TheDay.com Launches a Paywall That Keeps Readers and Advertisers Happy

Want to create a paywall, sell thousands a year in online subscriptions, and keep both advertisers and readers happy? Well, read on. The Day’s

Want to create a paywall, sell millions a year in online subscriptions, and keep both advertisers and readers happy? Well, read on. The Day’s Director of Marketing & Audience Development Daniel Williams spoke to us about how The Day continues to generate $25 million in revenues. Plus, this Case Study contains lessons about membership rewards program, retention marketing, and subscription marketing ideas to inspire every subscription and membership site!

Company Profile

Founded: In print, 1881; online, 1995; paid subscriptions online, 2011
No. of Publications: 1 daily newspaper, 15 weeklies, 1 quarterly. Plus Zip06.com, a Patch-like network on town news micro-sites (44 towns in network, each with its own page).
Employees: 240 full-time.
Business Model: Hybrid
Paying Subscribers: 35,100
Location: New London, CT
Website: www.theday.com
http://rewards.theday.com/
www.zip06.com
www.graceforwomen.com

Target Market

The Day primarily serves residents and readers interested in New London and eastern Connecticut (the area is home to a large naval base, the U.S. Coast Guard Academy, and two of the U.S.’s largest gaming casinos — Mohegan Sun and Foxwoods resorts).

The average subscriber is 54-years-old, affluent (a median household income of 88,000 versus median market level of 74,000), educated (45% graduated a four-year institution) and loyal (average length of subscription is 11.8 years).  

Content

The Day newspaper and website provides news for the New London and eastern Connecticut communities, mainly consisting of articles, videos and photogalleries online. The company also has an electronica replica of the paper, and an HTML5-based mobile site.

Free Content
Content provided by wire services, like the Associated Press, is free to view, along with some blogs and photo galleries.

Paid Content

Premium content (i.e., content written by The Day’s staff) is marked with an icon (see image). Visitors can view 10 premium content articles a month before being asked to subscribe. (They are asked to register with an email address after three.)

Content is added multiple times a day and about 40-50% of the content available through the website is not part of the print product. Approximately 35% of our 4 million monthly pageviews are premium content items, says Williams.

The Day maintains a 55-person news and editorial division, which is atypical for a newspaper of this profile (34,000 daily circulation). The paper and the site have won multiple awards.

Rewards Program
The Passport Rewards Program is included with a subscription to The Day. While hosted on a separate site and tech platform, the program doesn’t require a second login, thereby making readers feel the program is integral to The Day’s digital product.

The program has three components (new offers are added daily):

    1. Rewards — ongoing discounts to local businesses and attractions. The Day is ideally suited to pair local businesses with residents in a way a national newspaper could not.
    2. Dream Giveaways — raffles for exclusive deals, such as an overnight stay at Mohegan Sun, dinner at Bob Flay’s restaurant, family night at minor league baseball in a luxury suite. The Day uses marketing trades to acquire these goods and services.
    3. Discover Events — Members must RSVP for these first-come, first-serve events, whose attendance numbers are capped. Recent events consist of date night at The Guard Arts Theater — which included free admission to movie, a catered open bar, Member day at Mystic Aquarium, an evening with Eugene Robinson of The Washington Post, and a panel discussion with an actor’s studio that Robert DeNiro and Al Pacino attended.

“Advertisers love it,” Williams says, because they are not being charged — The Day is just asking advertisers to provide exclusive access and a product or service that subscribers find beneficial.

With the Passport Rewards Program, The Day has found a way to 1) nurture relationships with existing advertisers, 2) compete with sites like Groupon and Craigslist, 3) maintain a competitive advantage with readers, who could find information on local events elsewhere, but not the discounts. Thus, the rewards program is helping The Day keep both advertisers and readers happy, a lesson for all subscription sites.

