Reader payments now make up 12 percent of The Guardian’s revenue

The Guardian now gets more revenue from consumers than from advertising. More than 900,000 people pay it through a combination of membership, recurring contributions, print and digital subscriptions and one-off contributions, accounting for 12 percent of the publisher’s total revenue.

Speaking at the Digiday Publishing Summit Europe in Barcelona, Spain, this week, Anna Bateson, chief customer officer at The Guardian, said she sees that 12 percent figure rising to around 20 percent of the publisher’s total. Unlike advertising, which can be limited by market borders, donations have a more global scope — contributions come equally from the U.K., U.S. and the rest of the world. But the publisher has to overcome payment friction and learn more about what drives donations.

“It’s a revenue stream we can believe in,” Bateson said. “It can grow by improving the payment. There’s still too much friction, particularly on mobile and understanding local variations around how they want to give and the amount will yield future return.”

While subscriptions rely on the reader’s relationship with the publisher, donations have their own drivers. Investigations and emotional political moments along with stories on the environment and climate change boost donations. Donations also are driven by reader emotion. Bateson said stories like the Thailand cave rescue can drive double or triple the usual number of conversions. In the U.S., The Guardian got a spike in donations when it ran solicitation messages around coverage of gun crime, stories where ad revenue would usually be limited due to keyword blacklists from advertisers.

“We were nervous about how appropriate this would be, but because it was bound up in this specific ask around keeping gun reporting visible, it felt OK,” she said. “There are moments when advertising is the best route to monetization, but donations can unlock value if done the right way so that it feels genuine and not crass, and we have a lot of debates about that.”

Donations and payment methods vary by region. One-off donations are more common in the U.S., while memberships and regular contributions are more popular in the U.K. and Australia. In Australia and Scandinavia, people tend to be more generous than in the U.K., although Bateson acknowledges this could be due to the country’s wealth.

Next up, The Guardian is looking for ways to increase the amount and the regularity of payments; around 20 percent of people who have given once will donate again. To that end, there’s been a lot of experimentation around elements like language, design and payment amount. It turned out that customizing the language of the donation message to the type of journalism didn’t help the donation rate.

The Guardian is also thinking more seriously about churn, including how to strike a balance between continuing a dialogue with readers without overloading them with messages. Newsletters drive retention, but ones containing messages from Guardian journalists thanking people for their support have had mixed feedback.

Products also are being pulled into service. The Guardian’s app users are among its most engaged readers, but they weren’t being effectively monetized through ads, so The Guardian introduced a premium, ad-free tier with additional features. The Guardian also is simplifying the number of donation tiers it has; the bulk of donations are at the lower end, around £5 ($6.56).

“The idea that just because [The Guardian] was available for free meant you couldn’t persuade people that it was something of value that they would want to pay for has essentially been proven wrong,” she said.

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