Spending money to make money, Part II: Case studies of newsrooms using paid acquisition

By Phillip Smith

January 21, 2020

After publishing the first report back from our paid acquisition experiments with publishers last year, I started to receive a steady stream of emails from publishers across the country saying “Hey, we do this too. Can we share our story?”

At the same time, I was starting to reach out to several publishers to ask if they’d be open to speaking with me about their strategies, tactics, and hard-earned lessons.

In this second installment of “spending money to make money,” I’m going to start bringing you these case studies. We’ll kick off with a daily print newspaper that is growing quickly in the digital space, a print-first regional magazine, as well as two digital-first publishers focused on email newsletters.

And, over the course of the next few weeks, there will be more updates from the first cohort of publishers in this research (where the experiments focused on Facebook and Care2). I’ll also share early numbers from our second cohort of publishers who will be experimenting with paid acquisition using Google, YouTube, LinkedIn, Quora, and more.

If you’d like to make sure you receive future case studies and updates on this research, stay tuned at The Byline by Pico, The Lenfest Institute, or Membership Puzzle Project, and feel free to join my newsletter

A playbook for paid acquisition for newsrooms

As Philadelphia Inquirer Marketing Manager Jaime Hutkin pointed out when we spoke: many publishers — regardless of size — are working without the kinds of digital marketing playbooks that are available in other industries. Hutkin would know. Before she joined The Inquirer, which is owned by The Lenfest Institute, she worked at a small media company that owned local TV stations and newspapers , as well as in digital marketing role in an agency context before that.

Working without a playbook requires newsrooms to run a gauntlet of experiments to see what works and what doesn’t — and that’s something many resource-strapped publishers are unlikely to do.

However, across the industry — as the following case studies highlight — many forward-thinking publishers have taken up the challenge, run their own experiments, and have learned a lot. I’ve interviewed four publishers for this report. And I’ve been in contact with a dozen more who would like to share their strategies and tactics.

Collectively, there is enough hard-earned experience out there to develop a playbook for succeeding at paid acquisition in the news industry — it’s just waiting to be compiled. If you have a story to share, I hope that you’ll also reach out.

To funnel or not to funnel, that is the question

In such a playbook, the first chapter would likely want to introduce the idea of the marketing funnel and — ideally — it would also challenge the relevance of the traditional “funnel” concept in 2020 and beyond. Let me explain…

More and more, publishers who engage in paid acquisition are reporting that they think about the relationships they have with their audience in increasingly nuanced ways. It’s no longer just a few big buckets like “top of funnel,” “mid funnel” and “bottom of funnel” because holistic concepts like the “customer journey” are starting to take root. These newer concepts plan for more than just a single trajectory toward a financial relationship for each audience member.

A great example of this is provided by The Discourse, a digital newsroom in Vancouver, Canada.

When I spoke to Caitlin Havlak, Chief Data Officer at The Discourse, she described how they think about “super audience members:” readers who’ve subscribed to a newsletter, visited their site five times, and opened an email — all in the last 30 days.

In the framework of a customer journey, these super audience members would likely fall into the “advocate” category — they might not be financial supporters yet, but they are highly-engaged and a key ingredient in the recipe for reaching more readers.

However, if one attempted to map these people onto a traditional marketing funnel, they might simply be considered leads that did not convert to membership, subscription, or donation — potentially overlooking the authentic “social proof” value they’re providing by sharing articles, talking about the publication, and engaging in other ways like attending events or workshops.

Borrow these tactics for early in the customer journey

In the early stages of the customer journey, publishers should be thinking about how to introduce their publication to new people who are likely to enjoy it. In the classic marketing funnel approach, this stage might be called “awareness.”

Luckily, the techniques of paid acquisition can prove particularly helpful toward coming up with new and creative ways to tell a publication’s story. At Numlock News, a daily newsletter that highlights the context and importance of the numbers you read about in the news, Walter Hickey figured this out and is using it to grow his newsletter’s reach.

 “Through A/B testing [with ads] I’m able to find the most direct, effective way to pitch the newsletter to someone new,” Hickey said, adding that the objective was “not only to make the ads better,” but also to find “better ways to talk about my product in general.”

The Discourse is using a similar approach. Not only are they using Facebook paid marketing at every stage of the customer journey, according to Havlak, but their approach early in the customer journey is particularly notable.

