Will your paywall kill your website traffic (and ad revenue)?

Transcript:

Welcome to episode 28 of the Paywall Podcast. I am here with Tyler Channell from Paywall Project who works with lots of local newspapers, West Virginia and beyond . Yep. Welcome.

Alright, today we’re gonna talk about “Do paywalls kill website traffic?” And what that really means is: Do paywalls kill your advertising? That’s the big fear, from what we hear from publishers, and this podcast is really dedicated to the publisher that’s at the front end deciding about a paywall, right?

Whether you need one, maybe you’ve already decided that you need a paywall — You’re just nervous about implementing it. And the thing we hear over and over again from our publisher customers is, “What’s gonna happen to my website traffic? What’s gonna happen to my ad revenue?” And of course, the story is with ad revenues generally, especially network ad revenues.

There are some bright spots which we’ll talk about, but network ad revenue is in a very tough place. And yes, if you paywall your content, technically you will drop your traffic. So there’s the bad news out of the way.

Okay, so before we jump in there are really two types of paywalls we just want to cover here.

And I wanna share a little story about this is a years ago, we were dealing with a magazine publisher who implemented a hard paywall. And they they were print publisher. They distributed nationally. They had a website with all their content on it. And one day, and we were working with them , and one day they decided to turn on a hard paywall, which means that every single article on their website was locked down and we’re talking decades of articles that were on their website.

Anyone want guess what happened to their traffic? How hard do you think their traffic fell? What percentage of traffic do you think? This is a hard pay wall. Hard paywall. Every article. It fell off a cliff. Sure did. That’s, I couldn’t give you an exact percentage, but they lost at least 80% of their traffic. It was over 80.

And I went, actually looked at their Google Analytics and it fell off a cliff. I, couldn’t, I was completely stunned. I emailed them right away. I said, What are you guys doing? And I could not convince them. This was a well known publisher, a well known publisher that no longer exists.

Ouch. I’m sorry to say they did everything wrong. Yeah. However, let’s talk a little bit about the modern paywall, the metered paywall, which is of course what we’re involved in. And the metered paywall is a very different animal. And when we look at across our sites, when somebody sets up a metered pay wall, we do see a bit of a traffic drop.

It varies really depending on how you set it up. For instance, if you go very restrictive — let’s say restricting views to one article per month — for a typical news publisher that’s gonna, by definition, cut your traffic down, maybe up to upwards of 30%, if you are generous with your meter.

In other words, let’s say you allow five or 10 free articles to be read, per month. Because what the meter does is it lets the inbound visitor read a select number of articles and you, the publisher, get to choose how many articles there are. And maybe the impact’s only about 5% of your visitor traffic.

So it really depends on, how you set it up. And Tyler, I know you work with a bunch of newspapers that are running this. What, kind of metering do you see typically?

Typically a one-to-one ratio, I call it. So, one free article for the masses of non-logged-in people. And then after that article, asking them to sign up for free for an additional article, which as if you’ve listened to this podcast, puts them on your newsletter and also registers them in WordPress. Making it that much easier for them to eventually pay without having to go through all that process.

Let’s, jump into it since you started with the free registration and such. Yeah. And what I want to talk about is the challenge of the hard paywall, the metered paywall.

Yeah. A bit of a loss in, short term traffic. But what I’m gonna say right away is that a, with a modern pay wall, that’s set up correctly, you’re actually gonna do two things. You’re gonna grow your ad revenue, you’re gonna have better ad revenue. We’re gonna talk to you about how to do that.

And you’re also gonna be growing, and most importantly is you’re gonna be growing your readership in the long term, and you’re gonna have a higher quality level of readership. And that’s what’s really important. And yeah, advertisers want quality readers. That’s, really, they want results is what they want, and you can give it to ’em.

But before we jump into that, I wanna show a chart here that we’re all looking at. It says, biggest opportunity on here. And if you step back and you look at your visitor traffic and if you look at your visitor traffic to your publication, you have generally three categories of visitors.

You have the visitors that are really your big fans, and when you put up a paywall of any kind, really, it doesn’t matter what it is, they will generally subscribe pretty quickly to you, and that’s okay. That’s on the left side. They’re your hardcore fans. They’re gonna support you no matter what you do. They’re gonna, they’re gonna give you money, They want your content, they wanna support you, they love you, and that’s great.

