This is the last in our series of interviews with speakers for our Media Marketing Strategies conference on November 19.
The decline of newsstand sales for consumer magazines can’t be seen in isolation. It has also had a huge impact on the way in which subscriptions are sold, both in print and digital.
That shift and its impact on subscription marketing have been witnessed first hand by The Economist EVP and managing director of global circulation Michael Brunt over the seven years he has worked at the publication:
“It’s very disruptive in the way that we sell,” Brunt tells TheMediaBriefing. “It becomes a more complex pricing message. Subscriptions were traditionally sold on the discount of the newsstand copy and convenience. That’s no longer relevant when you are selling a subscriptions to an app or a website.”
“Effectively you shift from a message that is ‘a subscription makes sense for a regular reader of the newsstand copy’, to one that focuses purely on the benefit of paying for our content.”
The Economist offers three main categories of bundle: Print-only, digital-only, and a combined print and digital offering. Brunt says The Economist doesn’t care which bundle package subscribers choose, and its numbers suggest the platform-agnostic approach is working well:
— Readers: The Economist had an average of 1.6 million paying readers each week, and an estimated readership three times that at close to five million.
— Subscribers: Nine in ten of those readers are subscribers, with around 117,000 taking a digital only subscription.
The platform-agnostic approach is reflected in the way the deals are priced. Digital-only packages priced on a par with print only. Combined bundles carry a premium of around 25 percent.
Prepared to fail
This increase in complexity also applies to the ways in which The Economist can reach its subscribers, which has led Brunt to invest a fifth of the budget for driving circulation on experimenting with new tactics and routes.
“That means a high failure rate,” he says. “That’s the nature of an R&D budget, we expect about 80 percent [of new ideas] to fail.“
Brunt says the need to experiment has affected the skills he looks for when hiring marketers. Gone are the days where he would prize the combination of the ability to analyse the numbers and understand subscribers and the messages that would go down well with them.
“What we’ve done now is strip out the number crunching and put them in a separate team, and what we are looking for is innovative marketers.”
“We rarely recruit people from publishing. What we really like is people who’ve worked in entrepreneurial environments who can imagine multiple ways we can reach our audience.”
Lifetime marketing value
That preparedness to fail doesn’t mean a lack of concern for being cost effective.
“We have a model for measuring the life time value of all our marketing spend,” says Brunt “What weighs in is the cost to acquire, the likely retention rates of those customers, and also the revenue.”
Those calculations guide The Economist’s choice of marketing channels. So while in the US 40 percent of The Economist’s marketing budget is spent on direct mail, elsewhere The Economist spends virtually nothing on mailouts.
Brunt says the type of material they use to acquire subscribers also has an impact on the predicted lifetime value. Someone who signs up as a result of reading a slimmed-down version of The Economist is expected to subscribe for longer than someone signing up via a display ad because they have been drawn in by content rather than a particular deal.
The less likely a subscriber is to renew, the lower the cost of acquisition must be to make the marketing effort worthwhile.
“We are continually evaluating all possible marketing routes and testing, testing, testing. It’s very, very traditional direct marketing, test and learn, and broadly do more of the things that work well and less of the things that don’t.”
You can find a full speaker list, agenda, and details of how to sign up for Media Marketing Strategies, here.
Image via Flickr courtesy of Global X used under a Creative Commons licence.