GigaOM posted the audio to a fascinating session at last month’s paidContent Live conference. In it, there’s a great insight/throw down by Bob Bowman, CEO of MLB, Advanced Media. Right around the 15-minute mark Bob calls those that read metered sites such as nytimes.com without subscribing, rooting around their 25 articles/month limit are, “professional freeloaders” of no interest to advertisers. He goes on to state that mlb.com gets 4X the CPMs for ads served to their paid subscribers than the CPMs served to free, logged out users.
Bob’s argument is that media sites that have a paid audience are more valuable to advertisers. While the audience of subscribers may be smaller than the audience of drive-by readers via the social web & Google – it is the subscribers, the true fans, that are more valuable to a media company. While CPMs on non-paywalled sites are driven downwards by the infinite number of impressions on the public web, subscription audiences get better CPMs because advertisers know that subscribers have a relationship with the site on which they are running their ads. There is an opportunity to further increase CPMs by taking an editorial interest in making sure the advertising compliments, not competes, with the editorial, making the advertisements even more relevant.
The challenge for a subscription site is how to gain new subscribers. You will always have churn so you need new subscribers to come in and replace those that are lost. Free sites do not have this challenge. Paid sites always have a bar that new readers will have to clear to read their content and the broader question is how much do you show before you require a potential reader to pay? Give too much and they don’t realize the value. Give too little and they never scratch around enough to try.
One innovative method a desirable subscription site such at the wsj.com can try to bring more potential subscribers in the door is to have the occasional open house where paywalls are dropped and the public invited in to poke around. According to the presentation from where the slide above was pulled, advertisers have been pleased with the campaign delivering 126% of the impressions anticipated. While the profile of those that see those impressions may not be as well-defined as the logged in subscriber, they are still an attractive segment of aspirational readers and therefore suitable proxy for the core audience. I have not heard of other publications using this same tactic and how effective it is in gaining new subscribers. A paidContent piece written about the Open House concept suggested that the benefits may be primarily for advertisers but I’d be interested to hear how effective they are in gaining new subs as well.
I watched Mad Men last night and as I DVR’d through the latest three episodes it struck me that the regular spots of Lincoln and Johnnie Walker featuring Roger Sterling and Joan Holloway blurred the lines between content and advertising. The brands are as much a part of the identity of the series as the characters. The two compliment each other perfectly so it makes perfect sense to have them underwrite each episode in just the same way it fits that Jaguar would invite me to enjoy 24 hours with The Wall Street Journal.
Something to watch.