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Perspectives | Revenue

Why product is the best subscriber-retention strategy

The subscription model is not new, but it has taken on a new significance. Over the past seven years, revenue for all subscription companies – from software to healthcare – grew by 321% on average. In the case of apps, this positive trend was bolstered by a 32% year-over-year increase in the number of users who sign up for a subscription after installing an app. 

Fast forward, and publishers report a massive bump in subscriptions and a surge in audience interest since the coronavirus outbreak. In just one week, subscription technology platform Piano observed that subscriptions across the European newspapers in its network increased by 267%. From Condé Nast and The New York Times to Disney and Viacom, subscriptions are big business for the media. 

However, these record increases may be short-lived. Already aggregate data from subscription technology platforms shows monthly subscription rates for digital news has declined from 3x the average (over the previous 12 months) in March to 2.4x in April. Growth rates, despite signs of slowing, still outpace pre-pandemic rates by a healthy margin. But there are other developments publishers need to watch. 

“News fatigue is [also] setting in, and the short-term and long-term economic impact of the crisis is likely to be profound,” warns the Reuters Digital News Report 2020. It combines insights about digital news consumption and the survey results of 80,000 online news consumers in 40 markets to highlight the factors “likely to accelerate long-term structural changes towards a more digital, more mobile, and more platform-dominated media environment.” 

Move to a retention-first model

As advertising budgets are slashed and a recession looms, content companies have two choices. They can persuade more people to pay directly or they can find ways to keep their existing subscribers. 

It’s not a toss-up. Seminal research reminds us that it can cost five to 25 times more to attract a new customer than retain an existing one. The Financial Times sums it up in cost savings. Drawing from internal research, the FT concludes that “it is four to five times cheaper to retain an existing user than to acquire a new one.” 

The task of keeping customers active and interested turns up the pressure on media companies to adopt a retention-first mindset. That starts with understanding who your customers are and then investigating the “why” of what motivates your audiences to interact with your content and keep coming back. That is where marketers need a retention framework that will allow them to develop a more nuanced view of customer engagement and stop churn before it starts. (I’ve written here on DCN about a new Engagement Pyramid model, also known as AIC. But you should choose the model that is right for your company and your audience.)

To help companies as they architect strategies to cash in on the “corona bump” and maintain robust subscriber numbers, I draw from two standout interviews with retention marketers and app publishers  featured on Retention Masterclass, the video podcast series I co-host with fellow Forbes Senior Writer John Koetsier.

Build a “radically superior” product 

Marketers who want consumers to commit to a recurring cost need to offer a product worth paying for in the first place. But they should also be prepared to “burn some boats” to get there. This was the advice offered by Nick Hobbs, an ex-Google manager who is driving a phase change in thinking around how to design and grow a subscription news product. Today he is the founder and CEO of Brief, a news app aimed at GenZ and Millennials and doubling its subscriber base every month. He told Retention Masterclass this growth is fueled by his determination to build a “radically superior” product. 

“It can’t be the same product with a new coat of paint,” Hobbs says. It also can’t be a product that is a little bit better than the rest. “It has to be fundamentally a completely different experience that’s vastly superior to what came before it.” 

One terrific example of a company taking this approach is Spotify, which does more than distribute music tracks. They offer an emotional soundtrack that delivers what audiences want and need. More importantly, Spotify has built a business model on access, not ownership. “Gen Z doesn’t want to buy things anymore,” Hobbs explains. “They want access and they want services.” 

Accordingly, Brief is a customized news service produced by human journalists and algorithms. Rather than offering audiences endless news to scroll, or a lot of options to personalize their feed, Brief focuses on curation. “Instead of trying to feed you more content, we’re trying to give you less.” The takeaway: When “product is the new marketing,” enabling a better experience is essential to achieve high subscriber numbers and strong retention rates.

Keep it fresh with “situational” communications 

Push notifications are growing up. And content companies are getting smarter about ways to deliver them. I’ve written that organizations, including ABC News, get high marks for strategies that use push and other communications channels to power personalized news experiences. 

However, while push notifications can be incredibly useful, they can also be noisy. Christian Eckhardt, CEO and co-founder of full-stack mobile marketing and tech consultancy Customlytics, called out companies for using push to alert users of every mundane activity. It’s a practice sure to backfire, Eckhardt told Retention Masterclass.

Push is part of product

Companies have to shift from attempting personalized push (which no company has mastered) to delivering more “situational” communications, Eckhardt says. This approach to communications is shaped by real-time analytics to “continuously improve the messaging, determine what is working and do more of it.” 

So: Is push related to mobile CRM or marketing? “If done right,” Eckhardt explains, “it’s probably more part of product than it is of marketing.”  Ultimately, push is a great asset for driving retention and engagement. Harness analytics to customize messaging to the situation in which users find themselves in your product.

Product-first marketing

What my conversations with Hobbs and Eckhardt demonstrate is that whether you are looking to add subscribers or retain them, the power of the product can not be underestimated. And, as we see that retention needs to be top of mind in any subscription model. And, again, product takes the front seat. 

The explosive growth of subscriptions for content online and in-app is a clear confirmation that users are willing to pay a monthly fee provided the value exchange is on the money. These days, a me-too product may help you attract new subscribers. But it’s the ability to offer a consistently excellent experience – informed by analytics and customized to audience activity – that builds relationships to last.

