The rise of Instagram’s Threads has been nothing short of remarkable.
As I write this article, the app has 112 million users, and by the time you read this, that number will be woefully out of date.
In less than three weeks, Threads has become the 34th largest social platform, sitting between Tumblr (33rd) and Stack Exchange (35th) and rapidly approaching the 150 million user base of Discord. But what does that represent in real value?
Threads proves the value of a subscribed audience
Social media platforms are often measured by their average revenue per user (ARPU) by week, month, or quarter. At the end of the first quarter of 2023, Meta’s quarterly ARPU (for Facebook and Instagram) in the United States and Canada was an impressive $48.85.
Meta has said it won’t sell ads on Threads until next year. And, even if it did, the average revenue per user would probably initially look more like Twitter’s quarterly ARPU – $4.96, according to some of the last numbers publicly available.
Let’s do some “back-of-the-envelope” math. If Threads had a quarterly ARPU of $5 at launch, the company would have created over $2 billion in annual revenue ($500 million per quarter multiplied by four) in the two weeks when over 100 million people downloaded the app.
More than anything, Threads’ phenomenal success speaks to the value of a subscribed, engaged, and addressable audience.
Subscribed audience power drives media company projects
Media companies have known the powerful connection between existing audiences and new products for years.
Think about the history of television and the concept of a “lead-in” audience. When a network wanted to stack the promotion deck for a new series, it would schedule the show to follow its most popular series.
Seinfeld flopped in its Wednesday night debut. But when NBC scheduled it to air after summer reruns of the popular comedy Cheers, audience reaction convinced the network to pick up more episodes. When Seinfeld returned to Wednesday nights, it cracked the list of top 30 shows by viewership. In the middle of the fourth season, it moved to Thursday nights, following Cheers, and the ratings jumped (and eventually surpassed the audience size of its lead-in show).
This phenomenon plays out across media properties today. Movie studios create “universes” to familiarize audiences with a character and then spin the character off as the star of other movies and series across platforms. Streaming services like Netflix and Disney+ use audience data to guide plotlines, directors, actors, music, and even what projects to develop or license.
This media company magic forms the foundation for advertising and sponsorships. Brands pay to advertise because “renting” the attention of an audience that’s already paying attention to the media company’s content is less expensive than building that audience and attention from scratch.
Engaged, subscribed audiences drive new products for brands, too
CMI has evangelized this model for more than a decade. Developing a relationship with an engaged, subscribed audience usually starts when a business transforms its email newsletter, blog, resource center, or digital magazine to deliver value to readers instead of sales pitches.
The content champion rationalizes the role of content marketing to executives using this logic: “If we can develop X number of audience visits or Y number of subscribers, we can turn that into Z number of customer opportunities.”
Then comes the difficult work of building the first audience and transforming it into a group that wants to hear from your brand, likes what you say, and trusts you to deliver value continually.
Too often, that’s the end of the conversation. But media companies understand the first audience just starts the magic. Engaged audiences are flywheels that add value exponentially to your business.
Subscribed audiences propel new content to new heights
The Cleveland Clinic’s Health Essentials blog grew to 12 million monthly visitors over 10 years. But when it revamped its health library site, the audience for that site grew from 200,000 to 2 million monthly visitors in just three years.
How did the health library audience grow so much faster than the blog? It benefited from a lead-in (existing) audience.
Recently, I worked with a nonprofit that relied on two donation strategies. It conducted seasonal campaigns through classic advertising and paid social media promotion. It also attracted a small number of monthly donors who signed up via the nonprofit’s website.
A revitalized audience development strategy helped grow the organization’s email list from 10,000, most of whom were monthly donors, to over 30,000 subscribers in two years. It converted many of those subscribers into monthly donors more efficiently than they could have with traditional advertising. The organization also used insight from its subscribed audience to make its paid media spend more effective.
When the nonprofit promoted its new podcast to its 30,000 email subscribers, it grew a listening audience of 3,500 followers within the first eight weeks. That podcast led to an increase in their monthly donor group because it allowed a more intimate connection between the organization and the listener.
Understanding where you are is the first step
Studies show acquiring a new customer is between five and 25 times more expensive than retaining one, depending on your industry.
Customers add wealth to your business because they buy your products and services. But expand that view, and you’ll see that audiences do something similar. They add wealth to your business because they can make marketing and sales more efficient, provide insight to reach customers more effectively, and even add revenue.
That is the real business case for content marketing. An audience becomes one of the company’s most important assets. Every media company has understood and measured that for years.
You can look at it this way too. What’s your average revenue per audience (ARPA)? I promise the road to your first valuable audience will involve many challenges and adventures. Once you’re there, it gets easier and faster.
It’s your story. Tell it well.