Foursquare and the Paywall Model

photo credit: Loon Pond

The Financial Times announced announced today that they are partnering with Foursquare. The new deal with the will allow Foursquare users free access to FT.com anytime they update their position in an area or venue near a major financial center or business school.

Here’s my thinking: The Financial Times has one of the only successful paywall models. They are a niche-specific publication that has financial information not obtainable elsewhere. Papers in smaller, isolated markets are best positioned to capitalize on a paywall model because of limited competition.

The Financial Times has a relatively small base of 11.4 million unique users. They increased their subscription prices (and it’s pretty hefty) so how does one reach the upcoming generation of business folks?

Hello, interwebs. Hello, social media tools that can make their job easier – and generate revenue.

Major publications, like Newsday, failed at a paywall model with fewer than 100 subscribers and a substantial decline in their online audience.

Here’s the question: Does the demographic that pays for the print subscription of the FT use geolocation services? Or will it open them to an entirely new demographic by building on a successful model foundation?

As their core readership gets older, the FT needs to evaluate how they can tap into the new business generation and encourage them to read their publication. Think of it as a “taste before you read” – if you can subscribe for free at certain places/check-ins, a consumer might want to have it all the time. They also are introducing day passes, which are secret codes redeemable for premium services.

Another interesting point? The publication’s small online reader base is less than one third of their subscribers, but generates 73 percent of their revenue from the digital aspect. (Sidenote: I wonder if FT is working on deals with the chosen venues to generate even more revenue in the form of an ad platform.)

I’m hoping they measure, among much more:

Percentage increase/decrease with subscriptions (paid and online – 3 mo., 6 mo., 9 mo. increments)
Percentage comparison of ad revenue v. subscription revenue
Online revenue (and if increase/decrease)
Social buyer revenue v. print ad

So, let’s chat. I know this topic will spark interesting ideas from both sides – how strategy can play a role, what they are doing, is this a stunt to be considered cool and buzz-worthy?

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jasonpkeith

Everyone should be looking at Financial Times and examining their moves, because they're doing so many things the right way.

One of the things that I haven't seen mentioned here is the type of specific targeting that this type of partnership offers FT's advertisers. They know what demographic is using Foursquare, and they know that that same demographic is going to be at financial and educational institutions, etc. That's very powerful for advertisers looking to attract and cater to that audience.

Like Laura mentioned, it's very "niche" but it's also likely to be higher income, educated, young, etc. Advertisers can capitalize on that by working with FT to customize ads that just those people that come in through these areas see. It's a potential boon depending on how quickly it's adopted and how popular it becomes. Part of advertising is finding the right audience and then hammering home the message - by doing this type of partnership, FT can sell this target demographic with confidence.

At the end of the day you still have to drive traffic, but they can accomplish two things here: expand their readership to a younger audience not yet exposed to them (expanding potential subscribers, either now or down the road), and also get those readers to look at very targeted, niche ads that can come at a premium price.

Either way, a win/win for the very innovative and talented team at FT.
kmskala

I'm agree with both Tim & Laura in this case.

Using Foursquare is not innovative. It's an interesting shift, but not even close to innovative.

That being said, I think the bigger picture is FT using social tools to try and gain more readers. It's not about Foursquare, it's not about GoWalla, it's not about FB. It's about the bigger picture of trying to reach younger folks where they spend the majority of their time.

That being said, I can see why they are using Foursquare. Yes, it is hype, but doesn't it make more sense to try this on a popular tool rather than one no one has heard of?

Tim, I agree that requiring users to check-in and adding additional steps is something FT could avoid. But simply providing content or access via "logging into wifi" I think shifts ownership. If that's the case, it'd be Caribou providing the value, not FT. By requiring people to check-in, FT can measure their efforts. If they relied on each individual shop's wifi info, you get into the whole "who owns what" debate.

Additionally, isn't it more valuable to get users to the FT site? When you say give content upon wifi login, where is this content stored?
Tim Jahn

I'm not sure it's a control issue, as FT would simply be partnering with Caribou rather than Foursquare. I'm sure they would work out some sort of deal...
laurenfernandez

I think it's possible to see innovation further down the road. The innovation isn't in the tool - its how a company executes and uses.