Havlak has been using paid Facebook marketing to put The Discourse’s reporting in front of potential new readers at least a few times before attempting to get them to sign-up for a newsletter using a Facebook lead ad. Havlak described taking this approach for both “cold traffic” — audiences that don’t know about The Discourse yet — as well as audiences that have already read some of The Discourse’s reporting (often referred to as “warm traffic”).

In this scenario, someone that The Discourse has identified as a possible fit for their reporting — by geography, for example — might see Discourse stories in their Facebook news feed. The stories are, however, a paid Facebook ad or “promoted post” that aims to introduce the person to The Discourse in a gentle way. The individuals who click through one of those ads are re-targeted later with a Facebook lead ad — an ad that invites the person to subscribe to The Discourse’s newsletter without leaving Facebook. (For more on this tactic, check out the first installment of this research.)

An example of a Facebook lead ad by The Discourse.

In Philadelphia,  Hutkin, The Inquirer’s Marketing Manager, is using similar tactics. Specifically, Hutkin has been using Facebook lead ads to drive signups to the Inquirer’s various newsletters, as well as free trials to, which has a metered paywall.

Recently, The Inquirer started working with content marketing agency, Keywee, to run their paid acquisition campaigns. Hutkin described that the partnership has taken off, and explained that Keywee is the main way that the Inquirer is driving newsletter signups right now. More than half of their new newsletter subscribers are coming from these paid acquisition campaigns, Hutkin said.

Keywee runs an enhanced form of Facebook lead ads that they call “Content-to-Capture” campaigns. These campaigns mimic a gated content experience within the Facebook feed (I shared some examples of these in an earlier essay). Beyond innovating new ad formats, Keywee’s COO Jared Lansky believes that the real magic behind Keywee’s success at driving subscriptions is their AI-powered distribution capabilities. Keywee uses Natural Language Processing to “read” an article and match it with audiences that are most likely to engage with it, he said.Then, with generative AI, Keywee produces ad copy that will drive those engagements while maintaining efficient cost and scale.

However, bringing potential new print and digital subscribers in the front door of a newsletter subscription is only the beginning of their journey, and Hutkin has her eye on that challenge next. Right now, new subscribers to an Inquirer newsletter are asked to double-opt in and then receive a welcome message before newsletter content starts to arrive regularly.

The first few interactions with a new product are critical to driving a long-term relationship. And, across the industry there’s a recognition that new leads arriving from paid sources might benefit from a different journey than leads that arrive organically. As a result, Hutkin is looking closely at the journey for the Inquirer’s new email subscribers and she’s thinking about a different onboarding experience for the people arriving via Keywee’s paid campaigns.

For the publishers participating in our first experiments, I implemented a multi-part automated welcome series that consisted of three-to-five emails over several weeks. The campaign immediately acknowledged where the lead arrived from (“Thanks for subscribing on Facebook,” for example) and then invited the new leads to participate in a short “give us editorial input” survey a few days later. The objective here is to be highly personalized in that first interaction and to then identify the most engaged leads via the survey.

Regardless of what you decide to do, it can be helpful to think of these new subscribers as a cohort and to track their activity over time. Using that approach, you can evaluate how effective your experiments are toward keeping those new leads engaged and — hopefully — converting.

Borrow these tactics for a bit later in the journey

Down East — an “identity” magazine for people who live in Maine — is investing in paid acquisition focused on those who are a bit further along in their relationship to the product. I caught up with Melissa Chowning, Founder of audience development agency Twenty-First Digital, to find out more. (Twenty-First Digital develops the strategy behind Down East’s acquisition campaigns.)

Chowning described a key part of the strategy for Down East as “communicating with those people who are already engaged with the brand.” Specifically, Twenty-First Digital does this early in the customer journey by retargeting people after they visit the Down East website with lead generation ads on Facebook and Instagram to encourage them to subscribe to Down East’s newsletter.

Shortly after, Twenty-First Digital will show subscription offers — delivered via Facebook and Instagram — to those people who are receiving the newsletter, or who are highly engaged on the website.

Chowning shared that this brand is price conscious and doesn’t like to discount their subscriptions — instead, they offer “a good price to people who are showing strong signs of engagement, but just haven’t spent money for the content yet.” And, according to Chowning, that is working really well for this publisher (more details on their cost per acquisition below).

The ads described above tend to focus on the beauty of Maine — think landscapes and lighthouses — that evoke a sense of pride of place for Mainers. The combination of the two — eye-catching photography and a good price point — has been part of what’s made these ads so successful, according to Chowning.

