Why the FT is tweaking its digital paywall

The Financial Times is changing its digital subscription strategy in a way that, on the face of it, is aimed at bringing in more readers. But it’s also an advertising play.

The U.K. publisher is rolling out a one-month trial period during which people can sign up for $1. After the trial, the full price will kick in. The idea behind this is to get people to build a reading habit, which will entice them to pay up at the end of the trial period. (At a base price of $335 a year, a subscription isn’t cheap, but the FT’s high-income readers can afford it.)

“We are evolving this and developing a different approach which is paid-for trials, whereby as for a nominal sum, will have unlimited access for a month,” FT CEO John Ridding told the Guardian. “The theory is that within that they can build a habit, and then become a subscriber.” The FT said that using paid trials rather than increasing subscription rates by between 11 percent and 29 percent.

The FT is widely considered a success story in pioneering the digital subscription model. Introduced eight years ago, its metered model has been widely imitated, by The New York Times and other newspapers. As a result, 70 percent of its circulation is digital.

But the economics of digital news is changing. The FT made a big bet on readers to shield itself from the ups and downs of advertising, and it needs more of them to offset declines in advertising. As a small premium publisher, the FT can’t compete on scale with big, free-access business news sites like Forbes and Yahoo Finance.

So the FT, along with a few other premium publishers, has made engaged time on the site — instead of the click — a central part of its pitch to advertisers. The rise of engaged time is related to the viewability debate, where advertisers also are cracking down on paying for ads that aren’t being seen by humans. Publisher must now show they have a good audience.

The FT’s subscription sampling offer reinforces the engaged time selling proposition. Registered users get three articles per month before they have to subscribe, down from a previous eight. By tightening up the number of articles non-subscribers can read for free could cost the FT in page views. But it also could weed out some fly-by visitors who don’t do anything for the FT’s engagement story.

By growing its high-quality audience, the FT is hoping to keep its edge in the marketplace, which could ultimately translate to higher ad CPMs, said Eric van den Heuvel, managing director at The Gate Media.

But Maikel O’Hanlon, vp of social media strategy at Horizon Media, wondered if the FT was missing out on monetizing the opportunity that casual readers would represent if it used engagement-based ads that let visitors access content for free if they first engage with an advertiser’s message.

“If I’m an advertiser buying on FT, I’m not sure how much I care about people engaging more or spending more time on FT unless it directly translates to improved performance of my ads, and ultimately with my brand,” he said. “And that’s a case that FT will have to make.”

Even so, the FT can’t ignore the need to expose its content to a wider audience through search and social media, and will likely continue those efforts alongside engagement tactics.

“On the engagement side, toward bottom of the funnel, they are using analytics to expose more stories to frequent readers to goose more time spent, and having some success,” said news analyst Ken Doctor, who wrote in-depth on the model change here. “I’d expect there would still be an openness to search and social, as necessary feeders, though the number of free articles could be adjusted, as they have up and down, over the years.”


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