Diversity, Equity & Inclusion | Industry-Research

Newsrooms evolve amidst the pressures of 2020

It’s an unprecedented time for individuals and industries. The forces of 2020 continue to reshape the media business — from a radical shift in work environments to calls for racial equity in industry ecosystems. Journalists find themselves in a unique position as they both report on these stories while being personally affected by them.

A new report from the Reuters Institute, Changing Newsrooms 2020, offers insight into today’s evolving news industry. The findings from leading researchers, Federica Cherubini, Nic Newman, and Rasmus Kleis Nielsen, are based on survey data analyses from 136 news industry leaders across 38 countries.

Remote working is here to stay

The pandemic forced many industries including the news media to adopt a work from home policy. And more than half of the news leaders surveyed report (55%) that their organizations are working more efficiently from home. However, at least eight in 10 respondents have concerns about employees maintaining relationships and communicating effectively.

Interestingly, nearly the same number of  leaders (37%) think that they are more creative working remotely as those who do not (42%). Nevertheless, more than half of respondents’ report (54%) that they would like to go to the office a bit less often than before coronavirus. A full 21% state that they’d like to go back far less often.

News leaders report that their newsrooms are already planning future changes to their physical workspace. More than half of respondents’ (55%) state that their news organizations are looking to downsize their office space. Many think that a hybrid model could be a positive and practical solution for publishers with added flexibility and cost savings. Only 25% of news leaders report that they want to get back to an office environment.

Building a diverse news culture

The focus and attention on Black Lives Matter added external pressure on news organizations and their leaders to examine and address the lack of diversity in the newsroom. To date, 80% of news leaders report seeing progress in gender diversity. However, only 43%, see improvement in ethnic diversity.

News leaders state that publishers are doing a good job in junior staff diversity (84%) and a fairly good job with mid-level staff (59%). However, only 37% think their companies are doing a good job on diversity among senior level management.

Publishers are working to transform practices in the newsroom. They are now tracking newsroom diversity, both gender and ethnic, to include news sources, contributors, and interviewees. Importantly, ethnic diversity is cited as a top priority in the news industry.

Attracting and retaining talent

Publishers have been under pressure to transform the news media building new digital businesses and revenue models, particularly over the past decade. These companies need high quality teams to effectively manage and evolve their business strategies. More than half of the news leaders (53%) believe in their organization’s overall ability to attract and retain talent.

However, their confidence is much lower in recruiting and retaining talent across a few key departments. These include product, audience, and design (23%), data and insights (21%), and technology (18%). Further, in hiring new talent, publishers want to attract younger employees. It’s important to note that younger talent often looks for a highly competitive salary and demands high standards in a company’s culture and values.

The transformation of the newsroom’s work environment and social culture offers an opportunity for positive change. It may present challenges and potential disruptions. But its critical for publishers to stay the course to produce the necessary structural shifts in the news media.

Featured Post | Innovation

Text-to-speech is the audio opportunity no one’s talking about

Audio articles are making quite a noise in publishing. Podcasting may be hogging the headlines. But creating features and news that your audience can listen to is an audio opportunity that should not be ignored.

While offering articles in an audible format is nothing new, this type of content is currently enjoying a massive boom, as time-strapped audiences look for convenient ways to consume online media.

A boom

In the U.S. alone, spoken word’s share of audio listening has increased 30% over the last six years and 8% in the last year alone. And when multi Pulitzer Prize-winning titles jump on-board, you know that audio content is a serious business. In July, The Washington Post announced plans to make audio versions of all of its articles. And a few months earlier, the New York Times acquired Audm, a platform that turns longform journalism into audio content.

Other big brands using Audm’s audio services include The Atlantic, BuzzFeed, Wired, and Rolling Stone. Similar platforms Curio and Noa ­– which are based in the UK and Ireland respectively – have signed up the likes of the Financial Times, The Telegraph, The Economist, and The Guardian.

What’s even more interesting is that listener numbers have risen since Covid-19. In fact, 75% of the U.S. population has listened to spoken word audio in the past month.

The Washington Post began testing text-to-speech capabilities on its Android app in early 2020, assuming the feature would appeal to readers on their daily commute. But Leila Siddique, senior product manager, said they have been surprised to see steady adoption rates, despite people working from home.

“What we’ve learned from users is that they listen to the news while doing other things. And they are consuming far more content than they would normally,” she says.

It’s not just the U.S. that has seen a boom in audio articles during the pandemic. England’s The Economist has offered audio editions of its weekly magazine since 2007. However, according deputy editor Tom Standage they are currently enjoying “record numbers of streams/downloads and unique listeners.”

Engagement

Listener figures are still way below the numbers of people who read text online, with the New York Times enjoying in excess of five million subscribers across its print and digital content. However, audio content isn’t just about numbers, it’s about audience engagement.

Reading takes time and focus – which is in short supply with modern audiences. According to Chartbeat, even the top stories only engage readers for around two-and-a-half minutes, while 45% of readers leave within 15 seconds. In contrast, Noa cites an 84% average completion rate for stories

“Completion rates are higher because people are generally busy doing other things while listening. So, it’s less convenient to switch away from something,” says Standage.

Basic value

Despite the fact that these platforms use professional narrators, audio content is still fairly simplistic compared to podcasts, which often require dramatic story-telling and high production values. The key to audio articles’ success is convenience – and quality journalism.

