A Year Into IBD’s Digital Transformation, Subscription Revenue Soars
A Q&A with Investor's Business Daily president Jerry Ferrara on how the financial media firm is riding data to its "most profitable year" in a decade.
Just over a year ago, Investor's Business Daily officially went weekly, reducing its print frequency and allocating more resources toward its suite of subscription-based digital products, particularly those catering to users on mobile devices.
Characterizing the move as a proactive one, IBD president Jerry Ferrara told Folio:, at the time, "Unlike a number of publishers, we are actually profitable and have been for many years. By taking this step, we will grow profitability and stay focused for long-term success."
One year on, the move appears to be paying off. Revenue per subscriber is up 25 percent since the shift, according to the company, with subscriptions now accounting for 75 percent of the brand's total revenue, up from just over 50 percent a year ago. Moreover, the company says it's on track to record its most profitable year since before the 2008 financial crisis.
But while Ferrara credits a variety of investments, new product launches, and tactical moves with driving the company's success on the subscription front — for example, a clever repositioning of the company's MarketSmith stock research product that resulted in subscriber growth of 15 percent despite a 50-percent rate hike, or applying the brand's webinar know-how to producing more video content — he says the real key for IBD has been an ever-intensifying focus on data analytics.
Folio: sat down with Ferrara to learn more about Investor's Business Daily's ongoing transformation, and what's next for the brand.
Folio: A year into the new model, it sounds like things have been going well.
Jerry Ferrara: It has been going well. I think we’ve figured out a future way of doing business and what could potentially be the future of publishing, at least in my eyes.
Folio: A year ago, you described the move as a profitable company behaving proactively. Is there anything further you can share about the impact the past year has had on IBD's profitability?
Ferrara: Absolutely. Part of the reason we did this was to increase margin and profit, and we’re seeing strong growth on the top line, but especially on the bottom line. We're on track to meet our internal goals for high double-digit profitability in EBITDA, so we’re pretty excited about it.
Folio: You've more than tripled traffic to your website in the past year. What are some things you’ve been doing to achieve that growth?
Ferrara: The traffic growth has been driven by a few things. We were really able to hone in on the data of where our customers are coming from and what they're doing once they’re on the website, which is really our big story: we’ve become very data-focused.
What we’ve found is that users coming to our website are coming from particular referrers and platforms, and we’ve reached out to those platforms and struck some traffic partnerships. We've also really just begun marketing more appropriately to those different platforms that our prospective customers are coming in from.
On the iPhone, just as an example, if you open up the Stocks app that’s built into iOS, you’ll see a "news" section with premium publishers. We’re in there, along with the Wall Street Journal, the Financial Times, and others.
Folio: So that’s a platform where you saw a lot of potential IBD readers?
Ferrara: Yes, certainly. And it’s the same with Facebook.
Folio: The traffic is great, but the ultimate goal is to convert these web visitors into paying subscribers.
Ferrara: That’s exactly right, and that’s really the transformation story. We’ve moved to be more of a nimble, profitable company while being committed to that data DNA. But we’re somewhat contrarian in that our business strategy is to go after the end user first and foremost, and not the advertiser.
Seventy-five percent of our revenue is coming from reader revenue: subscriptions and product sales, like our mobile products, which are very education-focused. Anyone that’s a media or publishing brand really needs to figure out who they are, what they stand for, what they do. For us, it’s to help our subscribers make more money in the stock market and reach their financial goals. We’ve just doubled down on that. Advertisers are important to us, and so are licensees, and other revenue streams like events. Those are great, but we have to do what’s best for the end user.
Folio: And that's something you've been doing some time, being one of the earliest publishers to implement a paywall way back in the early-2000's. What are some of the ways that you demonstrate to consumers that value offered by a paid subscription?
Ferrara: We’ve adjusted our content strategy to be more complementary to data. A lot of what we do is getting true, authoritative, clean data points to the end user, and we complement that with our viewpoint and analysis. We produce between 50 and 60 original content pieces each day, and it’s all complementary to the data points of the day. We’ve trained ourselves to show what the key takeaways are for that end user, especially on mobile, who doesn’t necessarily have time to consume a long piece of content. They just want the top two or three takeaways. That’s been helpful in bringing in additional customers.
A big part of it is also educating our customer base about the fact that we have multiple different products. We’re trying to push more of a membership model to emphasize the fact that there are other products in our portfolio suite. SwingTrader, for example, is a product we launched early last year. We listened to what our customers wanted — then they wanted a mobile app version of it, so we launched that quickly. Right out of the gate that drove about seven figures in incremental subscription revenue for us, and it was from a lot of existing customers we already had. They wanted this additional product, we buit it for them, and they converted pretty quickly.
That’s how we are going to move forward: continuing to track what the customers are engaging with throughout the platforms we’re on, both IBD platforms and third-party platforms. And we’re investing more in data and building out our data team, so we can create new products off of that.
Folio: So data is essentially informing everything you do, from content to new product launches to the way you package those products together, and beyond.
Ferrara: Absolutely, and it does speak to the paywall strategy. I see that evolving over time because more and more publishers like ourselves are collecting data off of individual articles and web pages. And then we’re going to be able to morph and evolve that paywall strategy even further.
Folio: What sort of investments have you made on the data side, specifically?
Ferrara: We’ve partnered with a number of different vendors, and we’ve obviously invested in technology, like Adobe Analytics and Parse.ly. But we’ve also invested in proprietary data analytics tools. And we’ve built a team, essentially, focused on data analysis and data mining, identifying trends and insights that we’re able to see on a daily basis across all of our products.
We benefit from being subscription-focused, because when you're selling to subscribers, they’re providing more information that’s going to personalize their experience with us. If you don’t have a personalized suite of products and a personalized web and mobile experience, it’s going to be really hard to grow in the future.
Folio: That culture change seems to be a major key here. Can you speak to that a little bit?
Ferrara: There’s a popular saying that “culture will eat strategy for breakfast," and it’s true. Data needs to inform everything we do, including the types of people we bring in. We’ve benefited from the fact that some people we brought on don’t come from the financial space. I think maybe we were a little too insular in that respect in the past.