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Feb 26, 2003
Case Study

How Juggles Ad and Content Sales: A Big Lesson About Paid Barrier Visibility

SUMMARY:, the online version of The Economist magazine, has been offering subscriptions to its site since 1996. That is waaay ahead of the curve.

Learn how they mix open-access areas that generate enough pageviews to satisfy ad sales, and paid-only areas. Includes subscription sales data, and tips on protecting your ad sales brand online.

You are a trusted 160-year-old brand with a lot of top-notch business analysis content. That is a pretty good basis for launching an online venture.

You can not have a content free-for-all because you do not want to cannibalize offline sales or weaken that heavyweight brand.

If you lock everything behind a payment barrier, you miss out on all those ad dollars that typically contribute the majority of online content revenues.

Sound familiar?

How does keep its illustrious print cousin happy and still make money? We asked Paul Rossi,'s publisher, for an explanation.


Rossi's following five core tactics to keep the site on a course to profitability.

Tactic 1#: Leverage the brand and keep costs down

When the site was launched in 1996, the Economist Group chose not to build a start-up brand from scratch, but to fly it under the Economist brand.

Although the site is a standalone business unit, the print magazine provides most of the content. An online editorial staff of under 20 (less than a fifth of the magazine's staff) adapts this print material for the web and produces some original content, too.

The site gets by with a small marketing budget. It helps that the brand and content obviously pulls in a host of "free" traffic on its own, through the usual sources: type-ins, links, syndicated headlines, search engines.

Of course there are regular ads in the print magazine (which sells over 750,000 copies a week via newsstand and subscriptions).

Rossi also drives return traffic through email. No-cost site registration lets visitors to subscribe to topic-based email alerts which feature article headlines, rubric and a link to the relevant web page.

Tactic 2#: Get the paid/free content balance right

As Rossi explains, "If you've paid $125 to subscribe to the print version, we don't want to say, 'but actually you can get it all free online'[without a paid print subscription.]"

The way balances the equation is to flaunt what is essentially a fairly small amount of open-access content on the most visible pages of the site (the home page and major departments) while placing the vast majority of content (some new almost all that's older than three-seven days) behind a paid barrier.

This highly visible, yet limited open access content includes:

1. 10 new articles from the magazine per week that are open
access for that week only.

2. A dozen or so news analysis stories produced by staff writers are open access for 2-3 days.

3. A hodgepodge of syndicated news feeds, stock price feeds,
city guides, some country briefings, topic backgrounders,
an economics glossary, profiles of business personalities,
a dictionary and practical guides to specific business

To encourage more pageviews, this open access content is far more prominent on the site's home page than the paid content, although the latter makes up the vast majority of the site. The open access items are in effect the free tip of a very large paid-only iceberg.

In addition, to encourage pageviews in the paid-only areas, allows its sibling print magazine subscribers to register on the site and access all paid content at no cost.

Tactic #3: Offer a variety of paid options

Non-print-subscribers have three different options to access to the paid content; each option targeted to the needs of different potential markets:

1. Site subscription (with automatic renewal) at $19.95/month
or $69/year Aimed at those needing a detailed long-term
understanding of business news and information.

2. Read one article for $2.95. To attract people just
following a link from a site, friend or colleague. (Note:
this is different from which allows friends to read
forwarded links at no cost.)

3. Prepay for 5 articles for $9.95. For people like academics
or business analysts with very short-term information needs in
a specific topic area.

Rossi says the team did some research prior to developing content models, but, "In terms of asking people whether they'd pay for content. The answer's always no. You do these bits of research, and focus groups and all this sort of stuff and ultimately very few people stand up and say, 'oh yes, I'd give you $30 for that.'"

Instead, Rossi's simply observed how different offers have performed over the years to arrive at the best alternatives for his audience; "One of the things the web allows you to do is test very quickly, get very quick results. You can learn and adjust to what your customers tell you they want."

The paid content offers are promoted relentlessly throughout the site. In fact we counted 11 different types of banners, links and tactics used on the site to get attention for the paid option.