“We know that readers are time-pressed and feel guilty that they have not read enough of a given week’s edition before the next one arrives,” says Standage. “Offering audio content sends the message: we know you are busy and are willing to pay for high-quality information. So, here’s a handy feature that will help you ensure that you get value from our journalism.”

Publishers, in turn, get more value from their audience. While The Economist hasn’t shared numbers for the performance of their audio content, Standage says figures suggests the audio edition is an effective retention tool. “Once you come to rely on it, you won’t unsubscribe.”

The Washington Post’s managing editor Kat Downs Mulder agrees the convenience of audio is a “huge benefit” to both their subscribers and their subscription numbers.

“We know people love listening to news – our podcasts show that,” she comments. “Opening up more audio content and making it easier for them engage with The Post helps draw them into our ecosystem even further. That improves retention rates.”

Offer more

Interestingly, while most publishers create a limited number of long-form, analytical audio articles, The Post is using the text-to-speech features on Android and iOS to offer audio versions of all its articles. The 143-year-old paper has been experimenting with audio since 2017. However, Downs Mulder explains that they decided to offer automated storytelling across all its content.

“We are excited about the habit-forming nature of audio. But it’s

hard to build those habits if you only offer a limited number of articles,” she says. “Our readers know they always have an audio option, across all articles, which really reinforces its availability.”

Feedback from users is positive so far. Downs Mulder says subscribers who listen to audio articles spend three times as much time in Post apps.

Niche and personal

It’s not just the big brands getting onboard. Audio is a great way for niche brands to engage with their audience and create loyalty. Danish startup, Zetland, launched its audio model in early 2017 and has since grown an incredible 650%.

Just like The Post, all Zetland articles are available as audio. However, they only produce about three longform articles a day. This means they can offer a far more personalized audio experience, with each article read out by the journalist that wrote it.

“The personal voice of the journalists is quite important to the success of our audio products,” explains Zetland CEO, Tav Klitgaard. “We originally tried using professional voice actors, but it sounded too perfect. We like to build what we call a ‘human product’, including all the glitches and quirks of human beings. It is important for us that our content conveys honest passion and curiosity, and we’ve found that to be done best when the journalist narrates.”

This personalized approach certainly seems to be working. They now have more than 18,500 paid members, whose consumer habits are around 75% audio. What’s more, engagement levels are impressive, with close to a 90% listen-through rate.

“We’ve learned that once we get people to hit play on that first piece of content, chances are they listen to the end,” says Klitgaard. “They also have a higher usage frequency and subsequently membership retention, than those who do not listen.”

Audience appeal

In addition to increased retention, audio is also a great way to reach out to new audiences, as it is traditionally consumed by a younger demographic.  According to Klitgaard, more than 30% of their paying members are under age 30. And The Post says their audio audience is “generally younger” than their average reader.

As with all content, creating a successful audio model is all about knowing your audience. You need to recognize their needs and match the user experience accordingly. Whether that’s long-form analytical content, or easy-to-access daily news, audio is proving to be a highly effective way to engage, retain and attract audiences.

“Audio isn’t about changing user habits, it’s about embracing their habits,” states Downs Mulder. “Our goal is to convert causal listeners into dedicated listeners, by opening them up to getting news from us in other ways. And audio is proving to have an enormous importance to the news-interested public.”

Perspectives

OTT subscriber acquisition strategies for a new reality

Amidst the gloom of a global pandemic, the rapid growth of OTT subscriptions has sounded a rare positive note: it is estimated that global revenues for the sector will grow by an unprecedented 55% in 2020, according to Videomind.

Traditional pay-TV and broadcast subscriptions are falling away, particularly in the U.S. Therefore, it would be easy to reach the conclusion that Covid-19 stay-at-home orders have accelerated our arrival at the tipping point where on demand and OTT become the dominant models for video entertainment consumption.

The truth, however, is that the road ahead for OTT brands in an increasingly crowded and competitive market remains uncertain and fraught with challenges. Some of which come in the form of:

  • Unknown post-lockdown churn with continual changing global circumstances
  • Potential slowing of subscriber growth as the world returns to a sense of normal
  • Raised expectations in line with what customers have grown accustomed
  • Change as the only constant, with the ability to adapt quickly to meet continuously shifting needs

Opportunity from uncertainty

The net result is that subscriber acquisition is likely to be more important than ever in 2021. And the fact is that subscribers themselves will represent a more demanding, constantly moving target.

Our recent OTT playbook explores the opportunities for OTT brands to experiment and innovate at every stage of the subscriber acquisition journey. To succeed, brands need the ability to innovate, experiment and adapt quickly. This capacity has long been held back by everything from a lack of customer insight and inflexible business models to monolithic technology platforms that set limits on the pace of innovation.

However, that is starting to change.

Broad customer insight

No-one yet knows whether the pandemic-era spike in new subscribers will be temporary or convert into long term loyal customers. Subscriber growth– be it short or long term – offers clear financial benefits. However, it also offers something potentially more valuable and enduring: insight. 

It seems that recent subscribers were drawn from every section of society, not just the traditional heartland of the 18-35s. In fact, some of the most significant growth was among older age groups, with around a third (32%) of 55-64-year olds and 15% of over-65s using subscription streaming services, according to Ofcom.

What’s more, it would be a mistake to assume those demographic changes are entirely transient. Research from EY found that 19% of households agreeing that the pandemic has irrevocably changed their viewing habits.

