There are endless lists of KPIs (Key Performance Indicators) online, persuading businesses that they should be measuring every single one. However, these metrics differ hugely depending on your objectives and business strategy. So, which KPIs should you be following as a content producer with a paywall and subscription strategy? Which are the most important to measure?
This white paper provides every essential key indicator to make your strategy a success, from engagement, to conversion and retention. By measuring these values, you’ll be able to adopt a data-informed approach that moulds to your audience and allows you to monetize your content.
- KPIs for engagement
- KPIs for conversion
- KPIs for retention
- ⭐ The ultimate north star KPI ⭐
Each stage of the funnel has its own KPIs, with the most time and energy needing to be placed at the bottom where you there's the highest potential gain. Your subscribers, engaged subscribers and ‘ambassadors’ (those who recommend you to friends, etc) will bring the most revenue to your business, so neglecting retention KPIs and focussing more on vanity metrics (such as page views) will hold you back from a successful paywall and subscription strategy.
Note also that KPI data can differ hugely depending on context (e.g. content type, channel, device, type of user, etc). Therefore, KPIs should be analyzed by dimension to not only take the context variable into account but also to understand how context has an impact on engagement, conversion and retention. This will prove particularly useful if you segment audiences and build targeted user journeys depending on their context (which we recommend you to do).
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KPIs for engagement
User engagement is hugely important to measure as it directly correlates with a content producer’s ability to generate revenue because your engaged users are the most likely to pay for subscriptions in the future. Note though that engagement looks different to each business, so you need to prioritize the KPIs and actions that are important to you and your audience.
What’s more, engagement metrics tell you how your content aligns with your audience’s interests. By tracking these KPIs, you can understand what type of content encourages frequent visits, loyalty and engagement so as to ensure you create more of this content in the future.
The image below, from INMA 2018, shows how you can analyze the value of different content types for your subscribers in order to produce content that fosters engagement and increases conversion rates. This example informs us that we should reduce the volume of content on the topic of ‘culture’ whilst producing more content which covers the themes of ‘Transport’, ‘Healthcare’, ‘Crime’ and ‘Real estate’.
- ⭐ Average time on page: significantly more valuable than page views because it tells you how engaging your content is, provides insights into what they find important and so ultimately puts you in a better position to meet their needs. This metric will differ across businesses and whilst one site might be aiming for a longer period of time here (press websites for example) others will want users to move through their content quickly as it shows they found what they were looking for (such as purchasing tickets of some sort)
⚠️ Tool’s like Google Analytics don’t provide accurate data for this metric! To correct the formula and accurately measure average time on page, use this:
🧮 Average time on page = Total time spent ÷ (sessions - bounces)
- Visited pages per session: this will show whether users recirculate on your site and are engaged enough from one content to want to access another
- Bounce rate: bounce rate is the percentage of users leaving your site after only visiting one page. Again, the goal for this metric will differ across businesses. For some, a low bounce rate will prove that your content captivates your audience’s attention and encourages them to discover more. However, other content producers may seek a high bounce rate as it proves the site is well built and that users find what they’re looking for quickly.
⚠️ These KPIs are indeed important, however it’s more beneficial to your business to have visitors who return to your site rather than those who stay a long time or view many pages as these users are the most likely to pay for your content. This is particularly true for the press who want to create habits and become a part of their audience’s daily routine.
- ⭐ Returning visitors: these are users who are becoming regular visitors to your site (you can also track frequency of visits) and engaging enough in your content to want to return. As this audience is highly more likely to subscribe in the future, they can be nurtured and treated differently to fly-by readers in order to encourage conversion. This KPI can be measured more easily with a registration wall which will also help to increase the number of known visitors to your site, drive frequency and, ultimately, conversion
“Registration is the first step in lifecycle relationship management. Through the leveraging of onsite data as well as A/B testing, we ascertained that people who consume two articles a month have a deep enough level of engagement with our content that they would be willing to extend their relationship with our brands. Registration after two articles allows us to put these readers on a path to purchase through engagement with our newsletters and deepening their offsite engagement with content offered on social. Presenting the registration module at two articles also showed no appreciable impact on traffic.”
