While most print magazines have been struggling to find a way to stay viable, Consumer Reports has been able to grow its subscriptions to Consumer Reports Online (CRO) to account for almost half of its subscription revenues. Chief Marketing Officer Jamie Darnow and ConsumerReports.org Editor-in-Chief Rachel Hager gave us an exclusive look at how they do it, sharing 18 lessons for publishers to learn from and imitate, from creative marketing campaigns to their use of account updater software to increase retention rates and revenues.

Founded:  1997 Online, 1936 for Consumer Reports in print
No. of Publications: Multiple, including print-only (Money Advisor, Shop Smart, books, etc.), online-only (Consumer Reports’ Car Best Deals Plus, New Car Price Service, etc.) and multi-platform (Consumer Reports/Consumer Reports Online).
Employees: Staff of 600, more than 90% are full-time
Business Model:  Subscriptions (90%), Cross-sales and Fundraising (10%)
Subscribers:  More than 3.3 million online
Location: Yonkers, NY
Websites: www.consumerreports.org
www.consumerist.com,
www.ShopSmartMag.org,
www.ConsumersUnion.org

Target Market

Consumer Reports Online targets people who place a high value on reliable products and safety for themselves and their families. Their average reader is a well-educated and discerning consumer living in North America (they have more than 150,000 subscribers in Canada).

Content

Consumer Reports Online has a plethora of content, but a very clear paywall. All of their news articles and summaries, including video, blogs and other social media content, are available for free, but their scientific ratings and independent recommendations are behind a paywall.

CRO updates content frequently throughout the day, allowing them to publish information on products as they are tested, sometimes in advance of publication of the magazine. This is a clear best practice as it plays to the strength of online media–continuously updated content available for immediate reader access.

Most of the content is produced by the Consumer Reports “brain trust” of scientists, engineers, writers and IT professionals. In fact, the organization requires and encourages extensive teamwork between its technical departments (scientists, engineers, survey folks and researchers) and editorial and business departments. They use freelancers occasionally, but freelancers are considered helpers not critical staff.

The editorial department recently began experimenting with mobile content, and worked with a third-party developer to create mobile apps and content for the iPad, which they said was relatively inexpensive compared to their other content — both print and site development. However, the first lesson they learned was that, while the iPad will automatically serve up the mobile content, a growing number of users are leaving the mobile formatting to access the desktop-formatted Web content.

Revenue Streams

Consumer Reports Online generated approximately half of its $220 million subscription revenue from online subscriptions in 2011. CRO has three pricing options:

• $26.00 yearly
• $5.95 monthly
• $19.00 yearly for print magazine subscribers.

They also offer a discounted online subscription ($12/year) through their direct mail campaigns to existing print subscribers.

Of the online subscription pricing offers, 70% take the annual rate and 30% take the monthly option.  More than 700,000 people subscribe to both the print and online versions. Given the overwhelming preference for annual subscriptions, CRO tested removing the monthly option, but found that hurt response rates across the board, even for annual subscriptions.

Consumer Reports prices their print and online subscriptions separately, so print subscribers must pay an additional subscription fee for online access. (The print price starts at $29/year for new subscribers who were not solicited. Print subscribers will also get a $7 break in their print subscription price after joining the website. That means a reader will pay $29/year for print + $19/year for online, a total of $48/year to start, unless they take advantage of a special promotion, such as the direct mail campaign described above.)

Group Subscriptions/Site Licenses
CRO only has a couple of group subscription clients, and is very careful who they allow discounted access to because they feel that selling their content to a company at a discounted rate would interfere with their editorial impartiality. They do not aggressively solicit group subscriptions, relying on isolated inquiries. However, they refuse to sell group subscriptions/site licenses to companies whose products they rate. They are more open to educational institutions, but their library program has historically focused on print subscriptions.

One-Offs
Darnow claims that the revenues generated from one-offs, combined with fundraising, is less than 10% of their overall revenue, which still makes the organizations tens of millions of dollars.

Fundraising
Consumer Reports also received $17 million in contributions in 2011, most of which is from paying subscribers who are passionate enough about the product of Consumer Report’s advocacy activity (the company has three advocacy offices for consumer protection and safety in Washington, DC, Austin and San Francisco). The majority of contributed money is put back towards advocacy and publishing overheads.

Marketing

CRO primarily drives most traffic through search marketing and email marketing; but they also employ a wide variety of other marketing tactics in very smart ways that other marketers could apply.

SEM + PPC
Even though CRO is top-ranked  for certain search terms, like “product review”, they continue to buy PPC ads for those terms. The lesson for publishers is that having the top SEO result doesn’t mean you should stop paying for PPC. Furthermore, CRO directs consumers to different landing pages depending on whether they’ve clicked on the organic or paid search results (see the sample in our Marketing Samples Library).