As a result, OTT brands could attract and engage a much broader cross section of society, accompanied by diverse needs and behaviors. So, success will depend on understanding and adapting to a broader set of demands.

The good news, for those brands able to convert data into action, is that subscriber growth during 2020 has provided the basis for hugely valuable customer data. Interrogating that data, to understand customer needs and behaviors can be the basis for multi-faceted, adaptable and, above all, effective subscriber acquisition strategies.

Agile, flexible subscriber management

The brands best poised to act on that insight, and the ability to keep pace with a constantly moving subscriber sweet spot, will have a significant advantage. The scale of that advantage will depend how far along the digital transformation journey they have traveled.

Those still wrestling with monolithic legacy systems will struggle to keep pace with change. Siloed data will hamper customer insight. And complex systems requiring technical resource will limit the ability to innovate, adapt and experiment in response to change.

On the other hand, a new breed of fully integrated cloud subscriber management platforms will provide forward thinking brands with all the flexibility and agility they need – and at lower cost. These will allow OTT brands to innovate and experiment in every aspect of the subscriber acquisition journey. This will take hours rather than months, without the need for technical skills. These factors offer a critical competitive advantage in the months and years to come, as we all adapt to a new reality.

Experiment and innovate

In the post-pandemic world, there can be no standing still. OTT brands will need to constantly experiment and innovate in every element of the subscriber acquisition journey in response to diverse customer needs and rapidly changing behaviors, coupled with a demand for greater flexibility and choice.

Perspectives

DCN’s must reads: week of November 5, 2020

Here are some of the best media stories our team has read so far this week:

Industry-Research | Revenue

How publishers can develop a content-to-commerce strategy

For quality publishers with strong consumer relationships, a content-to-commerce strategy offers a valuable revenue diversification approach. The International News Media Association’s (INMA) new report, Content-to-Commerce Brings Revenue in Post-Advertising World, outlines key considerations, strategies and their implementations to help publishers build this line of revenue.

While ecommerce may sound straightforward, successful implementation is not easy. First, a publisher’s brand must have a purpose, a reason to exist for the consumer. It needs to be authentic, possess an emotional quality, and present a personality. If a publisher meets this high bar, then it can begin the work of developing a commerce strategy because its content connection to a purchasable product will be valuable to consumers.

The major models

The INMA report identifies three basic content-to-commerce models:

  1. Affiliate models, which send customers to an outside product link, earning the publishers a percentage of the purchase revenue.
  2. Attribution marketing, which tracks touchpoints from consumer to purchase, assigning a value to the touchpoints in the journey. If the publisher, is an effect touchpoint, they receive a percentage of revenue.
  3. Direct ecommerce, which offers company-owned products to consumers allowing for both higher revenue and higher conversions.

An integrated platform

Sweden’s Aftonbladet, a Schibsted-owned company and the largest news platform in the Nordic countries, partners with ecommerce platform Tipser. To sell products, Aftonbladet pairs its content with integrated ecommerce platform. They most often place embedded ecommerce in their features departments such as food and health. Aftonbladet made an important decision at the start not to integrate ecommerce in hard news content.

Aftonbladet recommends that publishers be completely transparent. For example, they need to communicate if they include embedded ecommerce elements in their content. An embedded ecommerce model should help build reader loyalty, not weaken it.

The content connection

Aftonbladet also creates content around ecommerce related products. If consumers search for a product of interest, it can lead to Aftonbladet’s library of content. It’s a great way to bring consumers to Aftonbladet content, connect them to products and increase overall traffic to the site.

The New York Times uses an ecommerce model with Wirecutter, which it acquired in 2016. Wirecutter is designed to help readers’ by offering them recommendations for retail purchases across multiple categories. The brand does a lot of the work for the consumer by providing product details, comparisons, and recommendations. Wirecutter Guides talk to category experts. They do the research, test the products, and find the best option in any category, then offer an unbiased recommendation.

Wirecutter maintains a reader-first mission, with a secondary focus on ecommerce. It also offers exclusive deals through their merchants and retailers. Wirecutter made an important editorial decision early on that product reviews cannot be influenced by a retail partnership. The core focus is to recommend the right product for the right consumer.

Question your approach

The INMA report identifies four key questions for publishers to address when identifying the right ecommerce model.

  1. What do your readers need that you can provide that benefits them?
  2. What’s the shortest journey to get it to them?
  3. How can you make money from doing that?
  4. How does your content lead the way?

As ever, a publisher’s primary goal must be to provide content that serves an audience. Then, they can build out an effective strategy to monetize their content and audience relationship throughout the customer’s ecommerce journey.

Revenue

How Crain Communications uses pricing research to grow revenue

Veebha Mehta is the CMO at Crain Communications, a diverse business publisher with titles spanning the advertising, healthcare, investment, automotive, and plastics industries. When she assumed this role, she quickly landed on three crucial questions to answer in order to grow the business. However, she certainly couldn’t have anticipated the global pandemic that descended just a few weeks into her tenure. 

As it turned out, these unexpected events only sharpened her focus on the hunt for these answers. Mehta recently shared those revelations with Piano, illustrating the process she went through around research, testing and data.

The full discussion between Veebha and Piano’s SVP of Strategy, Michael Silberman is available as part of our Piano Academy webinar series, Maximizing Acquisition: Perfecting Pricing and Promotions. We’ve distilled the highlights here. 

