The big question over the past few years in digital media has been how to squeeze more revenue from Facebook and Google, which haven’t been overly eager to spread the wealth that the two companies are accruing on the backs of publishers. The answer may be counterintuitive but simple: Buy advertising on the very channels that are outselling yours in order to sell consumers on a more direct and lucrative relationship.
As major media look toward direct-to-consumer relationships and subscription models to drive new revenue, it’s ironic that the duopoly offers some of the best return on media’s own subscription marketing efforts.
“Year over year, we continue to see high double- to triple-digit growth in paid social,” Paul Chapman, Executive Director, Digital Marketing, Condé Nast, tells Folio:.
Search and affiliate marketing are also among the top areas of investment for the brand’s subscription effort, but social is where Condé can assert its increasing data prowess. “A pivotal moment was when we restructured our ad accounts to take advantage of our data hierarchy—a performance-based classification of various data types and sources,” Chapman says. He continues that Condé’s results from continually refining this information to improve performance and limiting customer overlap, has been very strong and they will continue this practice.
Mark Beard, The Economist’s VP of Digital Media and Content Strategy, also indicates social excels in its efficiency. “[It] has helped us deliver a significant reduction in the cost per acquisition (CPA) of our acquisition activities as a whole,” he says.
For the more service-oriented titles from a publisher like Trusted Media Brands, however, paid search can still be especially effective and efficient. Chief Marketing Officer, Alec Casey says that they focus their campaigns on including branded terms.
“We also leverage any new features the search engines make available. For example, when Google opened up expanded Search Ad copy and Site Links we leveraged both of them and saw an improvement in our overall KPIs,” he says.
For decades, magazines were masters of offline direct marketing, with deep understandings of how to pull the levers of trial periods, pricing, snail mail and renewal timings. The platforms, audience matching and retargeting have now let magazine marketers hone that expertise with laser precision.
“We’ve identified certain behavioral patterns that lead to higher converting cohorts,” says Chapman. “For instance, users who have visited our site five or more times in the past 30 days have a high likelihood of subscribing; so, we identify and then retarget these users with direct response ads.”
Like with any retargeting tactic, however, the key is keeping a strong enough flow of traffic at the top of the funnel to which you can retarget. “To address this, we spend part of our budget on content marketing to make sure we have enough users in this bucket to meet our volume goals,” Chapman adds.
The Economist has a famously sophisticated retargeting program that also customizes the follow-up pitches with automated creative variants. “We also work hard to ensure we use The Economist‘s depth and breadth of content at the appropriate point in time when retargeting,” Beard says.
At times, it uses paid media to highlight content in a single topic and at others highlight the wider breadth of editorial the magazine offers. Beard affirms that “machines, of course, also help us a great deal in this regard and technology choices are now absolutely key and fundamental to our success.”
While retargeting is especially strong for Chapman and Beard, Trusted Media’s Casey also finds “our strongest performing audiences are typically the look-a-likes of our most valuable magazine subscribers that also have recent and frequent online activity. To avoid audience fatigue, we diligently work to update our audience and suppression files on a consistent basis.”
“There are the obvious ones like special promotions, exclusive premiums and strong calls to action,” Chapman says. “During our Labor Day promotion for The New Yorker, we offered a limited-edition tote bag and the result was a 64 percent higher conversion rate versus our average and generated more than 11,000 subs.”
As has long been the case, The Economist likes to market with its own content, using examples that not only show off the quality and relevance of the editorial to the prospect but also break the brand out from the constraints of its own name. Much of the brand’s content-based advertising, which clicks into an article rather than a pitch, is designed to show that half the magazine is not directly about economics.
At the same time, the brand uses engagement tactics that have proven especially effective with people’s online mindset. “We find that posing questions in our advertising helps optimize click-through rates,” says Beard.
Ultimately, it’s the return on investment (ROI) and trackability of digital channels that attracts magazine marketers just as it does consumer product and service brands. And like others in the digital marketing space, magazines are focusing their ROI metrics more on loan-to-value ratio (LTV) than on click-through rate (CTR) or even CPA.
Chapman says, “Our CPAs vary by channel and by offer based on different lifetime value assumptions. We have a good understanding of our demand curve and we are always managing to the margin. With that said, under the right conditions, we can generate over a thousand subs a day at a CPA well below $10, although typically our CPAs are multiples of this.”
And as Beard adds, lifetime cost is also part of that equation. “But we also closely monitor the amount our customers are paying, the cost of servicing their subscription, and the rate at which our customers renew.”
By combining these metrics, Beard says they monitor “LTV” and it’s the KPI that judges their acquisition activities.
“We find this helps us make better decisions and indeed sometimes very different decisions, than would have been the case if we had looked at CPA in isolation,” he says.
Magazine marketers are leaving no digital channel unturned in their quest for new subscribers. The Economist has an especially diverse channel mix, including TV and experiential marketing. Beard notes, however that Snapchat is proving effective in getting the venerable brand in front of a post-print, younger demo. But pod advertising, too, shows encouraging returns.
Casey notes that latley video ads have been particularly effective for Trusted Media Brands. “While their CPAs seem to fatigue quicker than our static ads, they have yet to drop below our typical control measurements,” he says.
Condé, too, is using video as well as playing with all of the new toys that platforms offer, like Facebook’s full-screen Canvas units and carousel slide shows on Instagram.
“In terms of partners, we think there is additional room for growth with platforms like Amazon and iTunes and are exploring ways to do more with sources like podcasting, video and messaging apps,” Chapman says.
The wonderful paradox of magazine media’s success in selling subscriptions through the major platforms, of course, is that they are using the same channels that have drawn so much ad revenue away from legacy media and disintermediated publishers from direct relationships with readers. The promise for publishers is not just in paid media, however. Both Google and Facebook have been dangling before their publishing partners distribution models that both honor paywalls and invite non-paying readers to subscribe to individual brands through these platforms. Ultimately, these models could help publishers not only sell subscriptions, but reduce their reliance on paid media to do so.
Or at least until the platforms decide otherwise.