E28: Will your paywall kill your website traffic? (and ad revenue)

Welcome to episode 28 of the Paywall Podcast. I am here with Tyler Channel from Paywall Project, who works with lots of local newspapers, West Virginia and beyond. Yep, welcome. How's it going, Pete? Great to see you again. All right, today we're going to talk about do paywalls kill website traffic? And what that really means is do paywalls kill your advertising? That's the big fear from what we hear from publishers. And this podcast is really dedicated to the publisher that's at the front end deciding about a paywall.

Right.

Whether. Whether they need one. Maybe you've already decided that you need a paywall. You're just nervous about implementing it. And the thing we hear over and over again from our publisher customers is, what's going to happen to my website traffic? What's going to happen to my ad revenue? And of course, the story is, with ad revenues generally falling, especially network ad revenues, there are some bright spots which we'll talk about. But network ad revenue is in a very tough place. And yes, if you paywall your content, technically you will drop your traffic. So there's the bad news out of the way. Okay, so before we jump in, there are really two types of paywalls we just want to cover here. And I want to share a little story about. This is a. Years ago, we were dealing with a magazine publisher who implemented a hard paywall. And they, they were a print publisher, they distributed nationally. They had a website with all their content on it. And one day, and we were working with them, and one day they decided to turn on a hard paywall, which means that every single article on their website was locked down. And we're talking decades of articles that were on their website. Tyler, you want to guess what happened to their traffic?

Why don't you tell us?

Pick a number. How hard do you think traffic sells? What percentage of traffic do you think.

Oh, my God.

It got cut down.

This is a hard paywall.

Hard paywall. Every article.

Oh, man. Had probably fell off a cliff.

Sure did.

Yeah.

Okay.

That could give you a percentage, but it was.

They lost 80% of their traffic. It was over 80. Yeah. I went actually looked at their Google Analytics and it fell off a cliff. I couldn't. I was completely stunned. I emailed them right away. I said, what are you guys doing? And I could not convince them.

Was it. Was this a well known publisher?

It was a well known publisher that no longer exists. Yep. Oh, yeah, they.

Ouch.

I'm sorry to say they did everything wrong. Um, however, let's talk a little Bit about the modern paywall, the metered paywall, which is of course were involved in. And the meter paywall is a very, very different animal. And what when we look at, across our sites, we do see, when somebody sets up a metered paywall, we do see a bit of a traffic drop. It varies really depending on how you set it up. For instance, if you go very restrictive, let's, let's say restricting one article like views to one article per month for say a typical news publisher. Yeah. That's gonna, by definition, that's gonna cut your traffic down maybe up to upwards of 30% if you are generous with your meter. In other words, let's say you allow 5 or 10 free articles to be read per month. Cause what the meter does is it lets the inbound visitor read a select number of articles and you, the publisher get to choose how many articles there are. And maybe the impact's only about 5% of your visitor traffic. So it really depends on how you set it up. And Tyler, I know you work with a bunch of newspapers that are running this. Do you. What kind of metering do you see typically?

Typically a one to one ratio, I call it. So one, one free article for the masses, non logged in people. Yep. And then after that article, asking them to sign up for free for an additional article, which as you've listened to this podcast, puts them on your newsletter and also registers them in WordPress, making it that much easier for them to eventually pay without having to go through all that process.

Yes. Okay, one to one, let's jump into it. Since you started with the free registration and such.

Yeah.

And what I want to talk about are we talked about the challenge, the hard paywall, the meter paywall.

Yeah.

A bit of a loss in short term traffic. But what I'm going to say right away is that with a modern paywall that's set up correctly, you're going to, you're actually going to do two things. You are going to grow your ad revenue, you're going to have better ad revenue. We're going to talk to you about how, how to do that. And you're also going to be growing and most importantly is you're going to be growing your readership in the long term and you're going to have higher quality level of readership. And that's what's really important. And yeah, advertisers want quality readers. It's really, they want results is what they want. And you can give it to them. But before we jump into that, I just want to Show, I want to show a chart here that we're all looking at. It says biggest opportunity on here. And if you step back and you look at your visitor traffic and Tyler, I know you, you know all about this. But if you look at your visitor traffic to your publication, you have generally three, three categories of visitors. You have the visitors that are really your big fans. And when you put up a paywall of any kind, really, it doesn't matter what it is, they will generally subscribe pretty quickly to you. And that's, that's on the left side. They're your hardcore fans. They're going to support you no matter what you do. They're going to, they're going to give you money, they want your content, they want to support you.

