Media Briefing: How publishers are working to improve their abilities to convert readers into subscribers

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The key hits:

• Gannett and Salon are seeking to extend the time non-subscribers spend on their sites.
• The Atlantic will test different subscriber acquisition tactics against 50% of its site traffic.
• The Daily Beast is focusing on reinforcing its subscriber funnel of “known users.”

Gannett, Salon, The Atlantic and The Daily Beast have all recognized that readers have become pickier about what they are willing to subscribe to, especially now that so many products and services are subscription-based businesses. So identifying the best candidates and speaking to them correctly is more important than ever when filling their funnels with prospective subscribers.

This is how the four news publishers are approaching their subscriptions businesses in 2022. 

Gannett wants to create a ‘stickier experience’ for readers 

Gannett sees on average 200 million readers across its digital sites every month and just crossed the 1.5 million subscriber mark in the third quarter last year, according to the company’s CMO Mayur Gupta. The conversion rate of existing Gannett readers becoming paid subscribers is less than 1%, which is below the industry average of 7% to 8%, he said. Closing that gap will be important for Gannett to reach its goal of 10 million subscribers by 2025.

To achieve that increase in conversion rate, Gupta said his team wants to “continue building a more sticky experience” that gets non-subscribed readers staying on its owned-and-operated websites longer by creating more landing pages for evergreen stories that don’t burn out with each new news cycle.

Currently, only a portion of Gannett’s local news sites are testing a metered paywall model. USA Today has a freemium model rather than a meter, which means it has a “​​massive amount of free content, which we think is our responsibility,” Gupta said. While a meter model will be tested across the local media group this year, he added that he doesn’t believe a one-size-fits-all approach will work for the 250 markets Gannett covers, so it will need to be optimized to each audience and the different archetypes of the varying markets over time. 

“A big focus within marketing is how do we create a destination where our users can come and discover these relevant topics which are timeless and tap into a particular vertical, like true crime or space. We want to make sure that we are able to drive discovery, awareness and reach within that audience,” Gupta said. These pages — some of which will be paywalled as premium content while others are open to all readers — will compile decades’ worth of stories that fall within each topic. 

“We are not necessarily expanding the top of the funnel, but [we are] talking to them differently about topics that are relevant to them in formats and ways that are more relevant to their behavior,” he said. 

Salon believes the key to a subscriber’s heart is through their stomach

As the news cycle slowed following the 2020 election and people had less reason to visit Salon daily, the political news publisher counted on its non-political content to help retain readers. Now it is eyeing the readers that content has captivated as an opportunity to convert them into subscribers.

In 2021, cooking content accounted for 20% of Salon’s page views, and 11% of returning visitors navigated to its main site after checking out Salon’s food content, according to Justin Wohl, chief revenue officer at Salon.

“We are wanting to increase loyalty so that people return to the site because from that, the secondary thing that we can do is begin to offer the people who come back a subscription. If they’ve started to express the investment of their own time in the brand, now they’ve become a candidate for our subscription offering,” said Wohl.

The Atlantic is entering testing season

After about two-and-a-half years of testing what makes for a successful paywall, The Atlantic’s CEO Nick Thompson said that there are a lot of commonly accepted truths about what works well in order to convert readers into subscribers. One of those things is allowing readers to check out with PayPal. Another is allowing two free articles per month before putting up a paywall. And giving people a free trial upon signing up for a subscription makes more sense than not offering one. 

“That means that we know we’re in a better position now, or we have a better menu offering than we did in October. But what we don’t know is if there may be even a better one out there,” Thompson said. 

To figure that out, he has dubbed this spring testing season for different formulations of the metered paywall, free trials, and pricing using five different hypotheses. Altogether, 50% of The Atlantic’s site traffic will be involved in a test, with each hypothesis being allotted 10% of the traffic to work with, he said. Recirculating content from different verticals and how to best guess what readers will click on is also part of that testing strategy.

