To date, these campaigns have delivered thousands of new email newsletter subscribers to some of the participating publishers. And, 12 weeks in, this is what we’re seeing across the subset of publishers who have undertaken Facebook and Care2 campaigns:

Engagement via open rate: Open rates for the email series range from 26% to 36%, and the average open rate across all emails and all publishers for new leads is 29%. This is higher than the MailChimp-reported industry average for “media and publishing” of 14%.

Engagement via survey: The rate of new leads who completed the short survey ranged from 2.7% to 7.8%, with an average across publishers of 4.7%.

Retention and churn: The unsubscribe rate, so far, has been between 0.8% to 6.4%, with an average across emails and publishers of 2.8%. In future updates, we’ll unpack how this compares to industry averages.

We’re also observing a consistent cost per lead of less than $3 USD across the two platforms we’ve tested. Care2’s pricing is set in advance, unlike Facebook’s, and varies based on how specific the audience criteria is. On Facebook, we’re seeing a range of scenarios play out, in some cases the average cost per lead is consistently below $1 USD, in others it’s between $1.50 and $2.50, and we’ve yet to learn if these costs will stay consistent across tens of thousands of leads.

What we’re also still assessing is the quality of those leads, their engagement with the journalism, likelihood to stay subscribed and, eventually, to convert. Lead quality will likely vary by lead source, as will the cost per lead. For example, platforms like LinkedIn will be more expensive to advertise on, but we might find that they deliver a lead quality that justifies the larger investment. There’s still a lot to learn.

However, If Facebook’s own observations hold true -- that news publishers are seeing conversion rates between 5 to 10% from free newsletter subscribers to a paid digital subscriptions and memberships -- then these lead acquisition costs are a promising signal for publishers to take note of. At a 5% conversion rate, using the most basic of calculations like the one above, the prediction is that a publisher would generate a tidy 2.5x return on ad spend (ROAS). At 10%, that would jump to a 5x return, a number that would be the envy of many people in publishing and growth science, too.

My own observations from over a decade of working as a staffer and consultant for publishers in South America, North America, and the UK have led me to be more conservative in my predictions. And, having spent many years managing projects like this at The Tyee, I understand what it’s like to work in a resource-constrained newsroom. My hope is that this research will eventually provide the detailed data necessary for publishers to determine their own estimates of what they can reasonably achieve within a certain timeframe and with reasonable investments of time, energy, and money.

Resources, staffing, & budget

Three of the biggest challenges ahead for small-to-medium sized news publishers who are interested in setting up a paid subscriber acquisition effort are:

The budget to invest; Availability of staff time and skill sets; And curated resources to assist with campaign planning.

Of the seven publishers in this research, less than half had invested in paid acquisition efforts over the last two years. And, combining the efforts of all of those that had invested, the total dollar amount invested was still very small. This highlights the first problem: many early-stage publishers simply don’t have the budget to invest in growth, which is a Catch-22.

More established publishers, with larger teams, struggled less with available budget and more with freeing up staff time. My observation is that publishers with six or more staff people or freelancers start to experience increased complexity in the work environment, leading to less nimbleness. In my experience this is usually due to the requirement of more clearly defined roles and management structures that are needed as team and audience size increases. This is another difficulty for those seeking to grow a digital news startup, where constant innovation is a likely part of the recipe for financial sustainability. (As Matt Thompson and Emily Goligoski wrote for this project, “membership cannot scale beyond an organization’s ability to serve its members. In some cases organizations are strategically limiting their growth to support members and ensure member value is not diluted. We think this has important ramifications for restoring the 'human element' to news.")

The third big challenge lies in having knowledge or access to knowledge about where to start when trying to build effective paid subscriber acquisition campaigns. Most publishers in the study are actively engaged in using paid marketing to promote their content on platforms, but none had active paid acquisition campaigns underway when the research started.

