Premium app offers stations entry into expanding subscription economy
News that tech monoliths like Google and Apple are phasing out third-party identifiers, such as cookies, has spread ripples of anxiety in the digital advertising world, as publishers and mobile app providers eye a decline of up to 80% in programmatic advertising revenue.
When it comes to effective ad delivery, “the goal has always been to be very specific and very targeted,” explained Ethan Dreilinger, global client solutions engineer at The Weather Company. During a recent TVNewsCheck webinar, New Rules, New Opportunities: Diversify Your Digital Revenue Streams, Dreilinger said that the elimination of third-party identifiers knocks out “one of the underpinnings that we’ve built an ad economy on.”
The good news is that TV broadcasters have an opportunity to replace lost programmatic revenue — and then some — by diversifying their digital revenue streams, according to Rodney Thompson, senior strategist at The Weather Company. He suggested stations capitalize on their highly respected weather brands by launching a premium, or subscription, weather app.
A Booming Subscription Economy
Industry research often points to weather as one of the top reasons that viewers tune in to local news. A premium weather service would let TV stations tap into the fast-growing subscription economy, which Forbes recently noted includes 78 percent of adults in more tech-reliant countries, like the U.S., the U.K., Germany, Japan, China, and France. Other research has found that use of subscription services could increase by as much as 27 percent this year.
To help broadcasters capitalize on these trends, The Weather Company has launched Max Mobile Premium, a subscription version of the white-label, ad-supported Max Mobile weather app that many TV stations offer their viewers. The smartphone technology addresses the consumer need for weather updates with a subscription-based digital experience that offers enhanced features like 24-hour radar, 30-mile lightning alerts, 15-day forecasts, Weather InSight and, importantly, a lack of advertising.
The cost to broadcasters to get this premium service up and running for consumers?
“There’s no overhead cost to our customers,” Thompson said. “They work with us, we get it turned on; the marketplace is going to take some of that subscription fee, and then we do a revenue share with the client.”
Don’t want to charge end users for premium access? Max Mobile Premium is available as a fee-license with additional sponsorable ad spots.
A Turnkey Opportunity
Thompson went on to describe the arrangement for The Weather Company’s partners as simply “newfound revenue,” one that doesn’t even require added man hours on the part of meteorologists. The data and features are provided to brands by The Weather Company.
“We either work with our clients to get this capability turned on, or our clients turn it on once we provision them with the technology, so it’s really easy getting it into the marketplace,” Thompson said. “About the only thing that would really be put on the meteorologist is any level of promotion; they’re going to be in the best position to say to viewers, ‘Hey, the next couple of afternoons, we’ve got thunderstorms in the forecast; ‘Premium’ really helps with that.’ ”
So not only is this turnkey a revenue stream, it’s also an additional way to keep consumers engaged with a broadcaster’s brand while away from their TVs — the kind of connectivity that only helps with sustainability. And when consumers interact with the weather data through the branded phone app, they’re treated to a highly personalized experience.
AI-Powered Personalization Enhances the Experience
Over the course of the past year, Thompson and a Weather Company team of researchers collected consumer insights through A/B testing to figure out what they might want out of a premium weather app, and what they’re willing to spend on one.
“The number-one feature that people want? No ads,” said Thompson. “I know that’s shocking,” he added facetiously, “but that’s the thing that they really want more than anything else; they want the weather experience without the ads.”
There’s also a batch of other premium features, namely what The Weather Company calls Weather InSight.
“Weather InSight is an AI-driven experience that will not just give you the forecast in a unique way, where it gets rid of a lot of clutter and there’s some real intelligence to the delivering of this forecast, but it’s going to tell you when the weather’s going to impact you,” Thompson said. “It will highlight negatively-impactful weather in red, and it will highlight weather in green if it’s going to positively impact you.”
For a more detailed account of the forecast, consumers can click on the color-highlighted icons.
The Weather Company also conducted extensive testing to compute a customer price point for the premium content. They experimented with costs of $5.99 per year up to $39.99 per year.
“The sweet spot we find with recommended pricing is $19.99 a year,” Thompson said. “The few people you lose that aren’t willing to spend the difference between $9.99 per year and $19.99 per year is offset by the higher price.”
Should a publisher have difficulty attracting business at the $19.99 price point, Thompson observed that it’s always easier to “calibrate down” rather than up.
Thompson also believes that a brand already with an up-and-running news app can expect between a three- and 10-percent premium weather subscription upgrade rate. But, he added, “It’s more than just that raw number because it is so much more lucrative than the programmatic side of things.”
A Recurring Revenue Stream
“Also, as a publisher, it’s recurring revenue,” observed Kathy Haley, TVNewsCheck’s publisher, “and is more recession proof than advertising revenue.”
Max Mobile Premium also has built-in marketing and promotional services to help app users who have not upgraded to premium do just that with just a couple clicks. The Weather Company also offers a tool called Advertising Accelerator to help drive subscriptions.
“We give our AI engine, Watson, headlines, background elements, and calls to action,” said Dreilinger. “The AI puts together the actual creative and then targets people based on what they do.”
The audience is then segmented and delivered targeted messaging inviting them to upgrade to premium.
“It’s the right ad, to the right person, at the right time,” Dreilinger said. “These great insights really do help you out in terms of understanding what your audience does and how they interact with your app.”
In turn, that data can help inform future marketing campaigns, not just in weather but also other areas of focus as well.
Still, starting with weather to attract and keep eyes on your brand, while generating new revenue streams, is a most advantageous approach.
“Every market has its own unique weather going on in it,” Dreilinger observed. “You get that big dispersal across a geo, even within a single DMA, and it’s really those pockets of weather that we’re trying to address.”
From hopeful hikers in Seattle to Bourbon Street bar hoppers in New Orleans to Citibike riders in New York, and everyone in between, weather informs life on a daily, even hourly basis.
“It’s what that forecast is going to be for what your plans are and what you want to be,” Dreilinger said.
Who wouldn’t sign up for that?