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Perspectives | Revenue | Supporter Spotlight

Segment your audiences to increase overall revenue

Reader revenue is among news executives top priorities. In fact, 79% of news executives who participated in The Journalism, Media, and Technology Trends and Predictions 2022 by the Reuters Institute for the Study of Journalism, said that revenue from initiatives like subscriptions and memberships will be among their key income priorities. As reader revenue gains popularity, it’s critical to assess the approach publishers take towards subscriber acquisition and revenue maximization.

Current approach towards reader revenue

In its simplest form, revenue calculation has two components: price and volume. Until now, the focus has largely been on maximizing subscriber volume as quickly as possible. This has resulted in publishers offering heavy price discounts to attract and acquire subscribers. Another tactic has been using excruciating cancellation policies to retain subscribers. 

The outcome of such growth tactics may be acceptable, but they aren’t particularly attractive. Even the largest publishers barely manage to capture 1-3% of their total audience before plateauing in the second year.

What about churn? A study by Nieman Labs identified that the top reason for churn was “money” in different forms:

  • Promotional rates expired
  • Irritated that subscriptions auto-renewed
  • News organizations weren’t transparent about price
  • Lack of funds/budget
  • Already have multiple subscriptions

Evidently, the tactics used for quick subscriber growth are also the main reason for churn. As Nicholas Thompson, chief executive at The Atlantic put it during the 2022 DCN Next:Summit, “You can get to a million subs pretty easily: You can massively discount, right? However, if you set a goal solely on subscribers, it can move you in some harmful ways.” 

This means that there is an opportunity to maximize revenue by shifting focus to differentiated offerings for mutually exclusive audience segments. Let’s find out how.

Consider a segmented approach to reader revenue

In addition to money-related reasons, people also cancel their subscriptions because of lack of value. They take out a subscription but are unable to justify the ROI.  Many can barely consume all of the content offered.It’s a classic “too much information, too little time” scenario. 

Consider the example of an airline. Every airline offers at least four different pricing options for its flyers: economy, premium economy, business, and first-class. Based on their willingness to pay, spending power, comfort, need, and other factors, flyers select the most suitable class for themselves. 

SaaS is another place where the segmentation of buyer personas is well understood. SaaS companies ensure pricing is different for small and medium businesses, and enterprise businesses. Then, within that, it usually follows a tiered pricing model based on the number of users or usage volume. The key lies in offering the right value to the right customer. 

For most publishers who are reader revenue-focused, they typically only think about subscribers (1% of the audience) and prospective subscribers (99% of the audience) and keep recycling prospective subscribers onto metered paywalls or registration walls at best.  However, clearly identifying and segmenting never-subscribers will help publishers monetize this large user base much better.

Segment #1: The Stalkers

We call the first segment of never-subscribers The Stalkers. They have no loyalty to any publisher and consume content from multiple sites without ever subscribing. Subscription models follow a winner-takes-most dynamic with the top few publishers capturing a majority. The median number of news subscriptions in the US is two. This means that a subscriber for one publisher will always be a never-subscriber for another publisher.

No matter how often publishers target this segment with introductory offers, free trials, or any other growth hack, they will not convert. So, ads are the optimal way to monetize this segment. 

Segment #2: The Daters

This segment of never-subscribers is made up of light readers we call The Daters. They could be  open to subscribing but are scared to commit. They need to be convinced of the value or ROI they get from their subscription. So, even if prompted to subscribe with a paywall, they will not immediately go through with it (at least the first few times).

For this segment, publishers can explore a pay-per-content monetization model or voluntary contributions Maybe during the first three visits, this segment can be shown a subscription paywall. But, after that threshold, every time a casual visitor/light reader declines a subscription paywall, a pay-per-article paywall can immediately be shown. By doing so, publishers can eliminate any risk of subscription cannibalization. 

Also, in addition to capturing first-party data, publishers will gain incremental revenue. Daters can then be nurtured towards a subscription with high-quality, relevant, and personalized content. Instead of offering an all-you-can-eat subscription, Daters could be offered a personalized micro-bundle based on their reading preferences.

This segment is also perfect for voluntary contributions. They already appreciate the content enough to keep revisiting. So before committing to a subscription, they may be amenable to your creative encouragement, even if they won’t subscribe. 

Segment #3: The Lovers

Finally, the third segment refers to the subscribers. We call them The Lovers. They trust their relationship with the publisher and hence the publisher’s focus is on retention and creating hooks for daily engagement. 

Unfortunately, a study by Medill Spiegel Research Center (SRC) has shown that 49% of subscribers never visit their paid publisher subscriptions even once a month. These are essentially zombie or sleeper subscribers who are highly likely to churn. When they churn, rather than showing them a generic subscription paywall yet again, publishers must treat them like The Daters segment, and engage and nurture them with pay-per-content or voluntary contributions.

Transitioning from volume to value

“I think that this is one of the follies of the industry – this volume chase. [We look at it from] a revenue standpoint, versus a ‘we are chasing this volume number’. There are all kinds of terrible things that you can do to your long-term viability and sustainability that will drive that volume number,” according to Kati Erwert, Senior Vice President of product, marketing, and public service at Seattle Times.

Revisiting audience segmentation, analyzing first-party data, aspiring towards high-quality content, and exploring innovative revenue models for different segments can help redefine value to those segments. By offering more value, volume will eventually follow. And if a greater value is delivered, publishers can command higher subscription prices. So then revenue becomes a value-game and not necessarily a volume-game.

About the author

Abhishek is a Co-founder & CEO of Fewcents, fintech-for-publishers that brings incremental reader revenue from ‘Never-Subscribers’. He is a seasoned business leader and technology product manager. He has worked in management consulting with PwC and Altman Solon in Boston, USA before moving to Singapore permanently. In Singapore, he started his own venture, Shoffr, a digital marketing solution that provides online to offline attribution for digital marketers. In 2019, Abhishek sold Shoffr to Affle, a publicly listed ad-tech company in India. After solving the advertiser’s offline attribution problem, Abhishek has now set his eyes on solving the content monetization problem for online publishers.

Advertising | Featured Post | Innovation | Policy | Revenue

Regulation, revenue, and relationships top of mind at the 2022 DCN Next: Summit

Held virtually January 31-February 3, the 20th annual members-only DCN Next: Summit was a gathering of digital content companies from all over the world.

CEO Jason Kint opened the event by offering his perspective on how the last few years have underscored the need for quality information. He also reinforced the need for trust, particularly as we move toward web3. “Where people have choice and a competitive market, where they spend their time, attention and relationships, trust will matter. Trust matters more than ever,” Kint explained.

Keynotes and discussion sessions touched on subscriptions, paywalls and reader revenue, video, film, audio strategy, and AI. The event also explored the political and technical forces shaping the media landscape today, with sessions focusing on cookies, identity, trust, privacy, and platforms.

The personal is political, and platforms

The opening keynote featured 2021 Nobel Peace Prize recipient Maria Ressa speaking with investigative journalist Carole Cadwalladr. They discussed platforms and the critical role a free press plays in healthy democracies. As Ressa put it, “Until technology gets guardrails around it, until we get to the point where the platforms that deliver the news are redesigned so that lies laced with anger and hate do not spread faster and further than facts, journalists will be under attack.”

Investigative Journalist Carole Cadwalladr in conversation with Maria Ressa, CEO of Rappler

Platform concerns and necessary regulation arose again throughout the event, notably in Thursday’s final keynote. Attendees heard from U.S. Senator Amy Klobuchar, mere hours after a Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights hearing.