1. How to effectively leverage a discount program?

An early observation Mehta made upon joining Crain was how extensively the publisher used heavy discounts to build subscription velocity. It’s common for publishers to offer low introductory rates or even free trials to bring in new users. However, without the right pricing strategy, customer churn and conversion can become detrimental. 

During the Covid-19 pandemic, publishers reported a resilience in subscriptions as more people turned to digital outlets for news coverage. This presented a surfeit of new users up for grabs and discounts are an effective way to bring these potential new readers into the fold. Using a combination of price research and live price testing, Crain ran a promotional program to drive up their subscriptions. 

Significantly, they discovered that many of their trusted products were priced far below what consumers were willing to pay. This data empowered Crain to adjust prices in order to meet revenue targets, as well as experiment with trial offers to attract and retain new subscribers.

2. How to balance revenue and circulation?

Pricing doesn’t exist in a vacuum. Changes to pricing and promotions naturally impact  readership. Tactics such as gating certain content behind a paywall, raising or changing pricing structures, or even shortening trial periods can positively impact revenue. However, they can also reduce a publication’s reach. 

During radical changes like the Covid-19 pandemic, longtime readers’ priorities and price sensitivity may shift. Publishers must account for that and be willing to adapt their strategies.

Crain Communications is developing a more sophisticated understanding of what people are willing to pay for each of its products. This would lead to creating a distinct pricing and offer strategy for each brand. 

In particular Mehta says Crain found that it was valuable to decouple its print and digital pricing. Price testing for Crain’s Chicago Business — a weekly business outlet with both a print and digital edition — showed that while both the print and digital editions were highly trusted within the market, demand for digital was higher than for print.

Prior to this analysis, the pricing was similar for both outlets. These crucial data points helped Crain adjust pricing for its digital edition in order to fully monetize that untapped demand. It also allowed them to prioritize further demand for digital subscriptions. This resulted in more digital revenue share, and a 39% overall conversion rate on subscription offerings.

3. Driving conversions through content and pricing

Finally, Mehta wanted all of Crain’s publications to focus on driving new subscriber conversions through a combination of innovative content strategy and smart pricing rather than relying on deep discounts. Using pricing research and testing, Crain was able to more clearly understand the pricing psychology of their core consumers. They also discovered the content that they most valued and use those insights to develop a conversion focused content strategy. 

Price research on some of Crain’s flagship business products showed a delta between what the publisher was charging and what its customers were willing to pay. It also revealed a need for specific content. This insight allowed Crain to optimize its promotional efforts toward the content that readers valued most. By locking specific articles and creating premium verticals, Crain was able to communicate that value of specific content and drive higher rates of conversion on its most valued content. 

Intimate knowledge of a specific audience is at the heart of publisher’s offerings. But without a complete view of an audience’s pricing psychology, as well as their willingness to pay for information, the data is simply incomplete. Harnessing the power of price testing and research can help even the most sophisticated publishers better understand their audience and serve them the content that will drive them to convert at a higher price point. 

Featured Post | Perspectives

Cutting through the noise: podcast marketing tactics from NPR, Vox Media and WaPo

Media companies continue to flood podcast platforms with new launches. The attraction is clear: a much-needed and potentially lucrative source of revenue. An additional venue in which to engage with core audiences. And, perhaps most vitally, publishers are capitalizing on the longer-term opportunity to introduce themselves to a massive and ever-growing pool of listeners.

But amid a glut of content, viral hits are rare. Rising above the noise to build audiences of scale is often a slow and arduous process. It’s far more involved than simply producing a compelling program and waiting for listeners to find it.

“I think a lot of people in media believe you can do it that way. We’re so used to a story succeeding or failing based on whether or not it’s good,” says Jessica Stahl, director of audio at The Washington Post. “Podcasting is such a crowded ecosystem. You really need to put as much might as you can behind letting people know that something is there.”

Dependence on platforms like Apple and Spotify makes it difficult for publishers to attribute success to individual marketing tactics. But it’s clear that the totality of these efforts has an impact. In their absence, the lack of engagement is noticeable.

“We try to do as much as we can with all of the levers that we have,” Stahl adds.

Leveraging existing capabilities

No stranger to audio, NPR has expanded aggressively into podcasts, complementing its radio programming with on-demand offerings for a generally younger cohort of listeners. The non-profit relies heavily on social media to boost its shows and tends to focus on promoting its podcasts during surges of traffic to its website.

“The question is, how do we take these people who are likely new to NPR and turn them into engaged users?” says senior director of brand marketing, Kristin Hume. “Podcasts are a great way to do that because they’re a really valuable engagement tool. You’re asking people to tune in week after week.”

On social media, NPR uses hashtags and affinity targeting to join conversations around specific topics relevant to its shows. Hume recommends posting individual episodes or clips rather than general marketing around the podcast itself. Facilitating shareability is key.

Vox Media also favors an omnichannel approach, leveraging websites, newsletters and social media channels from across its portfolio of 13 media brands. But building awareness is only the first step, according to Brandon Santos, Vox’s director of podcast marketing.

“The second step is converting people when they’re actually ready to listen,” says Santos. “We typically do that through audio promos on our existing podcasts, collaborations between shows, and occasionally through promotion on podcasts outside of our network. These tactics tend to drive more noticeable spikes in our downloads, but they work best when we’ve done the awareness-building work first.”

