Content recommendation supports subscriber growth for 3 conversion segments
Satisfying Audiences Blog | 21 August 2022
Subscribers will become the lifeblood of most news publishers. This means subscriber growth, including subscriber acquisition and retention, is one of the most important KPIs for news publishers to monitor. But how can personalised content recommendations boost this vital KPI to support the organisation?
When news publishers plan to increase revenue by boosting digital subscriptions, they start by examining their sales funnel. This typically ranges from all users that have visited the Web site at least once at the top to users with a (renewed) subscription at the bottom.
To maximise the number of users at the bottom of the funnel, news publishers need to focus on three key conversions:
- From anonymous users to logged-in users.
- From logged-in users to subscribers.
- From subscribers to renewed subscribers.
News publishers tend to focus on the second conversion with expensive paywalls, aggressive marketing campaigns, and discounted prices. While this improves conversion rates, it doesn’t increase the number of qualified leads the news publisher starts with (first conversion), nor
does it increase the user retention rate (third conversion).
In our experience, this results in most of the audience — often up to 50% — remaining in the anonymous reader group at the top of the funnel. Plus, the high churn rate leads to a very low customer lifetime value (CLV). Personalisation, when done correctly, can support these three key conversions, boosting customer loyalty and income.
Let’s look at each of these conversions to see the benefits of personalisation.
Conversion 1: Engaging anonymous users
Registered users have a conversion rate that is 45 times higher than non-registered users, making this a crucial step for moving users through the funnel.
Before they convert into registered users, anonymous users want to see the value of the news
publishers’ content. However, this is challenging to implement due to the increasing amount of
content generated every day and the vast variety of user interests. It is very easy to surface
irrelevant content when promoting the same articles to all your users.
The solution is to deploy engagement-focussed content recommendation modules in the most
visited positions on your digital channels, usually the top of your home page and article pages. This quickly delivers an uplift in your click-thru rate (CTR) (both on the module level and across the overall Web site), an increase in session length, and an overall improvement in total pageviews.
To put this into perspective, here are the average CTR uplifts for different recommendation techniques based on our experience at Froomle:
- Human recommendations: baseline
- Automatic recommendations (e.g., most recent articles or articles with the same tag): +15% vs. human
- Popularity-based recommendations: +25%
- AI-based personalised recommendations: +50%
On top of the CTR of the different techniques, we were also able to deduce that the CTR uplift tends to be higher for mobile users compared to desktop users.
Conversion 2: Convincing registered users
Conversion rates for registered users usually plateau around 10%, which leaves a lot of room for
improvement. Personalisation plays a central role in funneling your qualified leads to your paywall, first by identifying the registered users more likely to buy then promoting more paid (paywalled) content to these users, further encouraging conversion.
By fully rolling out conversion-focussed content recommendation modules, your Web site will see a direct uplift of 10% in paywall impressions (i.e., the number of paid articles visited) and a 30% increase in conversion rates (i.e., the number of subscriptions started).
Conversion 3: Retaining subscribers
While news publishers often feel that conversion 2 (convincing registered users) is the most
challenging step, we have noticed churn rates are often extremely high. Even aggressive
marketing campaigns rarely have a positive impact on user retention rates. Instead, users tend to
enjoy the free trial and/or the discounted offer while it lasts, and then directly cancel when prices increase.
It is also important to note that subscribers will consider cancelling their subscription if they are not actively using it. Research shows that around 40% of subscribers are actually “sleepers” and have not visited your Web site in the last 30 days. This group is at high risk for churning, and it is critical to reduce its size as much as possible.
When personalisation is implemented in your outbound channels, such as newsletters and push
notifications, it increases the frequency and length of visits. This directly reduces the number of
subscribers at risk for churning, which has a positive impact in the number of retained
subscribers and their CLV.
Personalisation and the sales funnel
When the right balance of engagement-focussed and conversion-focussed personalisation modules are deployed, personalisation creates a virtuous circle for your news platform. This creates more engagement and moves users through the funnel to increase your CLV and your revenues.