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    How Your Subscription Funnel Impacts Advertising Revenue

    Afton Brazzoni | Industry Analysis | 18th March 2021
    How Your Subscription Funnel Impacts Advertising Revenue

    Advertising has been fueling publishers' revenue engines for decades, and will likely continue to be so for years to come. Ad sales currently account for 72% of media organizations’ revenue, according to our recent Adweek report, Combining Revenue Models Gaining Traction in Media Industry. However, publishers should expect this income stream to look slightly different now that media subscription models are on the rise, accounting for 28% of revenue and on target to reach 32% in the next year.

    In this article, we’ll explore how your subscription funnel has the potential to impact your advertising sales in a big way, enabling revenue from both sides of your business to increase. We’ll also share how the right technology can help accelerate your media revenue diversification strategy.

    Shifting From a Sales Funnel to an Engagement Loop

    The traditional approach to media advertising sales

    During the heyday of print media, it was common practice for publishers to staff up their sales departments and launch robust efforts to entice various companies to place ads in their publications—which often included fancy dinners meant to woo prospective clients. However, the use of these types of in-person sales tactics has declined over the years, especially in 2020 when the COVID-19 pandemic made physical distancing a necessity.

    Today’s advertiser-client relationships more often than not play out with a lone marketer in their work-from-home office placing a digital ad on one of the Big Tech platforms such as Facebook or Google. This begs the question: where do publishers fit into the picture?

    “A great deal of digital advertising is no longer being sold directly by publications. This leaves publishers searching for other methods to monetize their content,” according to Digital Content Next. “Subscriptions do solve that problem. They allow publishers to directly monetize their audiences again. The model also has fewer middlemen and is a more stable, less disruptable business.”

    Moving toward an engagement loop

    Implementing a subscription revenue stream requires media organizations to shift from using a traditional sales funnel to creating an engagement loop. The latter model keeps subscribers consistently engaged with your content to ensure they don’t lose touch with your brand. When your data tells you a subscriber has stopped engaging with you, or has decreased their level of engagement, it’s time to nudge them to prevent customer churn.

    Until now, publishers have faced a challenge due to the standard data management platforms (DMPs) on the market and their lack of application programming interface (API) technology, which is what enables two applications to communicate with one another. Media companies haven’t been able to use DMP data inside of their subscription systems because legacy subscription technology can’t interact with DMPs.

    However, publishers now have the opportunity to leverage their advertising data to improve their subscription businesses. With Lineup Systems’ Amplio subscription management platform, media organizations can create a more robust profile of each customer and better understand that individual’s content preferences. This is a groundbreaking development for the industry, especially considering that 63% of publishers consider it difficult to convert audiences into subscribers.

    With Amplio, media companies can create nurture workflows to more precisely engage their audiences and move them along the path to purchase. The entire platform is built on micro services, which gives publishers the ability to easily integrate with other software, such as external business intelligence systems.

    How the Subscription Engagement Loop Drives Ad Revenue

    Subscriber revenue is an integral part of today’s media business model, especially in the wake of COVID-19. This is why it’s crucial for publishers to understand how the engagement loop works so they can leverage it to its full potential.

    “The double hit of consumers seeking more inspiring content to fuel their passions during times of limited activities, combined with a restricted newsstand, has led to substantial increases in subscriptions in parts of the market,” according to Campaign. “Bauer, Hearst, Immediate, and Dennis Publishing have all seen 20-50% increases in subscriptions.”

    Despite these promising numbers, 68% of organizations have yet to quantify the effectiveness of their sales funnels. With a best in breed system such as Amplio, publishers can begin creating effective subscription engagement loops to drive renewals through a deeper understanding of their customers backed by robust metrics.

    Mastering subscriber engagement, and receiving warnings if an individual’s engagement level has decreased, is only part of the power of a subscriber engagement loop. Publishers must also have the ability to develop subscription packages quickly to respond to audience preferences. Updating rate cards and packages has traditionally been a monumental task; however, with Amplio, you can do this easily and get your offerings online quickly.

    For example, you may choose to target male fans of a specific football team between the ages of 25 and 50, with an income level above $50,000 per year. With Amplio, you can use your segment data inside of the platform to create a package tailored to that audience. Once your package is ready, it’ll be automatically available for your customers in your self-service advertising portal. You’ll also have the ability to report on it almost in real time so you can make adjustments on the fly as needed and charge a premium for impressions.

    Stay Up to Date on Industry Insights

    Do you ever wish you could get in a room with 100 other media executives and ask them about their most pressing problems and their future plans? The good news is that Lineup Systems has done the legwork for you with our recent Adweek report, Combining Revenue Models Gaining Traction in Media Industry.

    The report uncovers key insights on the role of combined subscription and advertising models in the media landscape over the next few years. Download it today

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