Pragmatic cross-promotion

All three companies cite the use of existing podcasts to plug new ones as one of the more immediate and effective ways of boosting downloads. “Our listeners really value these cross-promotions,” says NPR’s Hume. “They don’t see them as advertisements. They see them as a way to learn about new content from a brand they love.”

Typically, a new launch will enjoy four weeks of promotion across NPR’s entire podcast network. Hume says that this provides a solid foundation from which to engage additional listeners outside the core.

At Vox, these cross-promotions take several forms, including ads inserted into shows with similar audiences, content collaborations, guest appearances by hosts on other shows, or episode previews shared in another show’s feed.

“We’re fortunate to have producers and hosts who respect each other’s work and understand the value in supporting one another,” says Santos. “Listeners already have a lot of confidence in those brands and hosts, so they’re much more willing to give that show we’re promoting a chance.”

Like Vox, NPR is comfortable buying or bartering for ads with “like-minded podcasts” produced by other publishers without fear of cannibalizing audiences. “It doesn’t feel like people are peaking out yet in terms of the number of podcasts that they’re willing to listen to,” Hume says.

Gaming the platforms

Discovery remains an inherent problem in a world where the dominant platforms host an overwhelming surplus of content, Stahl says. But there are still ways to optimize.

“One simple way you can help drive discovery is to make sure that you’re very clear about what your show is about in your description copy, your episode titles, and your show notes for each episode,” notes Santos. “Both [Apple and Spotify] scrape those fields for their search results and their ‘related podcast’ algorithms.”

Hume says NPR has had success pitching Apple for featured spots within its podcast app, a formalized process open to anyone.  “We try to get in their curated collections as well, and the best way to do that is to make sure you’re publishing content that connects to the issues of the moment,” Hume says. “Apple does try to be pretty editorial and topical in what they’re promoting, so listing individual episodes in your pitches is really helpful.”

On Spotify, it’s more about getting different episodes of shows into the platform’s curated playlists. Examples include “Real People, Real Stories,” or “Your Daily Drive,” which offer a mix of music and news originally intended for morning commuters.

Monetization, in perspective

When it comes to actually making money, solutions are a mixed bag. All three companies promote their reach and the intimate, trusting relationships between listeners and hosts, but offerings vary.

Vox provides both host-read ads and branded segments produced for advertisers, both as standalone sponsorships or as part of integrated packages. NPR sells a plethora of options, from mid-roll ads to programmatic insertions.

Inserted ads are the dominant offering at The Washington Post. But while advertising is a big piece of monetization, Stahl says it’s worth remembering that a successful podcast can also benefit the business in more indirect ways.

“As we think of subscriptions at The Washington Post and the value of loyalty, podcasts stand out as a particularly loyalty-driven medium,” she explains. “The amount of time a podcast listener spends with us each week is astronomical. That idea of capturing and holding those audiences is really valuable in itself.”

Despite the fact that most podcasts are offered for free, that cost for entry—20 to 60 minutes of a listener’s day—is actually relatively high, says Santos. This constitutes a much larger commitment than reading an article or subscribing to a newsletter. “That means it’s even more important that you have a compelling reason to listen and that you’re communicating it very clearly. Collaborating with content teams to make sure you understand the unique strengths of a show and the benefit to the listener is extremely important.”

Perspectives

DCN’s must reads: week of October 29, 2020

Here are some of the best media stories our team has read so far this week:

Advertising | Revenue

By prioritizing context and understanding over “attention,” Vox Media is poised for growth

Dave Constantino, Senior Director, Client Development of Oracle Data Cloud talks to Edwin Wong, SVP of Insights & Innovation at Vox Media about how strategy and tech power advertiser flexibility, immersive content, and emerging formats.

DC: Vox Media is seen as a trusted resource for its clients, from being a strategic partner to a thought leader. What are the short and long-term opportunities that you see for the advertising industry to transform and connect brands and publishers more closely to consumers? 

EW: As a modern media company, we help brands reach audiences wherever they are – across nearly every platform including TV and streaming, podcasting and digital. In the short-term, we are focused on offering brands flexibility, which continues to be a major priority for every advertiser at this moment. Long-term, we are modernizing the ways brands can work with us on brand building across the modern platforms where audiences are.

In long-term planning, we are putting greater emphasis in areas with strong growth in consumer engagement and areas where we can broaden the opportunity for marketers to work with us. This can be seen across the growth of our podcast network and our investment in our ad marketplace.

We’re excited about the opportunity in podcasting. The medium represents a shift from quick feed-based media experiences. It gives listeners a chance to lean in, connect, and immerse themselves around a subject. In fact, we found that 74% of listeners believe podcasts provide content not available elsewhere.

Investment in local journalism also presents a significant opportunity for marketers looking to reach local audiences at a national scale. We found that 38% of local news site visitors do not visit any national news sites. This means a large audience is not being reached by brands who only advertise on national news properties.

The study also found that a localized version of an ad (i.e. creative that included the name of the city) in a locally relevant environment performs significantly better compared to a non-localized creative on a national news site. In fact, almost every brand metric we measured was significantly higher among those who viewed this localized experience compared to viewers of a national news site. There’s a real opportunity there for brands to reach audiences and support local media. 

DC: Brand safety has been top-of-mind for brands long before the woes of 2020; how do you see advertisers navigate this shift from brand safety to suitability?