“We know that people tend to subscribe when they read stories in multiple verticals. We’ve tested recirculation algorithms that are more likely to send people to other verticals and so far, none of those tests have been very successful. They’ve all kind of had neutral results. But we are testing different algorithms and our recirculation units, in the hopes that we can find the right mix that makes people more likely to subscribe,” Thompson said.

The Daily Beast wants to know everything about prospective subscribers

The Daily Beast’s CRO Mia Libby said this year her team is working to “create a funnel into subscription” by prioritizing what it’s calling known users. These are readers who have shared some amount of first-person data with the publisher — either by signing up for a newsletter or desktop notifications or by downloading and using its app — but have yet to pay for a subscription.

Known users are valuable — The Beast earns on average 169% more revenue from known users than an unknown user, she said — because they spend significantly higher amounts of time interacting with the brands’ editorial products. Thus, they have a higher chance of being converted into a paid subscriber, though she did not share a figure for that conversion rate.  These readers are also more valuable from a first-party data perspective, having surrendered this amount of information about themselves in exchange for access to more content, Libby added. 

This year, The Daily Beast will invest in improving these products, including by launching a new newsletter this month. The publisher will also work to better understand how to convert unknown users into known users through the three aforementioned known products as well as through a registration wall on its site. — Kayleigh Barber

What we’ve heard

“I like seller-defined audiences and all of these different things, but really the ID belongs where you have to log in.”

— Insider svp of programmatic data and strategy Jana Meron

3 questions with Facebook Bulletin writer Rick Hutzell

Rick Hutzell is among the newest converts of journalists leaving their newsrooms to go independent. The former editor of Capital Gazette — a local newspaper covering the Annapolis, Maryland, area that experienced a mass shooting in its newsroom in 2018 — Hutzell has joined Facebook’s Substack-rivaling newsletter program Bulletin.

Last June Hutzell took a buyout after nearly 34 years at the newspaper, and “then Facebook, Meta, came calling,” he said. Specifically, Samantha Bennet — strategic partner manager for news at Facebook and a University of Maryland graduate — contacted Hutzell with an intriguing offer to launch his own publication within the Facebook Bulletin program.

“The opportunity to be a small business owner — if you’ve covered small businesses [as Hutzell has] — is engaging. And I can do it on my terms, pretty much, and the product is mine. I’m not stamping widgets, for anyone who remembers Economics 101. I’m basically putting out the same kind of thinking that I’ve done for the last several years, but now it’s my product,” Hutzell said of his newsletter “Meanwhile, in Annapolis,” which debuted on Jan. 14.

While Hutzell declined to share how many subscribers he has gained to date, he spoke about why he decided to join Facebook Bulletin and how he settled upon what to charge subscribers to read his newsletter.

The interview has been edited for length and clarity. — Tim Peterson

Why did you decide to join Facebook Bulletin as opposed to another route like Substack?

The reach that Facebook, that Meta, has is just exponentially larger. Obviously, I’m not in everybody’s Facebook news feed, but it’s undeniable that Facebook is most people’s phones. Working with Facebook is an opportunity to work with a company that has almost universal reach. 

I don’t have an editor at Facebook. They’re not looking over my copy. They’re as surprised as anyone when I write something. But I think they are being a little selective in who they’re picking. I think that’s a good trend.

One of the big pros for going with Facebook is that universal reach. Facebook also has a spotty track record with media companies and can be somewhat fickle when it comes to how it works with and to what extent it supports publishers. Did you seek out any assurances from Facebook? Because we’re talking about your livelihood here.

I don’t want to talk about my agreement with them, just because that’s personal finance stuff. But I will say they are supporting me. That’s both financially; they are paying me. And also professionally, they are offering me support in how to do this on Facebook or how to do that, what are good strategies. They’ve got some good advice on how to do things, which I’m perfectly free to ignore. 

You are charging $4.99 for a monthly subscription to your newsletter and $49.99 for an annual subscription. How did you decide upon the prices for your newsletter and having both a monthly option and an annual option?

