Less BS, More Facts, Some Opinions
With multiple brands centered on food and home, Meredith has been providing help and inspiration to people sheltering in place during the coronavirus pandemic. During the first two weeks of April, traffic for Meredith’s food brands – Allrecipes, EatingWell, MyRecipes and Food & Wine – surged 117%. Traffic to its home and garden brands, which… Continue reading »
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Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. Cashing In The new hottest thing on Instagram is … giving away cash. Facebook and Google ads are a slow, expensive way to accrue followers. With cash giveaways, brands acquire hundreds or thousands of new users in one swoop. Influencers provide a list of… Continue reading »
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Advertisers have come to view YouTube as akin to traditional TV. Under normal circumstances, that is a boon to YouTube’s advertising business. But in the current ad market, it has become a liability.
The advertiser shifts have already cut into YouTube’s advertising revenue. While YouTube’s advertising revenue grew by 33% over the past year to total $4.0 billion in revenue in the first quarter, the video platform’s advertising revenue growth decelerated to “high single digits” by the end of March, Alphabet CFO Ruth Porat said during the company’s earnings call yesterday. She said that YouTube’s direct-response advertising revenue “had substantial year-on-year growth for the entire quarter,” but its brand advertising revenue began to fall in mid-March.
Over the past six years as YouTube has packaged its most popular channels into premium inventory tranches for advertisers, successfully establishing itself among advertisers as a TV-like brand awareness platform that offers more flexibility than traditional TV. But that’s not what advertisers are in the market for right now, according to agency executives.
Under pressure to manage costs and protect revenue, advertisers are not looking to raise brand awareness so much as to push product. The brand-direct response pendulum always swings to DR in tough times.
That means advertisers want to redirect brand advertising campaign commitments to DR channels, such as search and social. While advertisers are cutting the money they spend on TV advertising, doing so is not as easy as pulling dollars from platforms like YouTube.
“A lot of clients are exercising the fact that [YouTube] is more of a cancelable medium than other video-based media. You might not be able to get out of all your upfront commitments on linear, but you can pause YouTube with a flick of a switch,” said one agency executive.
While some advertisers put a halt to YouTube ad spending , other advertisers have moved away from purchasing the top-tier inventory that YouTube sells on a reserved basis in favor of programmatic ads, according to agency executives. Two media executives said they have also noticed this shift from reserved to auction-based buying in their YouTube channels’ revenue analytics. The shift saves advertisers money: reserved CPMs range from $30 to $35 compared to $5 or $6 CPMs in the auction, according to Ting Zheng, social account lead at PMG.
The reduced competition among brand advertisers for YouTube’s inventory has cut down ad prices for performance-minded marketers that buy ads on cost-per-view basis, paying when someone watches an ad to completion (or 30 seconds of it) or clicks on the ad. Normally, advertisers pay YouTube around $0.04 per view, but the price per view has dropped to $0.02, said a second agency executive.
YouTube’s lower cost per view has helped the platform to attract more money from performance advertisers. For example, a streaming service that advertises on YouTube to acquire subscribers has increased its spending on YouTube ads by single-digit percentage points since the quarantine, according to the second agency executive.
However, ads on YouTube do not perform as well as ads on search or social platforms, especially as YouTube’s viewership has grown on connected TVs where people are less likely to click on an ad. For every dollar spent on Facebook ads, an advertiser typically sees $2 or $3 in return, whereas on YouTube the return “you might not see more than $0.50,” said Zheng.
As a result, even though companies are shifting more money toward performance advertising, YouTube is not a primary beneficiary.
For the streaming service advertiser, “it’s not like our go-to lower funnel re-marketing tactic. We lean more on the open exchange and finding our audience wherever they are across the web,” said the second agency executive.
The shifts have also cut into the advertising revenue of media companies and individual video creators that have seen YouTube ad prices drop by around 20% despite a surge in viewership. This dynamic is not unique to YouTube. “We are seeing the same user increases and CPM decreases on both Facebook and Snapchat,” said Jess Richards, global head of social at Havas Media.