I like your point about the bigger picture - because its spot on.

Popularity = larger user base. It's a no-brainer.

The control issue is an interesting aspect - and probably why they did this type of approach.
Jorge Jaime

I don't know if some has considered this, but what is actually brilliant is the fact that when you check in one of those places it means that you're there for work or to do something related to financial services. When I worked at a bank the first thing i did was check the papers. So this is also a remainder and a motivation to check the FT instead of any other financial source of information as soon as you check in the venue. The idea behind it is very good. I don't know if this could scale in the short term, but as location based services grow this experiment could be an option to increase the readers that are directly the FT's market, people that work in finance.
Tim Jahn

Again, the reminder would be much more in your face if the content was shown upon wi-fi login, instead of checking into Fourquare.

Fourquare is an unnecessary (and inconvenient) step created to "be cool".
Jorge Jaime

Yes, it will be. But Foursquare would be sort of opt-in, rather than have no choice that to get the content pushed to you every single time you login in to the wifi. And what if you just didn't user the wifi and used 3G for your internet access? I think the use of foursquare has it's advantages though it's not optimal, it's what we have now.
Tim Jahn

What are the advantages? I've yet to see any.
Jorge Jaime

Advantages: It's a platform that can distribute the data based on location in either wifi or 3g
It gives accurate data of who the readers are and hence some sort of insight to how to develop strategies and tactics for them. It also helps add a name to the person clicking. Not sure if all of this is ethical though.

It also has the game model that can work as a motivator for people to check in and earn badges or extra offers.
Tim Jahn

"It's a platform that can distribute the data based on location in either wifi or 3g"
Agreed.

"It gives accurate data of who the readers are and hence some sort of insight to how to develop strategies and tactics for them. "
Accurate? Where's your data on that?

"It also has the game model that can work as a motivator for people to check in and earn badges or extra offers."
I don't think a game is necessary to access content you like. I access content I like every day without playing games.
Jorge Jaime

Accurate because you can track down who has checked in and who is reading your content. With profile names and probably with all this listening tools getting better you can complete the profile for this person with some quick searches.

The game part is good for some, but not for all. I think it will lose more importance in the future. But the benefit, at least for a few is still there.

The point is that this experiment could get better as tools more specialized than foursquare appear. Tools that are aimed at help people shop through newspapers, shoes and food, etc. Foursquare is one step towards that, but not even close to what it will be in some years.
laurenfernandez

Interesting. I wonder if the impact that the specific field feels is a bit different - and if their models are more geared toward striving to always being the top financial source of information.... they are doing a great job.

Thanks for stopping by and sharing that - not something I had considered!
Deanna Ferrari

Laura - I absolutely agree. This is a smart move for FT. They aren't jumping on any bandwagons, they are taking advantage of new platforms and thinking of good moves to make as more and more online news channels move toward paid content and bigger competition among the large players. I think this is just the beginning of a bigger trend.
laurenfernandez

I'm curious to see how it will play out - honestly, this type of model only works with smaller or niche specific markets. Big publications might try to model themselves, but thats why FT is successfukl - they use trends and models that work for them and a specific demographic.
Danny Prager

This is absolutely an example of the FT, like Bravo before it, jumping on the Foursquare "trend train". It is unclear exactly who the FT is trying to target, but I, like you, view this as a way to encourage a new business generation to read their publication.

Here's why the Foursquare branding make sense (to me at least) :

1) Foursquare targets young professionals in urban settings extremely well, and the FT needs this new readership.

2) The branding tells a younger generation of business professionals that, regardless of any past reputation, the FT takes new mobile/ geo/ social tools seriously.

As far as selling this initiative to the C-Suite:

1) Foursquare partnership offers a cheaper alternative to advertising that targets a younger demographic.

2) If readership/revenue increase amazing case study/free publicity for the paper.

Thanks for putting this out there so clearly, and I'm excited to see how this little experiment for the FT turns out.
laurenfernandez

I like how you broke this down from a C-Suite view to a general branding view. I've been reading a lot of articles on how mobile applications are going to shift paywall models, for better or worse. It will be an interesting case study to compare large corporations v. niche.
Norcross

I used to read the FT when I was a money manager. And I agree that there was information there that was both useful and specific to the work I did. However, my company paid for it, not me. Had that not happened, I would have found that information elsewhere, since we all know nothing is really unique in the web content world (esp with financial markets).

