Inspired tactics: A news subscription series – Part 1, First-party data and the first 100 days
By Bihag Karnani
As a senior product manager at Google, I oversee the development of Reader Revenue Manager – a digital subscription service designed specifically for media companies. On average, I meet with approximately 50 to 70 publishers throughout the course of a year.
They come from a variety of backgrounds – local dailies, national brands, business-to-business (B2B) publications, and non-profit news organisations.
Our meetings typically centre on the same basic themes.
- We talk about how to increase conversions of readers into paying subscribers.
- We discuss why subscribers leave.
- We inquire as to what other publishers we admire are doing differently than us.
In this series, I will be attempting to answer these questions using the data from what the technology industry has learned about converting readers into paying subscribers and then identifying how one or two publishers used these concepts and what results they achieved.
Before we begin looking at some of the concepts we will be discussing, let’s outline the foundation upon which everything else will build.
The C.A.R.E. framework
Intercom created a framework called C.A.R.E., which is currently the de facto standard way that many in the technology industry think about managing relationships with customers along the entire subscriber lifecycle. The letters C-A-R-E stand for Convert, Activate, Retain and Expand.
According to Intercom, the process of developing a relationship with a customer follows four distinct phases. As such, each stage requires its own set of tactics.
- Convert refers to obtaining a customer to purchase a subscription.
- Activate refers to when a customer reaches their “aha moment,” which is the point in time when the benefit of purchasing a subscription becomes apparent.
- Retain represents the process by which a customer continues to maintain their subscription over time.
- Expand represents the growth of the overall relationship with a customer through means such as bundling services together, creating family plans, or adding additional products.
Most publishers fall short in terms of providing adequate resources to support the activation phase. Intercom is clear in its position regarding activation. “Customer retention is the new conversion.”
The effort required to keep a subscriber does not begin at renewal; it begins the moment they make payment.
Furthermore, there exists a time frame in which subscribers develop habits associated with a subscription – generally within 100 days.
Those subscribers who establish habits within that timeframe retain at significantly higher rates than those that do not establish habits.
This article explores what the technology industry has learned about this time frame and provides recommendations as to what publishers should take advantage of.
First-party data forms the foundation
For several years prior to the current landscape of cookie restrictions and declining traffic from platforms, news publishers were able to obtain insight into their website visitors based on third-party cookies and platform-provided data.
However, that model no longer exists.
Third-party cookies are limited, and platforms provide far fewer visits. At present, the only sustainable signal available to publishers is what readers choose to provide them directly (such as an email address, login credentials, topics read while logged in).
The conversion math presents a compelling picture.
Historically, consumer-subscription-based businesses have seen conversion rates from an anonymous visitor to a known reader (who may or may not yet be a subscriber) range from 9x to 11x greater than conversion rates from an unknown/anonymous visitor.
Once you know who your visitors are, you can contact them via e-mail. You can personalise their experience. You can score their propensity to subscribe. And you can intervene before they leave your service.
There is typically a single mechanism that enables a reader to go from being anonymous to being known. That mechanism is often referred to as a registration wall, which is essentially a soft prompt that requests an e-mail address and offers something in exchange (for example, a newsletter, additional free content, comment functionality).
Registration walls are placed in front of paywalls, not behind them.
Registration walls capture readers who are interested in your content but are unlikely to pay for it today but whom you can potentially convert into subscribers later.
One of the key features we developed at Reader Revenue Manager specifically for addressing this issue is one-tap registration via a reader’s pre-existing Google account. Our objective was to minimize the friction associated with moving readers from an anonymous state to a known state because the costs associated with leaving readers anonymous continue to grow.
How tech uses ‘known users’: Onboarding questionnaires
Once you know who your users are, the first thing that successful subscription applications do is ask them a couple of questions and utilize the answers they receive to personalise everything they follow.
Duolingo accomplishes this in 3 to 4 minutes. After registering, new users complete a placement test. Duolingo also establishes a daily learning goal (5, 10, 15, or 20 minutes) and asks them “why” – school, career, travel, fun. When Duolingo completes Four minutes worth of questions, they possess sufficient knowledge to dramatically personalise the next several weeks’ experiences.
For example, headspace asks “what are you trying to achieve?” (stress, sleep, focus). Calm asks “why did you download this application?” (relaxation, meditation). Notion asks what they plan on utilising it for and tailors template options based on their response.