Klobuchar, who has been working to hold big tech platform accountable, provided an update on the bipartisan antitrust app store bill that just went through committee, as well as other bills she’s leading.  “We just had an incredible vote on a bill that Senator Blumenthal and Blackburn and I … put out a few months ago on app stores: 21 to 1,” she said.

The bipartisan legislation, called the Journalism Competition and Preservation Act would enable news organizations to collectively negotiate terms with platforms to provide fair compensation for news content. Klobuchar  told attendees, “The big issue is advertising money and fair compensation. These companies are sucking up the ad dollars using the original content that you produce and they’re using the data they collect from your audiences to compete against you.”

Chris Pedigo SVP, Legal Affairs of Digital Content Next, interviews Senator Amy Klobuchar

First-party data and identity

Unsurprisingly, the upcoming deprecation of the third-party cookie was a topic of much discussion at this year’s summit. The change has destabilized the advertising ecosystem. Experts discussed how to prepare for the post-cookie reality and how publishers could invest in their first-party data.

To prepare for the post-cookie reality, Rachel Parkin, CafeMedia’s EVP, Sales and Strategy, suggested publishers strengthen relationships with advertisers and build up their arsenals and come up with the right framework for identity and authentication for users and content.

TRUSTX CEO David Kohl suggested that publishers, by acting as a group to create scale, can create competitive advantage. ” We are in transition and there’s tremendous chaos in identity and audience data. But here’s the thing: Chaos creates opportunity,” he said. “And the question is, how can publishers take the lead in organizing the chaos? How can we band together? It is time to create an ‘easy button’ for scale.”

Another session discussed how publishers are leveraging consent-based visitor relationship data sources to fuel monetization as the industry moves forward into a cookie-less future. David Rowley, senior director data and identity products at News Corp. said they feel first party data is going to be one of the most important assets to a publisher. News Corp is assessing what’s out there for external identity solutions, Rowley said, and building out a proprietary identity solution.

“Publishers use so many different types of technology, DMPs, CDPs, analytics platforms, you name it, all of them spit out and create their own identifiers. Being able to stitch all of those together to have a unified view of a user is critical, so you can have that one-on-one relationship with a user,” he said.

People and empathy

Another theme that echoed through the conference was that of managing during these difficult times. As Agnes Chu, president of Condé Nast Entertainment remarked, “I think it’s hard to drive change during a time where people are experiencing so much anxiety themselves.”

Lindsay Peoples Wagner, editor-in-chief of The Cut, outlined that it’s important for leadership to have and bring a sense of empathy. Leaders must “be able to step outside of yourself and understand that, yes, we’re all employees and work at a company, but we’re human beings,” Peoples Wagner said. “People, especially in the past couple years, have had a really hard time with mental health or their family issues or being sick. It’s important to understand, I think, that people may need time, and that push and pull as a manager, I think is more important than ever.”

Michelle Manafy, Editorial Director of DCN interviews Lindsay Peoples Wagner, Editor of The Cut

The biggest shift for TripAdvisor’s Christine Maguire when the pandemic hit, was from building products to empathy. “I had to sort of take a step back and realize where everybody was in their journey,” she said. “Having empathy for what goes on in their day to day is so important, because oftentimes we come in to make a change when there is a problem, and that’s too late.”

The future of work

The newsroom of the future may look nothing like the pre-pandemic one. Indeed, as publishers move forward, they’re stepping into a future which doesn’t look much like the past. There’s upside, such as the ability to create more flexible working situations, which facilitates broader recruiting.

However, as author Anne Helen Petersen noted, when companies allow their employees to live anywhere and work any time, they may run into a lot of sticky situations.

“The larger question that a lot of companies are dealing with is if we say that people can have really flexible work schedules and can go in when it is most convenient for them, are we also going to put stipulations on the states or countries where they can live,” she said. “Are we going to say that they get into New York within the day, that they take the train in? Is that okay? Or are we going to say that it’s one flight away? What are our boundaries?”

The future of the industry

On the last day of the summit, Co-founder and CEO of Insider Henry Blodget and Atlantic CEO Nicholas Thompson engaged in a spitfire conversation about the digital media industry. They discussed the complicated relationship with platforms, new technologies like AI, NFTs and blockchain, and made predictions for web3.

Blodget was optimistic about the future of local news. However, he sees a different scenario play out for others going forward. As the industry evolves, he thinks there will be three to five big generalists, a bunch of targeted specialist publications that serve a particular niche, and everyone else is in the middle.

Atlantic CEO Nicholas Thompson in conversation with Henry Blodget Co-founder & CEO of Insider

“I do think we’re all going to face pressure and there’s going to be a lot more consolidation because there are enormous returns to scale,” Thompson replied. “We see that every day with The New York Times, when they roll out some cool new tech feature that they can spread across their 10 million subscribers.”

“Let us just acknowledge that The New York Times is Netflix of journalism,” Blodget said. “My view is in five to 10 years, they will have 25 million subscribers and they will still be growing strong and they will become one of the most powerful English language journalism publications in the world. And the rest of us are gonna have to find places to carve out what is left.”

Industry-Research | Revenue

Publishers focus on scalability and audience growth for 2022

Most digital news publishers registered growth in subscription and advertising revenues in 2021 as compared to the prior year. And, according to Reuters’ Journalism, media, and technology trends and predictions 2022, close to three-quarters of publishers (73%) are optimistic about this year. To understand future trends in news publishing, Reuters surveyed 246 executives in 52 countries during November and December 2021. The participants were senior-level employees in digital media strategies at news publishers.

Building scale

As publishers look to the future, scale is essential for most. These companies see a future with a mix of models to grow revenue including subscription, advertising, ecommerce, and events.

  • Pure plays look to scale: Digital publishers are acquiring and merging to give them more leverage with advertisers and to compete with the dominant tech players of Facebook and Google. Buzzfeed’s purchase of Complex and Vox’s acquisition of Group Nine are recent examples of this strategy. Publishers expect more mergers and acquisitions in 2022.
  • Traditional media looks to digital acquisitions to drive growth: Large traditional media players have focused on the acquisition of digital brands to add value to their subscription bundles and target a growing digital audience. Axel Springer’s purchase of Politico and the New York Times’ plan to buy subscription-based sports site, The Athletic, are two prime examples. These acquisitions are solid plays to drive audience growth with digital audiences.
  • New models fuel local start-ups: At a local level, low-cost reader-focused start-ups are using newsletter platforms like Substack to attract audiences. Digital newsletter companies are also building local footprints. For example, Axios is expanding its newsletter-led model to 25 cities this year.

Audience strategies and innovation

Publisher efforts this year focus on podcasts and other digital audio (80%), building and improving newsletters (70%), and developing digital video formats (63%). Publishers are focusing on new audio formats such as audio articles, flash briefings, audio messages, and live formats such as social audio.

New audio initiatives (e.g., Clubhouse, Twitter Spaces, Facebook’s Live Audio Rooms, Reddit Talk) show audience interest in audio discussions. However, executives are unsure how engaged audiences are long-term in these pop-up, discussion-based experiences. More content also means more competition and a need for more content moderation.  

Still, publishers see audio as strategically important. It can deliver reach, loyalty, and revenue. Some publishers want to own the audio experience to control the full customer experience. The New York Times purchased Audm, an audio narration app, and they plan to launch a listening product this year.