Back to The Discourse, Havlak described how they’re doing something similar for people who are already engaged with their reporting. Specifically, Havlak described using Facebook paid marketing to promote The Discourse’s membership campaigns — these campaigns are where The Discourse asks regular readers to become paying supporters of their reporting. To do this, Havlak markets to people who are already subscribed to one of The Discourse’s newsletter products, or who’ve engaged with The Discourse content in some meaningful way.

Last June, The Discourse fell short of its membership target. The Discourse leveraged that moment as an opportunity to hit the reset button on its growth strategy and to help the industry learn from its experience, which it shared in a case study. The Discourse’s attention to paid acquisition was part of that reset, and it has since executed two supporter campaigns, one of which met its target and another which exceeded even its stretch goal.  [Editor’s note: This paragraph has been edited to correctly reflect the sequence of events at The Discourse.] 

Distilling the essence of these strategies, it’s safe to say that publishers can always be thinking about paid acquisition in increasingly nuanced ways by, for example:

  • Marketing to specific segments of people based on how they have or haven’t engaged in the past;
  • Tailoring the message to specific people based on their previous actions;
  • Providing helpful wayfinding for people as they navigate their journey with a publication.

The big question: How much to pay for a new lead, or a new “customer”

“The math is clearly there. I know that a fairly consistent fraction will eventually decide to become paying subscribers to the newsletter. Then I can use those figures to figure out how much it’s worth spending to acquire a new subscriber.”

Walter Hickey, Founder, Numlock News

Because Twenty-First Digital is using Facebook lead ads across several publishing-industry clients, I asked Melissa Chowning what they’re seeing in terms of email acquisition costs. In Chowning’s experience, the costs can be all over the map. The agency aims to find email leads for their clients under $0.50 per lead, and they’ve run some campaigns where the cost per lead is between $0.30-0.40 per lead. Chowning shared that when the costs are higher than $0.60 or $0.70 per lead they start re-thinking their targeting.

Specifically, reflecting on the campaign that Twenty-First Digital is running for Down East magazine, Chowning believes that a low cost per lead is possible because of a few key factors, including the niche audience (Mainers), the region (which embodies a strong sense of place among those who live there), and the beautiful photography used in the ads. The age of Down East’s audience might also be a key factor, as they tend to be a bit older.

These costs per lead are in line with what Hutkin is seeing at The Philadelphia Inquirer using Keywee, The Inquirer is seeing a cost per lead of less than $1 across all of their newsletters. Another trend that Hutkin reported — a trend that is consistent across most interviews, and my own research — is that acquisition costs can tend to go down over time as campaign targeting and creative improve.

Back up in Canada, Caitlin Havlak at The Discourse shared that, on Facebook, The Discourse is seeing a consistent cost per lead of about $1.50 CAD ($1.15 USD). That’s consistent with what publishers in our earlier experiments were seeing in the context of a four week Facebook lead Ad campaign, where cost per lead was in the range of $1.25-$2.50 USD. And that’s also inline with what Facebook’s Local News Membership Accelerator reported recently where “newsletter acquisition costs ranged from $1 to $3 per new lead via Facebook lead generation advertising.”

Walt Hickey at Numlock News shared that those numbers are in the same ballpark as what he’s seeing too as he works to grow his newsletter’s audience using paid acquisition. For Hickey, Facebook is “some of the better ROI” that he’s seen.” Hickey continued, “Facebook was effective at letting me know how to reach people,” but also warned that Facebook’s audience is “old as hell” and that people who click on ads on Facebook “tend to be older Americans.” Important considerations for publishers looking to attract a younger audience.

Cost Per Lead vs. Cost Per Acquisition

Cost per email lead (typically referred to as CPL, or Cost Per Lead) is a key variable to plug into a publisher’s calculations for how much to invest in paid acquisition, but the other critical number to know is the actual cost to convert one of these new email leads into a paying supporter of the publication.

Whether that payment represents a membership, a donation, or a subscription, that number is typically referred to as CPA (Cost Per Acquisition) and it refers to the acquisition of a new customer. If you’re a publisher and this is not a number that you can pull up at a moment’s notice, take note — knowing your CPA inside-and-out is considered by many in the industry to be critical to financial success and something to start working toward if you haven’t yet.