- Scroll depth: good scroll depth indicates that your content is engaging, informing you of the readability and interest in your content. It may also prove useful for when you want to employ a paywall to block content so as to ensure the maximum number of users view the wall (i.e. if the average scroll depth is 25%, you’ll want to put the paywall above this point so as to increase its visibility). You can use an event on Google Analytics to track this (this article explains how) or alternatively use heatmap technology
- Registering for the newsletter: this action from a user is a good indication that you’re providing the information that they find valuable and were looking for. Not only this, but working on improving this KPI will allow you to build a large and segmented email list of engaged users who can be sent targeted messages to help conversion. Within this, you can then measure email open and click through rates on links
🧮 Email open rate = unique open emails ÷ (total number of emails sent – total number of bounced emails)
🧮 CTR on email links = total clicks ÷ number of delivered emails) x 100
⭐ The north star engagement metric ⭐
Engagement is fairly hard to measure as a single metric. However, The Economist Group and The Financial Times have brought the collection of engagement KPIs into one single, more utilizable metric called either “Engaged View Rate” or “Readability”.
🧮 EVR = (users spending 30 seconds on content and scrolling to 50%) ÷ total users
This can be adapted to match your content (i.e what engagement on your content looks like in terms of time and scroll depth) and can be used to measure the performance of individual content, categories of content, device used, where the user came from, etc.
KPIs for conversion
It’s clearly important to track conversion KPIs in a paywall and subscription strategy. However, note that there are some metrics that are specific to certain stages of the funnel. Tracking each of these will allow you to really understand how each step and feature is performing so that you can work on reducing friction and optimizing conversions.
In general, the key metric to track for every step is CTR
- ⭐ Click Through Rate (CTR): click through rate is the percentage of impressions that resulted in a click. It can be used in various contexts, such as by advertisers or for email marketing, but here we’re referring to a user clicking through from one step to another. So, for each stage in the funnel, for the number of users that reached this point and saw the page, how many clicked through to get to the next step?
We can now look at the steps individually to see the relevant KPIs to measure. Remember that if you haven’t yet launched your paywall and subscription strategy, we have a white paper on how to get started!
Paywall: (read about the different paywall types and best practices here)
- ⭐ Traffic share on paid content: in our Digital Media Review, analyzing 75 publisher’s subscription and paid content strategies, we found a correlation between traffic on paid content and the reader-to-subscriber conversion rates. Therefore, aiming to increase the traffic on paid (as opposed to free) content can (up to a certain point) increase the number of users who convert. Note though that, as we found in our study, these premium articles should have high visibility in order to encourage subscription.
- Visibility of the paywall on page: this refers to how many users visit a premium content and see the wall. It’s particularly important for written content where the paywall is sometimes so far down the page that the majority of visitors to that article don’t scroll enough to see it. This will obviously impact conversion rates and should be measured alongside scroll depth on premium content
- Meter Stop Rate (MSR): applying only to metered paywall strategies, this refers to the share of users who exhaust their sample of free content and reach the paywall. Tracking this metric allows you to find a balance between being too hard with your wall strategy (not offering enough free content) and giving users the chance to engage with your content enough to want to subscribe when faced with the paywall
🧮 MSR = unique visitors ÷ unique visitors hitting a paywall
The Industry Research Report by Local Media Association & partners shows a wide variety of MSR among publishers, highlighting the difficulty in finding the right balance ‘between asking more readers to subscribe and allowing readers to sample enough content so that they are inclined to pay for a subscription’. They suggest a goal of 5-7% MSR.
- ⭐ Paid Stop Conversion Rate (PSCR): measures the overall effectiveness of the paywall as the start of the conversion funnel. It tells you how many users who hit the paywall actually convert into a subscriber. Of course, any visitors who don’t subscribe could be discouraged at a different step in the funnel (offers page, payment, etc), but this is still a critical indicator of conversion effectiveness.
