by Keith Sibson

Keith Sibson, VP Product & Marketing at PostUp discusses that today publishers face more challenges than they ever have. There is more available ad inventory, but revenues from ads have dropped, making it harder for publishers to sustain their ad-supported business models. He explains how smart publishers are considering paywalls to help monetize their content through subscription revenue

Publishers today are facing more challenges than ever before. As available ad inventory soars, revenues from ads have dropped, making it harder and harder for publishers to sustain their ad-supported business models. While digital advertising models lose their strength, savvy publishers such as The Boston Globe and The New Yorker have diversified their digital revenue models to sustain their online business. Adding a metered paywall into the mix is helping publishers monetize their content through subscription revenue while also retaining access to ad revenue from passing readers.

For years, publishers hesitated to implement paywalls, fearing they would be difficult to implement or would cut into revenue by turning away traffic that would otherwise generate ad impression. A new generation of paywalls address these concerns. Not only can paywalls be tailored to fit a publisher’s business model, they can also be personalized to adapt to a publisher’s audience. Publishers have long personalized their content to audiences in order to boost revenue. Now they can personalize their paywalls in order to optimize for the maximum combination of advertising and subscription revenue.

Publishers can use their available first party data to personalize how they present readers with their paywall to maximize the chance that they will become a subscriber, while also minimizing lost ad revenue. Unlike content personalization, paywall personalization doesn’t require having a wealth of data on audience members, which is good news for the typical publisher with more than half of site visitors being anonymous.

For instance, the paywall can take into account whether a reader came to their site from Facebook or Google and tailor the subscription path based on this data. Visitors from Facebook tend to be less engaged than others. These users are typically clicking on articles as they scroll through their news feed, and they will most likely return to Facebook just as quickly as they left. This group is not ready to transact, and putting up a paywall would most probably lead to a bounce. Because there is little chance of converting readers from this segment, publishers can drop the paywall and allow the reader to pass through freely, where they can still generate ad revenue.

A reader who visits your site from Google is a different story. Readers from search have implicitly indicated interest in a particular piece of content. As a result, they tend to be better contenders for subscriptions than fleeting social traffic, and they typically consume more content per visit. Because they are more likely to keep clicking around on the site, the paywall might trigger after one or two articles. Once the wall goes up, publishers might choose to allow these visitors to access additional articles in exchange for their email address. Once publishers get an email address, they get a direct link to the reader, an invitation to the inbox, with which the publisher can nurture the reader into a paying subscriber.

Publishers can also personalize subscription offerings when it comes to location data. If an anonymous reader is coming to the site while in New York — where the site’s core audience is based — they may use a strict paywall that goes up after just a few articles. If the unknown visitor is in France, a region outside of the target market, this visitor is less likely to have a lasting interest in this content. In this case, it might be best to opt for the easy ad revenue and skip the paywall.

Publishers can personalize pricing. Do you know the demographic of the reader? Are readers of a certain age group willing to pay more or less for content based on past subscribers? Adjust accordingly. Unlike in traditional print media, when publishers generally charged everyone the same amount, digital publishers have more leeway. Publishers can optimize price on their digital offerings to specific segments to maximize both overall subscription rate and total revenue.

Most importantly, publishers should test these different approaches to personalization to ensure that they work for their business model and types of audiences. The key for publishers is to determine how much content will satiate the reader, and optimize the paywall to catch them at the height of their engagement with the content. Ideally you ask for money while readers are still curious and interested, but not after they have gotten all they wanted and no longer have an immediate incentive to subscribe.

That’s why personalization is so important for successful paywall implementation: every reader is different. If readers can tailor their paywalls to capitalize on individual user appetites and behavior, they increase their chances of converting users into paid subscribers. When the future of premium publishing relies on subscriptions from individuals, it only makes sense that publishers should personalize their business model to those individuals.