Publishers also want to engage with younger audiences. They have a renewed interest in short-form video and look to native video formats to attract Gen Z. They are also using third-party mobile-friendly online video platforms to target Gen Z. Executives report that more effort is going to visual distribution and engagement platforms like Instagram (net score of +54), TikTok (+44), and YouTube (+43), and less effort into general-purpose networks like Twitter (-5) and Facebook (-8). Even with a renewed video interest, many news publishers still question the monetization strategy of short-form social video.  

News publishers need to develop deeper relationships with audiences. In particular, they must reengage the disaffected and target the young adults. This year, innovation is an important cornerstone to attract new readers, with publishers investing in new audio formats and short-form videos. Investment is essential to build the future Web 3.0 experience.

Advertising | Perspectives | Revenue | Supporter Spotlight | Video

Why premium video is media’s new monetization moonshot

In May 1961, President John F Kennedy declared that America would put a man on the Moon and return him safely to the Earth and his vision took the world to new heights. Sixty thousand companies in 70 countries invented five million parts and 400,000 of the world’s greatest minds collaborated to achieve a giant leap for mankind. That’s what you call a moonshot. 

There is a rising groundswell that the time is now right for a Media Moonshot: one that recasts the industry to blend trust with technology and a new commercial model that can last. The good news is that for those willing to embrace change, it’s not that hard.

A billion dollar opportunity

I have spent the past 15 years working in premium publisher video. I believe a relevant video in the right place in the right article lifts the quality of reporting, and improves the news experience for readers. This is now being recognized by ad agencies who are increasing spend in this sector.

To measure this, we at Oovvuu have been working with the Tribune Content Agency over the past year to match videos to articles from hundreds from America’s largest publishers. Those articles are read 93 billion times a month. Significantly, our data showed only 7% featured video, even when it was available.

Unfortunately, just 1% of the videos that were embedded were relevant. And, unfortunately, the least relevant videos of all were the most likely to be autoplay and contain low yielding bottom of the funnel programmatic advertising. However, our research showed that putting the contextual videos in priority positions, and making them click to play, was popular with news consumers and advertisers who would pay premium CPMs.

We used journalists, along with our own matching tech, with 100 global wires and broadcasters in the TCA project to ensure the highest levels of contextuality. The evidence was compelling according to Wayne Lown, Vice President of Tribune Content Agency, part of Tribune Publishing.

The Tribune News Service syndicates hundreds of daily articles read by millions and across the most trusted brands from Los Angeles Times, Dallas Morning News, Denver Post, St. Louis Post Dispatch, and Chicago Tribune. 

“We were able to match 86% of articles in the Tribune News Service with relevant video across news, sport, lifestyle and multiple other genres,” Lown said. “It proved relevant video was there and could be simply matched, revealing a major new revenue stream for publishers who get it right.”

A timely solution

Display advertising is in freefall and subscriptions nearing saturation. The good news is that premium video – which fetches $40 CPMs – offers a way to capitalize on billions of page views and reset publishers’ earnings.

Last month, the world’s largest ad agency GroupM released a report that showed global ad spend was predicted to exceed $1 trillion in 2025. Of that, premium video will account for 19.6% of spend in 2022. 

Mark Lollback who served GroupM CEO in Australia and New Zealand before joining Oovvuu believes that “Publishers are perfectly placed as they have massive engaged audiences. And the big global agency groups are openly talking about supporting publishing.”

At the same time, he pointed out that the biggest spending brands are looking for trusted locations for their messaging. Premium publisher video opens a whole new marketing channel for them, but it needs to be done right.

“Publisher video must be click to play, sound on, highly contextual and get premium positions in premium brands. When it does, it taps into users’ attention and delivers the high performance metrics that marketers are demanding,” according to Lollback. 

He recently presented research to the IAB showing publisher video delivered double digit performance boosts compared to YouTube on viewability, completion rates and click throughs. 

Publishers must act now

The benefits to publishers to grow revenue couldn’t be clearer. Unfortunately, 99% of US articles today feature machine-matched autoplay video with low relevance that attracts low yielding programmatic $7 CPMs. However, The TCA trial has proven that relevant video is available for 86% of articles and premium pre-rolls command $40 CPMs when they are click to play, sound on and highly contextual.

Autoplay should now be outmoded by the smart publishers so they can tap into the opportunity to shift ad spend from YouTube back to publishing. That is the Media Moonshot

Undoubtedly, the emergence of large video syndicators, powerful matching technologies and premium advertising support means it will play an increasingly important role in publisher earnings going forward. The good news is that publishers who do this will be poised to meet customer demand for video, increase engagement and performance metrics across their sites and open access to the largest premium advertising budgets on offer.

Featured Post | Innovation | Revenue

Avoiding platform-dependence pitfalls in content-powered ecommerce

The ecommerce boom was far and away the biggest trend to have come out of the pandemic – at least for digital media companies. Unsurprisingly, media organizations that had already invested in ecommerce infrastructure and affiliate revenue partnerships reaped big benefits. They made hay while the sun shone.

Good Housekeeping, for instance, saw an increase in ecommerce-powered sales of 567% in March 2020, compared to the same period in the previous year.

Some, like Dennis Publishing owner Exponent, even spun off parts of their businesses that were outperforming in terms of ecommerce. Its automotive-based properties were made into their own dedicated business – Autovia – in March of 2021. It was, as its chairman Peter Plumb noted, an opportunity “for those with the broadest and most engaged reach, the richest audience data and the most trusted brands and content.” They were poised to benefit from the rapid growth in ecommerce.

Meanwhile, Dennis’ future owner Future plc has absolutely dominated the ecommerce space. As countless analysts have pointed out, its long-held aim to own every part of the ecommerce journey from ideation to recommendation to purchase has proven to be a lucrative strategy.

But Future was not content to rest on its laurels. After announcing over $1bn in ecommerce and affiliate revenue in 2020, Future made a number of acquisitions to own even more verticals from top to bottom. As a result, it is set to push into the U.S. Overall, it sees a lot of headroom for its ecommerce ambitions.

And it is ecommerce-focused media companies that continue to grow ecommerce revenue even in the tail end of 2021. So, what do Future and the other huge media ecommerce successes have in common? The answer is down to that end-to-end ownership of a vertical. Though it remains to be seen how long that this strategy will suffice when platforms are also banking the benefits of ecommerce growth.

Putting the ease in ecommerce

One thing that needs to be pointed out is that it isn’t all that hard to simply launch an ecommerce strategy. Forbes has started selling branded items and called it its entrance into the ecommerce space, for instance. Meanwhile BuzzFeed has been loud and proud about its expansion into ecommerce partnerships as well. The company predicts that 18% of its total revenue will come from commerce over 2021. Even the companies whose print holdings are the main point of contact have doubled down on ecommerce technology, with fashion magazines like Grazia including scannable images in their pages.

And since the headroom for growth is so great it is also possible – or even likely – to report success in that area. That is itself cause for celebration. Diversification of revenue streams should be encouraged wherever possible. Even the recently announced tie-up of Vox Media and Group Nine was based in part on their shared investment in ecommerce, with the release stating that “both companies have proven success in bringing their brands to life through commercial licensing, affiliate partnerships, and collaborations with major retailers like West Elm, Target and Old Navy and producing premium capsule collections with, for example, Marc Jacob.”

