By Katherine Ruane, Director of Strategic Marketing, and Daniela Lomas, Marketing Specialist at Mather Economics
August 22nd, 2024
In an era of rapid change within the media landscape, publishers are increasingly focusing on pricing strategies as a key driver of sustainable growth. Our recent webinar, “Pricing in Practice: Insights from Leading Publishers,” featured a compelling discussion with two industry experts: Rachel Ciampaglia from the Philadelphia Inquirer and Sue Kerr from the Dallas Morning News. Moderated by Alicia Queen, a Director of Consulting at Mather, the session offered a firsthand account of how publishers are tackling their pricing strategy to drive growth and future-proof their business model.
Evolving Pricing Strategies
Sue Kerr kicked off the discussion by addressing the question, “What is your overall approach to pricing strategy in your organization and how has it evolved over the past few years?” She outlined her organization’s transformative shift from a volume-based approach to a revenue-centric strategy. By experimenting with higher step-up rates, the Dallas team achieved a remarkable 20% increase in subscription revenue with minimal impact on retention.
Despite this growth, Sue candidly acknowledged the trade-off between revenue and volume growth, highlighting the ongoing challenge for all publishers seeking a sustainable path forward. Additionally, Sue shared how they simplified their Digital rate tiers to expand their stop-save opportunities and minimize pricing frequency.
Image 1: Dallas’ step-up experiment revealed that, despite the significantly higher rates, retention between the $5.99 and $6.93 offers remained nearly 1:1.
In contrast, Rachel Ciampaglia provided valuable insights into the Philadelphia Inquirer’s dynamic approach to digital pricing. Working closely with Mather’s pricing experts, the Inquirer was able to boost ARPU (Average Revenue Per User) by 13% in just one year (2020-2021). With several years of pricing behind them, Rachel highlighted the necessity of evolving one’s strategy to combat pricing fatigue and maintain subscriber value.
Rachel also shared details about a current test underway in which they offer new digital subscribers a pre-renewal discount, aiming to retain them as they transition off the introductory rate. She noted that the test is still in its early stages and emphasized the importance of collecting sufficient data to draw valid conclusions.
Pricing Differentiation: Print vs. Digital Subscriptions
On the topic of pricing differentiation, Rachel noted that while digital subscription prices have yet to reach the same levels as print, digital subscribers are accepting similar rate increases. She expects these prices to gradually converge, paving the way for a more unified pricing strategy.
Retention Strategies
Addressing pricing fatigue is essential, and Susan shared Dallas’ thoughtful approach to managing it. The strategy includes transparent communication, optimized notifications, and extending the intervals between price increases once subscribers reach a certain rate tier. By maintaining price caps and moderating price hikes, Dallas aims to align pricing with the value provided and retain the loyal subscriber base.
Conversely, Rachel Ciampaglia highlighted the potential of a robust benefits program, exclusivity, and subscriber surveys in maintaining perceived value. Despite the Inquirer’s initial challenges with marketing personalization, their commitment to developing effective paid media campaigns and cultivating a deep understanding of subscriber needs has yielded encouraging results.
Challenges and Opportunities
Several pressing challenges were discussed, with Sue Kerr highlighting issues such as subscription and pricing fatigue, new member churn, limited newsroom resources, and a low willingness to pay for news. Sue emphasized the need for publishers facing similar obstacles to address these challenges head-on by investing in a diverse product portfolio, adopting data–driven pricing strategies, and optimizing resource allocation.
Rachel Ciampaglia shared similar concerns but also pointed out promising opportunities. She identified personalization and enhanced digital experiences as critical areas for growth. A striking example was Rachel’s team’s agile response to a local news event, where they created an interactive game, showcasing how creativity and quick adaptation can significantly boost subscriber engagement.
Image 2: An example of how Philly leveraged gamification to grow engagement
Conclusion
Looking ahead, Sue outlined Dallas’ plans to simplify print pricing, further refine their digital subscription tiers, explore new product offerings (including games and puzzles), and more. Rachel discussed the Inquirer’s goal to introduce premium tiers and continue leveraging data-driven insights and experimentation to optimize their strategies.
The insights shared by these industry leaders offer a valuable roadmap for navigating the complex pricing landscape and adapting to emerging trends.We are grateful to these experts for providing us with a firsthand look into their strategies and how they are tackling key pricing-related challenges.
We hope these insights inspire you to explore new avenues for pricing optimization and revenue growth!
Connect with our speakers
Rachel Ciampaglia is a Senior Director of Subscriber Service and Retention at the Philadelphia Inquirer. To connect with Rachel, click here.
Susan Kerr is Vice President of Consumer Revenue at the Dallas Morning News. To connect with Susan, click here.
Alicia Queen is Director of Consulting at Mather Economics. To connect with Alicia, click here.