They love you.

And that's great.

I see this a lot with the local news publishers who put up a, sometimes put up a website for the first time. We'll get a hundred plus new subscriptions without asking for much at all. They'll get a hundred new subscriptions right out of the gate.

Yeah.

And those are your loyal fans built in.

Yeah, yeah, absolutely. Especially if you've been, if you've been publishing, you have readers, you probably have a new letter list that you started.

And you have readers and a lot of them won't even bother with a free registration. Can't be bothered with that. Let's go, let's subscribe and let's pay.

Yep. And, and then on the complete flip side, the opposite side, which is on the right hand side of the chart, are the one and dones.

Right.

They're the visitors that land on your site. I won't even talk about bots and non humans, but the folks that come in because Google picked up an article, they're maybe they're in the region, maybe they're not, and they just read an article and that's it and they go away and they'll never pay you, they'll never even register for anything. They're just, they're just fly by traffic. And so those are your two extremes and then there's everybody in the middle and this is what we call the biggest opportunity. So these are the casual readers and the super, what I call the super casual readers. And the super casual readers are the ones that they like you, they like your publication, they want to, would love to support you, but they're just not ready to support you yet. They're not ready to pay essentially when you put up your paywall, they might be ready in a month, they might be ready In a week they might be ready. In a year, you just don't know. But you have this. Yep.

Sorry to interrupt. Some of them will even. Some of them will be ready in just five or 10 minutes. I have a Slack channel with all the publishers that I work with and I get pinged every time there's a new pre registration or a new paid plan. And oftentimes I, I see someone will sign up for free and then five minutes later will. It's a small percentage. Five minutes later we'll subscribe right away. They, they've seen the value within five minutes, which is fun. So that's.

And that free registration helps, right? That's right. They, yeah, they get the. You create momentum, right? Like they'll say, oh, I register for free. And then, then they read more and then all of a sudden it says upgrade and they're like, yeah, this is good, let's go. Yep. Yeah, that's great. Super. So the super casual, right? Probably the best. Super casual, five minutes. But it might take five months, right. Depending on the person. And you know, the, the key here, and this is what every publisher needs to do. Just about every publisher is set up that free registration we were talking about. And that's how you, that's how you capture the. That super casual reader and start nurturing them. I think that word's on the chart there. And what that means is you stop the reader after maybe an article or two and say, hey, read this article for free. So, so they get a subscription. We call it the nag, or a message that says, hey, you're sorry, you're out. But if you can read this article and maybe add some other benefits, get on the. You join the newsletter. Maybe you get, maybe you get an extra article every month. Maybe it's a few articles every month. Again, this is up to you as the publisher, depending on your traffic and your audience. But the registration is essentially a way to capture the email address and get that new super casual visitor onto your mailing list. So you're sending your newsletter to that person. That's the key. And then what does the newsletter do for you, Tyler?

It burns through those free views that the free registration user has and gently nudges them to upgrade. That's the goal. And also for those of you who are thinking about setting up a free registration and a newsletter, these folks are on your newsletter now too. And so your newsletter has value, I would argue has a lot of value for local advertisers. These being able to sell sponsorships or even just traditional Ads inside the newsletter to everybody in this town, or at least the percentage of everyone in this town. That's some pretty extreme value because these folks have engaged. They put in their email address, they put in their name, they've signed up. It's far more valuable than your average impression on your website, which is just eyeballs for the sake of impressions there. Nowhere near it as valuable.

Yes, sponsorship. That's right. The newsletter, although its intention when you put up. Main intention when you put up a subscription wall or paywall, is to drive folks back to your articles and then you nag them over time to pay. But that sponsorship is something that is so important. You have a growing newsletter and we're going to talk about the numbers a little bit in a little bit about what you can expect for numbers. But the ad world is changing. The digital ad world for publishers is really changing from that banner ad advertising to sponsorship. So the smart publishers are changing their tune to sponsorships. They're sponsoring packages of things. And the newsletter is the ultimate package of content. We love newsletters as humans. We love packages of content. We get a. We. I get the. The local newsletter, a couple of them every morning, and I read them.

Right.

If we. It could. If it's a magazine, you're in a hobby, you're in fishing or, or you're a tennis player or whatever, and you get that newsletter with a package of content, you're gonna read it, you're gonna look at it. It is. The newsletter is the best direct marketing tool that a publisher has, and I would argue even better than print. Direct marketing. And that's the old term that's like old guys like me.