But the corollary of that is that, in order to be one of those huge successes, you first need to be, well, huge. You need a big audience to sell to. You also need a stockpile of existing content to both demonstrate expertise and to repurpose as affiliate sales material. Hearst’s Kristine Brabson, executive director strategy and editorial insights, elaborated on this to Damian Radcliffe. Of its ecommerce growth, Brabson said “We didn’t suddenly create a bunch of new content…” Instead, the company ensured that the products being recommended on its best-performing pages were actually available for sale. It’s difficult if not impossible to do that from a standing start.

Top to bottom

Just as important as enormous scale and longevity, though, is ensuring that your ecommerce operation is layered throughout the entire operation. Meredith, for example, earned $27.7 million from its affiliate operations in Q2 this year, a 26% year- over-year increase from the same period the year before. And it did so without sacrificing any other revenue strands in service of providing the best possible ecommerce environment.

By contrast – though it has been a boon to the bottom line – the integration of Wirecutter into The New York Times’ wider business does not appear to have been quite as successful. Last month the staff of the affiliate publishing business (acquired by the newspaper in 2016) went on strike and actually urged readers not to make any purchases through the site itself. As NYMag explains: “Wirecutter was always treated as a second-class citizen, isolated in its own Slack, its own offices, and its own reporting structure under Perpich. It never joined the newsroom, and its work was openly sneered at by some long-time staffers. Many Times staffers don’t believe their work is journalism at all.”

A similar omission of an ecommerce-focused division occurred at Vice’s 2020 Newfronts. The company barely mentioned Refinery29, which pre-acquisition by Vice in 2019 had been lauded as a trailblazer for the burgeoning ecommerce space.

As with Forbes’ efforts, mentioned above, simply owning an ecommerce business does not mean that you can take the full advantage of the ecommerce boom. It has to be threaded through the entire business, treated as an integral offering, and allowed access to the entire breadth of the media company’s content. That’s what empowers Future’s success.

The reintegration of platforms

So where does that leave the media companies without the scale to own a vertical or the ability to build ecommerce through the entire business? One early clue comes from LadBible’s recent foray into the space in partnership with TikTok for a two-day “live shopping event”. Sam Oakley, director of social video at LadBible Group, said: “We are always looking for new ways to entertain and give our audience new things to discover and experience. We are proud to work together with TikTok and look forward to seeing our community enjoy a virtual shopping experience.”

While those of us with memories of over-reliance on platforms may balk, the reality is that ecommerce and affiliate revenue already rely in no small part on Amazon and other retailers. It is a growth industry not just for the newspapers and magazines, but for all players. You only have to look at the sheer amount of investment platforms as varied as Snap and Pinterest are putting into their ecommerce tech to spot their intentions are the same as media companies’. In many ways they are outpacing those publishers mentioned above: Pinterest now automatically updates products that are sold out with those that are available. But those publishers do have something platforms can’t replicate so easily – a history of curation and recommendation. Trust, basically. Provided we recognize the value of ecommerce and don’t shunt those teams to the side, we might not end up with the power imbalance between publishers and platforms that we did with advertising. Long may that growth con

Perspectives | Revenue | Supporter Spotlight

Give your media subscription funnel the gift of gift cards

During this season of giving, gift cards and gift subscriptions have made sharing what you love easy and rewarding for givers, receivers, and digital media companies alike. This is important because today there are over 200 streaming subscriptions available for consumers—a daunting number of options that can lead to decision fatigue.

On top of that, the average consumer spends about $273 per month on subscriptions according to a recent study about America’s relationship with subscription services. (In fact, after internet and phone connections, streaming and digital content subscriptions make up the next largest categories.)

In the crowded — and competitive — digital subscription market, you need proven ways to stand out and retain more users.

Gifts that keep giving

Gift cards are an easy, reliable way to give someone a subscription to try out your service. For starters, offering gift cards enables your existing customers to share their favorite and vetted subscriptions with friends and family members. Also, gift cards are branded and can be used only at the issuer’s site. This removes choice paradox for receivers, replacing decision fatigue with a positive and trusted experience.

According to Digital Commerce 360, digital gift card sales increased 100% during December 2020. Gift cards proved effective at helping businesses like restaurants, nail salons, and more stay afloat during the pandemic.

Notable brands offering subscription gift cards include The Wall Street Journal, Netflix, Spotify, Roblox, and Twitch. When used on top of discounts, gift cards provide consumers with an extra incentive to purchase.

The gift card conundrum

Automatic renewals are standard operating procedure for most subscription services. However, gift cards contain limited funds. While it may seem counterintuitive, limited funds encourage trial and adoption by providing just enough to get a taste of the experience. Controlling the sampling experience and how much the user is allowed to spend can actually help subscription brands entice users to stay engaged longer.

This was the intent of paywalls—a common tactic media companies use to provoke signup. What many paywall designers fail to realize is that the snippet of content usually available for 5 seconds is not enough to entice potential subscribers to subscribe. Particularly if the only perceived value in the moment is to read that article. More often, paywalls cause potential subscribers to become annoyed and exit. Unfortunately, that makes this interaction nothing more than a web impression with no way for the media subscription to reach out to the reader and re-engage them. Overall, that’s pretty ineffective at converting the reader into a subscriber.

Gift cards, like free trials but more effective, can inspire loyalty. First, a gift card removes the burden of making a decision, since the giver already made that important choice. Second,with a gift card, someone can sample the full subscriber experience, rather than a more limited trial. A recent study by InComm Prepaid Trends found that 85% of people who’ve received a gift card would likely go back to that brand and become a long-term customer.  

Cash, but better

For a digital subscription, issuing gift cards is like printing cash. By offering a distinct and universal way to pay, digital media companies can reach more customers. Consumers also get the flexibility to use a gift card instead of signing up for monthly billing.

Can a company print too many gift cards? Is this like a country printing money and causing inflation? The answer is no, because the funds in gift cards are scanned and activated at the time of purchase. So, companies do not lose potential revenue if they print more than what is sold. When a consumer redeems a gift card, your billing platform recognizes the revenue, and the full value of the gift card purchase goes directly to your company.

See the tall stand of gift cards by almost every cash register in your grocery stores? Brands of all kinds leverage gift cards to collect revenue from physical storefronts and to facilitate the gift-giving purchase behavior specifically nurtured by physical retailers. Yes, most subscription gift cards are valid for digital experiences. However, offering them in-store ties them to real world experiences.

The bottom line: Gift cards are not merely another way to pay for media subscriptions. They give existing customers a way to support and share the brands they love, and in return, provide digital media companies with valuable new subscribers.

To succeed with this model, choose a subscription billing platform that combines the best of both worlds: gift subscriptions and gift cards. If you are looking to get in on the seasonal shopping boom — and add another inroad to building your potential subscriber base — it’s time to give gift cards a look this holiday season … and all year long.

Advertising | Perspectives | Revenue

How automation can help any publisher compete in digital advertising

This is the Catch-22 era for publishers. Magazines, newspapers and other media companies must evolve their businesses into the digital space to survive. But the digital world has already disrupted their industry. Survival has been at the cost of doing more with less, including fewer editorial and operational resources. Google and Facebook dominate digital advertising. Ad revenues at traditional media like newspapers dropped 62% from 2008 to 2018. Layoffs, exacerbated by the global pandemic, continue to hammer the media industry.

But it’s not all doom and gloom for publishers: 81% of consumers say they trust content on a publishers’ sites. So in the near future, how can publishers survive and thrive given the inherent trust they have developed with consumers, and what technologies will enable that?

To figure out what publishers need, let’s start with what they are missing. Publishers lack a clear means to establishing a foothold in digital advertising that allows them to compete with the volume and efficiency of the industry giants. They lack the technology to provide reliable, data-driven paths to revenue. And increasingly, they lack the people-power to get it all done.