However, the dynamic is more consequential on YouTube, which is the primary revenue-generating platform for many publishers’ and creators’ digital video businesses. While some publishers and creators have seen the higher viewership offset the lower ad prices, others have seen the situation net out to a year-over-year decline in revenue. “It’s just another kick below the belt,” said one media executive.
The bright side for YouTube — and the publishers and creators that rely on the platform for revenue — is that, as businesses open back up, advertisers will need to draw people’s attention to the fact that they can shop in a marketer’s stores or eat at its restaurants again. While marketers could run billboards and TV ads to make those proclamations, they are more inclined to look for flexible buying options, such as ads they can bid on, such as ads on YouTube.
“It will bode well in that back half of the second quarter and the third quarter that YouTube has that flexibility,” said the first agency executive.
“We have a handful of channels that do well on Roku, Pluto [TV] and Samsung [TV Plus], but it’s a river of pennies — or half-pennies.”
— Entertainment executive
Will the economic downturn spur a flood of people to cancel their pay-TV subscriptions and subsist largely on free, ad-supported streaming services? Many industry executives have speculated it might and been waiting to see if they’re right. They might be, at least with respect to people’s interest in free streaming.
In March, Amazon saw a 20% month-over-month increase in watch time for live and free, ad-supported streaming apps on its Fire TV connected TV platform, according to Amazon’s vp of product development for Fire TV Sandeep Gupta. The company didn’t break down the free, ad-supported share of that stat or provide raw numbers to understand how much time people are spending watching free shows and movies.
While Gupta said the watch time trend signals an acceleration in people cutting the cord, it’s unclear how much of a contributing factor that may be at this point. For example, DirecTV lost 359,000 subscribers in the first quarter of 2020, but the satellite TV service has been shedding subscribers for years, though its streaming alternative DirecTV Now has seen a deceleration in new subscribers. One TV network executive said they have not yet seen a significant increase in cord-cutting.
Also unclear is whether the free, ad-supported streaming surge will survive the quarantine.
One media executive said their company’s 24/7 streaming channel is seeing “all-time highs in streaming and watch time hours on various [free, ad-supported streaming] platforms.” Having acquired 300 hours hours of non-exclusive programming to fill its streaming channel, this person has hopes that the spurs the maturation of the ad-supported streaming market. However, being in the media industry, they remain wary of the uptick being anomalous.
“Will we continue to see that viewership is rising so fast in [ad-supported] environments that we’ll see more premium programming in [ad-supported] environments? Or will the reverse happen and stuff starts coming off [ad-supported services]?” said the media executive.
Amazon is incentivized to accelerate the rush to free streaming service, considering it sells ads to them and for them. And it appears intent on doing so. Gupta said the company is working on new ways to draw audiences’ attentions to the free programming on its Fire TV platform. He declined to offer any more information than that. Nonetheless, “it’s definitely is a focus for us to do more to highlight free content on our devices,” Gupta said.
-3%: Week-over-week decline in time people spent streaming videos during the week of April 13 — traditional TV watch time fell by 2% — according to Nielsen.
15.6 million: Average number of people that tuned into the NFL Draft on April 23, which marks a viewership record, according to Nielsen.
Nearly half of TV’s top advertisers today were not among the top advertisers before the pandemic, according to research firm LightShed Partners’ analysis of data from TV ad measurement firm iSpot.tv.
This shift may only last as long as automotive and movie advertisers hold on to their money. And it probably goes without saying that the TV networks likely can’t wait for that day to come. Still, this recasting could be advantageous for the networks.
Some of the top advertisers cutting their TV spend are likely legacy buyers that enjoy lower ad prices after years of making upfront commitments. That caps the networks’ revenue growth, which is why networks like NBCUniversal love to tout the money they get from digitally native companies. The latter group are newer and therefore more lucrative for the networks because they are not negotiating from baseline prices set last century.
Returning to TV’s new top advertisers — and setting aside the question of Copper Fit’s long-term growth prospects — these companies are potentially the TV ad market’s new blood. They may only be advertising on TV right now because it’s much cheaper than usual. But if they find that their ads perform — and if networks’ sales teams use this period to recruit new clients — they may opt to spend more money on the medium moving forward.
With no games, sports publishers turn to user-generated videos:
Read more about sports publishers here.
