Since the recent rise in popularity of Spotify, I’ve had a few discussions with people regarding the business models it uses. I’ll assume you’re familiar with how it’s advertising and charging model works; get the service for free and get ads, or pay a monthly premium and receive the service ad free.

It’s an interesting approach, and one of the first major media services (that I know of) that allows it users to pay more and get the service ad free. Some websites also offer this option but not many. And those that charge for content through paywalls typically still feature advertising, albeit of a lesser degree.

Personally, I think it’s a great idea and hope that it will shape the future for many other paid services – though I have some doubts about whether it will benefit advertising.

TV subscription services such as Sky and Virgin charge for content in the same way, but their services feature advertising as well – you pay a premium for the service, and are still advertised to.  With the rise of the Spotify model, I know more than a few people who are becoming annoyed with that TV model – it’s almost creating a mindset for subscription services of “I’m paying for a service, why should I have to receive advertising too?”

Radio works in the same way, but is always free.  I’m sure  if they were to introduce a subscription service, you’d expect it to be ad free.  Cinema? You pay for your ticket but still get 30+ minutes of ads before a film, fair?

And the BBC, well they just charge anyone that has the potential to view the service as they maybe viewing it, and can function advertising free. Not a particularly fair model, but I’ll come onto that in some later discussions.

I think the Spotify model works great, and on tv subscription services could work well, it could almost be the future of content delivery.  I don’t however think it will be able to be delivered (at least not in the close future) – simply due to the technology that will be required and the cost.  With Sky requiring you to pay a premium and them receiving revenue from advertising to make their business profitable, I’d imagine they’d need quite a high subscription charge to make an ad free model affordable.  Upwards of £100 a month? Who knows.

Either way, I think the Spotify model is great and a subscription model that I hope a lot of other media providers consider.  Pay a subsciption, get the service ad free.  I also think a lot of people, particularly on what’s considered ‘over-advertisied’ services such as Sky, would take it up.

I don’t think it’s particularly beneficial for advertisers though, as it reduces their audience size and the amount of advertising people are exposed to.

You could argue if we make advertising more targeted and exposure people to less in general, then we’ll see it perform better, and I think that’s the key.

Less frequency, more relevancy.

A lot of sites I’ve been seeing recently have been starting to follow this practice in an effort to get as many email sign ups as possible. After all, more email address = more people that can potentially see your product through your newsletters = increased likelihood of purchase = £$ Quids in!

It comes down the quality vs. quantity issue – would you rather go for a poorer performing, larger list, or a smaller more high quality list? It seems to have been a trend I’ve seen, one of the key priorities being to ensure that the signup is visible at least on the homepage, and in as many other places as possible for maximum exposure = maximum likelihood of signup. In some cases this might be a header or footer placement on every page of the website.

But is this really the best strategy to take?

You can’t really argue that more placement doesn’t equal more signups – however, in my experience that sign up rate is generally very low anyway, and the benefit you get from increased placement is very tiny.

0.5%? 1%? I think you’ll be lucky to achieve figures in these areas  (unless you’re direct traffic makeup is somewhere like 75% of total).

Personally, I’m a strong believer in only offering the visitor what is relevant to them at each point in time throughout their shopping process.

With spam becoming more of an issue to customers each day, a lot of companies are seeing reduced signups even during the checkout process, and I think adding extra placements of this throughout the site just reinforces how desparate a company is for sign ups.  When you walk into a shop you’re not instantly accosted to give out your personal information for direct marketing.

If you’re going to propose a signup, remember the key factor – Sell it to the customer!

Sell what’s on offer; list the key benefits of why they should sign up, reassure them that their email address won’t be shared around and only used for relevant communication.  I’d even go so far as to dedicate an entire page to newsletter sign up, maybe even showing some pictures of what they can expect and how often, example of typical offers they might receive.

I’ve seen this work much better than offering tiny forms all over the site, which typically mean nothing to the visitor. If you offer them the opportunity to sign up at the right stage of their journey, clearly listing the benefits and options, you’ll get a  much better response.

You can achieve much higher conversion rates of sign-ups just by taking these steps, and it’s only going to get harder and harder to have people submit their details for newsletters as more customers become aware of the amount of spammers out there.

In short:

• Clearly & concisely list the benefits of sign up – Sell it!
• Reassure customer that they won’t be receiving anything they haven’t asked for.
• Offer newsletter sign up at a point in time most relevant to them – offering it more does not mean you’ll get more subscribers!

Personally, I would recommend offering sign-up:

1. During the checkout / registration process.  On the details entry page (or perhaps even on a separate page within this) you’ll find the best chance to capture their info as they are already committed to your company (by purchasing). List all the benefits, details, and examples of what they will receive.
2. On a dedicated page, reached through promotion on the site (via banner placement, for example).  A well designed, persuasive page will perform far better than a tiny form stuck in your header on every page.  You might also use it as a landing page for related marketing if the offering is strong enough.

Each site and audience will be different, but test, review & refine to find what works best for your site.  You’ve got web analytics and there’s no excuse not to.  I’ll look to get some examples of best and worst practice signups I’ve seen on the web.