The publishing business model is undergoing a transformation. More and more digital content creators supplement their advertising dollars with revenue directly from the reader through “digital products” – for example, content behind a paywall (known as “paid digital memberships”), webinars, ecourses, ebooks, etc.
Why the change? It’s risky to depend so heavily on advertising. Over the past five years, 35% of print ad spend has dissipated. It’s challenging to make up for that online since pricing has declined by an average of eight percent each year for the last five years. There are no signs of digital ad pricing turning around. And forget about mobile advertising saving the day. About 400 million people have some type of mobile ad blocker installed.
Advertising is not going to go away all together, but to grow, publishers need to rely on additional revenue streams.
Not formally a “publisher” but still creating great content that you think consumers would pay for? Take note: there are best practices that all content creators should follow in order to monetize distinctive paid digital products.
Consumers Will Pay For the RIGHT Digital Content
While some executives refuse to believe that consumers will ever pay for digital content. The data says otherwise. Consumers will pay for the right content. Research has shown that consumers are willing to open their wallets for paid digital memberships, so long as the content is high in quality (both the content itself and the associated experience online), curated and targeted at their wants and needs, and from a brand they know and trust. They’re also more willing to pay if it is for work, entertainment, or a hobby.
This is not to say that you should require consumers to pay for ALL your content. You still need to offer free content to support your inbound marketing efforts. This builds trust and nurtures your readers into a paid product. However, there is an opportunity to put your premium content behind a paywall.
If you already have content and an audience, you have an advantage over others to monetize content through paid digital memberships. However, one thing is sometimes missing: while the quality of the content is high, the quality of the digital product itself (e.g., the design, features, user experience) is not always up to par. If you want people to pay to subscribe to your site, you’re going to need an upgrade.
Did You Follow a Structured, Consumer-centric Process for Launching Your Membership Site?
Let’s face it. Nothing is guaranteed when innovating. But you CAN reduce the risk. Businesses that follow a consumer-centric process have 32 percent higher success rates, meet sales objectives 42 percent more often, and meet profits objectives 39 percent better, according to Nadia Bhuiya of Concordia University.
If you’re following inbound best practices, you have already done a lot of the work. You’ve defined your personas, and figured out their wants and needs. This is often the first step in any robust process.
A solid consumer-centric process includes testing concepts with your target persona. What types of premium content will you put behind the paywall? Will your app/website have special features that appeal to your target persona?
As part of the process, companies also need to make sure economic modeling serves as the “gut check” that the new product will be profitable under reasonable assumptions.
When your building and launching your product, use an agile method. What this means is instead of spending a year building everything behind the scenes and hoping you got it right, you create your offering incrementally and see how your persona responds to each piece before building the next component. This way, you incorporate real marketplace feedback into your development process.
Does Your Homepage Clearly Demonstrate Your Value Proposition?
A value proposition clearly states who you are targeting and what needs you are meeting for that population.
At Cook’s Illustrated, visitors are greeted with the message “Our 50 Test Cooks Make the Mistakes So You Don’t Have To. Get immediate FREE access to 3,000 foolproof recipes, 1,500 no-nonsense equipment reviews (we take no advertising), and 1,500 supermarket food taste tests.” Clearly, they are targeted serious home cooks who don’t want to waste their time sifting through the millions of free recipes of dubious quality.
Does a visitor to your website clearly understand who you are talking to and what problem you are solving for them? This is where you should use A/B Testing to get the message exactly right.
Is Your User Experience Responsive?
Users will consume your content across devices (desktop, tablet, phone). Unfortunately, research has shown as little as 12% of websites are currently responsive. When your site does not look good on a phone, you are hurting conversion, AND Google is ranking you lower, so you are missing out on prospects as well. Make sure your development team incorporates responsive design, or, if you use a website hosting platform, that your theme is responsive. Responsive design is simply a must.
Are you Current on Payment Processing Best Practices?
Here is a vocab quiz for you. What do each of these four terms mean?
- Wallet functionality
- Transparent redirect
- Card recycling
- Refresher program
If you don’t know, time to go to payments school. Best practices can lead to a 12-20% improvement in revenues once implemented. Here is a primer on these terms.
