A growing number of publishers are focusing on their audiences’ lifetime value, which in turn is affecting their advertising, product and editorial strategy.
Publishing platform Medium began to track the lifetime value of its audience at the end of 2017 following its switch to a membership model. Women’s interest publisher Meredith, after years of using lifetime value to measure its subscriber base, has been taking lifetime value into account on the advertising side of its business, too. The Atlantic, after years of thinking about its paying readers in terms of their lifetime value, is building the framework for a system that will help it track its entire audience that way. The Boston Globe has for years measured subscribers’ lifetime value, and is now personalizing the editorial content and marketing offers it shows people to improve conversion.
Lifetime value is a marketing term for the amount of revenue a company expects to generate from a customer over the life of their business relationship. That’s different from the revenue-per-visit or revenue-per-page models that define many digital publishers’ operations, but it’s more in line with what other industries have used to guide their digital marketing and operations.
“We’ve moved from a visit-centric view of the world to a user-centric view of the world,” said Matt Minoff, Meredith’s chief digital officer. “Now, when we make changes to our sites, we can understand the impact it’s having on [lifetime value].”
Advertising revenue has powered the growth of mass media. But as media has gone digital, publishers have lost control of their content distribution, and with it, the ability to charge a premium for access to their audiences. Platforms including Google, Facebook and Amazon all offer more scale and better targeting than any publisher, which has forced them to rethink their pursuit of scale in favor of direct, paid relationships with their readers.
Making such a shift has far-reaching implications. When Medium began monitoring lifetime value, for example, Michael Sippey, Medium’s vp of product, started paying less attention to pageviews and more attention to the number of logged-in users because they get a personalized experience that leads to longer engagement and makes them more likely to subscribe.
In other cases, a focus on lifetime value has changed the kind of feedback editorial staffers get on their work. The Atlantic recently formed groups that convene members of its editorial, data and consumer revenue teams and share information about what subscribers are reading. That information is meant to be educational rather than prescriptive, but they indicate a shift in priorities.
“I don’t think we’ll ever be in a world where there’s some mandate from the top that the growth team makes X, Y and Z decisions editorially,” said Sam Rosen, who heads growth at The Atlantic. “But that doesn’t mean we shouldn’t be offering more insight to our editors.”
A focus on lifetime value changes publishers’ approach to distribution, too. Where a publisher might have used a platform like Facebook to gather up cheap audiences, either through clicky headlines or celebrity-powered arbitrage, it now might use it to target smaller pockets of people at higher cost.
“It doesn’t cost a lot to reach 1 million more people,” said Rosen, noting that The Atlantic’s growth team has an audience development operation that’s independent of editorial. “But are those people going to be worth the effort of continuously trying to get them back over and over?”
Even publishers that have long looked at lifetime value need to balance that with the need to drive the advertising that still represents the lion’s share of their revenue. While paid products like memberships, subscriptions or even app downloads might produce more revenue over the long haul, that still has to be weighed against the sugar rush of selling an ad campaign that delivers revenue immediately.
When Meredith executives discuss how much of its sites’ ad inventory to use to pitch subscriptions or memberships, “we have to talk about how we’re doing for the quarter,” said Andy Wilson, Meredith’s svp of consumer revenue.