Following the release of our digital analytics guide for the media industry, we are running a series of offshoot articles that focus on specific challenges in today’s rapidly evolving online publishing world. If you haven’t read them already, please check out our blogs on working with ad blockers and optimising your audience retention strategy. In the third instalment, we delve into the challenges faced by media publishers when they try to monetise their content via the use of paywalls.
Part 3: creating a paywall strategy
Consumers have enjoyed access to free online newspapers and magazines since the birth of the internet. However, over the last few years, an increasing number of online media publications have been shifting away from advertising-funded journalism and are charging for their content – and more people are ready to pay for what they read online. In this blog, we look at different approaches toward subscription and paywalls and how AT Internet can help you to optimise audience interaction with your online publications.
What is a paywall?
Paywalls are systems that prevent online users from accessing specific website content unless the user pays a fee. They can restrict access to a specific site, story or publication and there are varying levels of restriction.
Soft paywalls such as metered access provide readers with a number of free articles before asking them to become a member and subscribe in order to access more content. By adopting data walls, businesses can collect more detailed information about their audiences and develop their customer profiles. This personalises the reader experience as it shows them the type of content they can find on a site and whether it’s valuable for them. The effectiveness of metered paywalls has been repeatedly called into question. ‘Metered’ business models can be off putting for readers who have a limitless range of other media sources at their disposal. They also cause user churn as they “reward future traffic rather than the authority and prestige that come from years of honest, serious reporting.”
The Telegraph abandoned its metered paywall for a freemium model in 2016 as it was impossible to differentiate between subscribers and those who were reading a story for free. They were therefore unable to target their content appropriately and were failing to retain their audience. They now run a payment system where free and premium coexist to fuel the subscription part of the business.
Nevertheless, metered paywalls can be effective revenue models. The New York Times reportedly spent $40 million over 14 months to build the infrastructure required to collect necessary data and present their readers with a metered paywall. Although it involved a large investment and significant marketing budget, the online publication reached 4.3 million subscribers at the end of 2018 and this continues to expand. COO Meredith Levien stated their main focus was the “breadth of reporting” and the goal was to improve their overall value by adding journalists and extending their product range.
Freemium content paywalls restrict access to select “premium” articles, while the reader can view all the available free articles. By subscribing, the reader pays a recurring monthly amount for unlimited access to all of the website’s content. Freemium allows content providers to maintain their advertising revenue while boosting conversion and retaining the most volatile readers. Although they can enhance audience loyalty to a particular website, they can lead consumers to change their habits and switch to alternative news sources, search for loopholes or other creative workarounds.
The Guardian operates a freemium model where visitors can access certain articles for free but have to view adverts. If they subscribe to the daily edition, the ads are removed, and the user can access premium articles. The publication also runs a support message at the bottom of each article – where it politely requests that users pay a monthly fee that will allow them to continue producing free articles. Online publisher Digiday has taken freemium paywalls a step further – as well as offering premium research articles, they provide their members with exclusive site access and a copy of their print and digital magazine.
Hard paywalls typically only display an article title and a few paragraphs before demanding that the reader pay. They are becoming increasingly common, particularly among professional and financial ‘niche’ publications. Although renowned for causing a sudden ‘drop off’ in the digital audience in the short term, they can be effective over the longer term – subscriptions have the effect of aligning a content provider’s goals with that of their readers. Creating accounts increases the connected user base and generates a higher average income per user.
The Times (London) introduced a hard paywall in 2010 and reportedly saw a 90% dip in visitors. It has since managed to recover a large proportion of its lost audience over time and through the quality of its reporting and reputation. It now boasts well over half a million daily readers and hails the success of its paywall strategy. Despite experimenting with alternative methods of gaining revenue from its online media, The Times is resolute in keeping its hard paywall. According to Digital Director Alan Hunter. “The [online audience] goes elsewhere to read news to be informed, but they come to us to get well informed. They can go deeper beyond the story to find out what’s really going on.”
The Financial Times will not allow readers to see anything other than the title and subheading of their articles and they have to choose from a range of subscription fees. However, their paywall model has worked as its 900,000 digital subscribers represent two-thirds of its total revenue (overtaking income from advertising). CEO John Ridding commented that “A lot of the industry was too quick to dismiss the ability to charge for content. If you have something that differentiates you, something that makes you special — it could be a brand identity, it could be a columnist, it could be a sector of coverage — you have the ability to charge.” The FT defends hard paywalls by saying that it wants to “achieve the habit in digital that people used to have in print” – and that metered models are counter-productive as they “ration” content.
Dynamic paywalls – the solution to monetising your online content
Dynamic paywalls address readers by customizing content and targeting users according to their level of commitment. With personalized segments, publishers can reach readers based on their specific profile. By collecting, interpreting and actioning data around each individual reader’s online behaviour, it’s possible to assess their likelihood to subscribe.
The Wall Street Journal implemented a dynamic paywall in 2018 based on a propensity score. It measures more than 60 signals such as whether the reader is visiting for the first time, the operating system they’re using, the device they’re reading on, what they chose to click on, and their location etc. They then used machine learning to create a flexible paywall that provides the user with precise targeted content and payment options. It has since introduced a new comments strategy that seems to be paying off – it has reduced the number of articles open for comments and put them all behind a paywall. This has resulted in a better quality of comments (from subscribers only), follow-up storied based on top comments and crucially, better Customer Lifetime Value.
