October 1, 2019

Testing Registration Walls & Facebook News Tab Updates

Digiday has a good post today about how “News publishers are embracing registration walls.” There are a few things worth discussing from it:

It can be tough to figure out what kinds of content an audience will pay for. So many news publishers are learning what their readers will register to consume instead, while girding themselves for the collapse of third-party cookies.

Other news publishers are keying in on registration walls too. Earlier this year, Hearst Newspapers put up a registration wall ahead of launching a paywall for its Connecticut newspapers, gathering up 100,000 email addresses in the process, according to Hearst Newspapers president Robertson Barrett; GateHouse Media launched a registration wall in the fall, and it has been adding it across the hundreds of titles it owns. Tribune Publishing, home to newspapers such as The Chicago Tribune, plans to test them again after a small test that ran in 2017.

First things first, let’s look at that bold section (my emphasis).

As Safari & Firefox continue to introduce stricter rules around cookies, publishers are starting to come to terms with the reality that cookie-based programmatic advertising is starting to die. If you’re still banking on that revenue as a publisher, you’re going to be in for a real surprise.

While I don’t expect Chrome to ever get rid of cookie-based targeting, since Google needs that for its revenue, Safari and Firefox make up a large enough percentage of traffic that publishers are going to continue seeing programmatic revenue drop.

Publishers need to be prepared for this. One way they’re doing this, according to the Digiday article, is by learning more about their audiences. Programmatic made it possible for publishers to pass the “known user” responsibility over to ad-tech. Now that cookie-based advertising is starting to die, publishers are responsible for once again having a relationship with their audience.

The registration wall is a smart way to approach this problem. Instead of being given cash for content with a subscription, the publisher is given user data. At the very least, it’s an email address, but publishers can get more creative.

As the publisher collects this data, it’s able to better understand who the user is and what their interests are. This data is powerful because it allows you to focus on content that the user actually wants and it also is actionable when trying to find advertisers to do more direct-like deals. The good news is, it’s not terribly difficult to build a registration wall out.

The easiest approach is to just treat the registration wall as a precursor to the paywall. If a user reads a certain number of articles, present them with a registration. Include copy that says “to continue reading articles for free, please create an account.” They create the account, they get to consume more articles, and everyone is happy. Then if they read even more, you can charge. Even if it’s only a single article difference, that user data will come in handy.

The more in-depth way would be to progressively capture data over time. You can still have the “create an account,” but then publishers will want to be smart about asking for more data over time. You can capture more data in exchange for commenting functionality, for example. It’s one thing to know who they are, but if you can build a more complete profile of the user, you’ll be in a much stronger place.

The downside is that registration walls can hurt traffic. This might be why so many publishers avoided this tactic. However, if ad revenue is going to drop anyway, a short-term drop in traffic might be worth it. According to Digiday, “Tribune Publishing abandoned a registration wall it was testing on the Hartford Courant’s after discovering that 90% of the people who hit it simply left the site.”

If 90% of people are unwilling to sign up for an account—especially if it’s free—that tells you something. Perhaps the content is just not that good. The content is the product. If it’s not good, fancy tactics won’t help.

The question some publishers might ask is whether this will hurt their subscription business. That doesn’t appear to be a problem:

A publisher using a registration wall can drive subscriber conversion rates 10 times higher for its known users compared to its anonymous users, said Michael Silberman, svp of strategy at Piano.

It’s not rocket science. Trying to get someone who is unknown to fork over money is much harder than someone you have a relationship with. Publishers that have been hesitant about introducing a paywall might see a registration as the first step.

I’ll be completely honest… I think every publisher needs to be thinking about this. If you’re not good enough for a user to create a basic account with you, reevaluate your business. If you’re not producing content that users want to stick around for, even for free, it might be time to find a new business. Cookie-based advertising is going the way of the dodo.

However, if your content is good enough to get people to sign up, a free registration is a great first step to getting users to pay. Continue to get them hooked, build a relationship, and then introduce a paywall.

Maybe the death of the cookie might turn out to be just what publishers needed…

Facebook snatches defeat from the jaws of victory…

They were so close to having a really good press narrative. According to The Wall Street Journal:

Facebook Inc. is planning to pay only a minority of publishers whose headlines will be featured in its coming news section, according to people familiar with the matter.