TV industry expects upfront ad market to split into two periods:
Read more about TV advertising here.
News publishers tap into live streaming on YouTube:
Read more about YouTube here.
Masterclass seizes its moment:
Read more about Masterclass here.
Come for Vanity Fair’s behind-the-scenes look at how the TV production industry ground to a halt. Stay for the revelation that “Riverdale” played an outsized role in the matter.
Producers I’ve talked to in the past couple weeks don’t expect to return to physical production until sometime this summer at the earliest. Even then they expect there will be phases to the return. In a proposal obtained by Variety, two producers have outlined how productions may be able to resume while protecting cast and crew.
Vox Media’s entertainment arm usually takes 10 weeks to produce an episode of its Netflix series “Explained.” For a special season on the coronavirus outbreak, the studio turned around the first episode in less than three weeks, according to The Hollywood Reporter. The episode’s production — relying on pre-recorded footage, animation and voiceover — is a case study on how producers are putting together shows during the quarantine.
Within less than a month of its launch, Quibi has lost its head of brand marketing, which follows the departure of two other top execs last year. That follows a debut that was beset by an actual force of nature and that has failed to produce a breakout hit (unless Rachel Brosnahan’s golden arm counts). T-minus 66 days until those 90-day free trials start to expire.
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Over the past seven weeks, many publishers have welcomed a coronavirus bump in subscribers as news consumption rises. That bump has been helped along by a significant acceleration in Facebook ad spending.
For example, subscriber growth across Condé Nast’s portfolio is up 100% from the start of March compared to the same period year over year. And 50% of the new subscriptions its titles have accumulated are coming from paid efforts, a spokesperson said.
This month, a publisher that uses Keywee to drive subscription growth using Facebook is on pace to spend more this month on Facebook ads to drive subs than they did in November and December, combined.
Thanks to a combination of soft advertiser demand on those platforms, strong engagement from readers there and conversion on their own sites, the cost of acquiring a digital subscriber has slid in the past month. An executive at one publisher said that their subscriber acquisition costs have fallen by to as little as one third of what they had been at the beginning of March.
Those same factors have made Facebook an attractive place for publishers to gather newsletter subscribers too. In the first half of April, the cost of acquiring a newsletter subscriber through Facebook fell from 75 cents to 25 cents, thanks to a combination of lower CPMs and significantly higher clickthrough rates, an executive at a second news publisher said.
Thanks to significant drops in cost per acquisition, Condé Nast expects to accelerate spend on Facebook and increase its titles’ ad spending budgets, its spokesperson said.
While publishers would love to pour as much gas on the fire as possible, in most cases, they do not have the option of raising the amount of money they are spending on the platforms because of budget cuts and austerity measures.
“We told people to lean into their spend early in the month,
get while the getting’s good,” an executive at the first publisher said.
Though publishers have spent the past seven weeks getting battered by declining programmatic ad rates, advertisers pausing or cancelling campaigns, vendors and agencies lengthening their payment terms, and events businesses being thrown into limbo, subscription growth has been an unquestionable bright spot, according to Piano data.
Historically, heightened uncertainty and emotion tend to be great drivers of short-term subscription growth. The widespread use of messages asking readers for monetary support — see The New York Times, BuzzFeed News, or The Daily Beast — helps too.
“Typically what motivates people to subscribe is an emotional event,” said Matt Lindsay, the CEO of Mather Economics; Mather found in its own research that subscriber conversion rates among its clients were up 190% over the past 60 day. “It gets them over their inertia.”
While the strong organic growth could make the case that spending to acquire subscribers would be unnecessary, the short-term revenue pinch many publishers are feeling makes the prospect of adding new revenue quickly more attractive.
“If I can stretch the return of the dollar in April and May,
then it probably behooves me to spend it now, rather than later in the year,” a
source at the second publisher said. “Not only do I get more value, but I also
drive more revenue in 2020.”
But finding the budget is tough, particularly in news, which
has faced some of the steepest declines in ad revenue in media. One source noted
that it is tough to ask for extra budget at a moment when colleagues are being
furloughed or even laid off.