🧮 PSCR = Unique visitors hitting a paywall ÷ unique visitors who click through the paywall and subscribe
- Trial conversion rate: this refers to the percentage of users who sign up for a free/reduced trial offer who then go on to become full-paying subscribers. Looking at this metric will help to prove the effectiveness of these introductory offers and can be combined with the user’s lifetime value (LTV) to see if the trial results in valuable subscribers
🧮 TCR = subscription trials started in month X ÷ subscription trials started in month X who converted to full-paying subscribers
- Soft conversion rate: how many of your users who are converting into a subscriber have already signed up for your newsletter or created a free account (maybe through a registration wall)? These soft conversions bring users closer to subscribing and are hugely beneficial for turning your audience into engaged leads. It’s therefore important to measure how beneficial these are for your end goal (subscription) so that you can put the time and effort into optimizing that area. For example, if you find that users that have already created an account are highly more likely to subscribe, then you could consider a registration wall strategy prior to the paywall in order to increase the number of users creating a free account.
- Exit rates: this should be tracked at every step (it’s basically the opposite of CTR) but here it’s especially important as the payment is the final decision-making stage where the user is officially committing (or not) to payment. This metric can give you an indication of whether your funnel as a whole is a success, whether you reassure users of your value enough, whether it might be useful to offer a free trial or introductory offer, etc.
- Preferred payment method: here it’s useful to benchmark against other content producers if possible in order to see which payment methods are most trusted by your audience. For example, if online payment companies like Paypal and Apple Pay are increasingly popular, maybe you should provide this payment method as an option. To make this indicator more useful, you can compare it with the purchase success rate and a user’s LTV to see if there’s any correlations
- Post-subscription engagement (e.g. article reading rate): this is to discover whether your audience actually consumes premium content from the moment they become a subscriber and beyond. Engagement can be analyzed differently according to the content producer but it should give you an idea of what content is most valued by new (and long-term) subscribers, ultimately informing you of what content you should produce in the future to increase retention.
- Activation rate for onboarding features: not every content producer will have onboarding features but they could include promoting the newsletter (like the NYT) or asking a user to select content that interests them (Spotify asks users to choose their favorite artists). The activation rate of these refers to whether users actually complete the onboarding process. If so (and especially if the process leads to a better experience for the user) then the onboarding is valuable, but if not then it might be a waste of time and have a negative first impression on your subscribers
- ⭐ Monthly Recurring Revenue (MRR): generally, this is the priority KPI for most subscription content producers as it tells you how much revenue you can count on every month. With this recurring revenue stream, you can then put the cash flow into different areas of your business in the knowledge that you’ll get a similar sum in the following months. It therefore shows you the health of your subscription strategy. If you only have a single subscription offer, you can calculate just one MRR, but if you have multiple offers or various terms (monthly, annual, lifetime) you can work out a MRR for each independently
🧮 MRR = average monthly revenue per subscriber (ARPS) x total number of subscribers
- Average Revenue Per Subscriber (ARPS): you can also utilize ARPS as a KPI in itself to provide insights into whether users are upgrading or downgrading their subscription offers and link this information to the content that you’re releasing. An increasing ARPS suggests your audience see your content as very valuable and want to move to the higher offers in order to improve their experience further and access more content
🧮 ARPS = revenue from existing subscribers ÷ number of existing subscribers
- Conversion rate: this reveals how many of the total number of visitors to your site convert into subscribers. Although a seemingly important indicator, there can be a lot of factors that affect this percentage so it has to be combined with other metrics in order to be useful. All the same, when utilized effectively, it can be a valuable indicator for your subscription funnel to see the stages that need optimizing
⭐ The north star conversion metric ⭐
- Customer Lifetime Value (CLV): indicates the total net revenue a subscriber will bring to your business throughout their entire time as a paying customer. It’s arguably one of the most important KPIs for business because you can look at it as a way to justify spending more on retention (not on acquisition). The longer a user continues to subscribe to your content, the larger their lifetime value becomes. Therefore, you should be incentivized to retain subscribers for as long as possible as it directly correlates with increased revenue from the customer over time
🧮 CLV = average recurring revenue x total length of subscription
For example, if you have an average revenue of $8 per month per subscriber and an average length of subscription of 20 months, the CLV will be $160. Specifically, this is the average revenue that every individual subscriber will bring to your business.
The CLV also helps to highlight that the action of converting a user into a subscriber (although important) has a smaller impact on your business than increasing the long-term value of each subscriber.
This data below demonstrates that a small number of users (long-term and valuable subscribers) generate the majority of revenue for content producers.
Grzegorz Piechota, INMA World Congress 2019
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KPIs for retention
Retention refers to the number of customers who were subscribed the previous month (or year) and remained so (i.e. they renewed their subscription). Retention is hugely important to track and optimize because it's easier and cheaper to retain an existing subscriber than to acquire a new one.
