When the Arkansas Democrat-Gazette put all its local news behind a paywall in 2001, traffic dropped by 30% for three months… but then it rebounded and the site has gone from strength to strength since then. Executive VP for Digital Conan Gallaty spoke with us about the site’s marketing, price tests, and subscription conversion tactics including one of the best-designed paywalls we’ve ever seen on a newspaper site.
Company Profile
Founded: In print, 1819; online, 1996; paywall launched 2001.
No. of Publications: Parent company WEHCO has 14 daily newspapers (13 online with online subs), 12 weekly pubs, and a bunch of local magazines.
Employees: ArkansasOnline has 18 employees, 16 are full-time. The Arkansas Democrat-Gazette has about 600-700 employees, some of which contribute to ArkansasOnline.
Business Model: Hybrid: advertising, subscriptions, daypass sales.
Paying Subscribers: 270,000
Location: Little Rock, AR
Website: www.arkansasonline.com
Target Market
The Arkansas Democrat-Gazette and its website, ArkansasOnline.com, primarily targets 25- to 55-year-old men and women living in the state of Arkansas with a household income of $50,000 or more.
ArkansasOnline also has a secondary market: A solid 50% of the site’s digital-only subscribers live out of state!
Content
ArkansasOnline provides local, regional and national news, mainly in written form, although the site does host some videos, photo galleries, and interactive maps.
Content that is Web-only (blogs, videos, interactive maps, articles from wire services, such as the Associated Press) is free to view. Content is added daily.
All of the local content produced and printed in the daily print paper is behind the paywall. This mainly consists of written articles highlighting local and regional news. The content is pay-worthy because it’s specific to the region and curated by beat reporters and editors knowledgeable of the area. Content from the daily print paper is published online around 5-6am, around the same time that the print paper is hitting doorsteps.
For tablet and mobile content, the same access rules apply: Content produced for and printed in the daily paper requires a subscription payment, digital-only content is free to view. But the tablet and mobile content can vary from the site content. For example, the site created an augmented reality app, which uses a camera on a smartphone to scan an image in the paper, much like a QR code. That image then launches a video file or photo gallery. See here for a demo: http://www.arkansasonline.com/plus/
Revenue Streams
The Arkansas Democrat-Gazette makes approximately $450 million a year in total company revenues. Advertising and classifieds account for 80%, while subscriptions are 20% (about $90 million). The sale of archived articles makes up a fractional amount.
The site has four main pricing plans:
- Home Delivery + Online – $28/month; $336/year. Includes home delivery seven days a week and access to all online content and tablet/mobile apps.
- Online only – $28/month; $336/year. Includes access to all online content and tablet/mobile apps.
- Sunday-Plus package – $5/month, in addition to home delivery of Sunday paper ($13.95/month). Includes access to all online content and tablet/mobile apps. No annual rate yet.
- Online Day Pass — 99 cents/day. Includes access to all online content for 24 hours. Not recurring.
All subscription plans are on auto-renewal.
About 263,000 people subscribe to the site’s Home Delivery + Online package, while 5,000 subscribe to the Online-only package.
The site only launched the Sunday-plus package recently, mainly to address the hole created by print subscribers who pay a reduced rate for Sunday-only delivery. As of November, about 85% of new Sunday-only subscribers were signing up for the Sunday-plus package.
About 300-400 site visitors a month sign up for the Day Pass.
The site has conducted a number of price tests over the years. Originally the Online-only package was $4.95, and the Home Delivery + Online bundle was $15. The site raised both to $28/month, and Gallaty reported there was no drop-off in subscription rates.
Marketing Tactics
Gallaty told us that one of the big fears in launching the paywall 11 years ago was that the site traffic would plummet. And in fact it did — by 30% for three months. But traffic then rebounded and has been growing ever since
“It was hard in 2001 to relay to readers why we were doing it. We looked like Luddites trying to lock down websites in 2001 during the dot-com bubble,” Gallaty says. It took a while for the company to explain to readers that the advertising revenue was not enough online to fund a large newsroom that created great content. “Once we got that message clear it got a lot easier,” says Gallaty, adding that having a clear and consistent message is something the company wished it had from the beginning.
