Media Collective report says publishers need to focus retention efforts on relationships not churn
A new report from Pugpig and the Media Collective highlights how publishers can increase retention and revenue, even for lightly engaged audiences.
13th October 2023
In the Pugpig weekly media bulletin, Pugpig’s consulting services director Kevin Anderson and digital growth consultant James Kember distill some of the best strategies and tactics that are driving growth in audiences, revenue and innovation at media businesses around the world.
Pugpig Consulting is working with many publishers on their onboarding strategies to drive app uploads and communicate the value of their entire subscription offerings. And we’re working with publishers to test their push notification and email strategies to increase engagement to support retention. If you want to know more about how we are working with publishers like you, get in touch at email@example.com.
The value of retention
For publishers, 2023 has been the Year of Retention. As we highlighted at the start of the year, 37% of people have cancelled a subscription in the last six months, which is why 68% of subscription businesses cited retention as their top priority, according to research by Minna Technologies and FT Strategies. In a new report by Pugpig and our partners in the Media Collective, we make the case that publishers need to rethink their approach. Instead of viewing the challenge narrowly in terms of churn management, we believe that successful audience retention strategies should be thought about broadly as relationship management. Reframing it like this is helping publishers maximise customer lifetime value, not just of subscribers, but also from audience members who want a lighter relationship with you. And our report, Retention Economics, outlines why publishers need to rally their entire organisation around retention efforts because it touches on responsibilities across a publisher’s enterprise including marketing, product, editorial, advertising and circulation.
It is one of the axioms of business that keeping an existing customer is cheaper than attracting and acquiring a new one. This has become even more true with increased competition for subscribers. The subscription model has become pervasive, expanding far beyond media and streaming services to monthly services for shaving razors, pop cultural merchandise and even bacon. Increased competition is just one factor that has grown the cost of acquisition of new subscribers by 60% from 2015 to 2020, according to Profitwell. And the benefits of retention are clear: Increasing retention by just 5% can increase profits from 25-95%, according to research by Bain Capital.
Maintaining relationships with all of your audience
To realise the full benefits of retention, publishers need to reframe retention management as relationship management, which means in practice “maintaining and nurturing audience relationships” at every level of engagement, according to the report. It means being comfortable with the fact that not everyone will be a subscriber, and that retention efforts will be different depending on the type of relationship that an audience member wants to have.
We divided the audience into four cohorts based on current and potential value:
- Ghosts – the large group of loosely connected, unknown users. Single visit, unknowns can make up to 90% of a publishers audience, Madeleine White, editor-in-chief of the Audiencers recently told Poool’s London conference.
- Friends – a smaller, but growing group of known, registered users who haven’t taken the plunge to become subscribers but who also have a lot of potential for the business
- Lovers – the small, but mighty cohort of loyal subscribers
- Zombies – you had a relationship with them once, but it has since cooled.
While the North Star goal for most publishers remains subscriber growth, there is revenue to be earned from all of these cohorts. New revenue streams such as events and e-commerce that publishers can tap from any of these cohorts were the fasting growing sources of income for newspaper publishers last year, according to WAN-IFRA’s World Press Trends.
Fundamentally, what we found was that:
- Publishers are shifting from conversion funnels to engagement loops. There is value in maintaining a relationship with audience members across these cohorts.
- ‘Saving’ at all costs risks driving down ARPU.
- Publishers need to, and are, deploying a range of tactics across these cohorts to maintain that relationship and generate revenue from them.
The tactics for each cohort
To maximise revenue across these cohorts, publishers need to offer a range of free and paid propositions, and those propositions should change over time depending on economic conditions and the publisher’s business. The Independent’s anonymous to known – A2K – strategy has allowed the paper to grow their registered user base to 5.3 m users, Jo Holdaway, Chief Data and Marketing Officer at The Independent, told the Audiencers Festival in London. They have been using that rich store of first party data to increase advertising revenue, and now they have a dedicated premium content team to increase their reader revenue.
The report echoes a theme that we talk about often in the Media Bulletin that building loyalty and habit are key to retaining a user. As the report says, “the honeymoon will be sweet, but it does come to an end”. One tactic that continues to pay dividends is the humble newsletter. If someone subscribes to The Telegraph after being a reader of their newsletters, they are 50% more likely to be retained after 12 months, Maire Bonheim, head of newsletters at The Telegraph, told the audience at The Audiencers Festival.
It is all about building the right, ongoing relationships for your audiences. At the core of any retention strategy are great products, and that requires empathy and a sense of what creates value for different audience segments. The result will be increased retention and higher revenues.
The two most intimate digital relationships a media organisation has with audiences are with the inbox and lock screen. Our readers are busy business leaders so we’re constantly considering the value we provide with push notifications and the number (and type) of emails we send themElizabeth Couch, Director of Audience at Crain Communications’ City Brands
That’s just a taster of what is in the report, you can download the full report here from the Media Collective – Pugpig, Manifesto Growth Architects, InDigital Marketing and Piano.
For more from the Media Bulletin, we have covered a lot of the successful retention tactics that publishers are using including:
- How Die Zeit re-focused their efforts from acquisition to retention after they found that their discounted offer had led to higher rates of churn. Their “first day subscription” project focused on building habit and loyalty immediately with new subscribers.
- How the Star Tribune in the US made retention an organisation-wide effort and helped every part of the business, including the newsroom, understand the role that they had to play.
- The importance of multi-product bundles, and the role of apps in retention.
Here are some of the most important headlines about the business of news and publishing as well as strategies and tactics in product management, analytics and audience engagement.
- The AP announces five AI tools to help local newsrooms with tasks like transcription and sorting pitches from Nieman Lab
- How Daily Mail went from voice of Middle England to Tiktok sensation from the Press Gazette
- Media Briefing: How Axios, Bloomberg and Semafor grew their events revenue in 2023 from Digiday
- Ask a(n email) Deliverability Expert: Should I Set Up DMARC? from Inbox Collective
- Can local podcasts become profitable? from Simon Owen’s Media Newsletter
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