Even prior to Covid-19, premium publishers were turning to audience revenue, mainly in the form of subscriptions, to grow profits. In an uncertain ad market, consumer offerings are critical for publishers. In fact, Reuters Institute confirmed this strategy in early 2020 reporting that 50% of digital leaders identify reader revenue as their income focus for the year. Now, fast forward mid-fourth quarter in the midst of a global pandemic and we find publishers further prioritizing audience-first initiatives with new products.
Recently, I spoke with Constantine Kamaras — who is the project lead for best practices in digital publishing at OPA Europe — about the long game for publishers. Kamaras (CK) offered keen insight into the reader-centric model and shared highlights from their new report Subscription Strategies for Digital Publishers.
RP: In OPA Europe’s new report, you speak about a cultural transformation for many publishers. What do you mean by this and what is the significance to publisher operations?
CK: It does not refer so much to the pivot from an ad-centric to a reader-centric model. This is something so well documented it’s becoming a cliché. One should look beyond the headline as there are several “sub-manifestations” of this transformation. For instance, the new relentless emphasis on UX — be it in design, in user journey, in ease/speed of registration/subscription or indeed payment options.
Just as importantly, there is a new culture of self-reliance, notably on in-housing some critical tech. Publishers can then focus more on marketing efforts within their properties rather than platform “top-of-funnel” advertising. The significance here is not so much in restructuring operations but in the need for new talent in all these areas. After all, the principles of transversality and agility are well established by now. One should note that due to the pandemic-induced recession, there will be, sad as this is, plenty of great talent to choose from, especially from the agency side.
RP: Can you discuss the benefits of having editorial working with those in charge of subscription products?
CK: The benefits are quite clear: Deconstructing the offering translates into a better understanding of its key components — content, design, UX, marketing, underlying tech, etc. This emphatically underlines that editorial does not and cannot operate in a vacuum. They are part of a whole, possibly the most important part but only a part, nonetheless.
The game changer here is the generational shift. As the print generation of grand editors retires so does its zealous devotion to all aspects of the historic “Church and State” separation. Needless to say, there are fundamentals that are still — and should always remain — in place, for instance not permitting advertising considerations to influence editorial content. Still, a new generation comprehends nuances better in most areas such as developing product, deploying analytics to inform decisions etc. Editorial should work closely with the business side, particularly those that deliver on publishers’ most promising revenue source.
RP: How should premium publishers look at advertising as part of the long-term framework for their business model?
CK: Frankly, with some sense of optimism. The first thing to get rid of is the either/or mentality whereby one can have either an ad centric or user-centric model. The chronic disappointment over digital advertising trends — with the triopoly stubbornly dominant — is understandable. So is the consequent focus on subscriptions however several partly related developments may be pointing to a changing tide.
Regulation, browser policies and new tech capabilities are a confluence that distinctly elevates the value of first party data. Major brands know this well by now. Hence the growing discussions about various forms of second party data deals and partnerships. If one adds scale through alliances, then the ultimate differentiator can be unleashed: users’ trust. This can redefine — or indeed reverse — outdated models of brand safety. In a post-pandemic “trust economy,” quality journalism wins in advertising too.
Premium publishers, with their trusted and direct consumer relationships, are thinking differently about a reader-centric business model. Many editors now work with their subscription and product development teams to meet consumer needs versus making a product retrofit. And new in-house tech is working to create a well-defined user experience. These advances along with new product offerings place publishers in a prime position to generate demand.