It’s set up so that you go through and you have to pick all these options and set these parameters in the [publishing] platform that Meta provides. I had set [the subscription price] a little lower, and it offered a recommendation, and I followed it. It was not that much different. I think it was a buck difference. But I mean, I don’t really know what the value of this is to readers. Five bucks a month, is that even one cup of coffee now? Fifty bucks — I just filled up my gas tank the other day, and it was 60 bucks. 

That’s not to say fifty bucks is not important to someone. I’m not making light of the commitment of someone to subscribe to what I’m doing. But we are in a subscription world right now where you pay a fee for something you want to consume. 

The onus on proving the worth of what I’m charging is entirely on me. I have to keep people’s interest. I have to make them feel they’re getting value out of what I’m providing them. Same thing with any small business.

Numbers to know

$200 million: How much money cryptocurrency exchange Binance is investing for partial ownership of Forbes ahead of the publisher’s planned SPAC IPO.

1 million: How many digital-only subscribers the Financial Times expects to have by the end of February.

-30%: Percentage decline in print circulations for the top 25 U.S. newspapers since late 2019.

41%: Percentage share of publishers surveyed by Digiday that said neither blockchain, cryptocurrencies, the metaverse, NFTs nor virtual reality would have the biggest impact on their businesses over the next few years.

56%: Percentage share of U.S. adults, surveyed by Pew Research Center, who said they never get news from podcasts.

What we’ve covered

How publishers are using Black History Month to cover the past that isn’t being taught in schools:

• Blavity, The Root and The Washington Post are responding to the challenges to critical race theory being taught in schools.
• The publishers are trying to ensure history is documented accurately.

Read more about publishers’ Black History Month coverage here.

The Trade Desk takes aim at Google’s Open Bidding with OpenPath launch:

• OpenPath will provide advertisers with direct access to publishers’ ad inventory.
• Condé Nast, Hearst and The Washington Post are among the publishers that have signed on to sell their inventory through OpenPath.

Read more about The Trade Desk’s OpenPath here.

How ‘Close Up’ host Kelley Carter developed into a multi-hyphenate entertainment journalist:

• Beyond text-based reporting, Carter hosts podcasts, is an Emmy-winning video journalist and co-runs a production company that is developing a TV show for Showtime.
• Her experience at print newspapers helped to familiarize her with the business side of journalism.

Listen to the latest Digiday Podcast episode here.

Instagram’s video ad-revenue sharing program has underwhelmed participating publishers:

• Instagram started testing sharing revenue with publishers for long-form videos last summer.
• Two publishers said they are seeing CPMs around $6, which is a third to half of their YouTube and Facebook ad rates.

Read more about Instagram here.

The pragmatic publisher’s case for privacy-first ads:

• During the Interactive Advertising Bureau’s Annual Leadership Meetings, executives from Insider and News Corp. spoke about the privacy considerations amid the shift away from the third-party cookie.
• Seller-defined audiences was a particular focal point that has excited publishers.

Read more about publishers’ privacy considerations here.

What we’re reading

Google’s ID lifeline:
Google is rolling out a program for publishers to use cookie-replacing IDs to share data with ad tech companies after the third-party cookie is disabled, according to Ad Age.

The Washington Post’s non-political coverage:
The Washington Post will add more than 70 newsroom positions this year to boost its coverage of climate, health and wellness and technology, according to The Wall Street Journal.

Media employees’ DE&I assessments:
University of Minnesota, Twin Cities journalism professor Danielle K. Brown spoke with DE&I manager as well as journalists working at media companies for their thoughts on the work being done and the progress being made. Tl;dr progress is being made, but there’s so much more work to be done.

Slate’s identity crisis:
Slate has lost several top editorial employees since the start of this year as the publication tries to sort out its editorial vision, according to The New York Times.

TikTok’s content moderation challenge:
TikTok may be the new Facebook and the next YouTube, and it is facing many of the same content moderation challenges that have dogged the predominant digital platforms in recent years, according to The Information.