I see this a lot with the local news publishers. Put up a, sometimes put up a website for the first time. We’ll get a hundred plus new subscriptions without asking for much at all. They’ll get a hundred new subscriptions right out of the gate. And those are your loyal fans built in.

Especially if you’ve been publishing, you have readers, you probably have a newsletter list that you’ve started and, you have readers, and a lot of them won’t even bother with the free registration. Can’t be bothered with that. They’re ready: ‘Let’s go, let’s subscribe and let’s pay.’

And and then on the complete flip side, the opposite side, which is on the right hand side of the chart are the, one-and-dones, right? They’re the visitors that land on your site (I won’t even talk about bots and, non-humans), the folks that come in because Google picked up an article and they’re, maybe they’re in the region, maybe they’re not, and they just read an article and that’s it.

And they go away and they’ll never pay you, They’ll never even register for anything. They’re just go, they’re just fly-by traffic.

And so those are your two extremes. And then there’s everybody in the middle.

And this is what we call the biggest opportunity. These are the casual readers and what I call the super casual readers. And the super casual readers are the ones that they like you, they like your publication. They would love to support you, but they’re just not ready to support you yet. They’re not ready to pay essentially, when you put up your pay wall. They might be ready in a month. They might be ready in a week. They might be ready in a year.

Some of them will be ready sooner. Some will be ready in just five or 10 minutes. I have a Slack channel with all the publishers that I work with. And I get pinged every time there’s a new free registration or a new paid plan. And oftentimes I see someone will sign up for free and then five minutes later, it’s a small percentage, five later, will subscribe right away. They’ve, seen the value within five minutes which is why that preregistration helps, right? You create momentum.

Like they’ll register for free. And then they read more, and then all of a sudden it says, Upgrade. And they’re like, Yeah, this is good. Let’s go. . .

The best case scenario for a casual reader is five minutes. But it might take five months, right? Depending on the person. And the key here — and this is what every publisher needs to do just about every publisher — is to set up that free registration we were talking about.

And that’s how you capture that super casual reader and start nurturing them. What that means is you stop the reader after maybe an article or two and say, “Hey, read this article for free.”

So they get a subscription (we call it the) nag, or a message that says, “Hey you’re sorry you’re out. But if you register, you can read this article and maybe add some other benefits – get on the newsletter, maybe you get an extra article every month, maybe it’s a few articles.” Again, this is up to you as the publisher, depending on your traffic and your audience, but the registration is essentially a way to capture the email address and get that new super casual visitor onto your mailing list, so you’re sending your newsletter to that person.

That’s the key. And then what does the newsletter do for you, Tyler? It burns through those free views that the free registration user has and gently nudges them to upgrade. That’s the goal.

And also for those of you who are thinking about setting up a free registration and a newsletter these folks are on your newsletter now too. And your newsletter has value; I would argue has a lot of value to, say, Local advertisers. They can sell sponsorships or even just traditional ads inside the newsletter to everybody in this town, or at least a percentage of everyone in this town: that’s some pretty extreme value.

Because these folks have engaged. They put in their email address, they put in their name, they’ve signed up that’s far more valuable than your average impression on on your website. If it’s just eyeballs for the sake of impressions they’re never near as valuable.

Yes. Sponsorship. That’s right. The newsletter, although the main intention when you put up a subscription wall or paywall is to drive folks back to your articles and then you nag them over time to pay. But that sponsorship is something so important.

You have a growing newsletter, (and we’re gonna talk about the numbers in a little bit, about what you can expect for numbers) but the ad world is changing. The digital ad world for publishers is really changing from that banner ad advertising to sponsorship. So the smart publishers are changing their tune to sponsorships, they’re sponsoring packages of things, and the newsletter is the ultimate package of content.

We love newsletters as humans. We love packages of content. I get a local newsletter, a couple of them, every morning, and I read them, right? If you find a hobby magazine — you’re in fishing or you’re a tennis player or whatever — and you get that newsletter with a package of content, you’re gonna read it, you’re gonna look at it. The newsletter is the best direct marketing tool that a publisher has. And I would argue even better than print direct marketing. (And that’s the old term. That’s for like old guys like me.)

You have a list; it’s your list. You own it, you control it. It’s not social media. Facebook isn’t changing an algorithm on you or LinkedIn isn’t changing your algorithm on you. It’s your list and you’re growing it, and then you get somebody to sponsor that. Who are those readers, right? They’re your best readers. They’re paid subscribers and people that registered. They took the time of putting their email address and choosing a password on your website.