The specialized news section—which will appear on the toolbar at the bottom of Facebook’s mobile app—is set to launch as early as the end of October and will include links to stories from about 200 publications, the people said.

A person familiar with the matter said Facebook had never planned to pay all the news outlets whose content it would link to in its news section. The plan is similar to what Facebook has done with its Watch section, which includes videos not paid for by Facebook, the person said. Taking into account companies that own multiple publications, Facebook will pay fees to about one-quarter of the organizations that will be involved at launch, the person said.

If there are going to be 200 publications at launch, only 50 of them are actually going to get any cash.

As a reminder, Facebook News Tab was supposed to be Facebook’s attempt at playing nice with publishers. It was going to pay up to $3 million a year for a three-year headline/preview feed with the largest national media brands. For smaller, regional publishers, Facebook would pay around $500,000 a year.

Now, though, it seems that for the majority of publishers, there’s no money at all. And just like that, Facebook snatches defeat from the jaws of victory. Instead of being a good source of revenue for publishers, News Tab now comes off as just another random attempt at creating a product that Facebook isn’t fully committed to. Even if this isn’t true, it has allowed the narrative to be out there for months that it was paying all publishers. It over-promised and under-delivered.

With this in mind, publishers now have to change their strategies a little bit. A headline/preview feed can still be a strong audience development tool. However, the only way this sort of a feed can help publishers is if the user clicks over. Therefore, I would encourage publishers first test what type of content performs best in the News Tab.

Naturally, Facebook doesn’t want that.

Facebook is still negotiating with several big publishers, and in most cases talks have centered around how much of their reporting publishers would allow to be posted on the Facebook tab, the people familiar with the matter said. Facebook wants news organizations to allow access to all their stories for possible inclusion in the news tab, but some outlets have pushed for only allowing limited access.

If Facebook is requiring a three year deal and then not giving cash, you definitely don’t want to give it access to all content. If you find that users are seeing the headlines, but not clicking over, you’ve got yourself a failed audience development channel and you should move on.

Now, if Facebook is going to pay $3 million dollars per year, I still lean toward getting the cash. A headline/preview feed doesn’t require much change in the operation, so this should be a good, short-term revenue play. Although it’s no guarantee, being paid for audience development remains an appealing outcome.

I said it in one of my early pieces, but we publishers are nothing if not masochistic. I’m the first to admit that I got my hopes up on Facebook News Tab. If the platform is going to dangle cash to get negotiations started and then pull the rug out from under publishers, it’s better to watch from the sidelines.

The thing is, publishers won’t…

A reader (nicknamed RT) reached out to me last week to express dismay at publishers getting roped into the Facebook game once again. He said:

The only reason to not do these deals is a respect for incentives. The last 100 times a platform emerged as a leading generator of attention and revenue, media companies explicitly or implicitly focused resources on that medium, that type of content, etc.

So the brilliance is that there is effectively no compelling reason not to do the deal – which leads to the societal issue – a massive collective action problem. Brands that otherwise could build a direct relationship with a smaller but more valuable set of consumers yet again opt to strip their brand, their direct relationship, and any of their market power for that next check. What happens next is obvious: a further commoditization of suppliers to the point where all consumption happens on a platform where the consumers have little value for any individual brand.

So perhaps the biggest issue is that in today’s media ecosystem, the #1 commodity is time and focus. And the opportunity cost of doing this is: rather than killing the vast array of commodity content that exists within a typical newsroom (e.g. national Trump coverage by a local news outlet) and focusing on a deeply verticalized DTC offering, publishers continue producing content that effectively doesn’t need to exist for that next check.

RT is spot on here. My retort to this is simple:

No publisher thinks that their content is a commodity, but does believe its competitor’s content is. More importantly, every publisher is afraid that another publisher will get a check.

It’s the prisoner’s dilemma. If every publisher were to realize that Facebook is not a good partner to work with, then Facebook would have to do more. But because each publisher is afraid of another publisher getting a leg up—both in audience and revenue—each operates in its best interest.

Then again, that’s business. Facebook is doing its job and publishers need to do theirs. I just hope that RT’s point in his first paragraph doesn’t come to fruition. A headline/preview feed for audience development can be great, but please don’t change strategies. The type of content that gets users from Facebook might not be the type of content that converts into a registered or subscribed user.