Tactic #4: Implement ad sales rules for the long haul

With a 160-year-old corporate perspective, Rossi views online ad sales differently than most dot-com only brands did. It is not so much about this quarter or going for the IPO, as it is building an ad sales operation for the long haul. Therefore, the ad sales team have limited their current sales to maintain the brand:

a. Church vs. state editorial rules takes its lead from the magazine, where there are clear rules keeping advertising and editorial separate. Rossi's content is not developed with the idea of supporting ad sales, but according to what editors feel is appropriate for the readership.

b. No intrusive ad formats

The team will not sell pop-ups and any other forms of intrusive advertising. He explains, "You're dealing with subscribers and with people who you want to come back. They're really there because of content; so putting stuff in the way of the content is problematic." (He does use pop-ups for internal Economist Group offers, though.)

c. Tight control over advertiser selection does all its own advertising sales, with ad sales teams in San Francisco, New York and London. Which means they have complete control of which advertisers appear at the site, and are not subject to the whims of automated ad feeds from network ad brokers.

d. No giveaways for print advertisers

From Day 1, advertisers knew that is a separate entity from the magazine, which means those buying ads in the latter do not expect to get a few freebies on the former (a fate that befell a lot of sites in the 90s and also again in 2003 as marketing budgets tighten).

Tactic #5 Let advertisers offer no-cost access to paid content

In early 2002 (before any other site we know of), Rossi began letting sponsors pay for visitors to access to normally paid-only sections of the site for a month (see link below for a live example). IBM was the first advertiser to test this Sponsored Access program.

Visitors clicking through to an article on a sponsored topic (e.g. mobile e-business) first see a jump page explaining that the article is usually for subscribers only, but is now free courtesy of sponsor X. A sponsor ad is placed next to a "click here to read this article" button.

At the subsequent article page, all the surrounding ad space is occupied by the sponsor, top banner, left-hand button, right- hand side-bar, right-hand skyscraper.

Rossi expanded the concept to a broadcast email ad campaign for Oracle. Offer recipients could get a limited-time subscription to at no cost in exchange for signing up to be added to Oracle's permission email list.

Rossi explains, "There was a very clear quid pro quo. This is a commercial site and content has a value, but here's a way of getting it at a price, and a user would have to determine if it was the right price for that value."

Sponsors thus access a targeted audience, while readers get no-cost access to paid content and are more positively predisposed to the advertiser's messaging. Rossi says, "It's another way of looking at the pay barrier."


In 2002, reached the break even point and 2003 is set to be profitable. Rossi's happy with progress, saying, "it's a real business with a plan to break even and make profit, and we've absolutely hit every number."

The Sponsored Access offering has been a success, attracting 15 advertisers since its launch a year ago.

While the revenue split in 2000 was 90% advertising, 10% subscriptions (and some e-commerce), it is now 60% and 40%. Although advertising's slice is smaller, ad revenues have actually risen, just not as quickly as subscription revenues.

This leap in subscription sales may reveal a general worldwide trend in Internet users being more open to paying for content. has not made any major changes (beyond Sponsored Access) in the way it prices, positions or markets subscriptions in the past two years. People are just more willing to pay now.

More paid content-related metrics and insights:

- The site had 1.6 million registered users at the end of 2002, and most have signed up for at least one email newsletter. This figure is up from 1.3 million at the end of 2001. Site traffic is about 14 million pageviews a month, growing at about 30% annually. Unique visitors per month is currently 1.2 million.

- The site has approximately 61,000 paid online-only subscribers currently, despite marketing subscriptions aggressively to visitors since launch in 1996.

This seems a very low number given that 99% of the site is paid-only content. However, it is a good lesson in perception. That tiny bit of open-access content is so highly visible, that visitors perceive they do not really need to pay. They are getting "enough" already.

Big lesson: The visibility of the paid barrier is more critical to subscription sales than marketing messages and percent of paid vs. open access content.

If the site chose to change tactics and move links to more paid-only content onto its home page and email newsletters, the number of subscribers would certainly leap immediately. It is a huge risk that Rossi currently chooses not to take because so much of his revenues are tied to ad sales based on pageviews.

- The site achieves a 70% renewal rate on annual subscriptions. Rossi says renewal rates have stayed pretty constant over the lifetime of the site, and increasing this number is one of his challenges for 2003.

- The site gets three times as many "1 ppv" sales as "5 ppv" sales. Rossi sees that as confirmation of the product/user match, "It's recognizing how people use your site. In terms of people coming in and saying I understand this is a paid site, but I only want this particular article because I've been linked to it or someone's told me to read it."

- Approximately 114,000 print subscribers, representing about 21% of magazine subscribers, have registered for no-cost access to the paid site.

He concludes, "A few years ago it was very easy to get carried away by the possibilities. But being focused on what your customer uses you for, where your value is, how you can add value and what your brand allows you to do is actually very important."

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