You’ve actually already introduced a little bit of friction and said, ‘Hey you, gotta jump through this tiny hoop here. It doesn’t cost anything, but you gotta spend time doing it. And then you get the, you get on the newsletter.’ So this list, these are not what do they call ’em? Zombie, zombie accounts. They’re your best readers. The super casuals and the paid readers and, those sponsors as your list grows.

And that free registration is exactly what will grow your newsletter and sometimes like ridiculously fast. I turned on a free registration for the first time for a client in a small town, 2,500 or less people within a week. They had a hundred free registrations. Which is, Wow. And people are hungry for it, yeah, for sure. Maybe they’re not ready to pay yet. And giving them a way in is helpful. It doesn’t require a credit card.

Yeah. Free trials are, great, but they still require a credit card and that’s an enormous hoop to jump through to read some content online.

I’m gonna go through and just review the free registration in terms of what happens and what the benefit is. (And we’re gonna loop back to traffic is this, this paywall killing my traffic? I promise we’re gonna loop back to that.) But first of all: is you’re building the relationship. And you want your readers to have a good experience on your website. You don’t want them to come to your website and just get knocked out by popup whatever, popup ads, popup, paywall pop, pop up this just, or just overwhelmed by advertising where, folks are using ad blockers.

It’s a spiral down. And so the free registration is the way you start the relationship. You’re saying, Hey you have to draw the line in the sand and say, hey, We need your support. Why don’t you just join our newsletter for free? That’s a good first start. You’ll get some extra content, you’ll get our newsletter and then you can take your time about it.

And then if they want more content, yeah, they can pay. But if they’re not ready for it, that’s okay. They’re there. That’s, the start of the relationship and that’s how you start with that seamless sort of reader experience. And then it grows, right? .

For example, take a B2B publication with a business newsletter that went free registration in three months. And this was in Youngstown, Ohio, a decent sized population, but be still niche-y because it’s B2B. And in, in three months they had I think 7,000 new email subscribers.

And then six months down the road they had broken 10,000. They had started with five or something. I don’t know. And it’s still growing right? Still growing.

And we talk about Small Boats Magazine. They were doing a good job marketing, but when they turned on their free registration, their newsletter subscriptions jumped 20% month over month. And they were really, actively marketing prior to that. So that just that one change made a big difference for.

All right, I’m gonna check my list here. Quality readers, we talked about these are your best readers, super casual readers, paid subscribers. You just can’t beat that. Advertisers were just drooling to get in there.

Oh, and then you, when you have when you add a paywall, you get the benefit of knowing what articles they’re reading. So you can go back and say, Hey, these were our most popular articles in the past 30 days, or whatnot.

Or, I know publishers that review this every morning. It’s six o’clock in the morning. They have a team meeting and they’ll look at, ‘Okay, what was the most popular article yesterday?’ And they’ll write follow up articles on the most popular articles that happened yesterday. If you’re a news publisher, this is a great idea that works like crazy, builds traffic, which means page views, which means you’re growing your traffic because you have the data.

So it’s simply knowing what articles your, free registered users and your paid subscribers are, consuming will help you grow traffic.

And to add one point, knowing which article converts the paid subscribers is invaluable. This is data that I love to look at: figuring out what tips to scale for people.

What kind of articles: are they community articles? Are they hardcore news articles? What drives them to put down a credit card. That’s one of my favorite benefits, again, we don’t talk about very much with Leaky Paywall, but it is very helpful.

And not that, as a journalist, that it should drive what you report on, but I think it does help it, it helps you understand what’s, of high value to the reader. Absolutely. And that’s something that we’re, you’re beta testing for us. And we, are releasing soon, we’re making it part of the core Leaky Paywall platform. But knowing we have been running this through Google’s data studio for a while and we’re switching to a just a built in metric.

So that, that is coming soon by the end of the year is that’s what Jeremy promised anyway, so he’s on the hook. I think we have it right now. I think it’s called like user history or something. Right now it’s more of a manual process. You of have to go through and look at each subscriber that comes on board, which is not that hard to do.

Unless you’re you’ve got a ton of subscribers coming in every day, then maybe you won’t care about that data. But if you’re a smaller publisher turn that on and go through and look and see what, it looked like what were all the things they looked at before they committed. So they paid, right? You can look at that now. Anyway, it’s coming in a nice, organized fashion for you soon. .

