People, not pageviews: Understanding your best users

By Nadav Shoval, CEO and co-founder of Spot. IM

The word "sustainability" is being thrown around a lot lately when it comes to digital publishing, and for good reason.

From interviews with high-powered execs to spotlights at upcoming industry conferences, players across the industry seem to be recognizing that they’ve arrived at a point of reckoning. Reliance on the old "advertising-only" model is fading and the "sustainable business model" is on the rise. Whereas the push for pageviews once took priority for many publishers, industry leaders now look to more consumer-focused ways of doing business.

While there are many potential paths towards revenue diversification that publishers can take, such as subscriptions, paywalls and e-commerce, they all have one trait in common: a focus on identifying and growing a loyal and valuable core user base.

In the end, the ability to create a sustainable business model relies on understanding one central facet: Publishers must understand who their best users are — and how to better engage them.

Lifetime value: Measure people, not pageviews

If publishers are serious about finding a more sustainable business model, there is one metric they need to start paying serious attention to: lifetime value (LTV). LTV is the average revenue per user (ARPU) calculated throughout users' total consumption time.

When a business zeroes in on LTV, it focuses its attention on who its most valuable users truly are. In turn, this incentivizes them to both identify and grow their own unique "power users" and find innovative ways to increase the value they create. In their drive towards a more user-centric business model, publishers would be well-served to zero in on ARPU and LTV as their metrics of choice rather than more traditional, less nuanced data points like pageviews.

Find what’s driving your high-LTV users

After a publisher identifies who its top users are, the question becomes why those people became power users in the first place. Unlocking that information is crucial to determining what products, features, or offers will incentivize power users to continue engaging. "Power users" on a publisher’s site tend to be people who:

1) Register or log in for each engagement action

2) Engage frequently and for longer periods of time

3) Visit and revisit directly, rather than through aggregation sources like social

Beyond those core trait, each publisher’s power users will look a little different. Once publishers know what’s driving their power users' high LTV, they can begin to optimize an experience that benefits both themselves and their users.

Rise above the race to the bottom

Knowing who your highest LTV users are — and what makes them tick — is the key to unleashing an extremely powerful and underutilized tool: optimization. Social networks such as Instagram and games such as Fortnite are so successful precisely because they optimize for high-LTV users. Indeed, optimizing for ARPU and LTV is applicable to all publishers, even those whose business models are ad-centric. This strategy often includes optimizing advertising and content based on the habits of top users, finding the engagement elasticity for your audience and switching incentives in your newsroom to focus on producing quality content à la The New York Times.

Simply put, understanding your power users is the engine that will drive any sustainable business model, and industry leaders are beginning to recognize this. As Matt Minoff, Meredith’s Chief Digital Officer, reveals: "We've moved from a visit-centric view of the world to a user-centric view of the world… now, when we make changes to our sites, we can understand the impact it’s having on [lifetime value]."

Grow the pie — and make it tastier

High-LTV users are important, and it makes sense that publishers should want more of them. Investing in community isn’t the only solution, but it’s a good place for publishers to start. Community is where power users often thrive.

Features associated with engagement, like commenting, typically require actions that are associated with high-LTV users. Commenters typically register or log in, and as a result they consume more content, stay longer and even view more pages and advertising through those visits. They also provide you with something often overlooked: their individual sentiment about the content you’re creating. In the end, maximizing LTV over pageviews isn’t easy. Chances are that the right fit won’t be found the first time. It takes trial, error, tech, data and even some luck.

The good news? Your core and most valuable users will tell you what they want — you just need to listen.

Nadav Shoval, CEO and co-founder of Spot.IM. Spot. IM's mission is to create exceptional technology that empowers media publishers to protect the free press and develop meaningful online communities.

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