August 10, 2021 | Authored by: Vivian Xie
Create premium digital experiences consumers will pay for
Publishers have experimented with paid-for digital content since the 1990s. In the time since, they have gained valuable experience, which has given them a much clearer view of what does and doesn’t drive engagement. These days, organizations of all types are laser focused on digital. For media companies, that increasingly takes the form of direct-to-consumer offerings such as subscriptions.
However, paywalls are no longer one size fits all. In fact, the models, gating, messaging and more have all become increasingly sophisticated. That said, everyone is trying to figure out the optimal model. Which new products and services should publishers explore? What are the barriers and challenges they face to effectively monetize their unique digital content offering?
Here are some key considerations that will help media companies figure out what will work best for their content and consumers.
Understanding consumer consumption
Content should be optimized for each intended channel. Unfortunately, even now, print content is too often repurposed for digital — an entirely separate platform with different demographics. The same goes for video, social, and more.
Simple redistribution doesn’t constitute a digital strategy. Instead, a digital approach and mindset is needed to create content optimized for individual digital channels. One of the most important questions to ask, then, is: “How do people consume content online?”
The content or service is, of course, central to the success of digital as a channel, but so too is the experience. Publishers need to make it their business to know when, where, and how customers consume online content and services. And they need to understand, and optimize, that specific experience. Without platform investment and the right levels of quality assurance and testing, consumers may find your digital product lacking. Needless to say, they won’t be likely to pay for it, and certainly to keep paying for it when their subscription is up for renewal.
Three hurdles hindering transformation
To figure out — and stay on top of — emerging challenges and opportunities, it is critical that media organizations transform their approach to focus on customer experience. Vindicia’s data shows the top three areas where many subscription approaches fail:
1. Insufficient digitization and payments support
For some publishers, adopting new digital models and diversifying into a range of additional paid-for digital products and services presents multiple challenges. High on the list is a lack of relevant skills and capabilities. In fact, App Annie discovered that app store spend via mobile and tablet has reached 20% year-over-year growth. This points to the necessity for in-app purchases and payments to be available and ready, enabling consumption. Your payment systems must be easy to use, flexible, and up to date.
2. Underrepresentation of customer-driven insights
Product managers and marketers are often in the dark about what audiences want. That will severely limit their ability to produce and promote successful new products and services. A lack of customer insights is the direct cause. This results in an under-representation of customer-driven offerings and features that a subscription showcases. Equip yourself to monitor and respond to customer usage and behavior quickly and effectively.
3. Lack of data expertise and scalability
Mather Economics recently found that 50% of digital newspaper subscriptions churn after four months. The primary reason? A lack of data analytics expertise and scalability. This same reason is the cause of why converting free readers into subscribers proves challenging in the absence of data analytics expertise, which urges publishers to undertake extensive A/B testing that hinders scalability. There are tried and true methods proven to generate more conversions in the publishing space. Whether the churn type is active or passive, publishing subscriptions need to pay close attention to churn indicators. For active churn, an indicator is low usage or usage that has tapered down. For passive churn, an indicator is chronic or semi-regular late or bounced payments. The ability to view and merge customer and churn insights allows publishing subscriptions to nurture each subscriber’s experience and retain them longer.
The critical role of a digital-first strategy
McKinsey recently reported that many companies are creating a new role: chief digital officer (CDO). This role is charged with ensuring that the organization has a digital-first strategy and integrates it into every facet of their business. Their analysis of how companies with a high [McKinsey] Digital Quotient (DQ) operate, shows that “90% of top performers have fully integrated digital initiatives into their strategic-planning process.”
In fact, one publishing house in McKinsey’s study set a target of generating 50% of its revenue and profit from digital media within 10 years. With a full focus on digital, it accomplished that target in half the time. With the coordination between CDOs, content creators, and CEOs, there are specific ways to extract growth opportunities from transitioning to and effectively monetizing digital content.
The path is clear: Determine a digitalization and content distribution strategy that fits the demographics your subscription is targeting. Leverage customer and churn insights to create offerings and features. And look to data to manage churn at the individual subscriber level. Digital is a fast-moving business with a whole lot of upside. With an organizational and leadership strategy that keeps digital innovation at the forefront, you will be positioned to keep pace and reap the rewards.
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