So those the, that’s all about the free registration and all the benefits. It throws off so many benefits, and that’s how you put your paywall to work, driving traffic, building the quality of the traffic, and building a relationship between those readers, that’s the goal.

All right, so let’s, I want to talk about traffic impact, like the actual numbers that we’re looking at. One of the ratios that we see is that roughly for every, let’s say hundred free, registered, super casual readers that you capture their email address, you’ll get about 10% that will subscribe. Plus or minus, but that’s a pretty, that’s a pretty realistic number when, we look through the subscriber records for publishers.

That’s some are different for sure, but on average that’s a pretty good, So out of every 10 free registered subscribers, one will have subscribed. Of course time is part of the equation. This is pretty rough, but that’s, it’s a good number. If you look at new newsletter capture right as the speed of newsletter capture, I’m just gonna pick a a, local example.

We have maybe 70,000 readers in our audience in New Hampshire. It’s a small, spread out geographic area. And if you look at Daybreak — who’s a news publisher there — in the first year that Rob, the founder came on, he captured 10,000 email subscribers.

And that was almost a year ago. And so it’s probably much higher. And if you do the math: 10,000 divided by 70,000. It’s about 14%, in just over a year. I don’t know what he’s at now, but what I’m gonna say is that you, may very well, and tell me if I’m wrong, Tyler, I want to hear it. I’m wrong, but you may very well capture 20% of your population, your readerships email addresses. As, a really rough number. What do you, think?

Yeah, especially with local news. I’ve seen more in local localized your, your publication is a higher percentage you’ll see of, capturing people. It might be upwards of 10, 15, 20% of the whole town that subscribe, it’s higher than broad. So imagine if you’re in an area with a hundred thousand people you’re serving the town. It’s a a decent size area, and you capture if you capture 10%, you got 10,000 people on your list. If you capture 20%, you have 20,000 people on your list, you have 20,000 readers that are coming back to your website to read articles. Google tells us that the average reader and — this is like crap readers plus your best readers, and everybody in the middle — looks about one and a half articles per visit, something like that, right?

They don’t get very far. They’ll look at one article. Some will just be one and gone, probably the most of them. And then some will be one and they’ll look at two or more if they can. So one and a half. So let’s say your best readers maybe read a couple of articles every time they visit and you’re sending out a daily newsletter, you’re sending out a, weekly newsletter that’s 10,000, 20,000 times two.

Once a month, do the math. It’s a huge, it’s a huge amount of, page views, of article views that your best readers will, look at. Now, it takes time to get there. This doesn’t happen tomorrow, but it, may only take a year or two, and you end up with a with, this list that is and your, newsletter is just literally direct mailing, just driving people back to your content.

Your direct mailing your, audience, your advertisers are loving it. The quality, the readership is high. You are, you’re gonna see traffic, growth, quality, traffic growth.

Okay, so those are the numbers. So what do we do?

Just a little recap here, Tyler. I, wanna point one thing out that…If you’re a news publisher and you’re like, eh I, know that I need a pay wall and I need some kind of, set up like this because obviously you wouldn’t be thinking about a paywall if your ad revenue was through the roof and growing every every month.

So there’s a reason that you’re considering a paywall. I would imagine. You’re, at a turning point in your, business model and you’re, looking at subscriptions as a way to stabilize and grow your business. If you’re worried about traffic, just make your, meter really generous.

At first set it to, I don’t know, 5, 6, 7, 8 free articles for a month before they hit the free registration. And then see how that goes. And then wait maybe a month and then crank it down a bit. Maybe go to four, three articles and just keep tweaking it until you get to a point where you’re like, okay.

I’m not living on all my traffic, all my ads aren’t going away. My business isn’t collapsing. People are actually signing up to, the free registration. Oh my God. They’re actually paying for things. And, make your move that way. Don’t don’t, let us tell you that doing the one in one strategy, don’t let that prevent you from, getting started.

If it scares you try it. Try a more generous offering, and then you can always tweak that to a more rationed meter. More, tight meter setup. You are a wise. Tyler . I hear this a lot though. Publishers are, afraid to turn on the paywall. They know they need the paywall.

