//Kevin Anderson /October 26 / 2012
Paid content: Measurement and marketing are key to success
Before the New York Times launched its paid content strategy in March 2011, only a handful of high profile news organisations charged people to access their editorial – most news businesses were unwilling to take a risk on what they saw as an unproven strategy.
The Wall Street Journal and the Financial Times both charged for their content, but apart from the South China Morning Post in Hong Kong and some minor, but oft cited examples, such as the Arkansas Democrat-Gazette, we had very few examples of digital paid content success for general newspapers. With both The Wall Street Journal and Financial Times being internationally-recognised business newspapers, they were seen as exceptions to what was seen by some as the rule that people wouldn’t pay for general news and information online.
The New York Times paid content launch has widely been seen as a success, and the trickle of news groups adopting paid content strategies has become a flood. A fifth of newspaper websites in the US now require payment for digital all-access, a figure that has doubled over the past year. Much of that growth has come from one of the largest US newspaper groups, Gannett, which is rolling out paid content strategies across 80 sites. Through a mix of higher print cover prices and the new digital subscriptions, Gannett’s CEO Gracia Martore told analysts that the company would meet its target of increasing circulation revenue by 25 percent by the end of 2013, which would add $100m of operating profit at the large group. Gannett’s newspapers are local and regional rather than the international media brands of the New York Times, the Financial Times and the Wall Street Journal.
The rush to roll out paid content strategies goes beyond the hard-hitHitThe record of a single online transaction event stored in a log file. One page…//read more US newspaper industry. Paid content projects are appearing across Europe, with German publishing giant Axel Springer announcing the end of the ‘free beer’ era on the internet and Slovakia’s Piano paid content system expanding to Poland. With the growing number of paid content projects, we now have a lot more examples of what works and what doesn’t.
Successful paid content pioneers have found:
- Hybrid systems are more effective than total paywalls such as The Times in London.
- Analytics are key to understanding what people are willing to pay for.
- Focus on usability, making the paid content system clear and easy to use.
- Success also depends on how well you market your paid content options.
- Digital subscriptions are simply part of your total subscription strategy. Many publishers are bundling digital access with print subscriptions.
Hybrid systems work better than total paywalls
Publishers have tended to view paid content in black-and-white terms, that it must be either completely closed or completely free, said Tomáš Bella, the founder of Piano Media. Bella was at the Slovak daily newspaper SME when it put all of its content behind a paywall in 2006. “The revenue was so small that it was not worth running the system,” he said.
Now, he adds, “from binary – free or paid – we are moving to a much more nuanced model.” People are moving to mixed models so as to keep digital advertising revenue as high as possible while also adding digital subscription revenue. Piano pioneered the national paid content model, which the company likens to a cable television model, where the subscriber pays a single fee to access content from a number of channels or sources. Many of the sites have a hybrid model, a mix of free and paid content, on their sites.
This more nuanced approach has led to a number of different models in terms of the balance of free and paid content for Piano customers. Slovak weekly news magazine Týždeň has experimented with digital content in the past, by selling a text-only copy online. However, their audience didn’t embrace it because it differed greatly from the magazine, which is known for its photos that make up about 40 percent of each issue. Most avid readers would wait until they could buy the printed magazine rather than pay only for the digital edition.
In 2009, they launched an updated website with staff blogs and blogs from external contributors as well, greatly increased the amount of video on the site and included more images from their award-winning photographers, said Federika Homolková, managing director of publishing house for Týždeň.
More than half of Týždeň’s content is only available to Piano subscribers, including content from the print magazine and more than half of the videos they produce. With digital advertising rates declining and the ongoing economic crisis, creating so much original content would have been difficult to sustain without the digital subscription revenue, Homolková said, adding:
I’ve met with managers of newspapers from Poland, Germany, Holland. Can your website survive just on advertising? No. You need another source of revenue.
This year, Piano expanded to Poland, bringing together major daily newspapers, magazines and Polish National Radio to a national paid content system. Gazeta Wyborcza has joined the scheme, making about 10 percent of their content, as measured by pageviews, for subscribers only, according to Michał Gwiazdowski, digital content publisher for the newspaper.
Before joining Piano, Gazeta Wyborcza only published some content online from its special supplements weekend magazines and a special supplement for women, and what content it did publish digitally was published only after a long delay following the release of the printed magazine. However, now the content for subscribers is published on the same day that the print edition is released, Gwiazdowski said.
Another hybrid model is the popular metered paywallMetered PaywallThe metered paywall allows users to view a specific number of articles before…//read more , in which a customer is able to read or view a certain number of pieces of content free, anywhere between five to 20 pieces of content, before being asked to pay. This model has proven popular because many website visitors are ‘casual users’, reading only a few articles a month, and it only asks the most loyal audience to support the site. The commercial benefit is that the site remains open to search engines and social media, which helps to maintain traffic and therefore digital advertising rates.
The New York Times has seen only “modest reductions” in page viewsPage ViewsWhen the page is actually seen by the user. Some platforms, like Facebook cache…//read more and unique users since introducing the metered paid content strategy last year, according to Michael Golden, vice chairman of the NYT Company. Fifteen months after launching the strategy, the newspaper now has 592,000 digital subscribers, according to a memo from New York Times publisher Arthur Sulzberger Jr. to staff. The memo included details of the third quarter results at the newspaper, and the new figure represents an 11 percent increase in subscribers over the second quarter.
