outside

‘Perk Benefits’ and ‘Hyper-Personalized’ Strategy Give Subscriptions a Boost

Subscriptions are in vogue. Crain Communications CEO KC Crain said that, “For the first time, our audience revenue—print and digital subscriptions—in 2021 will be greater than our print advertising revenue.” And Financial Times chief executive John Ridding said recently that FT’s digital content revenues are now bigger than all of its other revenue streams combined.

“I think you’re going to see a lot more businesses that are what I would call fully integrated within their category – [i.e.] they bring everything from commerce to utility to experience to content together in a way that is hyper-personalized,” said Robin Thurston, CEO of Outside, one of America’s largest digital journalism subscription businesses, in an article in UK’s PressGazette last week.

Outside announced the launch of Outside+, a subscription that gives customers access to online editorial content across all of their websites—including titles such as Outside, SKI, Yoga Journal and Women’s Running—plus other benefits (pictured above). Membership is $99 annually.

Looking at the strategy for Outside+, some elements jump out—numbers 1-3 below—that could help B2B publishers attract and retain subscribers. Numbers 4-7 are other vital subscription strategies.

Add perks that either don’t cost you much or you couldn’t sell for much. If we learned anything from 2020, it’s that virtual events are hard to charge much for. But they can still sound impressive. A subscription for Outside+ includes Zoom Q&A sessions with Olympians, “access to world-renowned film tours [and] behind-the-scenes coverage on world events like the Tour de France,” usage of their GPS software, training plans and discounts on gear and apparel. Although Thurston talks about the “experience” factor—“Even Disney now is adding perk benefits to Disney+ because they know you have to integrate the experience layer with the content layer”—they’re not including access to any in-person events.

Make it simple. With Outside+, Thurston wants to create “one unified platform. We have a single sign-on—you’re creating an Outside account, you can use that in every place on the platform.” I think it’s The Washington Post that will let you in with a special click if you forget your password. I’m always appreciative of that.

Charge by the year. Piano’s recently published Subscription Performance Benchmark Report found that 74% of annual subscribers remain loyal to the website after one year, vs. 46% of readers who pay monthly. “Historically, around two-thirds of new subscriptions acquired during any given month on Piano’s platform have been monthly,” said the report. “However, because annual subscriptions retain so much better with higher lifetime value, there is an obvious strategic rationale for encouraging annual commitments.” There’s less room for error with annual billing.

Onboard. Onboard. Onboard. Adding more benefits is all good and well, but it only amplifies the need for strong onboarding. “If subscribers don’t engage early, they often cancel quickly, or become a doomed ‘sleeper’ and stop visiting the site, even if they’re still subscribed,” the Piano report said. “While a sleeper might take many months to get around to cancelling, about half of them on annual subscriptions and two-thirds on monthly subscriptions are gone within a year of going inactive.” Keys to successful onboarding include: smooth log-ins, a clear website, personalization (find out their interests and preferences early) and usage reports.

Empower your journalists. Last year the Milwaukee Journal Sentinel put some responsibilities for getting subscribers on their reporters. It paid off. Rachel Piper, digital news director, said that leaders there “asked our individual journalists to be ambassadors for digital subscriptions on social media. Over time, [they] built a strong sense of ownership. Advocating for the [our] brand and asking people to subscribe no longer seems like the responsibility of someone else in a different department. And when these reporters ask their followers and fans to subscribe, it has a different power than our other asks and offers.” The Journal Sentinel even ran subscription contests for their newsrooms with prizes ranging from cash to ice cream socials. Dozens of new subscriptions were tracked to individual pleas from reporters.

Emphasize the content. Consultant Jim Sinkinson has always preached that subscribers need to be reminded and led to the great content you do sometimes. It was similar at the Journal Sentinel. “When encouraging those in the newsroom to share subscription callouts, we’ve made sure to tie it to our journalists’ excellent, important work,” Piper said. “Rather than telling reporters just to hawk the cheapest deal, we’ve asked reporters to share journalism they are proud of… and note that people can ‘support work like this by subscribing to the Journal Sentinel at jsonline.com/deal.'” Here was a typical tweet: “By the way, if you’re happy that the @journalsentinel has a reporter here covering this floor debate, another in the Senate, and two covering tonight’s State of the State, please subscribe!”

