4 Reader Revenue Tactics for Long-Term Sustainability
The decline in advertising revenue over the past few years has led many companies to reduce their investments in advertising across various sectors.1 This downward trend in ad revenue has affected major media companies, including Google, Paramount, Comcast, Disney, and Fox, resulting in significant year-over-year declines.
“With the decline in linear TV and digital search, ad revenues for the largest media companies were also off. The drop in digital search led Google’s ad revenue to decline for the first time on record. Meanwhile, Paramount, Comcast, Disney, and Fox also showed double-digital year-over-year percentage declines in ad revenue.”
- Aaron Barr, MarketingDive.com
Given these circumstances, exploring alternative revenue sources beyond advertisements is crucial. One of the most effective approaches is to generate income through reader engagement. Here are four key tactics, based on insights from more than 50 publishers worldwide, that can help media organizations sustain themselves in the long term.
1. Gain a Deep Understanding of Readers' Needs
Understanding readers' needs is essential for generating income and fostering customer loyalty. The simplest way to achieve this is by directly asking them for feedback. Surveys and interviews can be used to refine and improve the value proposition of a reader revenue business model.
Prominent publishers like BuzzFeed and The New Yorker have successfully used surveys to gather user opinions on marketing tactics and their benefits to readers. For instance, BuzzFeed conducted a poll that revealed widespread support for a subscription model. Interestingly, many voters did not expect any return for their support.
We can see what kind of topics are important to them. We do a lot of audience analysis with direct audience surveys to see how they feel about the stories and their connection with the news organization. We take all that data and advise news organizations on how to build products that will really deepen loyalty and better serve their readers. Rather than just posting random stories, how can we build products that will give readers what they need every day?
- Mary Walter Brown, CEO of News Revenue Hub.
By leveraging audience surveys, news organizations can gain insights into readers' preferences, analyze audience sentiment, and develop products that deepen loyalty and better serve their audience.
Here are some essential questions to ask readers to gather feedback on the reader revenue model:
- What type of content do you enjoy?
- Are you willing to pay for a subscription model?
- What value-added benefits do you expect?
- What are your opinions on our marketing and positioning tactics?
- How would you describe your experience as a user when visiting our site?
Tailoring these questions to address specific concerns is crucial for gathering valuable insights from readers.
2. Determine the Meter Strategy
Deciding how much content to provide for free is vital in generating revenue from readers. This can be compared to a meter that limits access to content.
There are different metering strategies to consider. One option is to place all content behind a paywall (hard meter), while another is to offer some content for free and reserve the rest behind a paywall (freemium). Finding the right combination is crucial to attract an initial audience and establish a relationship with them.
A newer paywall strategy involves automatic meter adjustments based on engagement data collected from the audience. Media organisations can manage content access while encouraging subscriptions by offering a lower paywall to active users who are more likely to subscribe and a higher paywall to occasional viewers.
To generate revenue and increase subscriptions, limiting the amount of free content provided to viewers is essential. Industry benchmarking playbooks suggest that the stop rate3 , the percentage of users encountering a paywall should be at least 6% for successful outcomes.4
Among the more than 500 news organizations analyzed, the fiftieth percentile of publishers stops only 1.8% of their readership with a paywall or meter.”
- Shorenstein Center and Lenfest Institute’s Digital Pay-Meter Playbook.
3. Implement Aggressive Introductory Offers
Many publishers adopt a growth-first, revenue-later strategy, and offering attractive discounts and flexible cancellation policies to first-time subscribers is one effective approach.
Successful publishing firms, such as the American Press Institute, have found that a compelling introductory offer can convert approximately 45% of the audience. People are drawn to great deals, so even if they encounter advertisements in various places, they may still subscribe to access premium content. Examples of aggressive introductory offers include $1 for three months or $1 per month for four months.
Customers who find value in the premium content during the initial period may continue subscribing even when the price increases afterwards. While this strategy may not yield substantial revenue during the promotional period, it can prove to customers the value of the content and establish strong relationships. Like the American Press Institute
4. Embrace Simplicity in Advertising
When employing aggressive advertising tactics, simplicity is key. Presenting and describing the offer most straightforwardly is crucial for capturing customers' attention. This can be achieved through clear and concise messaging.
For instance, presenting the cost as "$4 a month for a year" and "$48 for 365 days" conveys the same information, but customers may perceive the former as a better deal due to a clearer understanding of the savings. Offering a smaller amount can also be more appealing to customers.
This strategy applies to advertisements displayed in paywalls or email newsletters. Additionally, taglines play a significant role in attracting potential subscribers. Phrases like "Save 60% off" or "Get three months free" catch the eye and pique customer interest. Experimenting with wording and conducting A/B tests can help optimize the effectiveness of these ads.
Due to the challenging revenue landscape, media organizations must adopt different tactics to generate reader revenue and increase subscriptions. Understanding readers' preferences through surveys and interviews is a crucial step. Implementing a well-defined metering strategy and setting a stop rate above 6% are essential for successful revenue generation. Additionally, offering aggressive introductory deals and presenting them simply and attractively through advertising can further enhance subscription rates.
We have gained extensive experience working closely with media organizations such as The News Minute and Benzinga, providing comprehensive technical support and helping them implement effective business strategies to generate revenue. If you are a media organization seeking a technical partner to accompany you on your digital transformation journey, we are here to help. Our experienced consultants can collaborate with you to develop a tailored plan that aligns with your goals and objectives. Please contact us to schedule a meeting with our digital consultant.