Analytics: What content are your customers willing to pay for?
For sites offering a mix of free and paid content, the next question is what content to charge for. “It`s not as obvious as many think,” said Gwiazdowski, and with Gazeta Wyborcza, just starting with the Piano system, he will be watching user statistics closely to improve their paid content offering. To help Gazeta Wyborcza and other members of its scheme, Piano deeply analyse how audiences use their customers’ sites and consume content before making recommendations on the free-paid content – i.e. hybrid models with a mix of free and paid content – options.
Based on the analysis of traffic at member sites, Piano has experimented with new ways of dividing the paid and free content. For instance, some content might be available free to readers in the country but require payment for readers coming from elsewhere. With its national payment system, they have found that charging for early access rather than archives has been more effective. They have even experimented with charging for an old site design that some users prefer to a new design. “Publishers should understand that they bring more value than content to readers. … They often don’t grasp that the structure and design of the site is valuable,” Bella said.
It is only possible to make informed choices about these options with research. At the recent WAN-IFRA World Editors Forum in Kiev, Golden said, “Your customers will tell you what they want. Are you listening carefully?” The New York Times researched what readers wanted and what they expected before rolling out its paid content strategy. They also did research on the prices that readers were willing to pay and also the content bundles that were most attractive.
The New York Times can afford to spend the money, but for smaller publishers, this is where companies like Piano Media and Press+ help by providing research and analytics support to help publishers understand how to structure their paid content offering.
Usability and ease of use key to customer adoption
This data is also key in optimising the usability of the paid content system. This is one of the reasons that led Bella to suggest a national payment system because the data suggested that a single bill, a single username and password would be appealing enough to users and deliver enough revenue to publishers to be attractive.
Such a plan touches every part of the organization, IT, finance, marketing, editorial, advertising, production. Your customers expect a wonderful experience and you have to unite to deliver it. The standard is set by Apple, Amazon, Google. We have to measure up.
Bella compared the attention required to e-commerce sites who meticulously measure the performance of their sites and optimise every detail of their sites, down to the look of individual buttons.
Marketing: Communicate the benefits to your audience
Golden echoed that sentiment when he explained how marketing had been key to the success of the New York Times’ paid content plan, and he urged editors to aggressively promote their paid content offerings. He said, “Act like an e-tailer.”
Bella said Piano has run 10 marketing campaigns in the three countries in which it operates, Slovakia, Slovenia and Poland. “How you communicate the benefit, makes a big difference,” he said. You need to combine selling the paid content offering and explaining what service the newspapers are providing.
With Týždeň and Gazeta Wyborcza, both publications are either creating more original content or posting more content online due to the support of digital subscription revenues. “I think we helped ourselves – we gave more content than before, so we were ‘opening’, not ‘closing’ content,” Gwiazdowski said. Communicating that to audiences is important in selling the shift to paid content.
Some marketing solutions that have proven successful include:
- Email marketing that includes the best articles from across Piano’s national networks. Users see this as a new, valuable service. The New York Times has email newsletters promoting its content, which entices readers to return to the site more frequently and hopefully to become subscribers.
- Sites have created special sections to highlight their best premium content to entice new subscribers.
- Homolková at Týždeň said that making the case that the payment scheme costs only a few Euros, the cost of two beers, and delivers a range of content has also proven effective.
In addition to traditional marketing channels, Gwiazdowski said that Gazeta Wyborcza also tried some novel methods targeting their online audience. “We talked to people (in the comments) under articles, on Facebook, via e-mail. We’ve been explaining what readers can get and why we need to charge them for our content. I think talking with people helped,” he said.
Another strategy that is working is the “all-access” print-digital bundle. Publishers in the US are finding that they can charge higher rates for the bundles “…if you tell customers ‘we’ll get you our content however, wherever you want it’”, says US newspaper strategist Ken Doctor.
While Piano has learned successful marketing strategies, they have also learned marketing strategies that do not work. Early on, the company “let ourselves be forced to say that ‘you are paying so the quality of journalism will go up’”, Bella said. One week after the paid content system launched, some customers were demanding to know how the quality had improved with the launch of the system.
Bringing it all together
One of the key things that Bella learned with Piano and that the New York Times experienced is that paid content success is much more than launching a system to take payments. You’ll need to analyse carefully how your audience uses your site to gauge what they are willing to pay for, and you’ll need to do market research to fine tune other aspects of your strategy. This will also help you optimise the usability of your site for your strategy. You’ll also need to effectively market your strategy, stressing not only how being paid for content benefits your news organisations but also how it benefits your audiences.
Gazeta Wyborcza joined Piano in August, but the scheme has already exceeded expectations, Gwiazdowski said. In the long term, by 2015, he believes that “paid content will be one of the biggest sources of income for publishers like us”.
The revenue from Piano has proven critical for Týždeň as competition for online advertising has grown from Google, Facebook and the increasing number of websites. Fortunately, the revenue from Piano has been growing month-on-month, Homolková said. Paid content revenue has meant that the Týždeň’s website is financially sustainable.
This isn’t to say that digital sustainability is simply a case of developing a paid content strategy. Publishers need to understand that it is more complicated than simply adding a payment system. To succeed, publishers need to think carefully about the marketing and user experience and whether they have the resources to do it, Bella said, but if publishers take this comprehensive approach, then a paid content strategy can bring good results.
Article by Kevin Anderson