Lindsay expects that, as coronavirus subsides, publishers may find that they have a lower take rate, as they have depleted the ranks of people that might have become subscribers over a longer period of time. Those same publishers will also have to quickly segment the subscribers that signed on during coronavirus and try to find some other part of their reporting for them to read.
“What retains people is habitual consumption,” Lindsay
added. “You need to introduce them to something they’re going to get used to
doing every day.”
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As the coronavirus outbreak grinds on, news is getting a bump. For CBS, this has been a good opportunity to grow the audience on its streaming platform — and keep them even after the crisis ends.
Christy Tanner, evp and gm of CBS News Digital, said that historically, when CBS’s streaming channel, CBSN, has big bumps in views, those spikes end up resulting in higher average audiences even after the reasons for the bump subside. “We know that we’re converting people to streaming news when we have events like this where we draw a large audience,” she said.
Viewership for news is up on all platforms, but in March, CBSN had its best month in its history for streaming views. Last month, streams were up 342% year over year, netting more than 100 million views. April is on pace to remain the second-largest month in stream volume, with only a single-digit dip in views from March. Tanner said she attributes this to a shift from daily breaking news on state closures and shelter-in-place mandates, which led to several spikes in views in the first couple weeks of March, to more presidential and gubernatorial press briefings.
In the latest edition of the Digiday+ Talks, a series open to members of Digiday+, Tanner talked about how the news network has worked to fill the funnel of viewers on the streaming platform while also capitalizing on the audience it is bringing in.
Digiday+ members can access full video of the Talk and Christy Tanner’s slides below.
The bulk of CBS’ viewers come to the network through connected TV and connected TV platforms according to Tanner. But her team has been pushing its streaming platform on both mobile and desktop in various ways during the crisis to increase viewerships on those channels as well. This has helped result in the 342% year over year increase in unique streams in March.
The advantage of streaming news is that despite local TV stations having their own streaming channels, viewers are consuming content from outside of their local regions. This has helped to shape a bit how news is told, but it has also helped to fill the funnel of viewers.
Prior to the virus, Tanner said that there was a trend of advertisers “shying away” from the news because they thought it was too hot or controversial for their brands. Now, while CBSN experienced some advertisers initially putting their campaigns on hold during the onset of the pandemic, they are now starting to turn those campaigns back on. “Trusted news brands are a safe environment for brand advertising,” she said.
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U.K. broadcaster Channel 4 has bolstered its ad- targeting capabilities with three new tools to target audiences across its streaming platform, All 4. The aim is to allay the fears of data-privacy cautious advertisers as the third-party cookie rides off into the sunset.
One tool, called Brandmatch, makes All 4’s first-party data of 23 million registered users available for advertisers to view via a neutral platform through a partnership with data platform provider Infosum. This data clean room doesn’t share the information anywhere else. Soon, advertisers will be able to shop for their target audience through a dashboard by injecting their own customer data, which will then overlay with the broadcaster to find matches. All 4 can model out the audience segment to target audiences on the rest of its platform if the data match is prohibitively small through partnering with Mediarithmics. A year in the making, Channel 4 is using the tool with six clients.
“A lot of clients that we’re speaking to have valuable, rich first-party data and there are some very limited — but obviously scalable — platforms, such as Facebook, to buy against their own data sets,” said Jonathans Lewis, head of digital and partnership innovation at Channel 4.
Publishers like The Telegraph and Immediate Media have been touting how advertisers can overlay first-party data. A significant driver has been the looming deprecation of third-party cookies on Google Chrome.
Channel 4, which has asked audiences to register details for years, hasn’t relied on third-party cookies for identification. Previously, the broadcaster built audience segments based on its own first-party data, but the choice of audience targeting was limited, said Lewis. Behavioral segments were built from a panel of 6,000 super users, like beauty lovers or DIY enthusiasts, or contextual targeting against genres like comedy or documentaries.
This gives Channel 4 a route to discuss with advertisers their first-party data strategies, broadening the scope and value of business deals. It’s also attracted new clients who aren’t as familiar with advertising on broadcast video-on-demand but would usually advertise with tech platforms, said Lewis.