I just don't see how FourSquare fits into it. Yes, the demographics are getting younger. But the target audience, regardless of age, would most likely be apprehensive to be using the service at all, and those that do probably don't care much about the FT.
laurenfernandez

True. But someone like my friend Amy (who reads it religiously, but hates paying for it) might enjoy knowing she can get it for free in places she probably frequents.

Could this just be them riding the trend train? Possibly. But I also think those that ride the train have to have a strategy and metrics to prove its a solid idea to C-Suite. With it's track record, FT makes more sense than most for different types of business models.
Tim Jahn

Why couldn't Amy just get the paid content when she hops on the cafe wi-fi though? Why the extra step of checking into Foursquare (and possibly having to sign up for the service first)? The only reason I can think of is that FT wants to jump on the Foursquare bandwagon.

When I go to Caribou, I have to log in to their free wireless system. Which means they now know I'm on their system. Which means they could provide me with any sort of content (paid or unpaid) they want. Which is exactly what FT could (and should) do.

This is nothing more than another company/content provider hopping on the "social media" bandwagon. In this case, hype/coolness is trumping utility/user experience. And that's never a good thing.
Scott Hale

Tim makes a good point about jumping on the "social media" bandwagon - it seems like FT is jumping into Foursquare because it's the golden child right now. But what's wrong with that? There's no doubt this is a creative/innovative use of an incredibly hot trend.

Nobody else has done something like this. Maybe FT could use other methods*, but this method opens the door for companies that could make big moves in the same way. Like Laura said, FT has a huge user-base, and this move makes FT accessible to the group Norcross mentioned - A younger crowd that *could* find the information elsewhere if they look hard enough. Looking becomes less worthwhile if a BRAND brings you the info.

I know it's an isolated occurrence, but I imagine your friend will cancel her subscription, Lauren? If that becomes a large-scale movement, FT has issues - Once you give something free, it's hard to take away.

* If FT went the Caribou route, they would have to deal with each individual venue to make the offer when somebody signs into their wireless - Foursquare skips that step and FT only deals with one partner.
laurenfernandez

How many brands are encouraged to jump on Twitter for that exact same reason? Sure, some have scope, strategy and objective - and those are the ones succeeding - but many brands don't get that support from internal or external.

I like your point about how Foursquare helps to skip that extra step - which actually makes it a bit easier on the company.

Great thoughts as always S.
Matt Cheuvront

Agreed here - it's a jump on the bandwagon, but it's a hell of a bandwagon to climb aboard. I don't know that I really see all of the benefits here and don't know if the Foursquare "demographic" is all that interested in FT, but it's a very interesting experiment in attempting to bridge that gap.
laurenfernandez

FT has never been, and never will be, a mass market type product. They are utilizing a tool that could have the potential to reach the younger person in that specific niche demographic. It could fail miserably, but it could also be very successful.
Matt Cheuvront

To be determined I suppose... :)
laurenfernandez

The case study and quantitative metrics will prove a positive or negative (response) point, that's for sure.
Matt Cheuvront

We can debate back and forth all day long - only numbers will tell if the bandwagon jumping makes/made sense. Of course, I know I'm preaching to the choir in saying that - but safe to say, FT thought this through from a profitability/revenue standpoint and sees a real opportunity here to target (specific) new markets.
laurenfernandez

I think that might be a bit of a stretch for most business models. The first question: Are their wireless systems equipped to just provide content that way, or does that need to go on behind the scenes? (I 'll admit it, wifi models aren't something I'm very knowledgeable about!)

The FT has a history of doing things in a roundabout way, but they've made it work for them.

Yes, it might be them hopping on the bandwagon. But how many social strategists make their clients get on specific platforms with absolutely no strategy in mind? I think we need to wait to judge on that until we see measurable results, success or failure - and how they execute it.
Tim Jahn

Next time you login to a cafe wi-fi system, look at what's on the screen. It's just a web page - any content could be delivered easily.