their first visit.

Many applications can support customer targeting with custom segments and nice user interfaces, but the core targeting capability is not hard to implement. Investing more resources in the targeting algorithm, marketing messages, product development, and customer segmentation yields more return.

It is not all about the paywall

About half of all digital subscribers do not come from the paywall. New digital subs are acquired from newsletter click-throughs, “subscribe now” buttons on the Web site, customer service center referrals, and other channels.

Consistent channel communications require the same customer messaging and targeting to be applied in all these channels. Having a meter doing its own targeting using its own data can lead to inconsistent and perhaps conflicting customer journeys for a reader.

It is important to identify a reader across your customer touchpoints and apply the same business logic and messaging in each case. A focus on collecting the right data from each application within the tech stack, modeling customer behaviour with this data, and passing intelligence received from this modeling to the application that will communicate with the reader is the key to sustained digital subscription growth. Continuous testing is also very important.

How Intelligent Paywalls^TM fit within the big picture

The key elements of a digital subscription operation are:

• Develop a product people will buy.
• Maximise sales opportunities.
• Minimise friction in the sales process.
• Retain the subscribers after the sale.

An Intelligent Paywall is the key to maximising sales opportunities over time while maintaining as much advertising revenue as possible. The incremental digital revenue will provide a healthy return on the costs of turning your current paywall into an Intelligent Paywall. We would be happy to help you make that transition.

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