Revenues

The Day’s total company revenues are $25 million. (Note: The Day Publishing Company is owned by a split-interest trust. This arrangement ensures that the newspaper will remain independent and locally-owned and that profits from the newspaper will be distributed to non-profit organizations within The Day’s primary circulation area.)

The Day Publishing Company has five main revenue sources:

    1. Subscriptions (28%)
    2. Advertising (52%)
    3. Community and Commercial Printing (2.7%)
    4. Managed Service Program (.6%)
    5. Other (16.7%)

All subscriptions include access to digital replicas, and tablet and mobile content, as well as the Passport Rewards Program . The site has various price points for subscriptions:

    • Platinum (Mon-Sun home delivery + full digital access) — $247/year, $22.99/month
    • Gold (Thu-Sun home delivery + full digital access) — $199.99/year, $18.99/month
    • Silver (Sun home delivery + full digital access) — $119.99/year, $10.50/month
    • Digital-only — $99.99/year, $9.99/month

Of the subscription plans:

    • 86% of members are Platinum
    • 3% of members are Gold
    • 7% of members are Silver
    • 4% of members are Digital-only

Or, put another way, 34,000 subscribers receive a print + digital bundle and 1100 are digital-only. Digital subscriptions amount to around $100,000 annually.

Until the September 2011 launch of the membership/metering model, The Day never offered discounted pricing. Since then, they’ve tried some different promos and 38% of members are on a premium rate (an average term discount of 8%).

The site offers auto-renew, and it is an “opt-out” option. Since the online subscriptions launched in 2011, 88% have left “on” auto-renew. In addition, 29% of legacy subscribers (the 15,000 people subscribing to print prior to the online subscriptions launching) have been converted to auto-renew as well. In total, 33% of The Day’s subscribers are on auto-renew.

As mentioned above, individual subscriptions do not simply include access to the website and print newspaper

Group Subscriptions
The Day offers business-level access to its site. Usually banks, law firms, and other businesses where it’s important for employees to have unlimited access to local news take advantage of group subscription plans. The Day has three group subscription levels:

Most businesses that have a group subscription with The Day have 1-24 employees and choose the annual subscription price.

Managed Service Program
In addition to subscriptions, advertising, and commercial printing, The Day offers something called “managed services.” Basically, the company uses the audience development technology it developed in-house to offer marketing research and campaign management services for local businesses.

For example, The Day will study the customer file of a local theater using geo-demographic segmentation and research to determine the market opportunities. The Day will then work with the theater company to determine how many people fit the profile in the market and here’s how the theater can reach them through database marketing.

This service provides an additional $150,000 in revenues.

Marketing Tactics

Paywall Launch & Transition
The Day decided to move from a free site to a paywalled site in 2011. After announcing it to readers, Williams told us the reaction during the first 24-hours was negative. However, during the next 24-48 hours, loyal fans of The Day start defending and promoting the decision to skeptical audience members.

“They convinced naysayers why this is necessary and a good decision and why it’s important for them [consumers] to support TheDay financially,” Williams sad. “We didn’t have to get in and engage. It added a degree of credibility that the readers were making this case.”

Williams and the publisher of The Day then hosted an informal live chat a few weeks after the announcement. Williams said the live chat was very helpful in explaining The Day’s reasons for pursuing a paywall, and the reader promotion led to a more civil tone with fair questions. There was not the “ugly tenor” that might have occurred had the site launched without notice, he said.

Subscriber Acquisition
Overall, 78% of new subscriptions come through online, 16% are through in-bound call center and the other 6% are through mail response.

Here are some of the marketing tactics the site uses to acquire new subscribers:

    • SEO: The Day’s website gets 24% of traffic from search engines, 26% from referring sites, and 50% is direct.
      “My sense is that we have very good practices for SEO,” Williams said, which is supported by the site’s use of keywords related to a hyperlocal context.
    • Social Media: The site also has a pronounced social media presence, with 12 to 20 daily posts across Facebook, Twitter and YouTube, which also increases its SEO rankings.
    • House Ads: The Day runs print ads in its own print publications (including the weekly pubs). The Day also sponsors events, which includes prominent signage.
    • Postal Direct Mail: The Day drops 150,000 direct mail pieces annually, mainly for new member acquisition for the bundled subscription packages.

