Algorithm May Help Publishers Determine Paywall Price Points
A paywall service provider has announced the release of a new feature promising to set optimal price points for a publisher's online content.
MediaPass, which offers custom content subscription tools for online sites, debuted its automatic price point testing feature Oct 11. The service uses market feedback and conversion rates to calculate the price website visitors are willing to pay for any piece of content.
The system uses baseline price point sets that have worked well for other MediaPass clients, according to MediaPass CEO and founder Matt Mitchell. Publishers pick two or three sets of price points to offer, which are randomly presented to users. "[The system] decides which price sets are 'winners' and 'losers' once they hit a large enough sample size to be considered statistically significant," he says. "The system throws out the losers and learns from that by applying a low score to it, which impacts the likelihood of that price set being used in a future test for any publisher."
The system uses an algorithm to decide when it has enough data to declare a real "winner." This price is then offered to 80 to 90 percent of users, with the remaining 10 percent part of ongoing tests to refine or update the price point.
"Even extremely low conversion rates result in a much greater effective CPM," Mitchell says.
The system currently must be utilized manually; an automatic version is currently in beta testing, he says.