Chris Duncan, chief marketing officer for News UK, will be appearing on a panel at TheMediaBriefing’s Monetising Media conference which takes place from 21st – 23rd October 2015 in London.

News UK was one of the earliest proponents of the subscription model of digital news. Its reported success in recalibrating an audiences’ expectations about what’s worth paying for online resulted in The Sun’s digital audience doubling year on year back in 2014, and results released since then suggest the news organisation has demonstrated it is possible to build a viable subscription model.

The group’s CMO Chris Duncan attributes much of that success to a constant reappraisal of their audience needs and, ultimately, turning the transactional nature of a subscription into something more akin to a relationship, using technology from Zuora:

“What we’ve done here over the past five years for the Times and probably two years for The Sun is try to work out how do you transition news from a product-led print business or a free digital business into a paid lifetime value digital business.

“We’ve worked hard to frame subscription as membership because we were clear that [while] subscription is a transactional way of paying, membership is a way of having a relationship with a newsbrand for the long-term.”

To encourage that initial leap on the customer’s part into becoming a subscriber, it’s common for News UK to offer an extra incentive to the news content, whether that’s a one-off product like day passes to Sky Sports or something longer-term, in a bundle. But, as Duncan explains, it’s imperative that the subscriber is in it for the long-term:

“When you’re creating bundles, you’re creating a view in the eyes of the consumer that the combined value of the bundle is worth more than the individual parts.

“For it to work, the consumer has to already value both news and the incentive. Incentives that get people to sign up who aren’t interested in reading the content are commercially disastrous. You end up with high cost of entry, very low lifetime revenue.”

As part of that, it’s vital that News UK learns at what point along the customer journey they become a subscriber, and Duncan believes that’s an iterative process that doesn’t end when a person clicks the subscribe option. Instead, it’s an ongoing matter of examining the data News UK has (which is extremely granular, Duncan says), and reappraising what matters to that individual:

“We record every article read by every customer every day in order to understand how customers are navigating the product, which of our articles are more or less successful, whether content consumption ultimately leads to whether customers stay as subscribers.

We have an almost unlimited access to data at a product, article and customer level.”

Benefits beyond

That data can then be used for more than simply reducing the hassle gap for consumers who might be tempted over the barrier into becoming paying subscribers. As Duncan argues, it’s at the centre of News UK’s advertising strategy:

“Firstly, it feeds our advertising business. We run a blended model ever since launch; we take revenue from both customers and from advertisers.

Advertisers are increasingly interested in targeting different groups of readers. Take a really easy example: If you’re Sky Sports, it’s interesting for you to understand which sports our readers are interested in, which columnists they follow, what time of the day they’re reading about sports…”

 And data alone, without successful extrapolation and implementation of what it tells you about your audience, isn’t enough. Duncan believes that the data they gather from their subscribers aids them in monetising their customers though identifying areas of coverage where they can be better served, and selling that data to advertisers.

It’s a reciprocal relationship, a two-way street between publisher and audience:

“We use audience segmentation to narrow down the audience segments we’re most interested in, where we think there’s long-term growth. And we concentrate quite hard on streamlining the number of things you bring to market, because at the moment the data is not the barrier. The marketing resource and the ability to coherently bring things to market is probably a bigger barrier.”

Wider advertising woes

News UK is in an interesting position when it comes to distributing its content. As was argued in a recent media spat about exactly why The Sun appeared to be relaxing its paywall, it retains control over the context in which its readers consume its articles, videos and advertising. That’s not the case for the wider market, which is finding itself increasingly reliant on third parties like Facebook and Instagram to get significant audience numbers.

Of that tend, Duncan believes it will have implications for the tripartite relationship between publisher, audience and advertiser:

“…understanding to what extent advertising revenue is consumed by intermediaries, and how much of the benefit – particularly in the publishing space – of your content accrues to third parties rather than yourself [is vital].

“You find yourself, in a way, picking your way through ‘what do I need to do with distribution’ versus ‘how do I make sure that that distribution ultimately benefits my business rather than the third-party platform that I’m serving it through’.”

Ultimately, then, the cause of News UK’s apparent return to profitability might be a by-product of controlling the context in which their audience consumes their articles and advertisements. And at the heart of that, according to Chris Duncan, is a membership mentality among their subscribers.

Chris Duncan, chief marketing officer for News UK, will be appearing on a panel at TheMediaBriefing’s Monetising Media conference which takes place from 21st – 23rd October 2015 in London.