Conversion Tactics

All visitors to TheDay.com are entitled to 10 premium items per calendar month. Visitors are required to register through and overlay and create a profile after the third premium item. After the 10th premium item, non-subscribers are invited to become a member or link their home delivery to unlock full access to the site.  For non-members, the meter resets on the 1st of each month.

The site does not offer any free trials, but does send one email per month to non-members inviting them to become a digital or a Silver member with a limited time, reduced price offer.

Group Subscriptions
Leads for The Day’s group subscriptions are primarily driven through print and digital ads with a branded URL. Most of the orders are taken digitally.

Retention Tactics

The Day employs a number of retention marketing tactics, including:

    1. Renewal notices with tailored messaging
    2. Voice-recorded calls to expired subscribers (who get a 30-day grace period)
    3. Three email contacts after expiration over 30 days
    4. Stop-save efforts through The Day’s inbound call center and technical support desk

Since the implementation of this retention program, The Day has reduced churn by 18%. The site also shifted its sales channel mix from 77% telemarketing/crewing (knocking on doors) to 74% direct mail/email/web response over the same two-year period.

The average account lifetime is 11.8 years. For new subscribers, the annual retention rate is 66%.

About Daniel Williams

Daniel Williams began his career in newspaper operations management, and then shifted to a marketing focus in 2001. His background in technology, call center operations, database marketing, business analytics, and CRM allowed him develop and implement The Day’s new user-focused business model.

His biggest lesson learned was the shifting nature of customer service for today’s local papers. While most local papers used to focus on delivery mechanisms in order to ensure customer satisfaction, they now have to focus on technology support, which requires a different skill set.

His advice to other publishers is to “begin with the end in mind.”

“Establish the three to four axioms that you will not deviate from — for example, The Day had decided that we will own the customer relationship, we will achieve single sign on, and we will use open-source technology. Then proceed from there.”

Vendors & Technology

Hosting — Emailvision for enterprise marketing and audience management system, Media Temple for The Day Passport
http://www.emailvision.com/
http://mediatemple.net/

Payment processing — FormRouter and BillTrust
http://www.formrouter.com/
http://www.billtrust.com/

Email management — Emailvision’s Campaign Commander and Vertical Response
http://www.emailvision.com/
http://www.verticalresponse.com/

Web design and development — Julia Balfour, LLC (The Day Passport), Internal staff (theday.com)
http://juliabalfour.com/

Content management — ModX (The Day Passport), Saxotech (theday.com)
http://modx.com/
http://www.saxotech.com/

Subscription Site Insider Analysis

By offering the Passport Rewards Program, The Day has given both paying subscribers and advertisers a reason to celebrate the paywall — which we like a lot. We also like that the site is offering auto-renew, and using a combination of “tried-and-true” marketing tactics (like direct mail and advertising) with newer tactics (like registration overlays and 30-day email campaigns). And we especially like the company’s full-developed retention campaign.

Our best suggestion for the site moving forward is to engage in more rigorous testing. It may want to consider streamlining its conversion funnel online and placing a “Subscribe” link on the homepage (as we say in our Case Study on Foreign Affairs, a large percentage of conversions can come through the homepage after visitors hit a paywall a couple of times). The site should also A/B test overlays and its automated email series. And lastly, even though the site is successful now, it may be challenged later on, especially since the average reader is 54-years-old. The Day’s next goal should be to grow its subscriber base among younger readers, especially among 20- through 40-year-olds residents. Fortunately, the large editorial staff affords the site with the resources to explore content formats and opportunities that the next generation of readers finds engaging.

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