EW: News around the pandemic, the much-needed rise of awareness around systemic racism and climate change have caused the definition for what is considered “brand safe” to evolve along with our current reality. Early on, brands cautiously steered clear from any association with news and stories around the pandemic. We also saw brand safety go past its intended solution when ads were blocked on the home pages of Vox, The New York Times, and The Wall Street Journal around coronavirus content.

We are also seeing a shift in advertisers reassessing how their actions and their marketing budgets reflect their values as a company. More than ever, employees and customers are holding companies accountable for following through on the values they are communicating to the world. Every company needs to take into account how they are allocating their resources, whether its advertising budgets or team resources. 

To reach a place where brands feel safer spending on the open web, part of the solution will be for publishers, like Vox Media, to build opportunities for advertisers to align themselves with quality, trusted content. Publishers should be focused on solutions where brands aren’t being forced to sacrifice quality or brand safety for scale.

Another part will be to help our partners understand how and when our audiences want to hear from brands. In fact, this year we learned 86% of our audience strongly believes that making great products is no longer enough. Brands also need to make society better.

I believe that, in the last decade, we celebrated the entertainment and engagement of the feed. The next will be more about the understanding, activation, and change from the stories we report and tell each other.

We must recalibrate what brand safety looks like in this new context.

DC: What do we need to get done in what’s left of 2020? And what do we prioritize in early 2021 to ensure that we are moving the industry forward?

EW: It’s time to redefine the concept of contextual targeting and how we use first party data. Vox Media has always believed that the context and engagement of content can be a strong signal when it comes to audience targeting. This is a key part of driving the industry forward. On the data and audience privacy side, 2021 will have wide implications of how we use data when engaging our consumers.   

When quality content is matched with people’s passions and interests, it creates a much richer picture of who the audience is, why they are there and what motivates them. When we do this right, we no longer base contextual targeting on just the individual, an individual action, or an individual piece of content, but on what our platforms deliver for the audience holistically. It changes the retroactive perspective of targeting and makes context targeting future-facing.

Compared to behavioral targeting, we also found contextual ads are also more inclusive. We recently worked with a client recently to reach Small Business owners across the U.S. We found that with personalized behavioral ad targeting, only 27% of the impressions reached women. But when we optimized with contextual targeting, 40% of the impressions reached women. What percentage of small business owners in the U.S. are women? 38%.

DC: Our industry values scale, clicks, views, but what about impact, connections, and loyalty? Can you talk to the sweet spot of setting a strategy that enables you to find audiences and earn their attention?

EW: We prioritize perspective, context, and understanding over “attention.”

Our networks have made strong impact, connections and built loyalty with audiences across a number of platforms, covering nearly every topic. We’ve put a focus on growing our consumer revenue lines of business, across subscriptions and commerce. And we’ve seen New York Magazine and The Strategist have record months this year and Vox launched a successful contributions program. These are all built on audience loyalty and trust.

Industry-Research | Revenue

How to combat ad fraud spikes during the holiday season

The holiday shopping season was once a time of packed stores and crowded gallerias. These days, people are much more likely to stay home and do their shopping from the comfort of their couches. In particular, IAS found that this year, nearly all holiday shopping will be online, specifically on ecommerce and retail sites. So, while audiences watch nostalgic holiday movies, they’ll also be on their phones researching gifts to purchase for their loved ones. 

Unfortunately, consumers aren’t the only ones online — fraudsters also have their sights set on holiday traffic. Invalid traffic (IVT), which includes malicious fraud as well as general non-human activity, has the potential to steal valuable impressions. Since it looks like Cyber Monday will become Cyber Season, publishers should optimize their inventory to both support marketers and thwart fraudsters. 

Unwrapping holiday ad fraud

Shopping online offers a convenience that brick and mortar stores lack: information. In their search for the perfect gift, IAS found that consumers turn to search engines, review sites, and online advertisements. Consumers look to advertisements for guidance, and are most interested in ads they see on well-known and respected sites. IAS research shows that retail sites are especially prone to fraud, witnessing spikes around popular shopping dates like Cyber Monday.

At the same time, holiday season campaigns tend to be short and sweet, only meant to appear in consumers’ feeds for a few months. Longer campaigns give advertisers more time to review and optimize campaign performance. However, during this time, advertisers rely on premium inventory to achieve the ambitious KPIs associated with holiday campaigns. This puts additional pressure on digital publishers to optimize their inventory to minimize risk and maximize performance.

Putting fraudsters on the naughty list

A recent survey of U.S. consumers found that 51% of respondents plan to start their holiday shopping earlier this year. To mitigate fraudulent activity, publishers should also prepare early by optimizing their inventory. Bots can be given instructions to visit premium sites, pick up desirable cookies, and then visit fraudulent sites to monetize. In order to protect the value of their inventory, here are some key reminders for publishers looking to prepare for the holiday season. 

Make a list and check it twice 

✓ Figure out where site traffic originates 

  • The first step in identifying fraud is recognizing where traffic originates. For example, traffic that is sourced from a supplier has a higher possibility of attracting fraudulent bot traffic. Suitable ad environments are powerful, and transparency helps to build a strong relationship between publisher and advertiser. 

✓ Confirm how visitors are attracted

  • If traffic is sourced, there is a higher possibility of fraudulent bot activity. If most traffic comes from data centers, rather than residential or corporate networks, publishers should confirm that there are no software tools being run in those data centers that hit their website. Running tools that drive traffic may result in invalid traffic per industry group standards.