The underlying principle is quite straightforward. Rather than making assumptions about what all users want to accomplish, simply ask them one or two questions and guide each user toward his/her individualised “aha moment.”
The questionnaire itself is not intended to serve as a socialisation process. It serves as a data-gathering activity that fuels all subsequent interactions with the user.
Activating information across every channel
The second form of technology borrowing is the multi-channel principle. For years, SaaS companies have understood that when a customer integrates products across multiple channels, the product can become a habitual component of the customers’ life.
A person who has a Dropbox account with apps on their phone, tablet and computer will use Dropbox every day. Someone who uses the web-version of Dropbox may only use it sporadically. Slack determined that workspaces that generate over 2,000 messages in a month have a 93% retention rate.
Translating to journalism; a new subscriber who doesn’t download the mobile app represents the largest segment of churning subscribers that you have.
The first habit forming message sent immediately after a new user subscribes should specifically encourage installation of the mobile app, activation of push notification service and sign-up for newsletters. With each additional platform that is enabled the reader’s ability to form habits increases.
Push notifications are the most effective method for re-engaging mobile subscribers – provided they’re implemented effectively.
Duolingo created a multi-arm bandit test system to evaluate approximately 200 million potential reminders and used it to score candidate reminders as to whether or not to send them using a recently tested template, while also balancing new copy vs. sending successful messaging.
Duolingo reported a 0.5% increase in Daily Active Users and a 2% increase in New User Retention. One Signal, the primary provider of push services, reported that using send-time intelligence to send pushes to each user at the time when they were most likely to receive them increased open rates by 23%.
Long-term stickiness
Spotify’s Discover Weekly is powered by collaborative filtering and utilises natural language processing on the lyrics of songs as well as audio analysis. Netflix reports that more than 80% of all viewing occurs due to recommendations made by its own recommendation engine.
This demonstrates that providing users with personalized experiences is how subscribers engage with your product beyond initial usage. As more data is fed into these engines (i.e., the longer subscribers remain), the more valuable the engines become – creating a positive feedback loop where the longer you subscribe to a product, the more it knows about you, the more relevant it becomes.
Translating to journalism
The Financial Times’ has incorporated all of this into its designed experience.
In a WAN-IFRA article last year, Muj Ali, Group Product Manager at The FT, explained that nearly 70% of the FT’s daily traffic from subscribers comes from within the app. Further, he stated that subscribers who utilise the app are 37% less likely to unsubscribe than those who do not.
When the app is initially downloaded, The FT presents a welcome page. Afterward, they present an onboarding sequence which asks which categories of topics the user would like to follow.
Those topics are then utilised to determine push notifications based upon user interest. “Though small,” Ali stated, “these nudges are important drivers of both engagement and retention.” The onboarding process is similar to Duolingo’s questionnaire and Netflix’s personalisation engine but applied to news.
Schibsted Media Group (Nordic publisher of Aftonbladet and Aftenposten) took it further with respect to the personalisation layer. Their internal data team developed a machine-learning-based model that recommends front-page stories based upon each user’s first-party demographic data and their first-party behavioural data.
Tests demonstrated a 75% increase in sales resulting from front-page story recommendations versus previously existing models. (WAN-IFRA). Schibsted began with 158 different data points related to users and ultimately narrowed down to around a dozen of those that really mattered – all of which were collected from registered users.
What to do
This week: Review your registration funnel. What percentage of anonymous users convert to known users each week and what does it cost them to do it? If your registration barrier exists behind your paywall, move it in front.
This quarter: Develop an onboarding questionnaire. No more than three questions. Use the answers to populate your push-notification and newsletter systems, so the answers inform every interaction you have with subscribers, rather than simply being stored in a database.
This year: Determine what action best predicts retention among your data (e.g., app-installation, three topic-follows, newsletter-open), and design the first 100 days for each new subscriber to take actions toward that behaviour.
- A subscriber who has not established habits by Day 100 is living on borrowed time.
- The subscriber who has established habits is yours for years.
Virtually all differences are determined in the first 90 days – virtually all of it determined by what you know about them when they arrive.
About the author: Bihag Karnani is a Senior Product Manager at Google, where he leads Reader Revenue Manager (RRM), Google’s subscription platform for news publishers, and drives user personalization strategy for AI Mode and AI Overviews. He works with publishers globally on subscription strategy.
