In this latest post from Robbie Kellman Baxter, she explains the difference between ad revenue and subscription revenue, subscription pricing, valuable content, and advertising in a subscription-based business.
I have always encouraged organizations to choose a lane when it comes to pricing. The power of subscriptions is that they are a good way to price when you’re solving the subscriber’s problem on an ongoing basis.
Subscription pricing aligns the goals of the reader with the ongoing goals of the organization. In advertising models, you might say that the readers are the product and the advertisers are the customers.
Doing both concurrently is problematic, because you’re trying to please two groups with different goals.
Advertisers want eyeballs. So the goal is to attract lots of viewers–maybe with a video about Kim Kardashian, or the day’s most sensational breaking news story.
In contrast, audience revenue is generated through content worth paying for. So it’s going to need to be differentiated content, and perceived of as being valuable, like an analysis of the bond market or the final match of a water polo tournament. It may attract a smaller, more committed audience.”
Included in this article:
- The move from cost per click to cost (CPC) per acquisition (CPA)
- The relationship between content and advertisements
Read the full article, Maybe the Secret to Advertising Is… Subscriptions?, on LinkedIn.