Eschew free trials. The Piano report also noted that many publishers started to give up on free trials through 2020, going from 17% to 5%. “This indicates that publishers are getting more confident in their pricing and smarter about promotional strategies, since free trials often don’t make financial sense when carefully analyzed… Paid trials, even at a relatively low price like $1, retain 82.1% when the trial period is over,” 33% better than free trials.

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Crain Communications Emerges from the Pandemic Focused on Subscriptions and On the Hunt for M&A

KC Crain

Last November, KC Crain became president and CEO of Crain Communications, representing the third generation of leadership at the 105-year-old, family-owned publisher, whose brands include Advertising Age, Crain’s Chicago Business and Modern Healthcare.

AMPLIFY caught up with KC to talk about his vision for the company, such as changing revenue streams (including digital and print subscriptions, which for the first time will exceed print advertising revenue for Crain this year) and a desire to expand into new markets through acquisition.

AMPLIFY: KC, how has Crain responded to the crisis over the past year and how has that positioned the company as we start to come out of the pandemic?

KC Crain: Like everybody else, the biggest fire was our events business. In a typical year we do about 200 events across all our brands and as it became a reality that we would be canceling all our events for the year, we made a massive pivot. We did over 900 virtual events over the last year and kept about half of our overall events revenue but the margins increased significantly. On the digital side, we had to get smarter about the analytics around our audiences and we paid a lot of attention to our audience strategy. We saw some nice increases in paid digital audience.

AMPLIFY: You’ve mentioned that audience strategy is the key to Crain’s future—can you expand?

KC: When we look at this business, it’s always been based on audience—your events audience, your digital audience, your print audience. We’re trying to get as smart as we can about who is engaging with our brands and on what platforms. We doubled down on our journalism. After 105 years, journalism is integral to our strategy, but now more than ever, it’s fundamental. If you have good journalism that people can’t get anywhere else, then they’re going to have to subscribe.  We’ve put in place a great team, we got smart about the analytics around our audience and their consumption habits and we’ve seen a huge lift.

AMPLIFY: As part of Crain’s prioritization on audience, you made a major hire in Veebha Mehta, who ran audience and marketing at Financial Times, Pearson and Cengage. What is her role with Crain?

KC: We had to look at how we were marketing to consumers and for the first time we have a global CMO in Veebha, whose main focus is our audiences. She’s a great hire and put together job functions we haven’t had in the company before.

AMPLIFY: What’s the revenue mix today for Crain?

KC: For the first time, our audience revenue—print and digital subscriptions—in 2021 will be greater than our print advertising revenue. Our revenue mix really changed from trade print advertising and event revenue to digital and audience revenue and the margins were significantly better. We saw a huge improvement in our first quarter numbers and I think we’ll see that trend continue. We’re up 50 percent year-over-year in our digital business coming out of the pandemic. As we’re focused on audience, digital, data, and custom, those business lines will continue to grow.

AMPLIFY: How does Crain look at the relationship between media and events as events start to come back?

KC: If people didn’t figure out a way to enhance their digital business during the pandemic, then shame on them. The pandemic 100 percent accelerated our digital strategy, namely in the data and analytics around our audiences, which we will continue to push in 2021. Coming out of 2020, nobody knew what 2021 would be like. We originally budgeted for zero in-person events but we will have our first in-person event in July and this fall we will have in-person events all over the world. There will be different aspects to our events such as live streaming and I think we will see a hybrid model for a while yet. We have no interest in running 900 virtual events again; it’s not sustainable. But as we move forward, we will continue to see virtual events where the topic and the market make sense.

AMPLIFY: KC, you are the third generation of leadership for Crain. What’s your vision for the company?

