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What’s behind the paywall

In an era where digital media consumption is booming, the rising prevalence of paywalls poses both challenges and opportunities for advertisers seeking to reach their target audience effectively. We speak with media organisations and a media buyer about the pros and cons of advertising in these exclusive spaces.

With advertising budgets being squeezed left right and centre, journalism – a discipline that traditionally has relied on advertising to exist – is feeling the pressure to perform.

However, publishers are pinning their hopes of the continued growth of digital subscriptions, memberships and donations, which have been seeing some positive movement over the last few months.

According to the Journalism, Media, and Technology Trends and Predictions 2023 report released by Reuters and Oxford University, a survey of 303 media leaders in 53 countries, things are looking surprisingly upbeat, with 68 percent of respondents expecting some increase in paid content income.

However, this same paper reveals that publishers may be looking to focus more on retaining existing subscribers, rather than growing them.

Locally, in late April this year, Stuff announced it was launching new standalone digital news sites for The Post, The Press and the Waikato Times, along with fresh new branding.

To those keeping a close eye on New Zealand media, this move came as no surprise given Stuff was the last publisher in New Zealand news media not to have a paywall.

According to Matt Headland, the Executive Commercial Director of Stuff, the growth and development of the Stuff Group has created a prominent audience network with abundant data, offering a range of connection points and advertising possibilities across an array of multimedia products.

“Advertisers told us they want more relevant local alignment across multimedia channels and we’ve seen strong demand from the advertisers we’ve engaged so far on this new opportunity,” says Headland.

Matt Headland.

“Whether it’s reaching audiences at scale in print, digital and audio channels, or capturing attention in a one-to-one interaction via our portfolio of newsletters, advertisers who want to find their next customer will find them in the Stuff network.”

But what does all this talk of paywalls mean for advertisers? Particularly when reach plays a big part in deciding which channel works best for a brand. 

Headland says having a subscription-based service creates a more engaged environment, and in Stuff’s case, because the content is regional, audiences are even more engaged simply because the news is relevant to their everyday lives.

He emphasises the importance of collaboration between marketers and audiences to maximise engagement opportunities. “The key thing for marketers is working with us, and our audiences, in creative and new ways to drive deeper engagement.” 

When it comes to planning advertising strategies, Headland says it’s now more important than ever for advertisers to understand the regional nuances and tailor campaigns accordingly.

“Through being a content provider that people engage with, we understand the tone of that content and the voice of that content.”

And it’s this understanding that is crucial for advertisers, as it enables them to create campaigns that align with the local audience’s preferences and expectations.

Headland further stresses the need for localised content and tone, highlighting that having an understanding of regional context is equally, if not more, important than grasping the national perspective.

In his words, “Clients must recognise that having an understanding of that region is as important, if not more important than understanding what that looks like nationally.”

This underscores the shift in digital marketing trends towards personalised and targeted communication. Advertisers now have the ability to tailor their content and adopt a localised tone to engage effectively with specific communities or industries.

BusinessDesk, a New Zealand-based news service, is an example of an industry-focused organisation that has experienced remarkable growth since its inception 16 years ago.

Originally starting as a newswire, the organisation successfully transitioned to a subscription-based model, attracting over 10,000 subscribers.

Despite launching its paywalled service just weeks before the first Covid-19 lockdown, BusinessDesk has expanded from a team of five journalists to a substantial team of more than 20 journalists located all across New Zealand.

According to BusinessDesk’s General Manager Matt Martel, the initial subscription price of $24 per month and $249 per year has remained unchanged since the company’s launch. However, it is planning its first price increase soon.

The introduction of the paywall has allowed them to expand their newsroom Martel says, and charging this fee enables the company to achieve profitability without relying on massive scale.

From the outset, BusinessDesk also offered corporate team subscriptions, providing an additional revenue stream. When the Covid-19 pandemic struck, the team anticipated significant challenges for the company. 

