Online Subscriptions - Revisiting Subscription Revenue Strategies to Support Changing Business Models
Title: Revisiting Subscription Revenue Strategies to Support Changing Business Models
Detail: What's the right mix of free and paid content? How do I balance advertising, subscription, and single item revenue streams to meet quarterly goals and maximize long–term profitability? If you are like many strategists in the world of online subscriptions, you're looking at adjusting your revenue mix formula and adjusting your marketing strategy accordingly. Don't miss this spirited discussion to learn how a shift in the "big picture" will affect your efforts to boost traffic, increase conversions, and optimize revenue per subscriber.
Bobby Burton, Chief Operating Officer, Rivals.com - could not make it, Marybeth
Gavin, Senior Marketing Manager, Hoovers.com, John Boris, VP Marketing,
Zagat Survey
Moderator: Sean Donohue, MaketingSherpa
My notes:
His intro went over the turmoil over the last year in the subscription model talking about the move back to the advertising model. He reckoned that this is cyclical and only applies to certain content which is explicitly up against similar content.
Adverts versus subscriptions - he asked them about the hybrid business models,
Marybeth explained that Hoovers supplies B2B information with a subscription service that takes advantage of their propriery content.
They found that their subscribers became a valuable group for advertisers and they were approached to carry adverts. So they did! And it now comprises about 10% of their revenue - but it is carefully done
John said that Zagat has bounced backwards and forwards between subscriptions and adverts for the last couple of years. Now they are on a hybrid. A specific change they have made in the last year has tripled their advertising revenue.
Advertising is the fastest growing revenue stream from their sites and they are debating moving to a free model - but giving up a guaranteed revenue steam from subscribers is difficult and may not be necessary. Subscriptions are still larger than advertising though.
Sean Donohue asked how they decide to place content on either side of the Free V Paid barrier?
John said that the key piece of information behind the barrier is the review of a establishment and they now also have other stuff like video and tours which (if they are community generated) are behind a free sign up barrier.
Their mobile content is new and behind the subscription level.
Marybeth - they use the free site as a lead generation tool (they do not have a free registration level) and they tease with summaries for which the detail is available behind the subscription barrier. All their proprietary and analysis content is subscription only. The primary benefit they offer is that even with the non proprietary information they can save vast amounts of time by gathering and summarising it in one place.
Sean mentioned Rivals.com (missing panellist). It gathers information and communities around college sports. They realised that the community they service is really active at certain times of year and so they ramp up their content and marketing to match those natural peaks in interest.
Sean then asked about the community/Web2 levels of content - these are very typically kept behind free registeration. He asked Marybeth if Hoovers have been considering this area?
She said that they have implemented community forums, blogs and podcasts. More recently they have added self listing for individuals to add themselves as executives on company listings. However she said that their client base is time poor and the takeup has been poor. They have launched a separate site to promote those features.
Sean said that Rivals.com (who charge $9.95 a month) have found that the community features have been a key attraction for their subscribers.
He then asked how the panellists prioritise their attention across the various revenue streams?
John - they have two teams focused on advert V users/subscribers. They have started to promote their free offering online to maximise advertising revenues and then subscriptions (to combat the perception that they are a paid only site).
Marybeth. They focus on bundling contextual content and wrapping advertising or sponsorship around this content bundle. They also line up free trials and other benefits that complement the content.
As they are used a lot by job seekers looking up background information they have also run job adverts on company pages (ie Dell openings on the Dell page)
Sean asked them each for one quick tip to share with audience
John - they used to have multiple subscription offerings and they eliminated the lower price offering. They did not reduce the conversion rates.
They also changed their cancellation policy - now by phone only and their cancellation rate has reduced by 40%. [this seems dumb to me, keith]
Marybeth - a livechat option is used as a conversion tool - if a visitor delays at a conversion page for too long they are presented with a livechat box asking them if they need anything - this has a very high success rate.
They have also used webinars with a lot of subtle background inferences on how Hoovers can help the audience for the webinar.
What really, really works commercially is to ask an advertiser to sponsor one of those webinars.
Q from audience - someone whose business model is more subscription than advertising. She asked about how they are doing the financial modelling on the future revenue models.
John said that they gather a mix of quantitative information and informed opinions. If they forecast an inflection point in the future then they do need to decide on if they make a short term decision to pre-empt the future change.
Q - are either of them using widgets etc to push some of their content into social networking sites etc?
John - they are working on this at present to increase awareness but they are a strong destination site and this influences their approach.
Marybeth - they have developed a Google live search widget and a couple of other things but they have not yet seen traction with those.
Q - how do Zagat move people up the value train?
They have seen the biggest success in moving people from visitor straight to subscriber. Conversion from user to subscriber is less successful. They have offered a trial subscription with some success and use various onsite messaging to change people.
Q - product development split between free and subscription sites
Both said that their content is shared and so the product development is similar for both.
keith
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