Wallet functionality means you can keep a card on file and use it to process all future transactions (think: Amazon one-click). By removing the friction in checkout or at renewal, you will see substantially higher conversions.
Transparent redirect allows you to bypass handling sensitive credit card information while making it look to the user like they never left your website. The form that captures the credit card data comes from your web server and looks/feels like your website. However, behind the scenes, the sensitive data goes direct to your payment gateway. This is really the best of both worlds. You’ll lose conversions if you physically send the customer to another website for checkout. You don’t want to deal with the legal liability and potential customer service headaches of handling sensitive information on your own servers.
Card recycling means re-trying transactions a few times after receiving a “soft decline.” A soft decline occurs when there is a temporary problem with a credit card (for example, if there was a temporary hold while a possible security breach was being investigated). Don’t give up – try again. There is an optimization point where the success rate of the re-try justifies the added processing costs.
A refresher program updates credit card numbers and expiration dates on file. This is especially important if you are running a subscription business, because customer’s cards expire (and/or get stolen) over the course of a year.
Do You Have Flexible Business Model Options?
You should have the ability to offer monthly or annual subscriptions. You can also help conversions with free trials, couponing, and gifting.
One truth about paid digital memberships is there is no silver bullet when it comes to business model. You are going to have to test into what works best for your specific audience and content vertical.
Is your payment system set up to handle this range of options? If not, you’re leaving money on the table.
Do You Nudge Engagement Through Content Discovery on Your Site?
One mistake is lack of direction behind the paywall. The reader buys into your marketing messages, but once they plunk down the credit card, they’re a little confused about what to do.
You should be nudging your customers to engage with your content once they’re on your site, so when that renewal notice comes, they do not decide to unsubscribe.
Here are three ideas for you:
- Make sure you have a quality on-site search technology in place. As part of implementing this technology, you need to commit to adding the right metadata to your content to aid with search discovery.
- Make sure you are using a content recommendation engine. Use the info you already know about them and what they've engaged with to continue to delight and serve them the best and most relevant content.
- Think like a print newspaper – have a new headline every day. Readers still like when you curate interesting content for them. On your homepage, be sure to rotate what goes on above the fold daily. Fresh content is also critical for Search Engine Optimization.
Are You Always Testing, in a Simple Manner?
Always have a learning agenda! This is a list of open questions you have about optimizing your business. For example:
- What ad copy / ad image / offer is most effective at driving traffic to our site?
- What homepage best communicates our value proposition, thus leading to lowest bounce rate / greatest time on page?
- What free offer is most effective at email capture?
- What introductory price leads to the highest conversion?
- What landing page / squeeze page / checkout page leads to the highest conversion?
- What traffic source leads to the highest conversion?
- What features / content create the most engagement?
- What renewal price leads to the highest renewal rate?
- What renewal notice language / design leads to the lowest unsubscribe rate?
You should review your learning agenda at least once per quarter with your management team and agree which experiments you are going to run over the next 90 days to answer a few of the unanswered questions.
Furthermore, best practices is to only test one thing at a time. There is a trend toward “multivariate testing,” and there are some good use cases for that. However, there are also many stories about abusing multivariate testing, resulting in a “Frankenstein Product.” The math suggested optimal subcomponents, but when you add them up to the whole, it just looks weird!
Optimize Your Paywall Today
Again, the purpose of this article is NOT to encourage you to put ALL your content behind a paywall. You still need to use free content to build your reputation and attract an audience.
However, there is an opportunity to add more revenue by putting premium content behind a paywall, thus creating a paid digital membership.
There are some tactical best practices discussed above, but the most important point is to make sure you are staying consumer-centric in all your decisions. You have a head start if you are already implementing inbound marketing best practices – you have defined your personas and figured out wants and needs that resonate with them. Make sure your digital product manifests this understanding.
What is working or not working for you with respect to charging for digital content? Post in the comments!
from HubSpot Marketing Blog http://blog.hubspot.com/marketing/selling-digital-content-seven-questions-to-answer