The Era of Traffic Is Officially Over
We are approaching that time when registration for the upcoming AMO Summit shuts down. I’m printing badges ahead of time, which means I need my final registration list. If you are planning to attend the event on October 26th, you only have until one week from today to act. Otherwise, you will have to wait until 2024 to join us at the AMO Summit. Buy your ticket today.
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Social traffic goes to nearly zero
It’s interesting that Ben Smith published his book, Traffic, in the same year that the era of traffic—chasing scale of anonymous pageviews—officially came to an end. And yet, here we are. According to Axios:
Traffic referrals to the top global news sites from Meta’s Facebook and X, formerly Twitter, has collapsed over the past year, according to data from Similarweb.
If we look at the numbers, Facebook went from driving nearly 120m referrals in August 2020 to only 21.4m in August 2023. That’s an 82% drop. X’s drop is not as stark, dropping from under 60 million to 22.6 million. Nevertheless, it’s a massive drop and continues a trend that publishers have seen coming for years and yet, as Axios writes, “are still unprepared.”
In my very first issue of A Media Operator, I wrote about how Slate had seen a monumental drop in referrals from Facebook—28.33 million in January 2017 to 3.63 million in May 2018. We have been expecting this sort of transition away from traffic for years.
Look at the changes X has made even just this week. The platform has decided to stop showing headlines when you paste a link. According to The Guardian:
Links posted on Twitter now appear as the image included in the article, as well as text in the left-hand corner of the image noting the domain of the link. If users want to visit the page, they must click the image, but it only appears slightly different to how images uploaded to the site appear.
It’s making the platform far more unusable than it has ever been. This war in Israel against Hamas is the first major news event in my adult life that I have struggled to verify the information I am getting on Twitter. It’s sad and was easily avoidable.
And if it’s not platform decisions, then it’s unbelievably bone headed laws that are further hurting publishers. According to WSJ:
Canadian lawmakers in June approved a law that compels Meta and Google to compensate media outlets for news links posted on their platforms. The companies have so far refused, and in August Meta said it would block news links for Canadian users of Facebook and Instagram rather than pay.
The decision has resulted in a sharp drop in traffic to smaller news sites—visits that had previously been driven by links featured on Facebook and Instagram, according to online-only publishers.
…
He [Jeff Elgie, CEO of Village Media] said traffic has dropped by about a fifth on the company’s roughly two dozen websites offering news to smaller Canadian communities, and he puts the blame on the Canadian government for not taking the platforms’ warnings of blocking content seriously.
The story goes on to report that Village Media will not expand into any further communities from the ones it operates in today.
The models that have worked in the past are not the ones that will work going forward. The ease of distribution that publishers had at the time is going to get significantly harder now that the biggest platforms are resistant to sending their traffic off platform.
Traffic as a unit of currency simply won’t matter anymore. We will need to develop new ways of acquiring and retaining audiences. The quantity of people may be smaller, but they will more likely be seeking out the information you have. These will be the types of readers we want versus the passive fly-by traffic that we have had over the years. We’ll need to invest more in brand building and direct response marketing.
This is also why it’ll become even more important than it already is to have means of getting a user hooked to the site. Introducing tools like newsletters and registration—even if it’s a free site—will be necessary to ensure that we can communicate with the user even if they leave.
The traffic era is dead. But that doesn’t mean the era of good information is dead. We’ll simply have to adapt.
One of the things I respect about Semafor’s Ben Smith is he is unabashedly addicted to finding that next scoop. We all knew something was off about Ozy, but it was his reporting that finally popped that bubble. He often knows something before anyone else in the space.
That’s why I always look forward to receiving his and Max Tani’s newsletter every Sunday night. I get perspective on areas of media that I simply have little experience in and a view on what’s going on globally in the media industry. It’s a must read for the ambitious media professional.
Subscribe to Semafor Media here.
Don’t be cheap on subscription
The Reuters Institute for the Study of Journalism has published the results of an in-depth survey conducted about people’s behaviors tied to paying for news. There are a number of important points that are made, with a deep dive into cost-of-living driving growing churn, and the fact that nearly 50% of non-paying subscribers say they’ll never pay.
But while the full report is worth exploring, I want to zero in on how price can impact renewal. According to the report:
Our research suggests that consumers have become increasingly conditioned to expect special offers. These introductory prices are highly effective at attracting users in the first place, but often hard to wean consumers off when the renewal comes around.
This jump from a trial price to the full sticker price has become a key challenge for publishers, compounding the problem of churn as subscriber bases have grown.
Said a different way, there are often two competing teams working at a publication: acquisition and retention. The first team thinks only of the quantity of people that they acquire. And so, the team does an offer like Wired’s $5 for one year promotion. But then it’s on the retention team to figure out how to get that same person to pay $30 for the second year.
Why would anyone willingly pay 500% more in the second year if they were getting it for so little in year one? They won’t. And yet, the acquisition team continues to aggressively acquire people at incredibly low prices. No wonder we can’t continue growing.
Instead, we need to approach subscription pricing one of three ways with hypothetical numbers to just make a point.
First, we don’t offer any discounts. If the subscription is $30, we promote it at $30 and only the people that absolutely need or want the information will agree to pay. This is how I handle things with AMO for the most part because I believe in the quality of the content. However, growth is certainly slower because of it.
Second, we can offer a discount, but not an egregious discount. For example, if a subscription costs $30, then the first year could be $15. It’s 50% off, which is a healthy discount, but the price only doubles year-over-year. The downside of this is that people might be unwilling to pull the trigger when the discount is only 50% off versus the 83% that Wired is doing.
And third, we can offer the extremely low price, but then we need to think about the subscription over the long-term. If the goal is to hit $30 and you’ve started at $5, maybe you need to increase it to $10 in year two. In year three, increase it to $20, and then finally get to the full price in year four. It’s an incremental approach where you are giving yourself time to get to goal.
Whatever the solution, the most important thing to understand is that they cannot be two teams. The acquisition and retention teams need to share the same KPI: longevity of a paying subscriber. Getting someone in for $5 only to have them churn in year two is not a win. The two teams needs to be aligned if we’re going to win.
Thanks for reading today’s AMO. If you have thoughts, hit reply or become an AMO Pro member for an invitation to the private AMO Slack.
Like I said above, tickets for the AMO Summit on October 26th are only available for one more week. If you want to come, buy your ticket today.