This challenge was clear in a recent informal survey of 20 newsrooms, and the question “what do you believe to be the main challenges for your organization in committing resources to paid acquisition campaigns?” to which 70% of respondents answered “resources to assist with campaign planning.”

This isn’t entirely surprising given how quickly the landscape of lead generation advertising options shifts and how frequently the algorithms behind these systems change. It can be a full-time job staying on top of all of these shifts and changes: changes that can significantly impact campaign performance. That is perhaps the largest challenge here. Only the largest publishers have a dedicated resource focused on this; most others make do with this expertise being just a part of larger job description.

A related research question that we’ve surfaced is: how can early-stage, small, and mid-sized digital-first news publishers take advantage of the opportunities that paid acquisition presents?

So far we have clear patterns emerging in both the data that is being collected directly from participating publishers and from less formal data we’re gathering literature reviews, interviews, and surveys.

Paid lead acquisition is an established path to new customers that is being leveraged by many growth-oriented business. It’s not just tech startups, online mattress firms, and companies that sell online courses, it’s being used by many small-to-medium sized businesses across the country, including everything from car dealerships, to plumbers, to real estate agents and more.

There are signs that larger, more digitally-savvy newsrooms are increasingly investing in paid growth of their email newsletter lists. Case studies are surfacing that report promising results toward converting free newsletter readers into paying supporters, like WhereByUs and the Seattle Times. And the data we’ve collected in this research so far indicates that new leads can be acquired for a low enough costs to provide a positive return on that investment over time.

I believe the question “can publishers who seek to grow their membership invest in paid lead acquisition tactics and predict with strong confidence the rate of return on their investment?” can be answered with “most likely; more data forthcoming.” It is clear that the tactics of paid lead acquisition do translate to the world of journalism--people do respond positively to the advertising campaigns, subscribe from social platforms, and stay engaged. And these strategies can be useful even if you have a paywall or patronage model.

To fully take advantage of these opportunities, I think the sector needs to further develop the following:

An easy-to-use spreadsheet template, or calculator, that does that math for publishers who are trying to justify the investment (to themselves, to investors, and/or to funders). It should quickly provide a detailed prediction for a range of possible outcomes based on a small number of inputs. And it should make the investment case clear, as well as defining the metrics that publishers will need to keep an eye on.

A playbook for how to get started with paid acquisition in the context of journalism and local news. This should be a resource that is frequently updated to stay current with the field, and it should aim to surface the best bets in the moment for publishers who are just getting started. Ideally, it would also provide detailed case studies from publishers who’ve lead the way.

Most importantly, funding to help publishers get underway with this work, knowing that audience growth has the potential for exponential returns across several indicators. And for publishers who’ve already established their paid acquisition strategy, there’s a need for funding to scale their campaigns. The would ideally be in the form of “no strings attached” operational money, where a funder might say “Show us you've got an acquisition model that works -- money in equals more money out -- and we'll give you a grant to scale it.”

The simple act of getting started with these campaigns helps to deepen the publisher’s understanding of how it works. We’re seeing it boost their confidence in being able to continue the work independently. In the words of one of the publishers in the study, “It has been incredibly successful in terms of getting us new subscribers [and] a lot of insight on how to run a successful campaign. We’ll be interested to see the quality of these subscribers going forward, but it definitely proves that investment in lead acquisition can pay off if done correctly.”

Expect the next update to this research before the end of 2019. It will dive into more details of the experiments, the outcomes, and the data. We’ll also be adding other platforms to the mix (if you’re curious about one that’s not on our list, please drop me a line) and experimenting to scale the successful campaigns.

You can follow along at @membershippzzle, @trypico, or @phillipadsmith. And if you have questions, comments, or input that could help to guide it forward, please get in touch. Specifically, if you’re in a newsroom that’s leveraging paid acquisition and you’re open to sharing your wisdom, I’d like to hear from you. You can find me on the web as @phillipadsmith and at phillipadsmith.com.