Probably the key success factor for any reader-revenue strategy is subscriber acquisition. Retention is important once you have the business, but signing new customers up has to be the starting point in any subscriptions business. Knowing the best people to target makes acquisition earlier and micropayments might help.
- Identifying the audience members most likely to pay for your content is a definite advantage in any acquisition effort. Strong audience behavior data is crucial to drive segmentation and targeting efforts around sales messaging and offers.
- The ability to open and close access to content is also a primary tactic in subscriber acquisition. The dominant theory is that customers who use up metered allowances and hit the paywall regularly will eventually convert. But conversion rates on metered paywalls are as low as 0.5%.
- And metered paywalls are only effective for regular users; what about people who come to your site via a one-off Google search? Zach Seward, Quartz CEO, said failure to convert visitors coming from search was the reason Quartz ultimately dropped its paywall. He explained:
That has not produced enough value for Quartz or our readers to justify the downsides of the paywall in terms of reaching more people with our great journalism.
Micro-payers will subscribe
With the Quartz experience in mind, a recent article in What’s New In Publishing asks an intriguing question. Sunny Sen, CEO of content monetisation platform ConsCent asks: when does the journey of a paying user begin?
- For Sen, the answer lies with micropayments, allowing site visitors to buy access to a single article or even a day pass to read premium content. He believes, by implementing a ‘pay-as-you-go’ option, publishers can facilitate on-demand sampling for consumers and broaden their own acquisition funnel.
- The approach solves the problem that Quartz encountered. Rather than simply bouncing off the paywall, the drive-by audiences that make up 80% of most publishers’ traffic can be monetised at the article level. This can be seen as incremental revenue from ‘never subscribers’ – Sen says up to 5% of site visitors offered a micropayment option will pay for an article, money that is currently left on the table.
- Looking at subscriber acquisition, micropayments can be seen as the first step in the subscription journey. Data from ConsCent shows that 20% of micro-payers who have made three or four micropayments will go on to pay for annual memberships. If an individual makes more than 5 micropayments, the chances of them becoming a subscriber rise to as much as 30%.
Sen makes it clear that micropayments are not a replacement for subscriptions. Subscriptions are likely to account for 75% to 80% of reader revenue. However, micropayments could account for 75% to 80% of customers. He writes:
It is simply a more effective top-of-funnel acquisition method.
Other micropayment benefits include:
Building trust – 99% of visitors who encounter a subscription barrier abandon the site. Sampling through micropayments can help establish trust.
Data capture – Micropayments let publishers gauge reader interest and purchase intent. Customer data can also be used to target relevant content and future offers and discounts.
Propensity to pay – Micro-payers are warm leads and can be targeted directly with activation and conversion communications based on an established relationship.