I get that it’s much more stable. You don’t have to go out and hustle for ad revenue. I but let readers come to you let them pay you and stabilize your business model. It’s gonna take time. It’s not overnight. I’ve got some publishers that it’s in, in really tiny towns, 2000.

That in two years have brought in close to $3,000 per month just from digital only, like alone, Which might not sound like the lot, but that’s a lot for a small town newspaper in the middle of a small town and in West Virginia, for example. Yep. So just give it time give it a shot. Don’t, let, don’t don’t be afraid of, the paywall.

It’s, It can, it will help you grow revenue. Absolutely. Traffic, revenue, quality, readership advertisers, the whole package, the pay, If the paywall is implemented correctly, you’ll grow your whole, you’ll grow your whole system in a nice, organic. And, if you’re very, nervous about turning it on, then do exactly what Tyler just suggested.

Be generous. Just stop people after, say five article views, and then in a few months you’ll, do what Pete suggests and that’s just crank it down to one free article per month, and make people register, Which they’ll do. Yeah. Yeah. They’ll do it. Yeah. Yeah. Your traffic won’t, take that much of a hit.

Don’t, worry too much about that. You’re gonna far surpass that with all the new subscriptions that you have that are paid. And continue to that they pay you every month, yeah. And, one thing on a recurring automatic basis. Yeah. And one thing. And and the last thing I’ll mention, which I completely forgot about which is it’s something I, we get from publishers all the time, it’s Okay.

Yeah, So I’m, I am gonna lose a little bit of traffic. Maybe what do I, tell publishers? What you tell publishers is you now have targeting tools too, right? So when somebody who’s either a free registered subscriber or a paid subscriber is logged in to your website, guess what?

You can target them precisely with the promotion that you want to. Paid or free subscriber, right? Yeah. Or your advertisers, you actually are gonna develop better targeting for your advertisers through your paywall. Yeah. Yeah. And, let me say this too. You’re growing that newsletter at the same time, and we talked about this earlier, there’s room for sponsorship inside of that newsletter.

So don’t, worry too much about the, traffic dent that you might see. It’s there’s, more value in other places for, advertisers. And secret, ninja tactic, if you’re still listening, find a sponsor for your free registration. We have a publisher doing that in Australia very successfully and has been for a while.

So when somebody comes and registers for free, you can even write in the message, write in the free nag that shows up. You can mention this: ‘Your free articles and, newsletter is sponsored by So-and-So’ and then of course the welcome email to the free registered user can mention the sponsor, the newsletter, too.

Certainly to go all out: maybe, you have a separate newsletter for your free registered subscribers, which promotes your subscription, which you can easily do through tagging. Now your sponsor can have a whole thing: your free registration sponsor will pay cuz they’ll get a whole package including direct newsletter to your super casual readers.

Yeah, imagine showing up on every article when they’re getting hit with that subscribe message that’s brought to you by so-and-so bank or whatever in your town. And that’s some pretty valuable. And you could even call your free registration. You could name it after that sponsor if you wanted get creative with it.

Yeah. It’s like our local bank. Sugar River Savings. Your free registration or newsletter can e like the sponsored by Sugar River Savings. Call it the Sugar River Savings Registration or whatever. I don’t know. That’s hard to say. Publishers are more creative than I am with their names. Anyway, bottom line. Start, set up. Go for your paywall. Yeah. Set up a generous metering, if you need to.

Set up a free registration, absolute requirement. Start building your newsletter and start talking to your advertisers about how you’re building, your list is growing with better readers or quality readers. And they’re being, your newsletter is now essentially direct marketing.

And get in touch for sure. Yeah, Cause we love to talk about these things and every audience is different and, content. Every publisher is publishing different content, so there’s, a magic blend in there, which we always love to, to bring to the surface.

And one, one quick thing. If, an advertiser tells you that I can go on Facebook and I can target down to the exact location, the person or age, the whatever. Your answer is: the newsletter audience. You can’t beat that. These are folks that are high value. They’ve shown a commitment to signing up to your newsletter. They’re real people.

Versus Facebook you, don’t really know what kind of eyeballs you’re getting here. You might be able to target it, but the value of the person, of the eyeball that’s looking at it is not as high . Imagine, capturing the email addresses of just 10% of your local market. That’s a big list. That’s a powerful list for an advertiser, of your best readers. Yeah. Good stuff. All right. I think we’re outta time, Tyler. Thank you so much. We’ll talk to you next time.