Do advertisers want to be in Times paywall club?

Hollywood’s take on the relentless rise of Facebook in The Social
Network is set to pass a milestone of its own this week, when UK box office
takings top £10 million.

It’s still got some way to go to push 2009 blockbuster Avatar (£90m), but
double-digit millions is good going for any film in little old Blighty.

Fiction or not, the fact that David Fincher’s simple and rather contrived plot
makes a plausible story says something about the value people place – or at
least imagine others place – on being seen to be in the right club.
The desire to be part of the right crowd is presented as the driving force
behind Facebook’s real-life founder Mark Zuckerberg, and it got me thinking
about News International’s paywall experiment.

It’s been less than three weeks since News
International offered the first hint as to the impact its online subscription
strategy is having on sites for the Times and Sunday Times
, and plenty of
questions remain.

Understandably there’s been frustration at the lack of transparency regarding
the actual number of paying subscribers.

Many have
highlighted the likely loss of traffic across the sites since the move, falling
back on Nielsen estimates that visits to the Times’ stories have fallen around
90% since the paywall was erected.

Analysis has also focused on NI’s
potential digital revenues
, or rather lack of them, due to the various
discount offers and sampler exercises currently in operation.

One area less explored is News International’s underlying attempts to
convert readers not only into paying customers, but ultimately signed-up
members; making them part of the club.

Times readers become part of the club

Katie Vanneck, chief marketing officer at News International, is keen
to move the focus away from traffic volume in favour of quality of audience
engagement and the ability to “develop an emotional connection with them”.

The CMO believes a deeper knowledge of the digital reader is essential to get
brand advertisers to truly embrace the digital space. It’s certainly true that
up to now much online spend has largely been driven by search, classifieds and
direct response.

“If you think about what you need to believe that digital provides the right
environment for your brand campaign, you need a very different type of
experience and platform to the high-traffic, search, information-led one,” said

“If you take that back and see what we are delivering with the Times as a multichannel
subscriptions product, and therefore our digital subscribers, then we are
delivering Times people… we’re delivering the right customers, who are the
right profile and in the UK.”

Nigel Gwilliam, digital director of ad agency body IPA, is mindful of the size
of the task the publisher has taken on. “A media owner offering an advertiser
stronger reader engagement, closer ties to their brand and more creative
solutions is a good thing,” he said.

“But can this provide the entire basis of a commercial operation? Tailored
partnerships do carry a premium but they are labour intensive to sell and to

Whether a much reduced, digital readership pool can continue to shape the news
agenda in the open economy also remains to be seen. [Comments
made by The Guardian’s Alan Rusbridger about the splintering fourth estate last
provide plenty of food for thought.]

The internet has certainly commodified the business of newspapers and the danger
of the Times serving an increasingly compact audience were highlighted by
digital evangelist Clay Shirky
in one of the most comprehensive, and
ultimately damning, accounts of the paywall to-date.

“The Times has stopped being a newspaper, in the sense of a generally available
and omnibus account of the news of the day, broadly read in the community,” he
said. “Instead, it is becoming a newsletter, an outlet supported by, and
speaking to, a specific and relatively coherent and compact audience.”

But it is worth remembering that throughout The Times’ 225 years of publishing,
it has never positioned itself as a mass market title, yet has maintained influence. In 2009, circulation averaged 522,000 and readership 1.8m, far from
blanket exposure in a country with an adult population in excess of 50m.

As Andrew Mullins, managing director of the Independent Print, noted at the
recent launch of 20p spin-off ‘i’: “It’s easy to assume that there’s a huge
amount of people currently buying newspapers and you have to force your way in.
Actually 91% of UK
adults don’t read a quality newspaper at all.”

Historically, this has never stopped The Times from being able to shape the
news agenda, or deterred advertisers – who currently account for about half of
the title’s total revenues. So is it possible The Times can retain its hold of
C-suite readers online for advertisers?

Stefan Bardega, digital managing partner at the UK’s largest media agency MediaCom,
believes it might be, but is currently frustrated with what NI has given him by
way of ammunition for clients.

Advertisers need more proof that engagement boosts sales

“We’re being told plenty of quantitative measures about how dwell time has
shot-up since the paywall, but we now need them to help prove the link between
increased engagement and brand impact, or better still, purchase intent.

“Our own research has shown brand awareness and purchase intent increases
rapidly as dwell time increases, but we need more research in this area.

“We’re currently using the wrong metrics to sell. If they are serious about
unlocking brand budgets they need to prove the value of such increased site

News International’s willingness to sacrifice the transient reader online in
favour of a more engaged customer does mirror wider trends already being
pursued by most national print editions.

Over the last two years, as marketing budgets have been pared back, there’s
been a dramatic reduction in the number of bulk copies and free give-away
covermounts in the quality sector, long-known to be the crack-cocaine of

The artificial and short-term highs they provide have largely been dropped in
favour of ‘locking readers in’ via other services. Home delivery schemes, like
the one rolled-out
by the Guardian earlier this month
, are a great example of this.

The Independent runs a similar scheme, as does the Daily Mail, and once locked
in, readers part with rich data in return for a raft of exclusive offers and
membership perks.

The Times has invested heavily here too, with its ‘Times+’ package offering a
range of free and paid for events, exclusive offers and access to exclusive

Some 35,000 people are said to have attended a Times + event in the last year,
which range from the opportunity for like-minded people to meet members of the
England cricket team before the Ashes, to free art exhibitions at the Saatchi

“One in three of our digital customers have engaged with The Times +
proposition, which is phenomenal,” said Vanneck. “You will not see in any other
industry, membership [of that scale] getting to a third of customers so

She added: “There’s so much content in it, it’s about the customer choosing and
personalising what is relevant to them, and represents the best reward to them
for the fact that they’re a subscriber to The Times and Sunday Times, whatever
platform they want to subscribe on.”

As a newspaper, The Times has always been famous for its esteemed letters page
– a backbone of customer engagement and a reflection of a community talking to
itself. Such communication has increased online, and, according to Vanneck,
readers are now more than twice as likely to comment since the paywall has been

“Our subscribers now see themselves as members of something that they really
value and that they really engage with,” she said. “We’re seeing a much, much
healthier engaged audience.”

So it’s readers as digital members then: doomed newsletter economics or what
brand advertisers have been waiting for?

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    Nigel Gwilliam has hit the nail on the head. Increased reader engagement is great, but that isn’t enough.