The power of automation

Automation will be key to turning weaknesses into strengths. Automation will also build on the advantages that publishers retain amidst all the digital change happening in their industry. Publishers still have the most premium audience, customized content against which to advertise, plus a deep understanding of their audience and its preferences. And unlike on the assembly line, automation won’t replace staff. Instead, it frees up more human time for higher-level, more creative problems.

Publishers will have to learn or acquire the knowledge to automate in a few areas if they want to stay in the game. Automaton supports:

  • Sales and planning support
  • Pricing and bidding calibration
  • Reporting and relationship management
  • Identifying opportunities for growth and new business lines

Sales and planning support

Pre-sales activities, like vetting, scheduling, and negotiation, take a lot of time. Automation along each of these chokepoints can keep the sales funnel unclogged and new leads coming in, contributing to more stability in revenue flow. Even the process of creating mocks or proof of concept-level examples can be largely automated. This frees up time in the sales journey for real relationship building and, well, sales. Streamlining that demo experience can impact both sales and dev teams and will be pivotal as publishers move to scale exponentially in the digital world. 

Pricing and bidding

Automated pricing and bidding is nothing new in digital publishing and advertising. But as the demand for more customized, alternative pricing models such as engagement-based pricing arises, publishers will spend more time on manual processes to adapt these models to work alongside CPM pricing models.

Now, technology has caught up, and these calculations can be automated within the bidding process. This offers publishers the ability to charge a premium for alternative pricing models as well as frees up Ad Ops teams, enabling them to work and think more critically and carefully (rather than wasting time on tedium) and offers customers greater transparency into fee structures and profitability —  a feature that is becoming more important for brands and consumers alike. 

Reporting and relationship management

Whether you run QBRs or provide end-of-campaign reports, the full planning and execution cycle for these deliverables can be a seriously time-consuming process in and of itself. This is another place publishers need to focus to bring the technology of automated reporting in line with the expectation.

Anyone in advertising has probably spent time battling reporting processes or templatizing minutiae deep into the night. Nailing automation here is both a time-saver and a stress-saver. It’s also one of the best ways to continue to grow your relationship with a customer, providing them with regular insight and feedback and enabling you to work together to make campaigns work better or hit their specific goals.

Opportunities for growth and new business lines

It’s not uncommon for major companies to make decisions based on  screenshots of reports imported into Powerpoint templates. Let’s face it, insightful decisions require ready access to the breadth of a publisher’s data across campaigns. You can’t improve what you can’t measure. So, some well-placed automation of these processes can be game changing.

Streamlining company-wide reporting and data-driven insights, if done right, can guide a company on where to expand next or what they should be focusing on. These are strategies that advertising giants have used for years —  now this technology is available for smaller players to understand and exploit to create more dynamic decision-making.

Bottom line

The bottom line is that we’re not going to compete with the Metas and Alphabets of the world through volume. However, we stand a good chance doubling down on our core audiences and building streamlined, efficient advertising machines. These can be built to incorporate automation that provides more accurate insights, and frees up our human staff to keep bringing that personal touch to the business.

Perspectives | Revenue

How pricing flexibility and personalized offers will win the subscription wars

The subscription economy is firing on all cylinders and across all verticals. However, an avalanche of subscription offers turns up the competition for audience attention. Content companies must find innovative ways to drive customer connection and conversion to rise above the noise. 

The stakes are high and so are the profits. The 2021 Subscription Economy Index published by subscription technology platform Zuora, reveals an impressive 21% uptick in subscription revenue growth in Q4 2020 alone compared to the previous quarter. That’s yet another data point in a growth trajectory that has seen subscription revenues increase 6x over the last nine years. 

But cashing in on the boom requires publishers to embrace flexibility and customer convenience, even for cancellations. It’s not enough to build the capabilities to sell as a one-time transaction to readers. Publishers must reach potential subscribers in the right context, and at the right stage of the customer journey, to reinforce the decision to commit to recurring costs. 

Personalize pricing and paywalls 

Each customer is an individual, not a generalized demographic. Their willingness to subscribe also differs widely. Most efforts focus on moving consumers from free trials to the full-meal deal. However, an increasing number of content companies are experimenting with flexible pricing and new subscription billing models.

Some publishers offer readers the option to commit to smaller, more frequent payments instead of annual subscriptions. Others remove friction by providing options that allow consumers to manage or upgrade their accounts quickly and easily. While these efforts to convert consumers deeper in the funnel can yield impressive results, they bypass the business benefits publishers can gain from customizing pricing earlier in the consumer journey. 

Publishers are “leaving money on the table by not changing subscription offers and upsells based on acquisition source,” according to Andy Carvell, CEO and partner at Phiture, a mobile growth consultancy that specializes in app engagement and retention. 

Keynoting at CleverTap Quarterly, Carvell advised publishers to use data to optimize pricing and advertising based on acquisition source. At a basic level, this means showing consumers a different offer or pricing depending on whether they come into the app via paid advertising versus if they discover your app organically.

Customize for customer wins 

Different platforms attract different audience segments. But publishers should resist giving away discounts based on generalizations. “The theme here is: Go in high and then drop prices after they [consumers] have resisted a few of your paywalls,” Carvell says. However, rather than assume a GenZer exposed to your content via a TikTok ad can’t afford a subscription, check the data. Metrics such as low time-to-install or time-to-conversion suggest high intent and signal a strong willingness to pay. 

Consistency across the funnel is critical. Align the pricing on the paywall with the ad campaigns and copy currently running on your acquisition channels and ad networks. That way, Carvell says, “the user feels like the subscription is right for them because you’re speaking the same language as you did in the app.” 

Cancellations and connections

Customizing top-of-the-funnel communications can attract and convert subscribers. But what do you do when your audience makes the conscious decision to cancel?

This is the cue for most publishers to show apologetic pop-ups or send emotional emails asking for a second chance. Granted, a sincere message to remind consumers their subscription matters or helps support quality journalism can be convincing. But if publishers are delivering this nudge after consumers click the button and prepare to make their exit, it may be a moment too late. 

A better approach is to preempt the decision altogether by playing to FOMO fears and showing consumers upcoming content they don’t want to miss. It’s the strategy Sasha Kurdiuk, head of customer experience at Shahid MBC, has followed. Shahid is the leading Arabic language video-on-demand service globally known for the largest library of Arabic movies, shows and dramas – including two Emmy–nominated series.

In a podcast interview, Kurdiuk told me how he uses personalized perks and content shorts to stop churn before it starts. “Rather than pop-up and ask you not to go, which is a message that could enrage you if you are determined to cancel, we asked ourselves what might happen if we showed you a bit of the top content you haven’t watched.” 

Drawing from behavioral and analytics around what subscribers view and enjoy, Kurdiuk’s team personalizes messaging to influence them at this critical moment. “Contextually relevant communications convince many subscribers to think twice and then press resubscribe,” Kurdiuk says. It’s also the well-timed and highly customized nudge that has allowed Shahid to “reduce voluntary cancellations by more than 20%.” 

Given the pressure on content companies to compete for advertising, it is only good news that the subscription economy is booming. However, as an increasing number of products, entertainment, and information services compete for subscription revenue, companies must work hard to stay competitive. They will need to stretch their models and personalize offers and experiences to drive connection and conversion across the subscriber lifecycle. 