Although there are a few metrics to follow at this stage, the key to retention is to engage your subscribers. As we can see in the graph below from The Lenfest Institute, there’s a significant correlation between subscriber engagement and retention.
You can therefore utilize data collected about a user and information from KPIs surrounding engagement to ensure that you’re continuously providing valuable and engaging content to your subscribers in order to optimize retention.
In terms of KPIs relating to retention, you should mainly focus on churn. This is because repeat/long-term customers are the most valuable to you, so understanding why users are cancelling their subscriptions will help you understand the source of churn and what measures you can put in place to reduce it.
“Reducing your churn rate by 5% increases your profitability by anywhere from 25 to 125%.” - Saasquatch
- ⭐ Customer churn: how many users have cancelled their subscription
Customer churn = number of subscribers who cancelled their subscription ÷ number of subscribers in the previous month
- Revenue churn: how much these unsubscribed users represent in revenue. This can be calculated by finding the MRR of the churned customers.
Note on churn prediction modelling:
Churn prediction is the task of attempting to identify subscribers who are likely to cancel their subscription through understanding typical behaviors and attributes which signal that the user is about to churn.
This predictive information is hugely valuable to content producers who can use it to put preventative measures in places to reduce churn, such as specialized offers or incentives that encourage a user to continue subscribing.
With the increasing amount of data that you’re able to collect about your users and subscribers, especially insights into their behavior and interactions with your content, churn prediction modelling should be considered as a valuable tool to improve retention rates and increase revenues.
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⭐ The ultimate north start KPI ⭐
Moving to a subscription based model means that engagement should be the primary focus due to its direct correlation with your ability to generate revenue. Engagement can of course differ amongst content producers, however there’s one KPI that should be prioritized for everyone.
Namely, frequency of visits.
The change in the paradigm is that news organizations are now much, much more focused on finding repeat loyal local visitors than just the mass of eyeballs that they had been looking at before. And the incentives are no longer how do we get from 5 to 10 million monthly unique visitors or UVs to how do we get from 100,000 to 200,000 local loyal repeat visitors and what’s the best way to engage them. That is partly the content and it’s partly the user experience.
Why is it so important?
A high or regular frequency of visits by users demonstrates the engagement that they have with your content. The more engaged that your audience is, the more likely they are to convert into subscribers and remain so in the long-term (provide a high CLV).
What’s more, measuring and seeking to increase frequency means that you’re trying to create habits amongst your audience. Becoming a part of someone’s daily/weekly routine is the ultimate way of creating and then fulfilling a need in their lives.
“Habits are a big part of our lives: 50% of our actions are not conscious decisions. Habits are our brain’s way of increasing its efficiency. Our brain turns daily actions and behaviours into habits, so we can do them automatically and without too much thought – thus freeing up brainpower for other more important challenges.”
In their article, Twipe highlights how habit forming should be a strategic priority for content producers and that successful news organisations focus on understanding patterns and adapting content to fit readers’ daily lives.
How can you increase this KPI?
- Create content series: just like when you follow a TV series and watch it on the same day every week, this creates a habit based on the release of a new ‘episode’
- Publish games or interactive content: encourage interactions with your content and follow on from the habits with newspapers to move puzzles into the digital age
- Regular newsletters: sending out newsletters at a set time each day/week/month means your audience will come to expect it and, if it engages them, will be slotted into their routine. The New York Times, for example, produces a Morning Briefing newsletter , sent out daily to sum up the news for the day. We’re encouraged to register for it after creating a free account or subscribing
- Newsletters in general: notify members of new content, send personalized recommendations and encourage clicks through to your site
- Allow users to ‘follow’ content topics: The Globe and Mail in Canada allows registered users to follow topics or journalists and access them from their personal account page. This is placed at the bottom of every article, meaning it’s very easy to choose topics based on content accessed
- Create a ‘saved content’ section: they may not be able to consume it now or might want to have easy access to it in the future, but a saved content area in a user’s account space can be very beneficial for engagement
Interested in launching a paywall and subscription strategy? Or optimizing one you already have in place? Book a meeting and free demo with the team to turn your audience into business!
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