It's.

You have a list. It's your list. You own it, you control it. It's not social media. You're not. Facebook isn't changing an algorithm on you, or LinkedIn isn't changing your algorithm on you. It's your list and you're growing it. And then you get somebody to sponsor that. Who are those readers? Right? They're your best readers. They're paid subscribers. And those that registered, they took the time of putting their email address and choosing a password on your website. Like you. You actually introduced a little bit of friction and say, hey, you got to jump through this tiny hoop here. Doesn't cost anything. You got to spend time doing it. And then you get the. You get on the newsletter. So there. These are. What do they call? Zombie. Zombie accounts typically, right?

Yeah.

They're your best readers. The super casuals and the paid readers and those Sponsors as your list grows. And that free registration is exactly what the purpose is. It will grow your newsletter and sometimes like ridiculously fast.

Yeah, I turned on a free registration for the first time for a client in a small town, 2,500 or less people. And within a week they had a hundred free registrations, which is, wow, that's our town.

It's 20. I think we're at 2, 700 or something like that.

Yeah, yeah.

Wow.

Yeah. And people are hungry for it. Maybe they're not ready to pay yet. And giving them a way in is helpful that doesn't require a credit card. Yeah, free trials are great, but they still require a credit card and that's an enormous hoop to jump through to read content online.

Let me look, I'm going to go through and just review the free registration in terms of what happens and what the benefit is. And we're going to loop back to traffic. This, this paywall killing my traffic. And I promise you're going to loop back to that. But first of all is you are building, you're starting the relationship. And this is you want your readers to have a good experience on your website. You don't want them to come to your website and just get knocked out by pop up whatever. Pop up ads, pop up paywall, pop, pop up this just. Or just overwhelmed by advertising where folks are using ad blockers. So spiral down. And so the free registration is the way you start the relationship. You're saying, hey, you have to draw the line in the sand and say, hey, look, we need your support. Why don't you just join our newsletter for free? That's a good first start. You'll get some extra content, you'll get our newsletter and then you can take your time about it. And then if they want more content, yeah, they can pay. But if they're not ready for it, that's okay. They're there. That's the start of the relationship. And that's how you start with that seamless sort of reader experience. And then it grows. Right. You mentioned an example. I'll Talk like a B2B example with a business newsletter that went free registration in three months. And this was in Youngstown, Ohio, decent sized population, but still niche because it's B2B and in, in three months they had, I think 7,000 new email subscribers. And then six months down the road they had broken 10,000 and they had started with five or something, I don't know, it was. And it's still growing, right? Still growing. And we talk about small boats they turned on, they were doing a good job marketing. But when they turned on their free registration, their newsletter subscriptions jumped 20% month over month. And they were really actively marketing prior to that. So that just that one change made a big difference for them. All right, let me check my list here. Quality readers we talked about. These are your best readers. Super casual readers, paid subscribers, you just can't beat that. Advertisers just drooling to get in there. Oh and then you, when you have, when you add a paywall you get the benefit of knowing what your readers are looking at, what articles they're reading. So you can go back and say hey, these were our most popular articles in the past 30 days or whatnot or I know publishers that reviewed this. Every morning at 6 o' clock in the morning they have a team meeting and they'll look at, they'll look at, okay, what was the most popular article yesterday? And they'll write follow up articles on the most popular articles that happened yesterday. If you're a news publisher, great idea. Works like crazy. Builds traffic, which means page views, which means you're growing your traffic because you have the data. So simply knowing what articles your free registered users and your paid subscribers are consuming will help you grow traffic.

Yeah. And to add one point, knowing which articles that convert to paid subscribers is invaluable. This is data that I love to look at. Figuring out what tips to scale for people. What kind of articles are they community articles, Are they hardcore news articles? Are they what drives them to put down a credit card? And that is one of my favorite, maybe a plugin we don't talk about very much with leaky paywall. That is very helpful and not that as a journalist that it should drive what you report on but I think it does help. It helps you understand what's of high value to the reader.

Absolutely. And that's something that we're here beta testing for us and we are releasing soon. We're making it part of the core leaky paywall platform. But knowing we were we we were been running this through Google's data studio for a while and we're switching to a just a built in metric. So that that is coming soon by the end of the year is that's what Jeremy promised anyway so he's on the hook now.

Well I think we have it right now. I think it's called like user history or something. I don't think.

Well that's true.

