The Success Story Of Our PUR Offer For an Ad-free Reading Experience
How annoying is advertising on the Internet really? Is it accepted by readers as a kind of counter value, so that journalistic news services can be financed? This question has been polarizing for many years — now we are beginning to find a realistic answer on the SPIEGEL homepage. In February, we introduced of our PUR (“pure”) offer, giving our readers the choice between accepting ads and a paid ad-free experience. Since then, a kind of live test has been running: Readers have to decide whether they would rather use our website as usual with ads and ad tracking or whether they would prefer to pay 4.99 euros per month instead (1.99 euros for subscribers).
After nine months, the current figures now suggest that not only has a new solution been created to give readers a choice in full respect of transparent data protection terms, but also that a new business model for media companies is evolving here. Of the more than 20 million unique users who visit our site every month, around 17,200 have opted for a PUR subscription and are currently reading our websites (SPIEGEL.de and manager-magazin.de) without ads and ad tracking. 17,200 versus 20 million may at first seem like a small fraction — in the media industry this should be seen as confirmation that advertising and ad tracking are widely accepted as financing models among our audience. This is also our basic assessment. But at second glance, there are more insights.
The more than 20 million monthly unique users do not all read us on a daily basis. On average, we usually have more than 4 million readers every day. In a rough calculation and depending on your perspective, only less than one per mil of our monthly readers or slightly more than four per mil of our daily readers have chosen PUR. But extrapolated over the year, they pay a good half a million euro for the PUR subscription — which currently corresponds to around one percent of our online advertising sales. The exact figures at the beginning of November:
- 3032 readers bought PUR on the website for 4.99 Euro per month, 3508 in our apps (where revshares for Apple and Google apply).
- 10,704 bought PUR in combination with our SPIEGEL+ subscription offers for 1.99 euro.
As expected, most of the above bought PUR in the first days when it was launched. We knew from mails and other feedback that some of our readers had longed for such an alternative for a while, hence the strong interest at the beginning. Over the year, we have begun to optimize PUR marketing and e.g. advertise it in the video environment; accordingly, the figures have been clearly on the rise in recent weeks. Retention and churn statistics — especially the amount of months users stay with PUR — are not yet entirely meaningful, given that the service was only launched in spring. Of course, some readers test PUR for a while and then decide in favor of advertising; however, according to our feedback, many find the site much faster and more appealing to read and therefore stick with PUR.
From an economic point of view, we therefore believe that, in addition to the continuing strong growth of our SPIEGEL+ subscription model and the rather pressurized classic digital advertising revenues a new source of revenue is opening up here that will help to compensate for possible advertising losses. In view of the consequences of the corona crisis and the risks of the post-cookie advertising world, it is helpful to know that, in addition to conventional subscription models for content, extended offers for features such as ad-free experiences can also establish themselves.
How it started, how it works
In the end, the introduction of PUR on our website went relatively smoothly. The most fascinating thing was to watch the amount of readers who were startled by the hard alternative, which ultimately said: “Please pay with advertising approval or with money,” and thus decided to leave immediately. And in fact, 30 percent of readers still initially bounce when they first meet the mandatory choice between advertising and PUR subscription. However, this effect levels off over time. Readers keep coming across our widely popular homepage again and again, and at some point they come to grips with the question and make a decision. Accordingly, we have not seen any decline in reach, except for the very first days when the readers first saw the mandatory choice at once and the bouncing effect was at its peak. This soon wore off.
The overall positive development also confirms that, with transparent communication, readers understand very well that they pay for journalism in their own way and make a conscious decision to accept advertising: 92.3 percent of the non-bouncers click on “Accept” immediately, while the others take a closer look at the PUR offer. Of these, a certain proportion then chooses to buy.
PUR was initially designed as an internal experiment, after we first saw its success at “Der Standard” in Austria. In fact, we quickly received positive feedback from data protection authorities, and several publishers in German-speaking countries have since followed suit. The Interactive Advertising Bureau (IAB) Europe, which sets international standards in the advertising business, has incorporated the model as an alternative in its consent guidelines (which otherwise regulate the much more complex advertising dialogs on websites):
“…a Publisher shall not be required to allow a user to make granular and specific consent or opt-in choices if the Publisher implements a way for the user to access its content without consenting through other means, for example by offering paid access that does not require consenting to any Purposes. For the avoidance of doubt, all other policies remain applicable.”
Our experience with PUR encourages us to question traditional digital business practices that have been in place for decades. One of the biggest challenges in the coming years will be that our business models will require us to know our users better than before. As can already be seen on news websites in the English-speaking world, logins and therefore more direct customer relationships are becoming increasingly important, both for subscription marketing and for advertising, because otherwise there is little chance of competing against the data quality Facebook and Google constantly deliver. We are currently discussing how we can integrate users into this process. But since starting PUR, we have begun believing that it will be possible to convince users to register and log on to our websites much more often in the near future, even if it’s uncommon today.