Featured Post | Innovation | Revenue

The newsletter boom: capitalizing on the intimacy of the inbox

When it comes to building direct relationships with readers, newsletters boast a superpower: intimacy. In addition to being a direct avenue for relationship-building with readers, newsletters are also major drivers of revenue diversification and provide insights from first-party data. As such, they have become an all-purpose survival tool for publishers. 

“There are so many ways technology has helped email newsletters become a replacement for the newspaper and magazine as people’s view into the world and how they get news and information,” says Kerel Cooper, CMO of email service provider LiveIntent. “It’s in your inbox. It’s there almost on-demand when you’re ready to consume it.”

LiveIntent’s Industry Pulse Survey, published in July, found that 87% of publishers and marketers were actively investing in email and 94% were prioritizing scaling their email programs this year. 

“Prior to the Covid pandemic, we were seeing newsletters trending in a very positive direction. People were spending more than five hours a day between their personal and work emails,” Cooper explained. “With the pandemic and everyone being home, that growth accelerated.”

The FT’s newsletter machine

Sarah Ebner, Head of Newsletters at the Financial Times, agrees with Cooper that newsletters were already “having a moment” before Covid struck. 

“Newsletters have been ‘the big thing’ and then ‘not the big thing’ for probably a decade,” says Ebner. “[In] the last year, with the pandemic, ​​because many people found themselves in a situation where they were stuck at home and hungry for information, newsletters became a very big tool. People wanted information and news sources they could trust.”

To quote journalist Faisal Kim, “What could they deem more trustworthy than emails they’d chosen to receive in their inboxes?”

Currently offering 32 curated newsletters and counting, FT was early to embrace the newsletter distribution channel. Way back in 2019, shortly after crossing the 1 million subscriber threshold, they began using newsletter polls to increase subscriber retention.

“We know that the engagement rate is very high for FT subscribers,” Ebner explained. “It’s even higher if they’re newsletter readers, which is a really good thing.” 

According to Ebner, readers on a trial are 134% more likely to be retained if they subscribe to a newsletter. “[Newsletters] drive traffic and engagement. They also definitely enhance loyalty and create habits and they really can push people to subscribe and donate,” Ebner told me. “You can also promote events or other newsletters through them. So, they do a lot of things in a really simple way.” 

The personality-driven future of newsletters

Again, given the intimacy of the inbox, it isn’t a surprise that readers develop a relationship with newsletter authors, not just the publishing brands behind them.

Last April when David Leonhardt was appointed to lead The New York Times’ flagship morning newsletter, he was given the title of “writer, host, and anchor.” For a newsletter that reaches the inbox of over 17 million subscribers, Leonhardt has the equivalent audience of some primetime news programs. “Host and anchor are the language of TV, which I’m sure isn’t accidental,” wrote Nieman Lab’s Joshua Benton. “Morning shows have used the personal connection between anchor and viewer, reinforced daily, to build extraordinarily profitable businesses.”

Independent publishing platforms like Substack are leveraging this connection and luring top writers from newsrooms like salaried moths to a self-employed flame. In response, publishers have begun to embrace the personality-driven content structure more boldly in their newsletter offerings.

“One of the amazing things about newsletters is that you build up that direct relationship with the writer and you trust them,” FT’s Ebner said. “When we relaunched Brussels Briefing as Europe Express, I spoke to [Britain After Brexit newsletter author] Peter Foster and asked him, ‘Can you mention it?’ Because he wrote it in his own words, saying ‘This is really good and you should sign up for it,’ it didn’t look like it was from an advert. That was the most clicked-on link in his newsletter that week.” 

Publishers are not blind to the power of personality-driven newsletters. In fact, many are embracing it. Just last week, The Atlantic announced it would be hiring independent newsletter authors to write under their brand (and behind The Atlantic’s paywall). Still remaining semi-autonomous, newsletter writers will not be full-time employees and “will have some light oversight from Atlantic editors.” They will earn base pay and additional incentive payments if their readers convert to Atlantic subscribers.

“When you think about how brands and publishers want consumers to spend more time with them, the more of a direct relationship you have, the more you can understand who the users are and their likes and their intent, the better you are in a position to provide them services to continue to stay engaged with your brand,” said LiveIntent’s Cooper.

“It’s definitely part of the strategy to have a strong anchor to many of these newsletters,” said incoming VP of Audience at Axios, Ryan Kellett. “You’ll notice that some of them come from teams. And some of that is the sustainability of the newsletter. It is very very hard to write a daily newsletter.” Kellet joined Axios last month after over a decade at The Washington Post. He most recently worked as Senior Director of Audience where he oversaw digital strategy and subscriber growth. 

Axios Local’s rapid expansion 

While some publishers like The Telegraph have recently chosen to embrace the “less is more” newsletter strategy by offering “fewer, more focused newsletters,” other leading media organizations are maximizing their newsletter model by replicating it in local markets.

Late last year, Axios launched a free-to-readers newsletter model for local news markets called Axios Local. According to Axios, “The daily morning newsletters cover the most consequential news and developments unfolding in each of the cities.” Their editorial model embraces personality-driven content by recruiting the most prominent writers from each of those local markets to “anchor” Axios Local’s newsletters. 

Kellett cites Axios Chicago’s Monica Eng and Justin Kaufmann, two veteran reporters and “former pillars of public radio in Chicago,” who began co-anchoring Axios Chicago’s morning newsletter in August, as examples of how personality-driven content is integral to the success of certain newsletters. However, speaking on broader terms than just one company, Kellett emphasizes the challenges of newsletter writing that often go overlooked.

“It is often underappreciated how hard it is to put out [newsletters] on a day-to-day basis and do a number of other things like attending community events, actually reporting stories, engaging on social media…” said Kellett. “Obviously, we want to have the strongest writers and the strongest personalities to be the anchors. But  part of it is thinking about sustainability and the teams that are required to feed some of those newsletters as well.” 

First launched in Charlotte in December 2020, Axios Local has expanded to morning newsletters in 14 cities across the US in less than a year, with plans to expand to 11 more during the first half of 2022, according to Kellett. Axios Local is forecast to make at least $5 million in newsletter revenue this year, with $2 million alone expected to come from its Charlotte newsletter. 

Leveraging first-party data in a cookie-less world

Source: LiveIntent’s Industry Pulse Survey

Apart from the outward benefits of fostering engagement and revenue, the email address itself has become all the more valuable with regard to first-party data collection, especially considering the impending death of the third-party cookie. According to LiveIntent’s July survey,  “​​99% of survey respondents believe that the email address is vital to the future of identity resolution after the third-party cookie’s demise.”

LiveIntent’s Kerel Cooper supports this position strongly by saying, “Third-party cookies have been a staple of targeting and monetization for a very long time in our space. As a publisher or brand, you have to think, ‘Okay, if this data set, this foundational element that I’ve used to build my business is going away, I need to replace it with another data set.’ First-party data and first-party audiences are going to be super key to that transition.”

“The email channel has already operated in the same manner in which the browsers have been wanting to get to forever,” Cooper continued. “There’s no third-party cookies. You have to opt-in or in some cases double opt-in to receive content from publishers or brands. And there are heavy privacy rules and regulations. Think CAN SPAM. It’s an environment where browsers already want to go.”

However, the value of email addresses may prove to become even more coveted, given Apple’s recent rollout of the iOS 15 update, which introduces Mail Privacy Protection to Apple Mail users. 

