On a rainy Wednesday evening, professionals from across the media and marketing landscape gathered at New York's Arno Ristorante to explore the subscription economy ruling today's market — from magazines to meal kits. Executives from two DTC brands and two publishers shared their insights with the standing-room-only crowd in an aptly named panel, "What DTC Brands and Publishers Can Learn From Each Other in Today's Subscription Economy."
"They are very, very similar," said panelist Mike Schanbacher, director of growth marketing for DTC toothbrush company Quip, who previously managed media strategy at The New York Times. At Quip, "we're technically selling [consumer packaged goods], but we have to think about things like lifetime customer value from a subscription perspective."
During the event, hosted by Direct Marketing Club of New York (DMCNY) and the Media & Content Marketing Association (MCMA), Schanbacher and the other panelists explored how this profitable model will shake up the future of marketing and advertising — not just in the magazine and CPG industries, but also among any businesses looking to harness the data-driven benefits of the direct-to-consumer and subscription models.
One area of overlap between DTC brands and publishers that applies to other industries is a sense of urgency to meet customers' ever-changing demands and expectations. Tammy Berentson, who previously headed consumer marketing at People magazine, pointed out that, since joining online grocer FreshDirect as its chief marketing officer, the pace of her work has changed — though not in the way she expected.
"People, I thought, moved really quickly," Berentson explained. "News would keep changing [and] you had to keep on top of it; it was a weekly magazine and minute-by-minute website, and I thought I was in the fast lane. Then I moved over to avocados…." Even the frantic pace of People's online news world didn't compare to the speed that FreshDirect needs to sell avocados and other groceries before their "sell-by" date.
That reality means management at FreshDirect is structured to take action. "There are [fewer] people to present to," Berentson explained. "When you have an idea [that] is going to move more bananas, you better go." Berentson wondered aloud how a similar approach would have fared at People.
Considering the approach that Trust Media Brands takes not only to generate magazine subscriptions, but also sell its DTC products, such as books and videos, an agile approach like FreshDirect's also works well for publishing companies.
"What's interesting at Trusted Media Brands," said Alec Casey, chief marketing officer of the media company, which publishes service magazines such as Reader's Digest, Family Handyman, and A Taste of Home, "is we've actually been developing DTC products for decades now. We started as a magazine company that uses magazines as sort of a lead-gen [tool]…." Once someone subscribes, the company quickly entices them to purchase books, and then music, videos, subscription boxes, and other items. "And the margins [get] higher and higher the further down the funnel you [go]," he added. This demonstrates the profitable connection between publishing and DTCs that use a subscription model.
Even so, Casey felt it was important to draw a distinction between subscription and membership. "We've been [telling] our editors … they need to stop thinking about just content factors and [start] thinking about [how] the content they produce creates community," he said. "Community is this sort of nebulous thing that we talk about, but it's really the stickiness of your content. And it's why we nodded our heads when we talked about membership versus subscription — because membership means you're part of a group … and a subscription is just a product."
Panel co-host, Christopher Cotnoir, TRG Media president and The Rothkopf Group executive vice president, concurred. The company had launched a podcast that was growing successfully, Cotnoir said, so CEO David Rothkopf asked him, "How do we build a business around it?" Cotnoir's answer, he noted, was to build on its community. "We knew we had a pretty loyal audience by the number of downloads the podcast was getting," Cotnoir said. "The question was, what was the best way to monetize that?"
Together, they explored how community could positively impact their bottom line. Cotnoir elaborated: "Membership [is] not just this idea of community, but it's also engagement…. We've tried a lot of different things and, ultimately, it comes down to, have we engaged with [listeners] on social media? What kinds of tools do we give to them to engage with each other?"
The customer-centricity needed to create community is integral to how Forbes Media is connecting with its subscribers and other readers. "The thing that is most interesting for us … is a focus on very customer-centric marketing," said Nina La France, senior vice president, consumer marketing and business development at Forbes Media.
Whether building a community or buying a toothbrush, it's clear that the subscription business model — no matter the industry — is creating unique opportunities brands and marketers to engage with customers in new and profitable ways. These insightful industry experts are just a few who can speak to the subscription model's diverse and adaptive nature.
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