However, they discovered that amidst uncertainty, individuals increasingly sought out trusted journalism, resulting in a surge rather than a decline in their subscriber base.

This surge in subscribers has also facilitated effective monetisation through advertising.

Martel says one of the many advantages for advertisers in leveraging BusinessDesk’s platform, is that the media outlet attracts a specific C-suite audience, making it an ideal channel to reach targeted professionals.

With the ability to send approximately two million emails per month, achieving a remarkable 70 percent open rate, BusinessDesk is able to integrate advertising within its communication, and by targeting ads based on factors such as geography and industry, advertisers can maximise their investment by reaching the most relevant audience.

In early 2022, BusinessDesk was acquired by NZME, a media company that had already launched digital subscriptions for Herald Premium in 2019. While NZME’s main website remained free, this acquisition provided further opportunities for BusinessDesk to expand its reach and enhance its offerings.

BusinessDesk’s evolution from a newswire to a thriving subscription-based news service has ultimately been driven by its commitment to delivering high-quality business journalism. By successfully implementing a paywall and attracting a dedicated subscriber base, the organisation has not only achieved profitability but also created a valuable platform for advertisers to target a specific audience. With the recent acquisition by NZME, BusinessDesk is poised to continue this growth trajectory.

Are Media is also announcing its entry into the digital paywall realm, with the company set to make the content from The Listener available online, allowing subscribers to engage with the digital version of the renowned masthead.

Stuart Dick.

“It’s a hard paywall, so readers will be able to see the first paragraph of each article’s content, but to read beyond that, they will have to subscribe,” says Stuart Dick, Are Media General Manager. “That’s no different, really, than the paywall that we have on our print edition, the cover price. Readers standing at the checkout might read the first paragraph, but in order to read the rest, they are going to have to pay for that.

“When it comes to the quality of content that our readers would expect from us, they’re quite happy to part with their hard-earned cash for that,” he adds. “Consumers are being conditioned to know that, if you want quality, then you’ll have to pay for it.”

Not only will this move potentially attract new audiences to The Listener, but it will also enhance the digital engagement of existing subscribers. The transition to a digital platform opens up opportunities for broader readership, enabling individuals to access the publication conveniently on their devices.

The Listener will be Are Media’s first digital paywall as all the other digital platforms are operated as free models, supported by advertising revenue, through audience scale. 

Are Media’s decision to introduce a paywall for The Listener marks a significant milestone in the company’s digital strategy. The implementation of a hard paywall ensures that readers value the quality content offered by the publication enough to invest in it and ensures brand safety for advertisers in a landscape where factual, well-researched information is becoming harder to come by.

“Knowing you’re in an environment where your brand will be looked after and not compromised by questionable presence of other advertisers,” says Stuart. “Also the alignment with the publisher itself. If you want your brand to reflect those values of trust, integrity, credibility, aligning with a brand where people see that is definitely a positive.”

From a media buyer’s perspective, the question of what paywalls mean to advertisers all depends on the content, says Simon Bird, Chief product and Strategy Officer at PHD Media.

“Not all content behind paywalls is high quality, but much of it is, and high-quality media tends to make advertising more effective.”

Brand safety and higher attention levels are other considerations advertisers might take into account when weighing up whether they should advertise behind a paywall or not, he adds.

“The big downside is reach, which tends to be much lower for obvious reasons. As with everything in our industry there is no blanket right or wrong or yes/no, it always depends on the category, the campaign objectives, the budget etc.”

As the media landscape continues to evolve, more publishers may explore the paywall model as a viable means of generating revenue while upholding the integrity of their content. With readers increasingly recognising the value of paying for quality journalism, initiatives like the one undertaken by those mentioned here shows promise for the industry’s future.

This article was originally published in the June/July 2023 issue of NZ MarketingClick here to subscribe.

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About Bernadette Basagre

Bernadette is a content writer across SCG Business titles, The Register and Idealog. To get in touch with her, email [email protected].

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