Blog post

How can content recommendation support subscriber growth

Subscribers will become the lifeblood of most news publishers. This means that subscriber growth, including subscriber acquisition and retention, is one of the most important KPIs for news publishers to monitor. But how can personalized content recommendations boost this vital KPI to support the organization?

When news publishers plan to increase revenue by boosting digital subscriptions, they start by examining their sales funnel, which typically ranges from all users that have visited their website at least once at the top, to users with a (renewed) subscription at the bottom. To maximize the number of users at the bottom of the funnel, news publishers need to focus on three key conversions:

1. From anonymous users to logged-in users

2. From logged-in users to subscribers

3. From subscribers to renewed subscribers

News publishers tend to focus on the second conversion with expensive paywalls, aggressive marketing campaigns, and discounted prices. While this will improve conversion rates, it doesn’t increase the number of qualified leads that the news publisher starts with (first conversion), nor does it increase the user retention rate (third conversion). This results based on our experience is that most of the audience – often up to 50% – remaining in the anonymous reader group at the top of the funnel. Plus, the high churn rate leads to a very low customer lifetime value (CLV). Personalization, when done correctly, can support these three key conversions, boosting customer loyalty and income.

Let’s look at each of these conversions in turn to see the benefits of personalization.

Conversion 1: engaging anonymous users

Registered users have a conversion rate that is 45 times higher than non-registered users, making this a crucial step for moving users through the funnel. Before they convert into registered users, anonymous users want to see the value of the news publishers’ content. However, this is challenging to implement due to the increasing amounts of content generated every day and the vast variety of user interests. It is very easy to surface irrelevant content when promoting the same articles to all your users. The solution is to deploy engagement-focused content recommendation modules in the most visited positions on your digital channels, usually the top of your homepage and your article pages. This will quickly deliver an uplift in your CTR (both on module level and across the overall website), an increase in session length, and an overall improvement in total page views. To put this into perspective, here are the average CTR uplifts for different recommendation techniques based on our experience at Froomle :

  • Human recommendations: baseline
  • Automatic recommendations (e.g., most recent articles or articles with the same tag): +15% vs human
  • Popularity-based recommendations: +25%
  • AI-based personalized recommendations: +50%

On top of the CTR of the different techniques, we were also able to deduce that the CTR uplift tends to be higher for mobile users compared to desktop users.

Conversion 2: convincing registered users

Conversion rates for registered users usually plateau around 10%, which leaves a lot of room for improvement. Personalization plays a central role in funneling your qualified leads to your paywall by firstly identifying the registered users more likely to buy then promoting more paid (paywalled) content to these users, further encouraging conversion. 

By fully rolling out conversion-focused content recommendation modules, your website will see a direct uplift of 10% in paywall impressions (i.e., the number of paid articles visited) and a 30% increase in conversion rates (i.e., the number of subscriptions started).

Conversion 3: retaining subscribers

While news publishers often feel that conversion 2, convincing registered users, is the most challenging step, we have noticed that churn rates are often extremely high. Even aggressive marketing campaigns rarely have a positive impact on user retention rates. Instead, users tend to enjoy the free trial and/or the discounted offer while it lasts and then directly cancel when prices go up. It is also important to note that subscribers will consider canceling their subscription if they are not actively using it. Research shows that around 40% of subscribers are actually ‘sleepers’, not having visited your website in the last 30 days. As this group is high risk for churning, it is critical that you reduce its size as much as possible. When personalization is implemented in your outbound channels, such as newsletters and push notifications, it increases the frequency and length of visits. This directly reduces the number of subscribers at risk for churning, which has a positive impact in the number of retained subscribers and their customer lifetime value.

Personalization and the sales funnel

When the right balance of engagement-focused and conversion-focused personalization modules are deployed, personalization creates a virtuous circle for your news platform, creating more engagement and moving users through the funnel to increase your CLV and your revenues.

Want to see how personalization can help your news platform? Contact Froomle to see the benefits of personalization in action.

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