One benefit of using Infosum’s platform, which locks both first-party data pools and only reveals the matches, is speed. Previously, second-party data partnerships or centralized data pools between a broadcaster and a brand take months, if not years, of compliance and regulatory work. Keeping data separate removes the risk of data mismanagement, avoiding the sharp teeth of regulators. Campaigns can be running between 10 and 20 days rather than six months, said Stuart Colman, vp of sales at Infosum.
“As soon as data leaves any company it slows the process down,” said Richard Brant, audio visual product partner at Dentsu Aegis. “This is a good way of getting things to happen quickly. As soon as [Channel 4] can data match, it can improve yield. But it very much still feels like a proof of concept for them.”
U.K. commercial broadcasters like Sky and ITV stole a march on tech and targeting developments in recent years with addressable products like Sky AdSmart and ITV’s Planet V. Storing data in clean rooms with a focus on first-party data strategies mean that waiting has worked in Channel 4’s favor.
“This is about making clients feel more confident,” said Mihir Haria-Shah, head of broadcast at agency Total Media. Last year, Total Media’s client wanted to overlay their first-party data with another broadcaster to see whether households who had been exposed to an ad went on to buy the product.
“The data overlay wasn’t done in a manner our client was happy with,” said Haria-Shah. “Incorporating first-party data in a completely GDPR-compliant way is hugely attractive to clients.”
Most agencies are still heavily reliant on third-party cookies, whether that’s through access to and the type of data that’s available to them, ad frequency management, measurement and attribution. But the clock is ticking.
“The vast majority of third-party powered solutions will be gone before the end of this year because the cookie will depreciate as users become more aware of the controls that can be put in place,” said Colman. “The time is now for those alternative solutions.”
The media industry continues to search for solutions for what life will look like once third-party cookies disappear, and there isn’t a silver bullet. The challenge for buyers is broadcasters are creating another walled garden to buy across.
“I could have done data matching with Sky and ITV, but what’s the overlap?” said Brant. “The same applies to using different DSPs: You have no real defined ability of frequency management across platforms.”
The post Inside Channel 4’s first-party data strategy appeared first on Digiday.
Julian Tan isn’t the face of Formula One like Lewis Hamilton, but as the sport’s head of esports is in the spotlight as in-person events evaporate — and face an uncertain timeline for a return.
When the coronavirus put the first eight races of the Formula One season on hold, Tan was quick to fill that void with virtual versions, the first of which replaced the Bahrain event last month. Unlike a real race, the virtual one was contested by both current and former drivers alongside celebrities, who were all overseen by a pundit and commentary team.
Analytics firm Esports Charts would later report that the race’s viewership averaged 289,000 concurrent streams that peaked at 359,000, with 199,000 on YouTube, 180,000 on Twitch and 18,000 on Facebook. In an interview with Esports Insider, Tan said the virtual race generated the “biggest numbers we’ve ever done in esports.”
Two more races have already been scheduled for the end of May and early June. While it’s unlikely the races will ever fully fill the void left by live racing, Tan never wanted to do it in the first place. In his mind, each virtual Grand Prix’ is a chance to reach the broadest cross-section of fans, he recently told the Financial Times. His goal is that when Formula One races do eventually return to screens they will take a significant percentage of new esports fans with it.
“The role of esports in rejuvenating interest in Formula One is likely to be critical, as you can assume much of its younger fan-base is there, alongside those with a predominant interest in online racing,” said Gareth Capon, CEO at video tech platform Grabyo. “The aim of the game right now is to stay relevant in the eyes of consumers.”
Despite Formula One’s strides into esports, Tan still has work to do in capturing younger audiences. Just last year it revealed that only 14% of its viewers are under 25. The main reason for this is access. Watching a live Grand Prix is currently reserved only for those with premium TV or cable packages. Engagement with sport happens when events are live, and Tan’s work is crucial to how the sport finds a sustainable way to reach younger audiences across digital platforms and devices.
When Tan became esports boss at Formula One in 2018, he hadn’t worked in sports or in media. He was a consultant at Boston Consulting Group, where he spent nearly three years advising companies how to tackle the challenges posed by digital media, according to his LinkedIn profile. In fact, Tan’s only experience of the media industry was when he was a columnist for the Huffington Post and Yahoo between 2012 and 2015.