That's how right now it's more of a manual process. You have to go through and look at each subscriber that comes on board, which is not that hard to do unless you're. You've got a ton of subscribers coming in every day that maybe you won't care about that data. But if you're a smaller publisher, go through and look. Turn that on and go through and look and see what it looked like. What were all the things they looked at before they committed.

They paid, right? Yeah, yeah, that's true. You can look at that now. Anyway, it's coming in a nice organized fashion for you soon. All right, so those. That's all about the free registration and all the benefits. It throws off so many benefits. And that's how you put your paywall to work. Driving traffic, building the quality of the traffic and building a relationship between those readers. That's the key. All right, so let's. I want to talk about traffic impact like the actual numbers that we're looking at. One of the ratios that we see is that roughly for every, let's say hundred re registered super casual readers that you capture their email address, you'll get about 10% that will plus or minus. But that's a pretty, that's a pretty realistic number. When we look through the subscriber records for publishers. That's. Some are different for sure, but on average that's a pretty good. So out of every 10 free registered subscribers, one will have subscribed. Of course, time is part of the equation. This is pretty rough, but that's. It's a good number. So if you look at new newsletter capture. Right. As the speed of newsletter capture, I'm just gonna pick a local example. We have maybe 70,000 readers in our audience in New Hampshire. It's a small spread out geographic area and if you look at Daybreak, who's a news publisher, in the first year that Rob came on, he built. It's just a little over a year. You captured 10,000 email subscribers. And that was almost a year ago. So it's probably much higher. And if you do the math, 10,000 divided by 70,000 is about 14%. Right. In just over a year. I don't know what he's at now, but what I'm going to say is that you may very well and tell me if I'm wrong, Tyler. I want to hear if I'm wrong. But you may very well capture 20% of your population, your readership's email addresses as really rough number. What do you think?

Yeah. Especially with local news. I've seen more local localized. Your, your publication Is the higher percentage you'll see capturing people. It might be upwards of 10, 15, 20% of the whole town subscribe. It's much higher.

Right. Imagine if you're in an area with a hundred thousand people. You're serving the town, it's a decent size area and you capture, if you capture 10%, you got 10,000 people on your list. If you capture 20%, you have 20,000 people on your list. You have 20,000 readers that are coming back to your website to read articles. Google tells us that the average reader, and this is like crap readers plus your best readers. And everybody in the middle looks at about one and a half articles per visit, something like that, right? They don't get very far. They'll look at one article, some will just be one and gone, probably the most of them. And then some will be one and they'll look at two or more if they can. So one and a half. So let's say your best readers maybe read a couple of articles every time they visit. And you're sending out a daily newsletter, you're sending out a weekly newsletter that's 10,000, 20,000 times two, once a month. Do the math. It's a huge, it's a huge amount of page views, of article views that your best readers will look at. Now it takes time to get there. This doesn't happen tomorrow, but it may only take a year or two and you end up with a, with this list that is in your newsletter is just literally direct mailing, just driving people back to your content. Your direct mailing, your audience, your advertisers are loving it, the quality of the readership is high. You're going to see traffic growth, quality traffic growth. Okay, so those are the numbers. So what do we do? Just a little recap here, Tyler.

I want to point one thing out, that if you're a news publisher and you're like, I know that I need a paywall and I need some kind of setup like this, because obviously you wouldn't be thinking about a paywall if your ad revenue was through the roof and growing every, every month. So there's a reason that you're considering a paywall. I would imagine you're at a turning point in your business model and you're looking at subscriptions as a way to stabilize and grow your business. If you're worried about traffic, just make your meter really generous at first. Set it to, I don't know, 5, 6, 7, 8 free articles for a month before they hit the free registration and then see how that goes and then wait maybe a month and then crank it down a bit. Maybe go to four free articles and just keep tweaking it until you get to a point where you're like, okay, I'm not losing all my traffic. All my ads aren't going away. My business isn't collapsing. People are actually signing up to the free registration. Oh, my God, they're actually paying for things. And make your move that way. Don't let us tell you that. Doing the one in one strategy, don't let that prevent you from getting started. If it scares you, try a more generous offering. And then you can always tweak that to a more rationed meter, more tight meter setup.

You are a wise man, Tyler.

I hear this a lot, though. Publishers are afraid to turn on the paywall. They know they need the paywall, and I get that. It's much more stable. You don't have to go out and hustle for ad revenue. But let readers come to you. Let them pay you and stabilize your business model. It's going to take time. It's not overnight. I've got some publishers that.