Audience acquisition strategies—why retention holds the key to profitability

Don’t mistake the wedding for the marriage. That’s good advice to any young couple but it turns out to also work for media companies trying to navigate a challenging landscape. A wedding is a moment; a marriage is the decision to build a life together. Now think of audience acquisition as a moment, and engagement and retention as the keys to building a lasting relationship over time. In recent years, the media business was largely focused on the moment—on using performance media, price promotions and other tactics to drive audience acquisition at all costs, with little regard for profits or lifetime value. That growth was rewarded by Wall Street and advertisers. But it was always a short-term strategy. As it became harder to find and attract new audiences, and as churn rates grew, the focus shifted. Acquisition regardless of cost went out of favor overnight, while engagement and retention were recognized and valued as crucial to driving growth and profitability. Check out the latest Ad Age events and award programs It makes good business sense. Increasing retention rates by 5% can increase profits by up to 95%, according to a study by Bain & Company and Harvard Business School. Your most loyal customers stay with you longer and spend more money on your products. That particularly resonates in the streaming space, where an audience-growth-at-all-costs mentality has given way to a focus on reaching sustained profitability. As Netflix co-CEO Greg Peters said at a conference in London this week, “Success in streaming is really about engagement.” To do that, streamers (and all content creators) need to turn customers into fans. They need to turn one-way conversations into true dialogues. And they need to celebrate and reward loyalty. The shift in focus is becoming more evident across the marketing and media spectrum. At the recent WPP Stream conference in Santa Barbara, multiple sessions focused on topics such as “The future of loyalty” and “Popcorn, not cookies.” As one speaker pointed out, “Loyalty isn’t a transactional relationship between a corporation and its customer base. It’s an emotional connection reinforced by experiences. Humans want to be seen and heard. They want to be delighted, recognized and excited.” That’s why in all the talk of acquisition, engagement and retention we need to remember that we’re talking about humans. This isn't just about customer acquisition costs and churn reduction. It’s about surprise, delight and interaction. When I check into a hotel I’ve stayed at multiple times and the person at reception asks, “Have you stayed with us before,” I want to answer, “You tell me.” Compare that to checking into a hotel where the front-desk attendant says, “Welcome back. We haven’t seen you in a while and it’s nice to have you here again.” The goal is to make fans out of customers. Fandom gives people a sense of belonging and community. And brain science shows that when we like something, we want to feel closer to it. It’s why after watching their favorite shows or sports teams people visit Reddit forums, create fan art and go on social media to predict who the killer is or whether the top seed will be eliminated in the first round. Increasingly, smart media companies are looking to engage audiences in their own ecosystems. It’s why interactive content is growing in popularity. They reward those who interact with them and create daily habits that reinforce loyalty. Nearly every major media company used the recent Upfronts and NewFronts to introduce new ways for their audiences to interact with content and advertisers. It’s not enough to bring new people in; you have to continue every day (or at least more often than not) to win the hearts and minds of those you’ve already attracted. If you do that, getting engaged after the wedding can truly lead to a happy ever after. See all of Ad Age’s 2024 Creativity Award winners here

Audience acquisition strategies—why retention holds the key to profitability

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