As AdWeek’s Ronan Shields explained, “Mail Privacy Protection will prevent brands from knowing whether a user opens one of their emails and hide IP addresses so that senders can’t link that action to other online activity or determine a user’s location.” The jury is still out on just how detrimental this change will be to publishers existing strategies for leveraging first-party subscriber data.  

As our digital sphere barrels forward to 2022, newsletters rightly serve as a powerful multi-purpose survival tool for publishers. Now that the churning momentum of independent newsletter platforms has gained the attention of tech giants like Google, Twitter, and Facebook, each of whom has announced plans to “get in the newsletter game,” publishers must plan to keep this particular survival tool very sharp. At the same time, while exploring all of a newsletter’s advantages, they must never forget the simplicity of the medium and its eternal superpower: intimate, welcomed, and frequent access to readers’ attentions.

TREE KEY ‘C’S FOR NEWSLETTER SUCCESSES

Newsletter expert Ryan Kellett outlines three basic tenets to foster reader loyalty in newsletters:

1. Create high-quality content on a frequent and regular basis

“As we all know, that email address is very valuable. You want to really try to deliver as consistently and as best as you can and at as high a quality as possible on a day-to-day basis.” 

2. Consistency yields dependability yields loyalty

“Consistency is really important in developing that relationship so the reader trusts that you’re there on a certain cadence, be it daily or weekly or bi-weekly…I think one of the reasons why daily works so well is because it says ‘Every day at 7am, that [newsletter] is going to be there for you consistently.’ You could have anything happen in your life and it will be there.” 

3. Community-building capabilities 

“I think with newsletters being so intimate, oftentimes it can be a little bit tough to say ‘newsletter community.’ It may or may not actually exist. But I think with really great newsletters, you are building a community there, despite it sort of being a one-to-one experience…It just depends on the medium… Podcasts, websites/comments sections/forums, and newsletters all have their own type of community.”

Advertising | Perspectives | Revenue | Supporter Spotlight

The bad ad problem: balancing short-term profits and long-term success

There are telltale signs that digital publishers haven’t embraced a user-first approach to monetization. Frequently, these unwelcome surprises come in the form of bad ads. There’s a subtle, yet crucial safety issue at play – that of the end user, and to publishers.  

Bad ads have become more tangible in recent years. They range from offensive and unpleasant imagery to off-brand messaging. Unfortunately, they have a raft of negative effects. These include user churn, widespread user complaints, and a serious dent in monetization.

In 2021, 76% of publishers reported ad quality challenges affected user experience.  Sixty-six percent of publishers reported that ad quality issues impacted their revenue, underscoring how vital it is to adopt a user-first approach. 

User experience expectations are changing, and working practices must keep up. Considering fundamental recent shifts in user sensitivity and expectations, we can’t expect outdated approaches to remain effective. 

The brand suitability question 

With 35% of publishers experiencing worsening ad quality challenges, the pressure is on for publishers to consistently deliver on-brand experiences. In the last 12 months, the definition of brand safety has evolved. These days, the focus is on the distinction between brand safety and brand suitability. It’s no longer enough for publishers to wonder, “Is this creative acceptable for a premium publisher?” The question now must be, “Is this acceptable for my audience, my message, and the content on this page?” That is the philosophy behind a user-first approach. 

Poor ad quality threatens the publisher-audience relationship. However, nearly half of all publishers say they lack the tools to control the ads that appear across their digital properties. Misleading links in ads are the primary type of low-quality ad publishers are seeing – 48% of publishers say they’ve seen such ads. Almost as many (44%) of publishers report witnessing fake news in ad content, 28% reporting links to sites with security threats (malvertising), 31% reporting violent content, and 27% reporting explicit or offensive content. 

Publishers are brands too 

To cultivate strong relationships with their audiences, publishers must deliver engaging, relevant advertising that works for their brand. And every ad counts towards retaining user loyalty, engagement, and ultimately, monetization.  

Publishers require custom controls to maintain their standards and values because there is no universal guide for what counts as a “good” or “bad” ad. In fact, publishers are demanding customization, with 47% reporting they need “more control and transparency” from their ad quality tools. 

Real-time protection against off-brand ads is essential to maintaining a positive user experience. Realtime ad quality protection enables publishers to avoid advertising that is inappropriate for their brand’s unique sensitivities and values but may be fully appropriate for another brand. Today, advertising must be aligned with a publisher’s brand based on its sentiment, tone, and messaging.

A dynamic need 

It is nearly impossible for a publisher to regain a user’s trust once the user has seen an ad that contradicts the publisher’s tone or looks suspicious, or especially if the user clicks through to a deceptive ad and lands on a scam website. In the world of brand suitability, it’s often “one strike and you’re out.” 

While an overall approach to brand suitability, trending topics, and news or event cycles is a must, continual diligence is needed. A user-first approach requires that publishers roll up their sleeves and assess suitability on the ground to ensure their audience’s experience remains on-brand. In short, brand suitability is not static. 

Publishers don’t have to start from scratch. Real-time ad quality tools that provide granularity exist to eliminate the heavy lifting. Setting content parameters and reviewing ads on a site is not merely a maintenance task for ad ops. It’s a vital component of a publisher’s business strategy. 

The way forward

Publishers have devoted time and resources to assure brand-safe environments for advertisers. Now, publishers must remember to devote the same attention to brand suitability for their own brand and users. Going forward, a user-first approach requires publishers to align page content and ad content, and consider them holistically. That control requires full visibility into all ad content on each page, as well as granular customization for their unique audiences. 

Boosting ad quality translates into revenue upside and enables a brand to stand out. When a user-first approach informs ad quality decisions, the benefits are felt by publishers and users alike.

Advertising | Perspectives | Revenue | Supporter Spotlight

Publishers can’t afford to ignore data leakage

The problem of data leakage is one often not well known or understood by publishers. Therefore, addressing data leakage is rarely prioritized. This particularly true if the pressure to monetize their inventory is high and resource is limited. But what does data leakage mean? And are there ways publishers can protect their data from leaking? It’s crucial that publishers learn more about this problem and about the solutions available that help prevent it.

Data leakage typically occurs when a brand, agency, or ad tech company collects data about a website’s audience and subsequently uses that data without the initial publisher’s permission. The core concern with data leakage is that it causes a publisher’s ad inventory to depreciate in value. If bad actors collect data about a publisher’s users, they can use this information to target these users elsewhere — potentially on cheaper inventory. In other words, programmatic spend is diverted from the original publisher. This results in a reduction in demand and, therefore, a lower yield.

Data leakage can happen transparently with the publisher’s knowledge or consent. For example, a company might request that a publisher install code on their page that allows data to be gathered about their users in exchange for something else such as a minimum spend commitment. In some cases, this might be considered a commercially worthwhile proposition providing the appropriate regulations are complied with.

More frequently, however, data leakage does not happen transparently. In the context of programmatic, this usually occurs when publishers choose to work with numerous technology partners in an effort to maximize revenue and yield. There frequently a correlation between the number of partners a publisher chooses to work with and the risk of data leakage.

How data leakage happens

There are a few ways data leakage can happen:

Open RTB bid requests

Data leakage can occur when Supply Side Platforms send bid requests to Demand Side Platforms via using the OpenRTB protocol. This contains a wealth of information about the user, the content they are consuming, the device they are using, their cookie id, where they are located to mention a few. (See the Site, App, User, Publisher, Content Objects). Much of this is information integral to the programmatic auction process. However, it could be used to profile users and target them elsewhere. How much this actually happens is unclear. It may even occur unintentionally by machine learning, bidding algorithms.

