Number 4 in paid subscribers: How did they do it?
The Provo, Utah-based dot-com is part of San Francisco-based myfamily.com, Its origins are in a Salt Lake City traditional publisher also called Ancestry, which has two semi-monthly magazines, Ancestry and Genealogical Computing, as well as books and CDs.
From free to pay
The original Ancestry web site, founded in 1995, was free. The site started selling subscriptions in 1997, because "we felt there was enough compelling content that was exclusive, that we could charge a subscription fee," said Roger Smith, Ancestry marketing director.
The key to increasing subscriptions, in Smith's view, is constantly adding new content.
The site currently offers access to records of 600 million names in 250 online databases. By the end of the year, the company's goal is to have one billion names available.
"I don't think a lot of what we're doing is rocket science," said Smith. "We've just learned how to do what we do pretty well."
Here are five of the most effective tactics Ancestry uses to acquire online subscribers:
1. Keyword banner placements on search engines, including AltaVista, Yahoo, Snap and Lycos. "We have a dollar figure that we know our customers are worth," Smith said. While he wouldn't disclose the amount, he did reveal that Ancestry will spend up to 70 percent of that amount to acquire a customer this way.
2. Offline advertising. Ancestry places ads in its own magazines and it also advertises in other specialty genealogy publications.
3. Direct e-mail solicitation. The company uses two offers: a free 2-week trial subscription activated by a subscriber's credit card, which automatically becomes a paid subscription after two weeks unless the subscriber cancels; and a totally free 2-week trial, after which the company asks the subscriber to continue on a paid basis.
When Ancestry doesn't get the credit card number in advance, conversion is 70 percent less than when the company has the credit card on file, Smith said. Response rates from opt-in lists is as high as 5 percent, and conversion to a trial subscription is as high as 65 percent.
4. Free e-mail newsletter. Ancestry has a free daily newsletter and a free weekly digest of the daily editions. Circulation among both newsletters is 450,000.
5. Affiliate program. Affiliate commissions increase as an affiliate increases sales volume. The base commission is $5 for a quarterly subscription and $20 for an annual subscription.
Smith focuses on the cost to acquire a new subscriber. The affiliate program is the lowest cost; category buys with banners on related-interest web sites has turned out to be the highest cost method.
The company is predicting profitablity at the end of the first quarter next year. While the other big subscription sites--those of The Wall Street Journal, Consumer Reports and Disney--"are still about twice as big as we are right now, we think that people who are interested in family history are probably more abundant than how well stocks are doing today," said Smith. "We believe we have a model that will scale."
Two important ways you can profit from Ancestry's success.
1. Test multiple marketing methods, and find a common measure to compare them against each other. Smith uses subscriber acquisition cost, and he is constantly seeking to drive that number down.
2. Constantly add fresh content. Even if you don't have a subscription business model, updating your content frequently--and letting your visitors know about it--will give people an ongoing reason to come back again and again.
David Garfinkle is editor-in-chief of What's Working Online, which is published twice a month by Georgetown Publishing House in Washington, DC. The newsletter covers effective, proven internet marketing tactics and strategies, as well as promising marketing innovations in the online world. Garfinkle says WWOL "is unusually useful to newsletter publishers wishing to market online." Charter subscriptions are available at $197/year.
David is also president of Son Francisco-based Overnight Marketing. specializing in direct mail advertising, and the author of Killer Copy Tactics.