SEO
Consumer Reports Online has clearly optimized its main site page, yet they are not content to rely on just one site page to drive traffic. CRO has augmented its SEO by having multiple blogs and purchasing another site, TheConsumerist.com, which drives a younger, more tech-savvy audience to their site.

Postal Direct Mail
Despite rising postage costs, postal direct mail is still a big traffic driver for CRO. They are able to keep costs down by using their house lists from their print newsletters and magazines. Marketers with access to in-house lists would be wise to start testing their own postal direct mail campaign.

PR
CRO has committed full-time, in-house staff to handle its PR campaigns, which usually occur around the holidays, or a big issue, like their annual car review. (However, the PR managers do not make deals that violate the editorial rule that does not allow reviewed products or companies to use the CRO logo on their site or say they are “endorsed” by Consumer Reports.)

Content Marketing Deals
CRO also provides limited free content to Yahoo and MSN, in exchange for traffic.  Big-event articles, like the CRO annual car review or a review of electronics during the holidays, get prominent display on Yahoo and drive traffic to CRO.

House Advertising
CRO also has some creative advertising campaigns and live events. They make sure to print the CRO URL in the footer of every other page of the print magazine, and have display ads in all of their publications for their other publications.

TV Advertising
In 2009, CRO ran a television ad in Madison, Wisconsin showing a couple experiencing shutter lag when trying to photograph their baby, which then suggested consumers check out their digital ratings and reviews. The ad was run in this one market in order to conduct a pre- and post-survey of brand awareness, which increased in the post survey. Also, Madison is a favored market to run test campaigns and surveys because it has a mix of rural and urban populations as well as red and blue voters (i.e., the ideal purple market).

Live Events
In 2008, CRO set up booths in Boston-area malls where consumers could search products and ratings. Those consumers also got a 24-hour access pass to the site. Darnow claims this significantly raised brand awareness of the website. CRO also makes its presence known at trade shows, but Darnow says this leads to very little traffic.

Social Media
CRO has a robust social media presence that employs some creative ideas, even though the traffic to the site is hard to measure.

• Twitter: The CRO Twitter account (@consumerreports) is the biggest driver of site traffic, especially around the holidays. Marketers should note that CRO has 200,000+ followers but only follows 27 people. Keeping your followers:following ratio high is a good way to establish yourself as an authority.
• Facebook: CRO has 215,000 “likes” on Facebook and does some creative marketing there. The non-fan page prompts the reader to “like” the page in exchange for a piece of premium content — Consumer Reports’ 2011 Review of Acne Treatments. This unique offer not only lets social media fans sample the content (through a “Fan Only Offer” with a VIP icon in the navigation bar), but appropriately targets a younger generation through the right medium.
• YouTube: CRO’s dedicated YouTube channel is personalized and has very professional videos that end with a call to action that directs you to the paywalled ratings on the site (see image below).
• Pinterest: CRO has created a compelling montage of vintage photos on the newly-popular site Pinterest — a great example of how to repurpose content for social media without giving away your premium stuff.
• RSS feeds: Like their newsletters described below, CRO offers a variety of niche-specific RSS feeds for free to readers.

Gift Subscriptions
Consumer Reports and CRO have had a solid gift subscription business for years (see samples of their gift subscription offer). The success of their gift subscription offers has led them to consider starting a formal word-of-mouth campaign whereby subscribers will get monetary or gift certificates for referring friends and family.

Email Newsletters
Despite being a general-topic publication, CRO has created nine separate, niche-specific free e-newsletters to target both paying subscribers and site visitors who enter their email address and then bail. The newsletters (as pictured in the screen shot below) can vary from “What’s New” to health topics. They have their own look and feel but follow a basic format: HTML formatting, including a large image-heavy header and multiple hyperlinked articles with a preview. On the right-hand column, there is a call-to-action to subscribe to either another e-newsletter or one of Consumer Reports’ print publications (sometimes with a free trial, although they are phasing out this offer for reasons explained below). Email recipients can also share the email through social media or email, creating word-of-mouth marketing.

Conversions

Darnow claims that most users are converted when their SEM, SEO and display ads for product ratings take them to a hard paywall. Their conversion page employs a number of best practices, including letting the subscriber know where they are in the process and no clickable links that take them away from the page (not even their logo is clickable). They also have a cross-sell offer on the conversion page.

CRO is currently offering a free trial with credit card to new subscribers through their homepage and email newsletters, but are phasing that out because they found that when they remind subscribers at the 30-day mark that they are about to be charged, many unsubscribe. Although we normally recommend publishers test free trials with credit card, for publishers like CRO where the particular content they’re trying to get at (i.e., product ratings) is for momentary use only, a free trial may not work.

CRO conducted two major conversion tests:

• The CRO homepage is based on a conversion optimization test of consumer preferences. Darnow said editorial and marketing were able to work together to conversion optimize the homepage based on consumer analytics as opposed to editorial discretion, and now the whole team is assured that the content is both well-received and well-read.

