• by Ray Schultz , Columnist, July 3, 2017

Publishers have long sought a way to monetize online content, and many have failed. But they have now found a solution: paywalls that block content until the person buys a premium subscription: One subscriber paying $10-a-month fee is equivalent to 12,000 paid views. 

But there’s a small problem: Nobody’s going to cough up money on a first visit to a site. So there are two solutions.

One is to offer a free email newsletter, and use that commitment to get people to the next level. The other is to personalize content needs, using machine learning, so a person who wants one article is treated differently from someone who reads 30.

That’s the sum total of a recent Webinar presentation by Keith Sibson, VP of product and marketing from PostUp, for the Data & Marketing Association. 

Sibson made a good point starting out: that the ad-driven media business model looks shaky. And publishers are facing 60% to 80% turnover. But getting them to buy a subscription is a step-by-step process.

Email is key, Sibson says, because with it, "if you can establish that direct relationship, you have a lifetime right to market and send content to that particular individual,” until they unsubscribe or disengage.

With email, you can work to graduate the user to different levels of engagement, Sibson continued. The New York Times has stated that email subscribers are twice as likely to convert to premium subscriptions.

Another benefit is that email is unique among channels. “You can send it any time you want, rather than having them come back to your site,” Sibson said. You know who they are when they visit, and unlike social media, you can control what you say, he added.

Email also allows the publisher to know who the readers are when they visit, and to monetize the subscription with advertising, he said.

Facebook is not a huge opportunity for publishers. It produces repeat visitors, but “they come to your site, see an article and go back to Facebook. They’re engaging with Facebook.”

So what role does an email newsletter play in the sales journey? 

The email list is at the top of the funnel. Building the list is more important that driving clickthroughs.

“A lot of publishers are spending the majority of time focusing on the clickthrough rate,” Sibson said. “But driving a 10% or 20% click-through increase is pretty tough to do.”

The answer? Increase your list size by 10% to 20%. Given the sheer volume, that’s the same as increasing your click-through rates by that amount, and it’s easier. 

“The tactics and approach to increasing your list are more understandable than nebulous things like content quality that might affect your click-through rate,” Sibson said. And building that list is the most important strategic element, he added.

As Sibson said in his slide deck: “Email list size is strategic because gains here cascade through the entire funnel, whereas other levels are constrained by performance of previous level.”

Sibson cautions, however, not to “confuse deliverability with inbox placement." What that really means is getting mail servers to accept email -- if it’s going into spam folder, you might as well have not sent it.”

That said, opens and clicks are important. Advertising is going to “pay out on impressions, so maximizing open rate helps you maximize your revenue,” Sibson noted.

Meanwhile, Sibson and his company use the term "content walls."

“The term paywall is very well understood, but it doesn’t have to be about money,” he said.  “It can be about registering or signing up for a newsletter. The strategy is one of limiting access to your content in such a way that drives users to take action. It could include paying, but is not limited to paying.”

He outlined the four content strategies: 

• Hard Wall – “This would be like a Financial times – you’re just not going to get into site at all unless you pony up something, usually money.” It’s a good revenue generator. The downside is that you lose search traffic.
• Soft Metered Wall – This is utilized by dailies like the Boston Globe. All content is available, and they are “somehow going to meter and throttle your consumption,” said Sibson. You might get five free articles, and then you will be asked to pay. But you have to find the right balance. The downside is that if you set wall too high, you’re losing potential subscribers. On the other hand, if you set it too low, say one article per month, they’ll read it and bounce.
• Premium Subset—This is the common model for special interest publication. There are two tiers of content, usually one with higher quality that the person has to pay to get access to, and more general available on Internet via search. The challenge and potential downside? It has to be high-quality content on both levels.  
• Hybrid Premium Model —There no examples yet, but this is “the theoretical model we’re proposing,” Sibson said. You would generate both ad and premium revenue. But you could lose ad revenue to bounces.

Sibson urged publishers to challenge paywall assumptions, and to personalize their offerings, which few are apparently doing. “Everyone has a different appetite for content,” Sibson observed. “Some people will never run into a wall, because they read only a couple of articles. Others consume 20 to 30 articles a month. Where you want to set it is right below the point at which they become satiated for content – you need a personalized content wall.”