Paywalls are commonly used by marketers to gatekeep certain content and services they do not wish to offer unless paid for. Paywalls require users to register for a subscription or pay a separate fee to gain partial or full access to the hidden content. It is the brand and its marketers’ discretion to decide how much content to gatekeep, how to set pricing levels for their subscription program, what type of paywall to use, etc. Paywalls are used across a number of verticals, including news sites, educational sources, and streaming services.
Mobile apps use a paywall screen, which is included in the app and serves as a blockade to restrict user access. A paywall screen typically consists of information about subscription offers, different pricing options, and a call-to-action (CTA) button users can click on to make the purchase. Each app designs and formats its own paywall screen with elements that best represent the subscription features and value of the app, and marketers can also decide when to display the screen within a user’s app session.
This model requires users to sign up for a subscription before gaining access to any piece of information or service. Setting such a rigid barrier may be risky, especially if users can find the information elsewhere at a better price. It may not be optimal to use if user retention is a priority. Currently, apps like The Wall Street Journal, Financial Times, and other large-scale newspaper companies use this model.
A soft (a.k.a. metered) paywall uses time-based metering or view-based metering to set a limit on the amount of free access granted to users. For instance, non-paying users could have free access to an app for up to a month, or read up to 10 articles for free. Once they exceed this limit, users are required to pay a subscription fee in order to proceed using the app. A number of streaming services including Netflix, Disney+, and YouTube TV use metered paywalls.
With freemium paywalls, users have the option to use the app for free or subscribe. All users are provided with the basic features, while those who pay are given access to additional premium features. This type of model gives users the freedom of choice, and they can decide whether to subscribe or not depending on their needs and interests. Examples of freemium paywalls are Spotify, LinkedIn, and Uber.
Dynamic paywalls are a recent development, and it uses machine learning to analyze user behavior and customize paywalls accordingly. With dynamic paywalls, apps collect information over time on each user to gauge characteristics like their subscription behavior, length of app sessions, reading habits, and interests. Based on these traits, apps decide the paywall most suitable for each person. For example, if a user is a high-propensity subscriber with frequent activity in financial news apps, the Financial Times could offer them a hard paywall. If a user is a low-propensity subscriber and occasionally reads the news, a metered paywall may be more suitable. As such, users go through different experiences under a dynamic paywall, but this framework has been proven effective for maximizing revenue potential and increasing user traffic.
The bottom line is, paywalls are ultimately for monetization purposes and for apps to maximize profit and user retention. In order to do so, marketers need to wisely design their paywall and ensure it benefits their brand. Here are several ways marketers can improve their paywall strategy:
Marketers should consider displaying paywall screens more often on user devices. There is a high chance that users fail to notice or simply brush over the paywall ad the first time, so a repeated exposure of the ad ensures that users encounter the paywall offer at some point in their app session. Furthermore, the repeated display can serve as a reminder, especially for prospective subscribers who are considering but hesitant to pay. The continuous views are likely to sway users into making a purchase.
Once users pay, it is crucial that users are informed on how to make the most out of their subscription. Apps should not make users regret spending money and in the worst-case scenario, cancel subscriptions. Hence, there should be an effective app onboarding process that demonstrates how users can access all of the offered services and an emphasis on the benefits to give them a sense of exclusivity.
Marketers should conduct A/B testing with different variations of paywall designs to determine the one that works best. Paywall screens should be eye-catching and easy to engage with so that users are more inclined to read over the content. The design, layout, and placement of the elements on the paywall are crucial to how the ad is perceived, which is why A/B testing is helpful in figuring out the most effective one.
By comparing competitor prices and accurately quantifying the worth of the app’s services, marketers can set fair price levels for their subscription program. If the prices are too low, apps will have difficulty in making up for their paywall spends, and if prices are too high, this will make the platform unapproachable and push users away. The key is to find the right balance that maximizes benefits for both parties and contributes to building brand credibility.
