A dozen local news publishers participating in Facebook’s Local News Subscription Accelerator, including The Denver Post and the Minneapolis Star Tribune, flew to New York, Austin and San Francisco this spring for a 12-week program to learn the intricacies of running a digital subscription business.
Facebook has had strained relationships with publishers, which hit a crisis point as fake news crowded out real news in the last US presidential election.
The social media giant’s most recent courtship of the publisher community is centered around driving digital subscriptions for local news, the latest program coming out of Facebook’s 21-month-old Journalism Project.
National media like The New York Times and The Washington Post have had tremendous success with digital subscriptions, inspiring local news publishers to pursue the same model, said Gordon Borrell, CEO of local media consultancy Borrell Associates.
Local news publishers need help to make their businesses more sustainable, and Facebook needs to show it can promote trusted sources of news.
“Facebook has seemed earnest in its initiatives over the past 18 months to help bona fide local news operations work within the Facebook framework. The relationship was extremely contentious prior to 2016,” Borrell said.
Accessing this revenue stream requires developing expertise in areas that don’t come up in home newspaper delivery. Paywalls, digital pricing models and ecommerce checkout systems create a completely different marketing funnel.
“If you had told me two years ago I would be learning about checkout models and pay-per-click campaigns and ecommerce, I would have thought you were crazy,” said Daniel Petty, a sports journalist turned social media editor turned director of audience development at Digital First Media, which runs the Denver Post.
The Denver Post just put up its paywall in January.
Since ads alone can’t support publishers anymore, subscriber revenue is crucial, Petty said – and harnessing that revenue means changing the behavior of customers who have never had to pay for journalism before.
To subscribe or not to subscribe
The digital subscription marketing funnel looks like this: First, readers need to like content enough to hit the paywall. Then, they need to be presented with an offer. They will either subscribe, or perhaps show interest by signing up for a newsletter, which gives the publisher an opportunity to nurture the lead.
Publishers want to maximize the number of people who get through each step. At the accelerator, they shared that conversion data under Vegas rules (What happens here, stays here) in order to benchmark against each other.
The Star Tribune, for example, realized that it needed to rework its checkout process after seeing how its conversion rates compared with other publishers in the program.
“We had suspected that our checkout flows were not ideal, but we didn’t have a way to quantify that problem,” said Louis Deering, senior digital marketing manager at the Star Tribune in Minneapolis.
Being able to show how much its conversion rates would increase helped prove out how much it could improve conversion rates – justifying the expense.
Flash sales almost always do well – provided the messaging around them is right. Publishers were encouraged to test new marketing techniques in the accelerator, and many have since tried their hand at flash sales.
The San Francisco Chronicle ran a two-week sale around the California primaries that boosted newsletter signups and subscriptions by 700%.
“Almost universally, the idea of a very low-priced intro offer, like 99 cents a month, performs really well, regardless of what the full rate is,” said Tim Griggs, the outside media consultant who designed the program.
But a message like “help us survive” will only work if readers believe that’s the case, he added.
Inspired by the success of publishers doing flash sale, the Star Tribune ran one themed around the midterm elections.
Promotions ran across email and social media as well as at the paywall gate. “Not surprisingly, it did substantially better,” Deering said.
Where does Facebook come in?
Of course, Facebook, which plunked down $3.5 million to sponsor the boot camp, also stands to benefit if it helps small pubs drive subscriptions.
“One of the big ideas that came out of the accelerator was that we needed to invest substantial money, time and thought in a mid-funnel strategy,” Star Tribune’s Deering said.
And that’s where Facebook comes in – as a driver of mid-funnel activity, where promoted articles drive prospective subscribers to a pay wall.
Star Tribune devotes about 70% of its marketing spend to Facebook, largely to promote content in order to get readers to hit the paywall.
The Denver Post plans to get smarter about what content it promotes to drive subscriptions.
For example, posts about high school sports, local businesses, and other stories tailored for an extremely local audience get few pageviews, but drive the most subscriptions.
“For years, the mandate was to grow pageviews. But if you look at the articles [readers] view before they convert, it’s overwhelmingly local content. It’s validating to see people willing to pay for local content,” the Denver Post’s Petty said.
In order to get that local content in front of more potential subscribers, Petty is working on implementing a marketing strategy focused on promoting local content. He might pay to boost a story on Facebook about light rail in Denver, for example, and track how exposure to that type of content affects conversions over a longer, 30-day window.
Beyond getting publishers to spend more on Facebook, showcasing local news dovetails with Facebook’s desire to promote content from friends and family. Two days before the accelerator met, Facebook said it reworked its algorithm to prioritize local news.
Local pubs tell community stories that are shared by friends and family, said Josh Mabry, local news partnerships lead for Facebook, who’s part of a four-person team helping publishers at the boot camp.
Publishers who participated saw results. The Denver Post’s digital subscriptions increased 60%. Miami Herald increased the number of readers hitting its paywall by a factor of three, and Gannett by a factor of 2.5.
Some of the results came from thoughtful program design. Not only did publishers meet in person three times during the accelerator, they checked in weekly with coaches and called and Slacked with their new peers. Plus, they each received a $200,000 grant to fund new tools to drive digital subscriptions – but only if they fully participated in the program.
Facebook said the goal of the program was to drive digital subscriptions, with the understanding that Facebook is only going to be one part of a publisher’s business, Mabry said.
Digital Content Next CEO Jason Kint – an outspoken critic of the duopoly – compared the program to Google’s Digital News Initiative in Europe, which gives out grants to publishers in an unfavorable political climate. Still, Facebook’s accelerator is doing its job to help publishers who need it.
Its membership sent a letter demanding Facebook and Google clean their platforms of fake news after the 2016 presidential election, and come up with “moonshots” to help the publishing industry. The accelerator answers that plea.
“Local was a key thing we said they needed to lean into,” Kint said.
After the initial accelerator’s success, Facebook is investing $3.5 million in a second one, focused on membership programs. And it will continue the subscriptions accelerator with a focus on retention, to help publishers figure out long-term value and minimize churn. With measurable results from the first accelerator, publishers are glad to see their publications benefit from Facebook’s local news outreach.
“Facebook sees goodwill as a pretty important area to be investing in right now,” Star Tribune’s Deering said. “And this is an area where that budget can drive broad-reaching social impact.”