Site Traffic
ArkansasOnline.com gets site traffic through the following means:
- 20% from organic search
- 30% from direct links
- 48% other inbound links
- 3% from social networks
Inbound site traffic includes links from a number of niche sites maintained by ArkansasOnline on lifestyle topics like pets, local photography, entertainment, moms, and local sports. These sites often run contests where visitors can vote and winners get prizes.
Gallaty also told us that mobile traffic is exploding and that there’s been very fast adoption on mobile platforms, which led to the creation of the augmented reality app (described above in the Content section). In fact, the app got more than 12,000 downloads in the first six weeks.
In regards to social media, all the articles can be shared, but if it’s a premium article, the visitor will be asked to subscribe to view the article.
PPC
The site got a lot of one-click wonders for PPC campaigns on generic terms like “Arkansas news,” so they now focus their PPC and SEM on promoting special stories or for special sections targeting residents looking for a house, job, car, etc.
Advertising
ArkansasOnline has electronic billboards in Little Rock streaming breaking news headlines from the website. Gallaty told us that the billboards basically stream the site’s RSS feed, and that it doesn’t cost any more than a still image would.
Events
As a local paper, ArkansasOnline sponsors a lot of local events, from job fairs and bridal fairs to the big fireworks show downtown and a big high school sports banquet every year. The site looks to sponsor events where they have associated lifestyle content.
Postal Direct Mail
The site continues to use postal direct mail to get new subscribers, but not as much as it used to since postal rates are doing up.
Email
Telemarketing used to be its best way to get print subscribers, but with the Do Not Call lists, the site has switched to more email marketing to rented third-party lists.
Conversion Tactics
The site’s paywall page design observes many best practices, including strong benefit copy (almost unheardof on other newspaper sites), having no navigation bar on the page, and having a button with compelling copy and a stand-out color.
ArkansasOnline.com does not offer a free trial, but its Day Pass pretty much serves as a paid trial. Of the 300-400 site visitors who take a Day Pass each month, about 10% convert to paid subscriptions. At the time we interviewed Gallaty, there was no touch point after purchase, but the site was looking to initiate an email series to help boost this conversion rate.
The site tried to offer a 99 cent trial for a month and then charge $28/month, but abandoned it since the jump in price was too steep.
Retention Tactics
All monthly and annual subscriptions ordered through the website are on auto-renew.
The site also retains subscribers by adding digital benefits, such as its Plus app. In addition, the site sends emails to current subscribers to let them know about these benefits.
About Conan Gallaty
Conan Gallaty got his start in journalism as a reporter. He has been working in digital media for the past 15 years.
He says that the biggest surprise during the course of his career is how the simplest ideas tend to flourish. “We tend to overthink things in this industry. The next big breakthrough isn’t about technology, but about approach. Like look at Facebook — it wasn’t the first social network. It just had the right target group when it launched and the right set of tools to get those type of people. Google wasn’t the first search engine, but they had a clean version and focused on quality results. And look at Groupon — it’s not really a breakthrough in technology — it’s email and eCommerce. The next huge company is using technology that’s out right now, but it’s moving the pieces in the right way.”
Vendors & Technology
Payment processing — In-house, but Day Pass payments are processed through PayPal
https://www.paypal.com/
Web development and CMS — Django
https://www.djangoproject.com/
Analytics — Omniture Analytics
http://www.adobe.com/solutions/digital-analytics.html
Pricing and marketing consulting — Mather Associates out of Atlanta
http://www.mathereconomics.com/
Subscription Site Insider Analysis
ArkansasOnline has one of the best paywalls we’ve ever seen on a newspaper site – and in fact other types of content sites should study their design for ideas. We’re also impressed with their track record of price testing. It’s fascinating that they saw no drop-off when they raised online-only subscriptions from $4.95/month to $28/month.
Lastly, ArkansasOnline has tackled the problem of which content should be free and which paid intelligently. By putting all local reporting printed in the paper behind the paywall, they demonstrate to their audience that local reporting – and the print edition – are worth paying for.
We’d like to see the paper work harder at turning daypass buyers into subscribers. A 10% conversion rate with no marketing effort shows there’s room to grow. We also suspect that because payment processing is handled in-house, they could significantly reduce churn by bringing in some outside expertise or upgrading to an external payments processing system that specializes in recurring billing.