Cookie syncing or tracking pixels

Data leakage can also happen when a third party gets access to a publisher’s page either via cookie syncing or a tracking pixel. A pixel is an invisible piece of code that marketers or ad tech platforms use to track users, apply campaign strategies such as frequency capping and monitor performance. Pixels can also collect information about a publisher’s audience. Unfortunately, that can be used to enable the targeting of those users elsewhere.

Today, the vast majority of players in the programmatic digital supply chain are reliant on third-party cookies for user identification and for campaign targeting, optimization, measurement, and attribution. Cookie synchronization is a process that is required to communicate user identity between platforms.

The problem of data leakage arises when platforms that publishers work with give other platforms that have no direct relationship with the publisher access to the page to cookie their users. That platform is then able to build user profiles, which allows them to reach that audience elsewhere without having to buy any media on the original publisher.

How to ensure your data is protected

One way to prevent data leakage is for advertisers, agencies, ad tech companies and publishers to have legal contracts that stipulate who owns what data and how other parties can use it. You might be protected contractually. But how do you monitor and enforce these contractual obligations in practice?

Publishers can also leverage tools that track which platforms are dropping unnecessary pixels or bringing unwanted data collectors. These tools can be used to undertake periodic audits to identify where data leakage is happening. Alongside, publishers should implement policies and practices to qualify, monitor and deal with bad actors.

How to balance the risk and rewards

It is important that publishers find the balance between a closed, safe environment and a risky but sustainable monetization strategy.

With the impending “cookie apocalypse,” publishers are already opting to work with identity providers that are not reliant on third-party cookies to ensure they maintain a healthy programmatic revenue stream and protect themselves from data leakage. Next-generation identity solutions provide a foundation for user identification, which is fundamental to campaign targeting, optimization, measurement and attribution. They also offer new safer mechanisms and tools that limit the amount of data leakage.

When choosing a provider, check that they have built mechanisms that will only assign your users an identifier if they have consent to do so and only share those identifiers with the platforms you have authorized. Finding the right identity provider today can help you prevent data leakage, respect consumer preferences and local privacy regulations while facilitating sustainable monetization.

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Featured Post | Revenue

Can freemium ever be free? Paywall strategies from news, B2B, and B2C

Is there such a thing as a free lunch? For online audiences looking for news, metered and freemium paywalls offer a little taste of the feast that exists beyond the paywall. And if we’re honest, savvy online audiences know that there are ways and means to get at the content behind those paywalls for free, too.

But for the publications that are looking to monetize digital audiences through a paywall, how much to give away for free is an inevitable discussion. Beyond the public service implications – such as The Atlantic and The Financial Times making much of their pandemic information free-to-access – the point at which the paywall kicks in is a constant consideration for digital media companies. Consider all the attention The Economist received for reducing the number of articles readers got for free – from five to three – back in 2019. At the time its MD of global circulation Marina Haydn said the focus was on providing “value over volume.” 

It’s a constantly evolving conversation. Better, more accurate modelling tools allow for flexibility of paywalls based on user habits and demographics, so even within the same publication there are different amounts of “free.” Similarly, there are many sites where the “cost’ of access isn’t monetary, but instead the time and data cost of handing over user information at the registration wall.

There are as many options as users, and often multiple in use across the same publication. But which content is always free at certain publications, and is there best practice for what should always be free in different publishing verticals? How do hard news, B2B and B2C shake out?

Always free

According to the Reuters Institute “more than two-thirds of leading newspapers (69%) across the EU and U.S. are operating some kind of online paywall.”

There is an excellent argument to be made that most news content online should be free to consume at the point of publication. In the article ‘The Truth Is Paywalled But The Lies Are Free’ Nathan J Robinson states that while news paywalls are justified, we need to reappraise that in light of the new economies of disinformation online. 

Given the number of recent revelations about the role of advertising-based outlets in disseminating disinformation, it’s more important than ever that we examine how news sites can act as a bulwark against that trend.

Despite these concerns, of the largest quality news publishers online only the Guardian has a direct audience revenue model and also remains free. But there are other digital publishers that are primarily user-funded that make free news at point-of-consumption a core pillar of their offerings.

Eurogamer, the UK-based consumer news and analysis site, recently launched its own subscription or ‘supporters’ service. Notably when announcing the move its editor-in-chief Oli Welsh was clear that the content that was free-to-access would remain so; its new content would be “additive”:

“One thing we decided very early on was that we didn’t want to lock all of our work behind a paywall. We wanted to keep it freely accessible to everyone. So, inspired by the example of The Guardian (as well as of some of our competitors), we’ve created this supporter program where subscription is entirely optional, but comes with a bunch of (hopefully attractive) benefits, ad-free viewing first and foremost among them.”

That additive model is very similar to that of The Independent, which also creates subscriber-only content while allowing the majority of its content to be free-to-access. It brands the content behind the paywall as ‘Independent Premium’ – which matches Eurogamer and many other titles using the partial paywall model. 

Similarly, back in 2016 the Telegraph abandoned its metered paywall in favour of its current model, which has certain types of content that are always free. It then has a premium option on top and certain perks of registration that encourage users to sign up.

Nor does the free content necessarily need to exist in the same medium as the paid-for content. Quartz, for instance, still offers its newsletters for free while gating some content on its site behind the paywall. It currently has around 27,000 subscribers. 

For news publishers of any stripe, then, the option is there to have a certain amount of content that is always free. That could be, as with the Guardian, from a purely ethical perspective or, as with Eurogamer, because other revenue sources afforded by free access are still a big part of the overall mix.

Never free

This is the easy one. Many of the most well-known subscription success stories have a hard paywall at their heart. In fact, in many cases, any free content that isn’t purely promotional is anathema to their publishing strategies. 

That’s especially true for B2B and business information publishers, which mostly never lost sight of the value of their own expertise. Despite that, even among news publishers the hard and fast paywall remains notably rare. Of the biggest subscription success stories, only the Financial Times, The Wall Street Journal and a handful of others really embody the hard paywall ethos.

It is, as has been pointed out, a fantastic option if you have a rich seam of proprietary information or data, or occupy such a rarefied niche that few if any competitors exist alongside you. 

Free enough

Consumer-facing magazine brand Condé Nast has ultimately said that it wants all its brands to be paywalled. That’s a huge bet upon the ability of titles – mostly based around lifestyle and hobbies – to convert people to paying readers, and on the back of a metered model. But it’s not a contention without some supporting evidence.

On the back of WIRED going behind a paywall in 2019, its editor Nicholas Thompson said that: “I think it can work for every Condé Nast brand. I don’t think it can work for every brand. Think about Forbes, which has this very lucrative contributor network. No one’s going to subscribe to the contributor network, in part because there isn’t really an identity or a style or a voice – why would you subscribe to that?”

But the ability of free, premium content to act as an antennae for potential future subscribers shouldn’t be overlooked. For both the freemium and metered models – which are neck-and-neck alongside one another in terms of popularity in the EU – that free-to-access content puts readers at the beginning of the funnel to a full-blown subscription.

That’s especially true for consumer magazines, which rarely occupy the sort of rarefied niche that would enable a hard paywall. Over the course of the pandemic research from Jellyfish found that UK tech and gaming titles saw a rapid growth in digital subscriptions (268% YOY) – of which most have a metered paywall model.

It would be foolish to say that the never-free model works best for B2B exclusively, or that a metered model is the definitive best for consumer magazines. There are exceptions to each rule, and often the individual brands themselves play around with which content is free at any time.

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