“It was a long-term, future-proof decision for Formula One to diversify into esports when it did,” said Capon. “By being one of the first to build an esports presence, Formula One had the foresight to use that time to learn about the industry, embed itself in the ecosystem and optimize its offering.”
Early in his tenure, Tan set to work raising the stakes of its own virtual races by increasing the prize money on offer. He also involved all the major teams in his plans for esports, which paved the way for more drivers to take part in virtual racers with gamers. The two-pronged approach gave Formula One a product that’s accessible to esports fans but familiar enough to those who aren’t.
One exec who has worked with Tan said he was “very smart” and pointed to his degree in composites engineering from the University of Cambridge. Other execs involved in Formula One’s esports have been impressed by what has been achieved since Tan’s arrival.
“With Formula One Esports growing success, it’s expected that sim-racing can go even further into the mainstream with a mix of real and virtual drivers both on virtual and real-life circuits,” said Guillaume Vergnas, partnerships development and esports manager at Renault Sport Racing, which has been competing in Formula One’s virtual races since 2018. “This bridge is and will be the continued success of F1 in esports.”
Rich audiences attract commercial dollars and Formula One’s virtual races are likely to become, if not already, a self-sustaining part of its business. The organization’s esports arm has major sponsors in DHL and Fanatec, an established format and well-known esports stars competing in its tournaments. During the pandemic, it has had all of these resources to leverage.
The post With races on hold, Formula One’s esports boss steps into the spotlight appeared first on Digiday.
Unlike many major marketers, 1-800 Contacts has increased how much it is spending on advertising in recent weeks, adding new channels like podcasts, streaming audio and more linear television to its media mix.
Following the stay at home order, 1-800 Contacts started to see an uptick in new customers, as some of those customers realized the closure of most eye care providers could make it difficult to get a contact refill.
Phil Bienert, 1-800 Contacts’ CMO, would not say how much the company has increased its advertising or break out how it has divvied up the budget. In 2019, 1-800 Contacts spent $12.5 million on media placements, per Kantar, which doesn’t track social media spending.
1-800 Contacts is setting up meetings with publishers and providers that the company hasn’t advertised with previously. New media placements include the podcasts Betches’ U up?, Happier with Gretchen Rubin, Anna Faris is Unqualified and Wait, Wait Don’t Tell Me as well as linear television shows Jimmy Kimmel Live, The Voice, Law & Order SVU, vintage SNL and the NFL Draft on ESPN.
The company declined to say how many new customers it has added. However, 1-800 Contacts did say that it has experienced a 23% increase in call volume since the pandemic began and a 20% increase in length of call time as well as a 200% increase in usage of its telemedicine tool, ExpressExam. The company did not provide context for those numbers to quantify from what and to what the percentage increases show.
Still, it appears that 1-800 Contacts may be part of a rarefied group of “winners” of the current moment. Much like online learning platform Masterclass, packed-goods giants, at-home fitness classes and streaming services, 1-800 Contacts is among a select group of industries that has benefitted from a world stuck at home.
“In the early days of the pandemic, we were getting calls from front-line health care workers who were saying they were running out of their contact lenses and that their eye doctors were closed so they were asking for help,” said Bienert. “They said they can’t wear their glasses because they have PPE on — that’s when we realized early on that we can take care of folks.” The company isn’t donating lenses to health care workers but is “expediting shipping when needed,” according to a press representative, adding that the company has “expedited contacts to ambulance workers before their next shift.”
When it comes to choosing where to increase advertising, the company has been “following a lot of the media consumption changes,” said Bienert. “There aren’t any sports but a lot of folks watching broadcast TV. There’s lots of people streaming audio; music, podcasts or other types of similar content.”
Bienert continued: “Because we’re a DTC company, we’ve always had a strong presence in digital and social media. A lot of where we’ve been trying new things has been more in upper funnel media because this is about getting a message out there that there’s an option.”
Using upper funnel media more now is a smart strategy, said “The rates are probably cheaper because a lot bigger players have pulled out,” said marketing consultant Nik Sharma. “With a lot of Fortune 100s out, there’s more inventory and better pricing available for DTCs.”
