The Financial Times treats data like an old friend. When it saw its advertising revenue decline, instead of trying to double down on it, the publisher leaned into the possibility of a new revenue stream – subscriptions.
McKinley Hyden, Director of Analytics Business Impact, Financial Times, joined WAN-IFRA’s recent Media Leaders Summit Middle East 2023 to talk about how the Financial Times Group has successfully managed to align itself with common goals, data ownership and platform relationships.
“If you are merely relying on being a newspaper business, as the FT once did, the only information at your disposal is revenue by geography, circulation, and survey data, if you’re lucky,” she said.
“On the other hand, an open-access digital product provides far more information such as page views, social media referrals, cookies,” she added.
However, having a paywall has helped the FT to track engagement levels, customer lifetime value, explore payment packages and content, and play around with newsletters. It also helps the brand investigate onsite journeys, a rich source of insight.
The company’s retention efforts have 15 times the value of acquisition, she noted.
Data and digital transformation go hand in hand
Through recent research, FT has found that a recognised reader – anyone the brand had basic demographic information about – is worth almost twice the value of what an anonymous user is to them.
Hyden pointed out that if a user is willing to give the brand some information about themselves, they are three times more likely to become subscribers.
Customisation and personalisation of content has led to a 10 percent uplift in trial conversion rates, making FT’s value proposition more appealing.
As FT’s focus on subscription has grown, so has its data collection.
In 2011, the publisher began its efforts to further data and reader revenue. This was followed by bringing in the core data warehouse in house in 2014. This move allowed the FT complete ownership of its data assets.
That same year, it began developing its engagement metric called RFV (Recency, Frequency, Volume), which has been the northstar for a while and crucial in understanding the value exchange for its customers.
In 2019, the brand created an insights hub, which serves as an internal research platform for people in the business to discover insights that the FT has created over the years.
Recency, Frequency, Volume crucial to strategy
RFV is fundamental to how the FT operates and one of the cornerstones of its data strategy.
This metric essentially looks over a 90-day period and calculates a score based on the number of days since a user’s last visit (recency), total number of visits in that period (frequency), and the number of “counted content pages” viewed. It does not apply to anonymous users.
Through this metric, the company has found that small increases to engagement at the lower end of RFV actually have huge reductions on cancellation rates.
A user is considered “engaged” when their RFV score is more than 18.2, and becoming “engaged” leads to a 10 percent reduction in cancellation rates.
“This has become a huge strategic and tactical piece of information that the FT uses to get customers hovering around that engagement point of 18.2 to reliably scooch over it,” Hyden said.
The RFV metric has also helped create a common language across departments, allowing people to share the same priorities and use data effectively.
Hyden shared three examples of three experiments and their impact on RFV:
MyFT: This was FT’s big push towards personalisation. The platform allows a user to curate a dashboard and follow particular topics. “We noted a huge uplift in engagement. It took us a lot of effort to put together, but gave us returns,” she said.
Push notifications: FT users love push notifications. “It seems to really increase their engagement. We are a business services company and several of our customers rely on us to give them breaking news and key analysis as it happens,” Hyden said.
Newsletters: The FT currently publishes 36 newsletters, and some are doing more for their audience than others. “Using the engagement metric allowed us to have a much more productive conversation about where we should really be putting our efforts for our customers,” she said.
The data team also used the RFV metric to create engagement clusters. FT Fans is their first engaged cohort. After scouring through data, the team found that this group was mostly B2C, living in the UK, and that they worked largely in finance and banking.
FT Fans account for 11 percent of the base but produce 67 percent of visits and 73 percent of clicks. This cluster is also the one that most uses personalisation and interaction tools and has the highest number of email sign-ups per user. They also have the second highest mobile FT usage (+34 percent of visits).
In 2019, FT reached its longstanding goal of acquiring 1 million paying users, a year ahead of schedule.
“It’s a testament to how galvanising this metric was and how well it was understood and utilised throughout the organisation,” she said.
A tough paywall pays dividends
Implementing a hard paywall has proven to be essential to FT’s strategy. Only 13 percent of FT articles published in 2022 were free.
“We do have sampling strategy, so it’s not a completely hard paywall. We recognise the need to grow our audiences, but we also have the luxury of having a niche that we are incredibly good at,” Hyden said.
New products to reach new audiences
An ever present challenge for FT, as for most publishers, is to reach new, younger audiences.
“Even though we feel our luxury status symbol product is buying us a bit of time, we still need to look at these more price-sensitive, younger readers,” she said.
In that bid, the company recently launched FT Edit, a standalone app that allows a user eight articles per day. It is free for the first 30-day days and costs 99p a month for the first six months and £4.99 (€ 5.83) a month thereafter. The app has had 140,000 downloads since it launched in March, 2022.
Hyden said they are also looking at creating smaller subscriptions for particular newsletters as another way to get a wider audience base that is unable to or unwilling to pay its substantial prices.
Retaining B2B and B2C users
The flow for B2B and B2C customers is a typical funnel.
The brand has heavily pushed anonymous users to register to gather more data about them.
“Ideally, we make them into a full B2C acquisition. We also have a strong trial list cohort, that is still a significant pool of premium converts. So that’s another way that we get them,” Hyden said.
For the B2B audience that has access to FT through their workplaces, but has to leave because of a job switch or other circumstances, FT tries to retain them as B2C subscribers. And that’s a hefty piece of work.
The company has a department dedicated to retention and engagement. “Our retention efforts have 15 times the value of acquisition, and so that’s where a lot of our effort is put,” she said.
What’s working and what isn’t
Engagement insights to optimise onboarding journey: Hyden said getting people to download the app, enabling push notifications, signing up for newsletters, adding topics on MyFT in a certain sequence was the key to them being more engaged and not cancelling their subscriptions.
The onboarding process is a perfect reflection of FT insights.
Year end review campaign: “This is a good use of data to personalise messages and has shown to delight our customers. It’s not just a review of customer behaviour but also drives them back to the website,” Hyden said. The last one led to a 2.5 percentage point increase in the retention rate 12 weeks after the campaign.
Desktop vs mobile traffic: The company has different teams in place to monitor traffic from both these sources, with different ways of optimising them. During COVID, the team saw a lot more desktop usage than mobile.
Optimising through experimentation
The FT regularly conducts rigorous A/B testing.
Testing the hypothesis that having a clearer subscriptions page will allow users to find the right offer for them and increase the page conversion rate worked wonders for the brand.
The team saw one of the bigger recent conversion uplift of 16.8 percent (B2C) and had a projected 2.4K incremental subscriptions over a 12-month period.
When the editorial team noted a mismatch between when they were publishing articles and when people were reading them, they launched an initiative to publish inline with reader behaviour for a better user experience.
The team even experimented with creating an “engagement” metric for editorial called Quality Read.
A Quality Read is:
An estimate of whether a user has read at least half of an article, calculated on the word length, average reading speed, and time spent on an article.
Expressed as a percentage of all readers who clicked through to a story but didn’t hit the paywall.
Used to understand how an individual article is performing amongst readers.
So, this value metric compliments a volume metric like page views to aid decision-making.
The brand was also able to link Quality Reads with commercial outcomes by finding a correlation with conversion and renewal rate. “We figured if we could have a higher percentage of Quality Reads, users were more likely to stay with us,” Hyden said.
Key takeaways: Focus and start small
Know the problem(s) you’re trying to solve. Data thrown at an unclear problem or the wrong problem won’t be helpful and will cause frustration.
It’s okay to start small (and this has benefits). Often people want to “have everything” when creating a data capability but starting small and learning iteratively can help you learn what you really need.
Source: WAN-IFRA