Identify Your Whales: How Successful Publishers Make the Shift to Reader Revenue
We’ve received the memo: it is time to diversify away from an advertising-heavy business model and introduce more reader revenue streams. Over the past year, we watched the New York Times generate $400 million in digital subscription revenue, Bloomberg Media earn three times as many digital subscribers as expected, and Conde Nast announce all properties will have a paywall component by the end of 2019.
We know we need to start charging for access to some of our best content, but we’re nervous. We have some questions that keep us up at night. We ask ourselves things like:
- Will our audience even be willing to pay for our content?
- How do I not lose a lot of traffic?
- What should be in front of versus behind the paywall?
Imagine if there were an answer key to these questions. A way to mitigate the risk of pivoting toward reader revenue. Good news: such a path exists. It’s all about focusing on your “whales.”
Whales? Yes, whales.
In this article, we’ll explore:
- What exactly are “whales” and why are they important to my reader revenue business?
- How can we find our whales?
- How do our whales help us launch successful digital membership and subscription products?
Whales: Your Most Engaged and Enthusiastic Audience Members
You know your whales when you see them. They’re wearing a hat with your logo on it. They treat your editors like celebrities. They read and comment on everything you send them. They’re the most committed 10-15% of your audience.
Here’s the challenge: under the old display ad model, all eyeballs were more or less equal in value. It was all about quantity over quality. We got paid for volume. The more people that came to the site, the more money we made under a CPM model.
As CPMs decline and more advertisers question the ROI of directly placed display ads, we need to shift our mindset to launch and scale successful digital membership or subscription products.
The key is focus: We need to stop being everything to everyone and start honing in on our best readers.
The data backs this up. We’ve seen publishers’ whales generate as much as 70 to 90% of reader revenue. There are a lot of other proven benefits to focusing on whales, because they:
- Are less price sensitive, making them more profitable
- Retain better and buy more often, thus increasing their lifetime value
- Provide favorable word of mouth marketing
- Want to help you innovate
- Behave more predictably
How to Find Your Whales
The beauty of the digital world is it’s relatively easy to spot our whales. And we have several tools at our disposal.
First, take a look at your email service provider data. Most tools these days have some sort of lead scoring functionality (e.g., a star rating system, score from 0 to 100, etc.). Those who score the highest are the ones who open and click the most often. Then check out your web analytics. Look at the past 30 days to find out who has visited most often, spent the most time on site, and clicked on the most number of pages. Now turn to social media and look for readers who comment and share the most. Finally, see who has paid you for your content, events, webinars, etc., in the past.
If you have a tool like a CDP you can get an integrated look across these four channels to get a unified master whale list. But don’t worry: even if you don’t have a CDP, you can either manually cross reference the four lists, or look into each pool individually.
Now Go Study Your Whales
Here’s where we get the answers to our questions. Go out and talk to some of your whales. Figure out their wants and needs. Ask questions like:
- What got you interested in this [name of your content vertical / niche / industry] in the first place?
- What pain points do you face in this area? What keeps you up at night? Probe on both tangible and emotional problems.
- How does our content help address these issues? What else should we be doing to help you?
Coming out of these interviews, you will be well suited to craft the value proposition for your digital membership or subscription product. You should be crystal clear on who you’re targeting (who are your whales), what problems you are solving for them, and why you’re uniquely positioned to make this promise (how you solve the problems).
Refine the value proposition with you team – make sure to get input across functions (sales, editorial, marketing, etc.). Then send out a quantitative survey to validate that you got it right.
Now let your vetted value proposition be your guiding light as you answer some of the tactical questions around who to market to and where to draw the line between free and paid (hint: the paywall should be in front of the stuff that squarely addresses the uncovered pain points).
Recall our research has shown that whales behave more predictably. That means in the interviews and surveys, they will be transparent about their wants and needs, and what solutions they seek. It’s like getting the answers to the tough questions around making the shift from the ad model to the reader revenue one.
We know publishers are going to be successful at making the pivot. We have the content and audience that all other industries would salivate over. Now let’s put our assets to use and create new revenue streams, with the guidance from our whales.
Rob Ristagno, Founder and CEO of the Sterling Woods Group, previously served as a senior executive at several digital media and e-commerce businesses, including as COO of America’s Test Kitchen. Ristagno is passionate about helping others grow near-term revenues by applying data science to uncover and test low-risk, high-reward sales and marketing strategies. Committed to spreading this message, Rob is the author of A Member is Worth a Thousand Visitors and the developer of the Growth Mindset Assessment.