✓ Not all invalid traffic is malicious

  • Some cybersecurity, testing, and analytics solutions employ methods that can trigger fraud detection models from ad verification vendors. For example, some bots are designed to crawl the internet and gather information or generate simulations. Publishers should work with their ad verification vendors to further analyze their inventory and consider adding known data center IPs to an exclusion list. 

Happy holidays

In order to protect the value of their inventory, the publisher needs to analyze traffic patterns and optimize their content appropriately. 

In conclusion, the web is rife with invalid traffic. Some traffic — consumers, crawlers, etc — is such a helpful gift to marketers that it should with a bow. However, there’s a great deal of malicious invalid traffic, the lumps of coal in the industry’s stockings. Such activity on publisher pages can threaten the trusted relationship you’ve built with your advertising partners and cost you real dollars. 

The holiday shopping season is right around the corner, and safe inventory is the best gift to give to your partners. If you’ve detected invalid traffic on your site, then it’s likely that your advertiser partners have too. No need to ring the alarm just yet though. Being proactive and well-informed can go a long way toward ensuring that you and your advertisers present a unified front against fraud.

Industry-Research | Revenue

Publishers show digital growth amidst pandemic closures and consolidations

Digital subscriptions have helped shape a stronger business for publishers. FIPP’s latest Global Digital Subscriptions Snapshot (Q3 2020) shows that subscriptions are serving to support publishers during the pandemic. In fact, research by Press Gazette reports that during the Covid-19 crisis the largest newspaper groups in the US and UK gained more than one million new digital subscriptions. Not only are large publishers faring well but smaller, regional and specialist brands are also showing record subscriptions.

Despite positive performances in digital subscriptions, Covid-19 brings with it challenges to the industry. Zenith Media expects a 9% decline in internet ad spend this year. The agency estimates a 6% recovery in 2021, driven by the rescheduled Tokyo Olympics.

On a global front, the middle east and Africa will be hardest hit with a 20% decline in advertising revenue. Western Europe anticipates a 15% decline and Latin American a 13% decline in ad spend. The Asia Pacific, Central and Eastern Europe markets are estimated to decline by 8%, respectively. North America expects to register the smallest decline (7%) due to the large spend on political advertising this year.

FIPP Q3 findings:                                            

News publishers’ subscription growth

  • The Athletic reports 1 million subscribers as of September 2020. Unfortunately, with only a few new subscribers in Q1 2020 and cancellation of live sporting events, the company laid off approximately 8% of its staff. In addition, there were pay cuts across the company to offset expenses.
  • Caixin Media in Beijing grew subscriptions by 70%, adding 210,000 new subscribers for a total of 510,000 this year. It’s the first media company in China to place all of its content behind a hard paywall.
  • Dow Jones reports that digital revenue now accounts for 71% of total revenue, up from 63% compared to the same time period last year. Total subscriptions, across print and digital products, is at 3.8 million, driven by a 28% increase in digital subscriptions. Interestingly, 2.2 million of the Wall Street Journal’s 3 million subscriptions are digital-only. Across the entire Dow Jones group, digital subscriptions account for 67% of subscription revenues.
  • Gannett is centering their business around digital transformation. To date they are close to one million paid digital subscribers.
  • The New York Times’s added 669,000 new digital subscriptions in 2Q 2020 for a total 5.7 million digital subscriber. In fact, for the first time ever, digital revenue now exceeds its print revenue. Overall, the company’s operating profit of $52.1 million is down 6.2% compared to same time period one year ago.

Magazine closures

  • South Africa magazine closures:
    • Associated Media – company closure
    • Caxton – selling off 80 titles
    • Media 24 – closed 2 of 5 titles
  • UK magazine closures:
    • Immediate Media – closed 11 titles
    • Bauer Media UK – closed 10 titles
    • Broadly – exited New Zealand, closed 8 titles and consolidated with Australian Mercury Capital
    • PLC – closed 6 titles
    • T1 media was acquired by Future

Streaming growth

  • Netflix consistently delivers content with new productions and licensing deals to the consumer market. As of Q2 2020, there are a 193 million subscribers globally.
  • Amazon Prime Video, part of Amazon Prime, is very successful in the SVOD market. Subscribers reached 150 million globally.  The company does not break out Prime Video from Amazon Prime. The company does not provide details on active users of Prime Video. However, the Kantar Entertainment on Demand Report offers a third-party analysis SVOD users. The Kantar Q2 2020 analysis shows that Amazon Prime Video subscriptions account for 23% of all SVOD subscriptions. That marks a 14% increase from the prior quarter. 
  • China’s merger discussions between Tencent Holdings and iQIYI could establish the world’s largest streaming service with more than 231 million paying subscribers.
  • Disney+ is exceeding all expectation with currently has more than 60.5 million subscribers.
  • Apple TV+ claims 10 million subscribers. However, many subscribers are part of a 1-year free trial offer because they are users of the hardware. Further, Bloomberg estimates that about half of Apple TV+ subscribers never used the service.

The coronavirus’ impact on the advertising industry further strained publisher revenues and forced several to close their doors and others to consolidate. The pandemic also showcased the consumers’ need for trusted news and entertainment content. This need feeds into the relationship of publisher and consumer. Its why consumers value the content and are willing to pay for it.

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