For example, here’s a simplified way to calculate Cost Per Acquisition:

  • If you were to generate 100 leads at $1 per lead, you would have invested $100
  • If 5% of those 100 leads convert to paying members of your site over the next several months, that’s five new customers
  • If you divide your investment of $100 by five customers you arrive at a $20 CPA

Keep in mind, however, that the complete cost of lead acquisition will often include staff time and other variables, so you overall investment might be higher than simply the cost of the ads.

Going back to the Down East example, Chowning shared that this publisher is achieving a CPA between $10-17 for paid subscriptions. The cost of that subscription is $14.95 — so, with a CPA of less than $15, they’re breaking even on the initial investment. New subscribers are set-up on auto-renewal and the objective is to keep those new subscribers for more than one year.

As a comparison, when using traditional direct mail marketing instead of digital marketing, Chowning has seen a CPA that is closer to $40. And that’s not to totally disparage direct mail — Chowning has also seen a $40 CPA for some publishers she’s working on the digital side too.

A lot of the big range between low and high CPA has to do with the fit between the product being offered, the marketing platform, and the audience on that platform, as well as the cost of the product itself. For example, at The Discourse, Havlak aims for the CPA of a new member between $17-30 CAD ($13-23 USD). And for the Philadelphia Inquirer’s print subscription product — a physical good that’s delivered, with a much higher price tag (the published “full rate” of a seven-day home delivery subscription is $611/year) — Hutkin reported that their CPA is “in the hundreds” per new customer.

That’s quite a range of CPAs to think about — $17.95 to more than $100 — so how do you go about calculating your target CPA? As Chowning hinted at earlier, the key variables to understand are:

  • The price of the product;
  • The cost to fulfill the product;
  • And how long a new customer is likely to continue to pay for the product.

A good target CPA balances being high enough to continue to bring in new customers at a consistent rate, but also low enough to ensure that a publisher can retain a margin of revenue from that customer after all costs of service, fulfillment, and acquisition. 

Where paid acquisition is headed & what to try next

If there was one theme I heard loud and clear in these interviews, it was what publishers should avoid at all costs — and that was display ads of any kind (think banner ads). On the flip side, reading through the ideas of where these publishers are looking next, you will find many clues to where the whole industry might be heading in 2020.

For example, Hickey at Numlock News thinks that “podcast ads are hot,” and he’s also experimenting with a number of other platforms, including Spotify, Gmail Inbox Ads, as well as ads in other newsletters. Of those experiments, Hickey mused that working with other newsletter creators to highlight the work being done at Numlock is by far “the most effective so far” in terms of his efforts to find new subscribers. Hickey is also looking to a referral program, along the lines of Morning Brew’s, as another way to bring in new readers similar to his current readers.

Further away from the digital realm, Hutkin shared an innovative example of some of the Philadelphia Inquirer’s out of home marketing: in this case, a subway advertising takeover with a text-message component. Subway riders can then text a message to a special number to receive four free weeks of Hutkin is excited to see how well these less-targeted campaigns perform over the coming months.

Along the same lines, Chowning shared that Down Home is busy expanding the opportunities they have for consumer revenue outside of digital platforms. In one case, they’ve launched  popular photography workshops run by their in-house photographer, in another they’ve set up their own affiliate revenue store working with local vendors in the state. While not paid acquisition, these kinds of revenue opportunities could easily be either paired with paid tactics to grow revenue, or the products could be paired with paid tactics to attract new leads. It’s great to have options.

Like everyone interviewed, Caitlin Havlak shared that The Discourse is always looking high and low for new and well-suited acquisition sources. And, as Hickey stated earlier, once a publisher has run enough campaigns to really understand how to talk about their product to new customers, those campaigns can be adapted to new platforms without too much extra work.

Some of the ad formats I’m excited to help publishers experiment with further include YouTube, LinkedIn, Quora, and Snapchat. And, thanks to the financial support of the Lenfest Institute and platform support of Pico, several publishers have signed on to help with that.

With some luck, I’ll be able to report back in February. Don’t forget to stay tuned The Byline by Pico, The Lenfest Institute, or Membership Puzzle Project, or simply give me a quick follow on Twitter.  And if there’s a case study that you have to share, or a platform or format that you’d like to know more about, please don’t hesitate to get in touch.

Phillip Smith is a veteran consultant and coach. His passion is helping newsrooms to make more money, helping news startups grow their audience, and helping journalists succeed as entrepreneurs.

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