KC: We’ve got the business to where we are 100 percent focused on growth and we’re looking at verticals outside our traditional businesses. When you think about Crain, you might think about healthcare, automotive, marketing and manufacturing, our city brands. We made an acquisition in 2019 in the genomics space—life sciences are a new market for us. You’re going to see us make acquisitions that are adjacencies to our current business but then we will also get pretty focused on growth markets as well. We are in the market and looking at deals weekly. This is an exciting time; there’s a ton of opportunity in our space.

AMPLIFY: What are you excited about?

KC: Our audience strategy. I’m so fired up. We’re a 105-year-old company and we’ve never been so analytical. We’ve got great team members doing things to grow the business and for the first time in a while, we’re having fun. We’ve put ourselves in position to take advantage of these market opportunities out there. We’ve got wonderful traditional brands, great legacy markets and we’re looking to grow into new markets.

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Monthly Subscriptions and Dynamic Models Can Add to Your Reader Base

SIIA member Piano came up in the SIPA Discussion Forum today. Coincidentally, their director of research, Patrick Appel, just put out some interesting information on subscriptions and renewals at a Readers First Meetup sponsored by the International News Media Association.

Monthly subscriptions have become more popular in the industry of late. And last year saw the increased popularity of billing every four weeks instead of monthly (20% of news publishers are doing this now vs. 3% in 2018).

Appel noted that “longer-term subscriptions tend to be higher value just because there’s such high churn at the beginning of monthly, short-term subscription.” But he added that publishers shouldn’t ignore monthly subscribers entirely: “There is a conversion rate, certainly, by offering monthly as an option … but after a subscription has been around for a year, you’re seeing a majority of annual.”

Here are more notes on subscriptions from Appel and others:

Focus on onboarding. For monthly subscriptions, Appel said that “really you’re talking about the first three months, the first six months, as this risk period. Either [the subscriber] bought it with the intent to churn—we’ve seen that before—or it hasn’t been effectively communicated about the value. Or maybe they bought it and were thinking about it and that first month, they didn’t see the value.” So when looking at monthly subscriptions, Appel said the focus is really on that onboarding campaign.

Think about the balance between short- and long-term commitments, as well as the pricing strategy between those two. “It’s really critical,” Appel said. “When we think about optimizing ultimately for revenue, we want to think both about what is the increase on acquisition, and what is the hit on retention.”

Look to other models besides metered paywalls. “I predict a shift in how U.S. publishers implement their paywalls, with many beginning to operate a freemium-style model (already common in Europe) and others beginning to experiment with dynamic models that ask different readers to pay at different points in their journey,” said Josh Schwartz, CTO of Chartbeat, on NiemanLab. “…While meters assume that each story’s contribution toward a user’s eventual subscription is in some sense the same, freemium and dynamic models let us think about how each story can best contribute to the business—bringing in new readers, driving engagement, driving subscriptions, or deepening engagement among subscribers.

For a price increase, do testing and look at data. “The best thing a publisher can do when they are thinking about raising prices is to start moving away from a gut feeling approach, where you ‘think’ you should move prices, and at least start with some data and see what that tells you,” said Dustin Tetley from a consulting group called Mather. “And test as much as possible before moving forward or throughout the price increase process. We find there’s really a lot you can learn from each price increase.”

And increase engagement. Customers who are more engaged tend to accept price increases more readily than those that are not engaged, Tetley reported. Engagement also has a big effect on overall stop rate and retention. “When you see a group that had no digital usage in the month prior to the price increase, they stopped at a much higher rate than customers that were highly engaged,” Tetley said. He added that new customers won’t like price increases so build loyalty and tenure.

Learn to tell the story of your company: who you are, what your product is, and why it is so important right now, wrote Eduardo Suarez in a new Reuters study. This appeal should be crafted carefully. It must take into account the mission of your organization as well as its ownership and its history. “Few news brands have done this more systematically than the Guardian. The messages at the bottom of its articles are long, conversational, and customized by topic and geography. They are designed to answer frequent questions from their readers before asking them to contribute.”