Aside from the media mix, 1-800 Contacts has also adjusted its messaging by retooling previously shot ads. The spots, by Portland-based Rain Agency, feature people at home helped by the company, able to renew expired prescriptions or get their contacts delivered rather than having to venture out in the world to find them.
“We’re really focusing on telling people that they can stay at home and we can give them contact-less delivery of your contacts,” said Bienert. “Also, if you don’t have an active subscription, which you need to legally buy contact lenses, we’re telling people not to worry about it as we have a telemedicine solution.”
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By James Henderson, CEO and co-founder at Zephr
Transactional customer relationships, and the technology that enables it, have underpinned the digital publishing ecosystem for the past 20 years. The path starts with attracting a reader, showing them a headline, a few words or even a whole article, then throwing up a paywall to get them to buy a subscription package, and then moving on.
This path treats potential subscribers as though they are any other e-commerce customer, assuming every reader is the same and sending them down the same conversion funnel. And we built complex tech-stacks to support that approach. We solved immediate use-cases with a confusing mix of ad-focused tools and subscription products, at the expense of flexibility within the customer experience.
These tools are static, operating at specific parts of the digital customer journey. For a long time, this lack of flexibility wasn’t important. The journey was straightforward, simple and linear — deliver content, monetize at all costs and possibly retain engagement. But this transactional approach is no longer meeting commercial or audience needs.
The growing subscription economy fundamentally altered the way consumers think about their products and services — even before COVID-19. People are accustomed to choosing what’s right for them, whether it’s buying products by frequency or features, opting into a premium package or a family-focused deal.
Successful recurring relationships are built on personalization, where consumers can access a product or package that’s right for them and leave the rest. If they can’t do so, they walk away. As the great Jim Barksdale says: “There are only two ways to make money in business. One is to bundle, the other is to unbundle.” Which one to pick, and when, and how, is now the most important question business leaders can ask.
To answer that question, at present, publishers are often forced to hack together existing transactional tools. Development teams are forced to invest effort into building and maintaining these complex systems instead of focusing on building new products to grow revenue. Marketing teams wanting to experiment with and fine-tune new customer journeys and packages are stymied by hard-to-use, inflexible technology.
The result is complexity, high costs and unsatisfactory outcomes. Consumers are still not offered the personalization they want while innovation remains low, and when shocks hit the system, such as ultra-low ad yields, publishers suffer badly.
Put simply, the industry’s technology is not fit for purpose. This is worrying, particularly as we’re heading into a future where dynamic products, packaged for each individual consumer, must be delivered efficiently through automation. By relying on transactional technology, with all its limitations, publishers are in danger of being entirely left behind in this new economy.
COVID-19 has done in six weeks what it would have taken the subscription economy six years to do in its own time. The UK’s largest subscription site, isubscribe, says its digital magazine subscriptions have jumped more than 400 percent in volume (as of 15 April 2020). The Financial Times reported that traffic to its website has grown 250 percent year-on-year over the past month, and we’re seeing an all-time high for industry conversion rates. But how many new acquisitions will stay once this crisis is over and audiences find themselves with a subscription that’s not right for their needs?
The recurring relationship economy needs technology made to support it. It must operate at speed, scale and be flexible enough for every team to use it and be suited to every customer’s journey. We should aspire to turn an audience experience of publisher-to-one-million into an audience experience that feels like one-to-one.
Commercially focused teams must be able to conceive and deploy highly personalized customer journeys without always going to their technology teams and asking for help. They need to be able to test, learn and change entire products, packages and revenue models in hours, not weeks.
This means publishers need tools that are intuitive to use and don’t require years of coding experience to handle. Most of all, it means they need tools that integrate across the whole customer journey — offering a wide range of personalized outcomes for every potential subscriber.
Tools to which publishers can turn include no-code platforms, which ensure that organizations can handle every client, prospect and visitor uniquely, putting the power to build and change outcomes at speed straight into the hands of specialists who understand the market. The world’s largest publishers are using these platforms to get ahead of the curve, making them better fit for the new normal and ready to steal a march on those who are waiting for the market to settle — and haven’t yet realized that it might not for a long time to come.
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