Next-gen paywalls balance privacy, engagement, revenue growth

Paywalls have become the backbone of digital monetisation for publishers worldwide.

In their early days, they followed a one-size-fits-all approach, treating every user the same regardless of location, preferences, or device. While this helped news publishers take their first steps into subscriptions, it also introduced friction, leading to a clunky user experience and higher churn rates.

The next wave of paywalls offers a solution to the privacy-first compliance media companies must abide by.

Over time, publishers have worked tirelessly to finetune the delicate balance between driving subscriptions and maintaining pageviews. It's a familiar struggle: The reader revenue team pushes to lock down content and boost conversions, while the advertising team argues for more open access to maximise traffic.

So, how do you build a thriving media business that satisfies both objectives - growing reader revenue without sacrificing engagement?

The power of dynamic paywalls

For many, the answer lies in AI-powered dynamic paywalls, a technology that's already reshaping subscription strategies. These intelligent systems seamlessly integrate into tech stacks, optimising paywall decisions in real time.

By leveraging a "smart metre," media companies can tailor user experiences, thereby deciding whether a visitor encounters a paywall, registration wall (regwall), or open access based on their likelihood to convert.

A late 2024 INMA survey found 38% of publishers are already using or planning to transition to a dynamic paywall. And for good reason: Publishers adopting these strategies are seeing real results. Business Insider reported a 75% increase in subscriptions, while The Philadelphia Inquirer saw a 35% lift in subscriber growth.

While the revenue potential is undeniable, one major roadblock to revenue optimisation remains: data compliance.

Paywall decisioning in a privacy-first era

The General Data Protection Regulation (GDPR) has set the global benchmark for data privacy, giving users greater control over their personal information. It mandates explicit consent before data can be collected or processed and ensures users can opt out at any time.

For paywall-decisioning systems, this presents a challenge. These engines rely on data to function effectively, but they must do so while adhering to GDPR's strict principles of data minimisation, purpose limitation, and lawful processing.

In practice, this means publishers are not able to optimise paywall decisions for visitors to their site who have not opted in to cookies. This limits the revenue potential and adds friction to the user experience.

Fortunately, necessity breeds innovation. New paywall technology now enables publishers to leverage real-time intelligence to optimise paywall decisions - without requiring cookies. Unlike traditional models, there's no application programming interface (API) call to retrieve a propensity score. Instead, the algorithms run directly in the browser.

This means visitors who opt out of cookies can be just as likely to see a paywall as those who consent - ensuring a seamless, privacy-first experience. These features have been widely welcomed by privacy officers, who are tasked with maintaining strict GDPR compliance.

This advancement is a game-changer for publishers, further enhancing dynamic paywalls' ability to leverage user behaviour and engagement to drive subscription growth without compromising pageviews and audience.

Industry impact: real results from next-gen paywalls

The impact is already making waves across the media industry.

A recent A/B test run by a publisher revealed a remarkable increase: subscriptions from its paywall more than doubled and registrations from its regwall surged by 2.5 times. All of this happened while driving an increase in total pageviews.

Another publisher that conducted a pre-/post-implementation test reported a 58% surge in subscriptions, all while reducing the number of paywall impressions by 29%.

Beyond boosting conversions, this next-gen paywall technology enables more advanced testing strategies. News publishers can now focus not just on maximising subscription rates, but also on attracting long-term subscribers who are more likely to retain. Additionally, by tailoring offers with varying promotional terms and pricing, they can further optimise revenue from new subscriptions.

Final thoughts: the future of paywalls

This is just the beginning of what AI-driven paywalls can achieve. Striking the right balance between subscription and advertising revenue - while remaining fully data compliant - is no longer a distant goal but a reality.

By making strategic technology choices, news publishers can accelerate business outcomes while prioritising user trust. After all, the future of this industry depends on it.

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About the Authors

Ariel Burkett is vice president of global sales and marketing at Mather in Toronto, Canada. Ariel can be reached at [email protected].

Michael O'Neill is founder of Sophi in Toronto, Canada. Michael can be reached at [email protected].

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