• CRO also conversion-optimized their ecommerce pages, looking at how many pages, how much information on each page, how many different things they should ask their user to do and have since come up with their optimal funnel.

Retention

CRO saw a lift in retention when they introduced their free monthly newsletter called “What’s New” and other vertical newsletters. They also have a system in place for dealing with chargebacks and declines (2-4 email series asking them to re-enter their info). When people cancel an annual subscription, CRO will ask if they’d like to complete their term before discontinuing (CRO will offer a refund on the remainder of an annual subscription if members ask).

Most importantly, CRO uses an account update service, which runs all credit cards of customers once a month against a list of everybody in America whose Visa/MC number has changed that month for whatever reason. The software then updates the customer’s credit card number with CRO without bothering the customer. This is a definite best practice that every publisher should be employing as it significantly increases both retention and revenues.

Cross-Sells and Upsells

CRO reaches out to their best prospects for cross-sales and upsales through their own ad server on the site (which targets individuals according to their search and page view history), through email, and sometimes through direct mail. They use a database marketing program to identify and segment prospects. They also employ some affinity marketing, offering auto products at the footer of auto-specific content.

About Jamie Darnow

Jamie Darnow worked for Reader’s Digest for many years, where he sharpened his skills in marketing and quantitative analysis. He then worked for BoardRoom, Inc., which did not accept advertising because they felt it would affect their ratings and content. He learned how to rely 100% on consumers and stop worrying about ad sales.

He says he has a background in “wanting to help people in the most honest way” and so CRO keeps him very inspired. For example, CRO ran a story about how there were over 50 ER visits a month by people who were run over in their own driveway, mostly children run over by their own parents. CRO joined with other organizations to lobby for legislation mandating back-up cameras in all SUVs by 2014.

Jamie says print and digital work well for consumers as well as the organization, allowing the company to double their revenues by charging separately for both, a lesson any site can learn from so long as they are willing to invest in the editorial resources needed to provide truly valuable content.

Vendors & Technology

With a staff of 600, CRO does a lot of its site maintenance in-house, including web design and development, content creation and management, video production and editing. Some of their third-party vendors include:

Payment processing- They have a proprietary system in house, but also use the following services:
Chase PaymentTech – www.chasepaymentech.com
Account Updater – www.visadps.com/services/visa_account_updater.html
PayPal – www.paypal.com/webapps/mpp/merchant

Email and Database Marketing — Acxiom Digital
http://www.acxiomdigital.com/

Site Satisfaction Surveys — ForeSee
http://www.foreseeresults.com/

Web Analytics — Adobe Omniture
http://www.omniture.com/en/

Subscription Site Insider Analysis

Almost every subscription site in the world could learn something from the tactics CRO is using. It’s great to see that print publishers can not only successfully transition online, but can also double their revenues by charging separately for online access. And every marketer should try to apply one of the 18 tactics discussed in this case study:

1. Create separate landing pages for traffic acquired through paid v. organic search results;
2. Do not rely on just one site for SEO, but employ multiple blogs and explore purchasing another site with a similar audience, if possible;
3. Postal direct mail still works, especially if you can reduce the costs by using in-house lists;
4. Invest in full-time, in-house PR professionals;
5. If you have a print publication, advertise your URL in the footer, at least on every other page;
6. Wisconsin is a great market to test advertising campaigns;
7. Try creating unique live events that allow consumers to see how even limited-time access to your content improves their lives;
8. A high following:follower ratio can help you stake your claim as an authority on Twitter;
9. See if you can offer a piece of premium content in exchange for a “like” on Facebook;
10. Make sure your dedicated YouTube channel has a banner ad with a call-to-action;
11. Make sure every video has a CTA at the end as well;
12. Try repurposing content for social media platforms like Pinterest;
13. Market gift subscriptions for great word-of-mouth referrals;
14. Create multiple niche newsletters even if your site covers a general topic;
15. Create an offer page that easily conveys where visitors are in the sign-up process;
16. Make your logo un-clickable on the offer page;
17. Don’t be afraid to break cardinal rules or best practices if they don’t work for your site (e.g., the free-trial-with-credit-card rule); and
18. Use an account updater service to increase retention and revenues.

We only have two suggestions for Consumer Reports Online. We’d like to see more benefit copy on their offer page, in lieu of instructions on how to subscribe. A simple A/B test would help them determine if this would increase conversions. Secondly, we’d also love it if the house ads within specific sections took them to a customized offer page where the benefit copy was related to the section they were just in (i.e., the offer ad in the electronics section would link to an offer page with how CRO can help you shop for electronics).

But all in all, Consumer Reports Online has earned its gold-standard reputation through some very savvy, creative, and data-driven marketing and conversion tactics.