Poool is a French startup specialising in intelligent paywall solutions. Founded in 2015 and an AT Internet partner, the company has brought a fresh approach to the paywall market. AT Internet’s digital analytics data can be combined with Poool’s paywalls to help you understand audience behaviour, identify key segments, determine the most effective paywall scenarios, and measure KPIs.
Read on to find out more about how you can benefit from advanced web analytics and dynamic paywalls with AT Internet and Poool.
Digital analytics: the key to understanding and segmenting your audience
When deciding which types of content and how much should go behind a paywall, it is important to understand your audience’s behaviour – and what drives them to purchase an article or subscribe to a site. By using digital analytics data, it is possible to segment your non-subscribers and offer them customised paywall options.
Reader visitors can essentially be grouped into three types:
- ‘Fly-by’ are one-off visitors that have viewed less than three pages on your site and are yet to engage with your brand. Allowing them to access your content for free, e.g. with a metered approach with complementary articles is a way you could convert them into occasional or regular visitors.
- ‘Occasionals’ are those that know your brand but don’t regularly consume your content. Depending on your site, one approach is to ask them to sign up for a free account to continue reading your articles.
- More regular and loyal visitors are known as ‘regulars’ and they access your content on a frequent basis – they often already have an account. Using their data is useful to analysing what type and how much content they consume and set out a ‘pay-per-article’ approach or personalised paid subscription offer.
The profile of a likely subscriber can be summarised as follows:
- Reads 5+ articles a month
- Subscribes to a newsletter or has provided their email address
- Follows your brand on social media
- Lives in your market area and reads local news
- Reads multiple categories of content
- Accesses your content across multiple devices
Quality digital analytics can also give insights into visitor interactions, their multi-device usage, and frequency of visits, etc. It can give you more information on the categories of pages and types of articles viewed on a site – and help you to assess if your paywall is effective across your full range of articles, e.g. news, sport, or just one type.
Founded in 2015, Poool specialises in the implementation of intelligent paywalls for its customers to optimise revenue from access to online content.
The company’s mission is simple: to encourage teams to regain control of their paywall strategy. Then to enable them to rapidly test and optimise their approach, whether it’s for acquisition, engagement or monetisation.
Poool allows publishers to set up specific rules to access content and charge for it, depending on the proﬁle of each reader. By being able to control content access rules, marketing teams can offer audiences more relevant experiences and by working on each lever, average revenue per user can be optimised – for subscriptions, ad impressions, one-off payments, or data collection.
The solution is highly accessible and adaptable according to customer needs. It is scalable and is implemented gradually via a ‘test and learn’ approach.
AT Internet’s digital analytics data can be combined with Poool’s paywall solution to help you understand audience behaviour, identify key segments, determine the most effective paywall scenarios, and measure KPIs.
Case study – Poool in partnership with Boursier.com
Boursier.com is French online publication that specialises in economic and financial news. The site had been operating with a freemium paywall model, reserving premium content for its subscribers, and were looking to optimise the way it interacted with its audience. Boursier.com’s main market advantage is its expert content that has a strong appeal to its audience. In terms of its monetisation process, it asked users to register on the site to become a ‘member’ before giving them subscription options.
By working with Poool, they developed a strategy to take advantage of their open content to boost the membership base. It also aimed to avoid any impact on the number of viewed pages which could disrupt the guaranteed advertising revenues.
After 3 months of testing, the results were highly positive and led Boursier.com to deploy Poool on 50%, and then 75% of the audience consuming free content. Their objective is to continue to increase account creation as well as developing new ideas: optimization of advertising revenues, anti-ad block monetization, and the differentiation of routes according to devices. With Poool, Boursier.com has increased its membership base by 25%.
The perception of paywalls has changed significantly over the last few years. Back in 2015, many publishers were convinced that consumers were unlikely to ever pay for online content and were increasingly blocking ads. Fast forward to 2019, and all signals point to a future where considerably less revenue will come from advertising and the ad business model will be supplanted by subscription-based paid content. The editor of the Spectator went as far as to say “Paywalls are the only future for journalism: if the quality of writing is good enough, then people will pay”.
With more and more advertising revenue going to the tech giants who can offer advertisers unduplicated reach, targeted ads and low overheads, an increasing number of publishing companies have launched digital subscription models – including the New York Magazine, Bloomberg Media, The Atlantic and the Condé Nast magazines Vanity Fair, The New Yorker and Wired.
This has also come about through a shift in the audience approach to consuming paid content – primarily thanks to subscription models on platforms such as Netflix, Amazon Prime and Spotify. A recent Deloitte study predicted that by the end of 2020, revenue from subscription will be on an even par with advertising for digital publishers – as recently as 2012, revenue from ads covered about 90% of the market. These days audiences are not necessarily opposed to paying for the media they consume – they are often looking for accessible, reliable, centralised and credible content – with an eye on supporting local news and journalism.
There are also a range of other factors that have caused a shift in reader behaviour – the numerous fake news scandals that have called into question the trustworthiness of major social media platforms, and the overwhelming dominance of the tech giants in the digital advertising market. Audiences are increasingly inclined to pay for quality reporting from a source they are familiar with and trust. This has inevitably fuelled the growth of subscription paywall and premium offer financial models.
By using AT Internet’s digital analytics combined with Poool’s dynamic paywall solution, you can create an online ecosystem that’s as open and efficient as possible and implement the most effective monetisation strategies.
If you’d like to learn more about orienting your paywall strategy, don’t hesitate to download our new comprehensive e-guide – “Winning the data game – Digital analytics tactics for media groups”.