A Publisher’s Paywall Strategy Is About More Than The Bottom Line | AdExchanger
While it has been part of a successful core strategy for a few major publishers for some time, the publisher paywall became a hot topic for the wider digital media sector last year, and the trend will most likely continue in 2018.
Unfortunately, this conversation has been mostly triggered by a deep decline in advertising revenue, making it reactive rather than a proactive change of strategy.
The view that adding a paywall to request payment in exchange for user access to content as simply a new revenue opportunity would be misleading and dangerous.
Before publishers can decide which paywall model makes the most sense for their business, they must examine their own identity and audience. These factors are, in my opinion, the root causes of the bumpy road that many publishers find themselves traveling.
On the philosophical side, many publishers have lost their self-awareness and identity, leading to some chasing different objectives in many directions that are, at times, conflicting and short-term. This has caused some publishers to lose sight of their value and position in our society and media ecosystem.
Identity, Identity, Identity
Another issue is operational: Editorial, technology, marketing, commercial and data teams often act separately, creating consequences for strategic implementation and outcomes.
To determine the potential of a paywall model, publishers must consider their identity and audience from every side of the business because it is not, counterintuitively, just a commercial issue.
What is behind the successful pay models of The New York Times, The Washington Post, Financial Times, The Economist, Wall Street Journal and The Times (of London), among a few others? They have a strong identity on top of a solid strategy to generate a close bond with their audience, which has been refined over the years through trial and error and, more importantly, significant investments.
No Copy And Paste
These enormous efforts require resources, ideas and a long-term mindset. But you also need guts for leading instead of following, creating instead of copying, and the confidence to put your neck on the line. No amount of money can buy that.
Identity is a mix of values, reputation, perception and uniqueness of a publisher’s value proposition. It determines the type of audience, the strength of its connection with the media brand and the way in which the two will engage; the monetization opportunities may be completely different from one media brand to another, even from title to title within the same publisher portfolio.
From 2013–2016, I worked for a large UK media company that operated two major titles behind a paywall. A couple of years later, a tabloid in the portfolio moved to a free model.
Same publisher, two titles with different outcomes from their paywall model. One operated successfully behind a paywall with a positive financial outlook and profitability for the first time in years, while the second reverted to an entirely free model.
The main reasons for the difference in outcomes? Different content strategies and audiences.
On one side, the first title moved decisively away from breaking news, which was widely available from plenty of reputable sources, such as the BBC, and it focused on commentaries, in-depth analyses and resources around politics, business, finance, culture, travel and sports, among other topics.
The content of the tabloid is of a different nature and more easily published, repurposed or shared by competitors within the tabloid space, often within minutes.
There were also general differences in the type of audiences of the two publications, the strength of their connection to each brand’s core content and the willingness to subscribe if free alternatives are available.
At the same time the tabloid’s audience, which didn’t embrace the paywall, was instead heavily engaged, also from a monetization perspective, with the tabloid’s brand extensions for gaming, travel and sports.
A winning strategy starts from understanding the audience and what they want. For example, still in the UK, The Guardian, whose mission has always been to maintain free access to its journalism, attracts more revenue from readers than from advertising today while still maintaining free access.
A Paywall Strategy Determines The Data Strategy
I am not making an analysis about the UK here. But these three different approaches show how identity and audience strongly influence the success of one business model versus another to help determine if a paywall is the right direction.
Sometimes it is about testing approaches and making mistakes, which in turn can represent learnings for the whole industry.
A paywall model also affects other aspects of a publisher’s strategy, including data. Operating behind a paywall increases knowledge about the user, such as data related to subscribers, content consumption and engagement with events, perks and promotions. It also enables a bot-free environment, stronger context and capabilities for a deterministic cross-device identity resolution.
But a paywall also means a much smaller audience, reduced ad inventory and some discrimination by buyers who prioritize quantity versus quality and look for reach at all costs.
A paywall does not represent incremental revenue but a radical shift of the business model.
For a publisher to have a successful pay-model strategy, it must include all parts of the company and have extensive knowledge of own audience.
Different audiences interact with pay models in different ways; what is successful with one audience in a certain context might not work with another.
Free content doesn’t mean that revenue is only generated by advertising; there needs to be a long-term strategy and companywide collaboration.
As advertising budgets increasingly move toward the triopoly of Google, Facebook and Amazon, publishers need to bring their core characteristics into the arena and move the fight where they are strongest.