Gabey Goh
Mar 4, 2016

Fixing the model to empower truth tellers at WSJ

MEDIA360 SUMMIT - Dow Jones’ Katie Vanneck-Smith is determined to lead the way in transforming the media landscape into a membership world, starting with the Wall Street Journal.

Katie Vanneck-Smith
Katie Vanneck-Smith

At last week's Media360Summit, Vanneck-Smith took delegates through the way The Wall Street Journal (WSJ) is transitioning from a subscription model to a membership model, which is more than a mere semantic difference, she argued. Behind the scenes, Vanneck-Smith gave Campaign Asia-Pacific more detail about how the programme works and why she is so passionate about the transition, which in the end is about nothing less than saving journalism.

Vanneck-Smith’s first job was a stint in the ad sales department of The Times in London. “But I found it a bit boring and just couldn’t see myself sticking with it,” she recalled. “So I went back to HR and asked if there was something else I could do.”

With her Masters degree in modern history from the University of Oxford, St Hugh’s College, the option of working with The Times’ archives department was offered, and she took it.

“At the time the archives was headed by this lovely elderly man by the name of Eamon, who asked me to pick two topics,” said Vanneck-Smith. “Because I had a horrible time on the tube that morning, I went with railways in England and the impact The Times has had on history.”

Vanneck-Smith arrived at the archives to a stack of handwritten letters by author Charles Dickens complaining about the state of London’s trains.

“I thought it was amazing," she said. "There were pages and pages of letters to the editor by Dickens on how bad the railways were. I asked if the Times published most of them, and Amen said only a few were, because nobody wanted to read about Dickens bashing the railway system all the time.”

The old archivist then placed an old lamp on the table, and asked Vanneck-Smith if she knew what it was.

“I said, ‘That looks like one of Florence Nightingale’s lamps’,” she said. “And it was. Well, one of them.”

The Times was the first newspaper to send war correspondents to cover particular conflicts, and W.H. Russell, the paper's embedded correspondent during the Crimean War (which took place from October 1853 to February 1856), was immensely influential with his dispatches back to England.

“He wrote a first-person account of the suffering happening with the people caught up with the war and how there weren’t enough medical supplies,” said Vanneck-Smith. “Readers were horrified and this led to a fundraising drive to send much needed supplies over, made possible by donations from Times readers.”

That up-close introduction, in a dusty rat-filled basement of the Times’ office, to the critical role played by the 'Fourth Estate', left an indelible mark on Vanneck-Smith.

“This is why I do what I do,” she said. “Because if you don’t fix the business model, then there will be no truth tellers, no journalists. And we need them.”

Fixing the model

Today, Vanneck-Smith is chief customer officer and global managing director, international, for Dow Jones, a position she took on in September 2014.

"In a world where many of our competitors publish for free, it’s essential that we build premium products and services,” she said. “And equally important is how we talk to customers about it and change the conversation about their relationship with us.”

The company’s current pyramid of membership programmes follows a reader through their career path from young professional (WSJ+) to elite practitioner (WSJ Pro) to business leader (WSJ CEO Council).

Such programmes to incentivise paid readership while also collecting detailed data on readers will be the key weapon in a changed media landscape.

“To know our customer better than anyone else will be our secret to success,” said Vanneck-Smith. “We need loyal readers to feel invested in a way that goes beyond a transactional relationship, to feel that membership matters and is something they would pay to be a part of.”

For example, members of WSJ+, an opt-in programme, have access to offerings like a newsroom tour and discussion with editor-in-chief Gerry Baker alongside chances to win all-expenses-paid getaways, discounts and free e-books.

Vanneck-Smith reported that WSJ+ now has more than 300,000 activated members, 61 percent of whom have said the programme’s offerings form a core part of why they subscribe.

She shared that the strategy the company is following has increased customer acquisition by 11 percent, reduced churn by 20 percent and enabled a price rise into the membership base in the last 12 months.

“That’s the difference between subscribers and members,” she said. “Members are engaged, they’re more rewarded, more connected and thankfully, more profitable.”

Vanneck-Smith agreed that a brand such as WSJ is in a unique position to take advantage of a members-driven premium offering, but noted that it is a path open to any media brand willing.

“People pay for what they value, and every news brand that has a loyal audience can do what we’ve done," she said. "Just do it differently. The Times isn’t The Journal and they’ve done it, in fact, the model was proven there.”

Vanneck-Smith said that the first step begins with customers, and understanding why they trust you as their media brand of choice and what content they want to get close to.

“For years, there was this arms-length relationship between journalists and their readers, but that whole dynamic has changed,” she added. “The magic ingredient is events, which in an increasingly digital world, matters.”

Brands, join the club

A membership-based media brand is also advantageous to brands, said Vanneck-Smith, because it provides opportunities to do more beyond the traditional—and still available—advertising options.

As membership is built on recommendation and advocacy, how members arrive at a brand’s space differs from regular readers, and the environment created is a trusted one.

“I would say to advertisers and brands, that particularly in digital, we have made a lot of mistakes as an industry,” she said.

Vanneck-Smith pointed to the viewability issue, where “we thought it was okay to sell ads that no one looked at” and the problem of lazy creative, where an ad gets in the way of the content experience—the reason why a reader is there in the first place.

“Now we’ve got ad-blockers,” she added. “People don’t switch on ad-blockers out of principle. They switch it on because they’re annoyed, and we as an industry created that problem.”

In a membership world, advertising should be part of the customer experience, not a separate or antagonistic component.

“You have interesting ways of connecting with the audience,” she added. “From speaking directly with the community through to custom content and partnerships, we’re only scratching the surface.”

When it comes to cultivating members from Asia Pacific, Vanneck-Smith admits that Asian membership, while growing, is “not where I want it to be.”

Currently, WSJ’s subscriber base is predominantly from the United States, with only 8 percent coming from international readers, half of which stem from Asia.

“You’ll probably see us get to a 90-10 spilt in terms of audience as we move forward with our goal of 3 million WSJ subscribers globally in three years,” she said. “But our growth internationally will be significant. We’re already seeing that in digital, and especially as we invest heavily in mobile."

 

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