Want to know the secret of the digital age? What’s behind all the trendy products being fawned over in the business press, from the Samsung Galaxy S7 to the iPad Air to 4G LTE data service to Oculus Rift?
And your journalists. And your archive. And your op-ed pieces, articles, videos, graphics, interviews, and other reporting.
Content Powers the Digital Age
In the early days of radio, manufacturers like Westinghouse started radio stations to encourage people to buy radios. There wasn’t enough content yet to sell the devices.
Today, sales of new, buzzed-about devices is partly driven by the desire to consume your content. So much so that even though the iPhone 4 frequently dropped voice calls (“Antennagate”), the phone was wildly popular. Because a phone is no longer a phone -- it is a content receiver.
Netflix, Amazon Kindle Ebooks, and Apple iTunes are all examples of digital content consumption success stories. The media industry has been built on quality content since the Gutenberg press debuted.
We launched a research project to further explore these questions, culminating in the publication of the latest freely available MECLABS Institute Executive Series issue: Newspaper Paywalls and Digital Subscriptions: Research with 900 U.S. news consumers reveals four key insights.
In this article, I’ll share a portion of data we collected in this research, some of which has never before been published.
Data Point #1: Customers see value in magazine and newspaper content
What is the barrier for consumers buying digital content? Do they simply not see value in the underlying product? Through MarketingSherpa (a publishing subsidiary of MECLABS Institute), we asked 2,021 U.S. consumers about their purchase preferences for certain products.
While 75% of Americans would buy print magazines, only 42% would buy digital magazines.
The numbers were similar for newspapers: 71% would buy print newspapers while only 41% would buy digital newspapers.
This data may simply reaffirm what you already know. So let’s dive a little deeper…
In separate research commissioned by MECLABS Institute, we surveyed 900 U.S. consumers with the following characteristics:
One of the questions we asked was: When choosing a news source, how important are the following to you?
As you can see, “known for being a credible news source” was the most important factor, receiving an average ranking of 5.44 out of 6 for degree of importance. Diving deeper into the data, 62% of respondents rated this factor a 6 (extremely important), and 24% rated it a 5, so 86% of news consumers think it’s important.
The least important criterion for choosing a news source was “gives me an opinion on the news,” averaging only 3.35 out of 6.
But how do these attitudes affect likelihood to subscribe?
As part of this research, we took a look at 48 factors and attributes that might influence propensity to subscribe (including the above 13 criteria for choosing a news source mentioned above) and ran a regression analysis to see which factors are the most important drivers of the decision to buy.
We found 7 out of the 48 factors predicted news consumers’ likelihood to be a subscriber. Four of the significant predicting factors were news topics that were important to consumers. These factors are essential because they are fertile ground for helping you build a more powerful value proposition that is aligned with your readers’ motivations. You can read more about them in the aforementioned Executive Series research report.
However, in this article I want to call your attention to the fact that 12 of the 13 factors in the above chart did not predict consumers’ likelihood to be a subscriber. (The one exception was “aligns with my political point-of-view.” The more interested consumers are in finding news content that aligns with their point-of-view, the less likely they are to be a paid subscriber to news sources.)
What are we to make of this data? Customers tell us certain factors are important criteria for choosing a news source. For example, “known for being a credible new source” and “covers a wide variety of news.” Yet these factors are not driving paid subscriptions.
Data point #1 suggests that customers perceive the core value proposition of newspapers and magazines. The disconnect is when they consider the product-level value proposition of digital magazines and digital newspapers.
Data points #2 and #3 show us that while consumers value certain factors when choosing a news source, these factors are not driving purchase behavior.
Why might consumers be acting this way?
From years of previous research MECLABS Institute has conducted into value proposition with companies in many industries, we’ve identified factors that help create a powerful value proposition. For example, appeal, exclusivity, clarity, and credibility. By optimizing these factors in their marketing and customer acquisition funnel, companies are able to close a value perception gap.
And make no mistake, there is a value perception gap. You may know this in your bones. But some publishers complain about this fact and blame the consumer. A value perception gap is never the consumer’s fault -- the burden lies with the company to communicate that value.
And here’s the good news…publishers can close this gap. It has happened before.
The perfect digital content example is Apple with its iTunes product. Before iTunes, customers mostly looked at digital music as something they could download for free on Napster. Now, 46% of the recording industry’s global revenue comes from digital, according to IFPI. That’s $6.9 billion in revenue, and it grew at a pace of almost 7% in 2014.
Apple wasn’t just reactive to the fact that customers didn’t want to pay for music. Apple created a product that was focused on usability, and then proactively used marketing to help the consumer perceive the value of its product, in effect, changing the conversation.
When publishers think of marketing, they may think of a wide range of topics from online advertising to direct mail to marketing automation to affiliate marketing.
But these are mere tactics. Marketing, at its core, is about identifying and communicating a value proposition. Marketing turns actual value into perceived value. Because, if the consumer does not perceive the value your publication is creating, it might as well not exist.
When we looked at their attitudes, we discovered that consumers are hungry for the news. In fact, 73% of consumers age 56 and older ranked the statement “It’s my personal responsibility to keep up with the news to be a good citizen” as a 5 or a 6 on a six-point scale.
It’s up to publishers to identify and communicate clear value propositions through their marketing so consumers understand the value of paying for digital subscriptions. Like Apple, this will take more than messaging. It also requires a buying process and product that has been optimized for usability.
Here are three ideas to get you started down that path…
If you’re challenged by value communication, you might want to find ways to let customers sample the value of a subscription before purchasing, such with 30-day free trials or offers to “get X issues free” where customers can cancel before paying.
But another way of sampling value that includes a value exchange is having customers buy subscriptions with airline miles. According to our research, 11% of news consumers are very likely to consider paying for subscriptions in this way.
And in conducting the background interviews for this report, we learned of The Economist’s experimentation with this tactic. .
“We have programs where we let people cash in air miles to subscribe and that can work really well for publishers,” says Michael Brunt, CMO and managing director of circulation for The Economist.
“What you get is an opportunity for readers to sample your content,” says Brunt. “And of course, behind the scenes, revenue changes hands with the airlines, not with the individual. And then at the end of that time, there's a good volume that then convert into subscribers that pay more directly. So that can work well for subscribers and I think that can actually be a good way for publications to reach a new readership or reach a new audience that might be challenging for them to reach with other marketing methods.”
One way to increase the usability of your digital product, identify the right marketing messaging to communicate its value, and optimize the subscription process is with A/B testing.
Testing is also important because, as we saw in the above data, customers won’t always know why they act. You can use surveys to get an understanding of why customers may purchase. But then you should test those hypotheses in real-world settings with customers to see what actually has an impact for your product.
Peter Doucette, vice president of consumer sales and marketing, The Boston Globe, is a big proponent of testing. When I went to the Globe to interview Doucette, he told me “When we test things, we try and understand things that will change our trajectory of the user journey…getting users to identify themselves. How do we do that? Where? What sequence? Creatively, what's the value exchange? We test all these different things.”
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