This week, I’m tackling the issue of building membership funnels, as well as some thoughts on why B2B media has built-in advantage, user experience atrocities caused by bad business models and the risky calculus behind steep discounts for subscriptions. As always, please send me an email with your thoughts, although I have to confess I’m a spotty email correspondent, something I’m going to improve in 2021. If you’re reading this and not yet a subscriber, please sign up.
Building a member funnel
Over a decade, I spent an inordinate amount of time drawing funnels -- and sometimes turning them into pyramids. I like the simplicity of them in cutting through the fog that often surrounds what you’re trying to accomplish in the business.
Every media company’s funnel is going to be different since the publishing industry is not a monolith. There are many types of publishers. But for an emerging class of DTC media businesses, from independent creators to micro-media outfits to business brands, a basic funnel is an important strategic tool to move people from their introduction to the brand to habit to loyalty and eventually to membership. It goes without saying, but critical to all of this is simply creating a product worth paying for — and doing it day after day, week after week, month after month. Here’s an example I often used:
Social: For a B2B media business, social can be a chore. I found it was a useful tool for getting people to find our brands, but Facebook wasn’t a priority at any point. It simply didn’t translate to much traffic that would be of use. LinkedIn did a better job, unsurprisingly. Our view of social: marketing.
Site: Getting someone to the site, through search in particular, was an opportunity to begin to establish a habit. This is one reason I find a meter useful so you can build that habit -- and let people understand and experience the product. The bonus for search: You can use it to collect data. For instance, we found our WTF series of programmatic explainers got a lot of search traffic, so we’d offer people a programmatic guide in order to collect data, including emails.
Email: This is the workhorse, long has been for B2B media. Email is critical for a few reasons.
It builds a habit and loyalty. We’d publish all our content at midnight because we wanted to win the morning. (That also forced content differentiation.)
It is the source of first-party data. The value of a B2B media business lies in its database.
People buy stuff from email, including event tickets worth several thousands of dollars. There’s a reason we were bombarded with retailer emails over the past week. It works, often too well because the data always tells you to send.
Podcast: I don’t have a ton of data to back this up, but podcast listeners are often not just loyalists but advocates. The personal nature of podcasts creates a bond that’s unusual in media. The influence of the Digiday Podcast paid tremendous dividends, even if the monetization was so-so.
Membership: Ultimately, this is where you want a big chunk of your audience -- 5-10% -- to end up. That said, you need to tend to the other parts of the funnel when many want to go right to getting people to pay up. Doesn’t work that way. For us, membership had three main drivers:
Meter expirations (3-5 stories per month) from our daily coverage.
Member-exclusive content in the form of columns, newsletters, research. It was critical to come up with this second layer of content that was different than “regular” coverage.
Extras: Events, a quarterly magazine, etc. These were nice-to-have benefits, but I saw little evidence a large number of people signed up for membership mostly for access to these.
Why B2B is well positioned
B2B media has long been looked down upon by the consumer side as a lesser form. That was somewhat deserved, since most trade publications were synonymous with being industry cheerleaders, shoddily reported and very boring. One of the bets we had at Digiday was to have a consumer media approach to reporting, design and product while not forgoing the many advantages of a B2B business model. As I’ve written previously, B2B media is by definition niche so it’s a bit more popular now. Here’s why.
B2B is by definition focused rather than broad. Even the largest industries are only so big and the topics need to be narrow and deep.
B2B media businesses are based around communities, not audiences. Attracting unqualified audience does very little for your business, so better to focus instead on adding value to the community, sometimes through reporting and content and sometimes by connecting them to each other.
B2B always lent itself to diverse business models. At Digiday, we made money a dozen different ways. There was no giant ad business for B2B, so a diversified revenue portfolio -- events, awards, memberships, etc -- was a necessity, not a choice.
Direct connections are everything. I can’t remember many discussions of our web traffic, but rarely a day went by without a focus on email connections.
First-party data is key. The value of B2B media businesses resides in their databases and knowing as much as possible about their communities.
Internet ads, still scary
The first article I wrote on the advertising beat was coverage of then Google CEO Eric Schmidt’s talk to the IAB in 2002. I led with his message to the assorted media, advertising and ad tech people to stop “scaring” people. This was an era where you arrived at a website and took your hands off the keyboard for fear you’d antagonize some Flash pop-up from crashing your computer. Can’t say a ton has changed in much of the ad-funded media.
The biggest flaw of ad-funded media is the separation of the customer (the advertiser) and the audience. In that situation, the customer wins every time, even if it’s not necessarily to anyone’s favor. Behold this disaster of a page from the Daily Mail, a publisher with a *successful* ad business, mind you.
We’re just above the fold here. We have five banner ads and an autoplay video, with the full headline not even visible. This will score high on ad viewability tests, I suppose. But long term, I simply can’t believe abusing visitors like this is a sustainable strategy. Maybe the brilliant business people who shove this stuff through over the objections of editorial know better. I suspect not.
Then again, publishers are still doing this shit with desktop notifications. Perfect that it’s covering up another pop-up to get people to pay money.
The risky business of Black Friday deals
The Athletic is in land-grab mode. It wants to amass a huge number of subscribers -- its last self-reported figure in September was 1 million -- in order to own the premium sports information and analysis market. Subs are the entire game for The Athletic.
Intro offers are necessary tools for getting people into the habit of a publication. After all, very little of The Athletic’s coverage is available for non-subscribers. That presents a problem: How can you convince people to pay for a year’s worth of access for content they haven’t seen? The intro offer solves that problem. The question becomes what’s the time frame for cutting the cost. You’ll see lots of $1 offers out there for high-priced subscriptions. Bloomberg regularly runs $1 offers for a short trial period, but the price then jumps to $415 a year. (Bloomberg’s Black Friday/Cyber Monday deal was for 50% off an annual subscription.)
The Athletic should pile on volume while putting at risk their average revenue per subscriber, which it pegged at $64 a year ago. The bigger question is whether these offers risk alienating existing subscribers and train the market to wait for steep discounts to avoid being the sucker who pays retail. This is the Gap problem of relying on discounting so much that nobody buys otherwise.
A few things to check out
If you haven’t already, check out longtime Publicis exec Rishad Tobaccowala’s newsletter, The Future Does Not Fit in the Containers of the Past. Rishad has an uncanny ability to frame big issues in a way that cuts through the bullshit. I particularly enjoyed his prediction that education, finance and health care are three giant industries poised to be remade on the other side of this crisis.
Shopify is one of the most interesting tech companies around and seems to operate from a different playbook than most. The New York Times Magazine has a good look at how Shopify is trying to be the anti-Amazon and power the legions of independent e-commerce companies.
Now that vaccines are ready to be deployed, it is time to debate the future of the office. Forget the extremists -- we are not going back to normal immediately or all becoming digital nomads either -- and focus instead on what the hybrid work world will look like once it’s safe. Packy McCormick’s Not Boring newsletter has a good, in-depth essay examining the ramifications.
On Friday, catch a conversation I had with CNN’s Brian Stelter at Web Summit. We discussed “the truth emergency” coming out of the U.S. presidential election. Next week, I’m a guest on the Beet TV podcast with Andy Plesser. We discussed the future for events, building a B2B media brand and more. The episode comes out on Monday.