In the past, “journalism was subsidized by advertising,” Barrett said. Now, publishers have to have a “product focus… and a direct relationship with the reader to ask them to buy that product.”
About eight years ago, Hearst spun off its large websites (such as San Francisco’s SFGate.com and Houston’s Chron.com) from its main newsroom management to focus on audience development. Those sites had about 60% reach across its markets. (At the time, the Los Angeles Times had about 30% reach, Barrett said).
Over the last decade or so, Hearst has invested heavily in diversifying its digital advertising to support those sites and moved away from its reliance on newspaper subscriptions.
“Every one of Hearst markets has an agency … of digital-marketing services team, with local sales representatives,” Barrett said.
The company also has a native content business based in San Francisco that serves all of Hearst’s local markets. Its growth strategy — to diversify its advertising revenue — has “doubled the digital revenue,” Barrett said.
Because Hearst Newspapers focuses on local markets, its brands have “a limited number of consumers, so we have to be more diverse and do more things with a smaller scale to pay us back,” Barrett said.
Thus, the company has turned to the larger sites its built, like SFGate and Chron, to develop new channels and potential subscribers.
Hearst now has profiles of 90 million users across all of its markets and has tracked the behavior patterns and content consumption categories of those users.
The company can look at engaged users who come to a site 10 times a month, Barrett said, and determine what content they are consuming. Then, it can serve them targeted content, email and soon, advertising. The site's content can also be personalized and tailored for specific profiles.
For example, a user reading mostly sports coverage on a site is more likely to convert to a sports site, especially if that user is served a special package to subscribe led by a sports pitch, Barrett said. The next step: Hearst Newspapers can create or acquire a sports-driven site that will attract that profile.
“We are focusing on behavior and content consumption more than the demographic” of users, Barrett said. “With profiling, we can mine larger audiences for those that can convert and create channels to drive subscriptions.”
Hearst is looking at tailoring a metered paywall to respond to individual behaviors, such as adjusting the number of articles a user can access for free, based on their profile.