Why a paywall isn’t enough

By Jesse Moeinifar


Toronto, Ontario, Canada


With the traditional ad-driven business model under pressure — especially in recent weeks with the COVID-19 crisis — media companies are pushing for new ways to increase the average revenue earned from each user. Recent research also notes 80% of publishers experience difficulties in converting anonymous traffic to known subscriber traffic, meaning a thriving and sustainable digital community is just out of arms’ reach for many.

Implementing a paywall is nuanced and dependent on several factors.
Implementing a paywall is nuanced and dependent on several factors.

A new report, Why A Paywall Isn’t Enough, covers the challenges publishers face while trying to generate revenue through common paywall strategies. There are key elements that publishers should be paying attention to ensure their paywalls are a success.

Data plays a critical role

First-party data is becoming especially important now that cookie tracking is even more limited due to browser restrictions and privacy regulations. What’s more, this information can vary greatly between known and unknown users.

Leveraging user engagement data increases paywall effectiveness because:

  • It yields rich user data publishers can use to derive meaningful insights into their audiences. The insights can then help them create targeted and customised experiences and paywall messages for their readers.
  • Users get value in the form of high-quality content and opportunities to engage with a like-minded community. In exchange, they’re more willing to give publishers their e-mail address and/or subscription fees.

Paywall type can make or break your strategy

There are a variety of paywall adaptations publishers have used over the years. Choosing the right paywall all boils down to understanding your audience and their needs.

  • Hard paywalls require users to pay for a subscription before content can be viewed. This can be considered a risky paywall strategy but works best for publishers who are well established with a defined tone. It can also work well with niche audiences.
  • Freemium paywalls are a combination of free and premium content. These types of paywalls allow visitors to read articles for free but often include ads. Premium content can be accessed once a user registers, subscribes, or pays to view the content. This type of paywall is best for publishers with a large number of casual users.
  • Metered paywalls allow users to view a set number of articles on a publisher’s site before requiring a paid subscription for further content consumption. This has worked successfully for published like The New York Times and the Telegraph.
  • Dynamic paywalls are a variant of the metered paywall. These paywalls leverage user data to tailor digital subscription offers based on their interests, online behaviour, and price sensitivity. An effective tactic here is to leverage your most valuable content to fuel subscriptions.

Make reader engagement your core focus

An academic study of a news publisher in Europe found only 10% of online readers were driving more than 74% of all online revenues — taking into account subscription and ad revenues combined. What this should signal to publishers is that they need to focus on their group of super-users.

We found that users more ready to pay for a subscription are those who:

  • Consume more than five pages per month.
  • Spend on average 40 seconds or longer per page per month.

This means publishers must take an active approach to engage and interact with their users to help build loyal reader habits. To do this:

  • You need to understand your community.
  • Have a vision for how you’d like your community to evolve.
  • Choose the right features to enable that interaction.

Publishers can make the most of super-users by gradually increasing their engagement with the site. For example, something as simple as prompting visitors to “like” a piece of content after consumption could boost your revenue.

Research shows loyalty in terms of social participation leads to more consumer spending on added features and services on a Web site. In fact, 80% of all user registrations are triggered on pages that feature on-site engagement tools and user-generated content.

How to measure engagement: the five most important metrics

A critical part of your user engagement strategy is to be able to monitor the right metrics that measure the overall health and growth of your digital community. Data related to how your users are interacting with one another around your content can then be used to fine-tune your paywall, editorial, and subscription strategies. This means moving away from monthly unique visitors and focusing on other engagement-specific metrics.

The five most important metrics are:

  1. Daily, weekly, and monthly active users.
  2. Engagement velocity.
  3. Daily, weekly, and monthly active engagement.
  4. Percent of user attention time in comment sections.
  5. Civility trends.

What makes an optimised paywall strategy

Figuring out how to effectively execute this new approach into readership revenue will have the biggest impact on differentiating yourself from the rest of the market. If you’re looking to get started, here are the fundamental steps that may be worth your while:

  • Have a clear vision of what your company is trying to achieve and how it wants to position itself in the market.
  • Understand your audience’s content experience, such as how and what they are consuming.
  • Identify the right metrics to evaluate your success and employ the best technology that will give you the proper data.
  • Build a community of engaged users who interact with you as well as other users.

The Why a Paywall Isn’t Enough guide also explores a variety of use cases, which demonstrate how to implement a paywall strategy. They act as a good base for publishers to generate their own ideas for experimentation.

To learn more about Why a Paywall Isn’t Enough, download the free guide.

About Jesse Moeinifar

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