Selling advertising as a monthly subscription

When Kevin Uhlenhaker, owner of Parking Today, calculated what 20 advertising subscriptions could generate, he saw an opportunity to cover the company’s entire editorial operating budget.

Twenty advertisers paying a fixed monthly fee could produce $500,000 plus in pre-sold annualized revenue—enough to cover a chunk of fixed operational costs without selling another ad.

And he didn’t have to invent the model from scratch.

At a publishing conference, Uhlenhaker learned how Family Resource Group, which owns eight or nine family magazines across the United States, was already selling advertising subscriptions through its Media Flex program.

For $1,617 a month, advertisers could choose five products from a menu of 27 options, swapping selections as their marketing needs changed. Contracts required a three-month minimum and 90 days’ notice to cancel.

The model offered advertisers flexibility while giving the publisher recurring revenue and fewer contracts to renegotiate.

Uhlenhaker went home and launched his own version the following month, expanding the menu to 30 products and introducing pricing and retention incentives of his own.

He called it Access Pass.

In its first two months, the program sold six subscriptions toward an initial goal of 20, a goal at which projected presold annual revenues at the start of each year will be well north of $500,000,  covering a large chunk of the company’s fixed costs.

How Access Pass works

Instead of purchasing individual advertisements, Access Pass subscribers pay a fixed monthly fee to select five advertising opportunities each month from a menu of 30 products.

Almost everything Parking Today sells is available through the program, including print and digital advertising, website placements, newsletters, programmatic advertising, sponsored content, and webinars.

Advertisers can change their selections as their needs evolve, without renegotiating contracts or issuing new insertion orders.

Not every product counts as one selection. For example, two targeted email blasts reaching 5,000 people count as one, while a larger programmatic campaign delivering 50,000 impressions with geofencing can use all five.

The structure allows advertisers to adjust their marketing programs while maintaining a predictable monthly budget.

Subscriptions require a three-month minimum commitment, with a 60-day cancellation provision.

Pricing rewards early adopters

One of Uhlenhaker’s innovations is an escalating introductory price structure designed to reward early subscribers.

Subscribers retain the rate at which they join, subject to a 5% annual increase.

If they cancel and later return, they must subscribe at the then-current rate.

The structure creates an incentive to join early and another incentive to remain subscribed.

The economics: Covering the content budget

Uhlenhaker designed Access Pass to create a predictable revenue base sufficient to cover much of the company’s fixed operating costs, rather than replace other types of advertising contracts.

His initial goal of 20 subscriptions could generate approximately $55,000 per month in recurring revenue, $660,000 a year at goal.

“That was my big aha moment,” Uhlenhaker said.

The subscription approach also defies the traditional economics of advertising sales.

“Much of the existing advertising pricing was anchored on assumptions and price points established 15 to 20 years ago,” said Uhlenhaker, who purchased the mature company about three years ago.

Rather than focusing exclusively on the historical rate-card value of an individual advertisement, the model puts greater emphasis on overall margins and predictable revenue.

“Why do I care how much it actually costs if  I’m making the margins I want?”

For advertisers, the monthly subscription generally works out to be slightly less expensive than purchasing the products individually.

For the publisher, the trade-off is a recurring commitment from advertisers, a more predictable base of revenue, and higher overall sales volume.

Three ways Access Pass encourages advertisers to stay

In addition to their five monthly advertising selections, subscribers receive three categories of extra benefits designed to increase the value of the program and encourage renewals.

1. Value-added benefits

The first category provides benefits beyond the five monthly advertising selections.

The press release benefit is another innovation, inspired by an idea originally shared by SpaceNews.

Nonmembers pay $500 for a DIY press release. Access Pass subscribers receive one included release and can purchase additional releases for $199 each.

These extras provide continuing value beyond the advertising selections themselves.

2. Tenure rewards

Subscribers also earn additional benefits the longer they remain in the program.

The structure gives advertisers two reasons to remain subscribed: their locked-in introductory price and the increasing value of their benefits.

After one year, for example, a subscriber gains a sixth monthly selection without having to purchase a more expensive package.

3. Prepayment rewards

Advertisers who prepay for a full year can receive the twelve-month benefit immediately, allowing them to choose six advertising items each month from the beginning.

In exchange, they give up the option to cancel during the prepaid term.

For Parking Today, this improves cash flow without requiring a price discount.

A different way to sell advertising

Uhlenhaker sees Access Pass as a way to rethink the traditional sales process.

Instead of purchasing a discounted bundle of products selected in advance, advertisers can adapt their programs as the year progresses.

“You don’t need to know what your exact plan is six months from now.”

That flexibility eliminates the need to renegotiate contracts or change insertion orders whenever an advertiser’s priorities shift.

It also changes the publisher’s role.

Rather than repeatedly selling individual advertising placements, the company can spend more time helping advertisers select products and manage their campaigns, something other publishers using recurring advertising revenue have also said.

Ideally, the sales relationship shifts from individual transactions to ongoing account management of a stable base.

There is also an important distinction between Access Pass and conventional advertising packages: subscribers aren’t simply buying a predetermined collection of placements. They are buying access to a menu of advertising opportunities that they can use differently from month to month.

Making fulfillment scalable: The Partner Marketplace

The flexibility that makes Access Pass attractive to advertisers also creates operational challenges.

With subscribers choosing from 30 products and potentially changing their selections every month, fulfillment needs to be as efficient as possible.

To manage that process, Parking Today is developing a digital DIY Partner Marketplace.

Ultimately, either advertisers or designated account managers will be able to select and place advertising orders.

“It’s a hybrid model,” Uhlenhaker said. When fully functional, either advertisers or account managers will be able to browse products, build campaigns, review specifications and deadlines, upload creative materials, and manage subscriptions all from one place.

The platform is intended to streamline ordering, invoicing, and fulfillment, including generating  invoices and providing advertisers with a central location for campaign materials.

Subscribers will be able to place their monthly orders through their own dashboards.

The marketplace is an important part of making the model scalable. Without an efficient process, the administrative work required to manage flexible monthly selections could offset some of the advantages of recurring revenue.

Early results and lessons learned

Access Pass is still in its early stages, but Uhlenhaker sold six subscriptions in the first two months feels is enough for proof of concept.

Several practical lessons are also emerging:

Subscriptions are an additional way to buy, not the only way. Traditional advertising contracts remain available. One of the company’s largest advertisers preferred to continue purchasing full-page print advertisements, even when a subscription would have cost less.

Flexibility is a selling point. Advertisers can change their selections as their marketing priorities evolve without renegotiating contracts or issuing new insertion orders. “Don’t give them a reason to say ‘no'” is the motto.

Early-adopter pricing creates incentives to join and stay. Subscribers retain their introductory pricing, subject to annual increases, but lose that pricing if they cancel and later return.

Additional benefits can improve retention. Value-added products, tenure rewards, and prepayment incentives increase the value of remaining in the program.

Recurring revenue supports the content operation. At its initial goal of 20 subscribers, Access Pass annualized revenue provides a predictable base to minimally cover content-side operating costs.

Flexible subscriptions require efficient fulfillment and interactive touchpoints. A broad product menu and changing monthly selections require systems that simplify ordering, scheduling, and delivery, along with account managers to provide services and recommendations.

Access Pass puts a price on a continuing relationship. The experiment challenges a fundamental assumption of traditional advertising sales: that the publisher must assign a fixed price to every product.  Access Pass instead puts a price on the ongoing relationship—and lets advertisers decide how to use it.