How did Rosetta guide an e-card company from a flagging business model to category leadership?

Situation

As online advertising CPM plummeted in 2002, a leading online greeting card provider needed to evolve from a CPM-driven, free-content model to a subscription-based model. However, the move was projected to reduce site traffic by 80%, which made the business model conversion a survival requirement.

Solution

Rosetta led efforts to:

• Develop a new subscription-driven business model that targeted the Personality segments whose preference for the product made them the highest potential for subscription conversion
• Optimize the division of free and paid content
• Optimize subscription pricing and conduct trial offers
• Develop detailed revenue and profit forecasts by Personality segment to rationalize market spending levels and targeting

Impact

• Client profitably switched from advertising-supported, free-content platform to a subscription-based model, despite reduced traffic
• In the first two years, client achieved actual results within ±15% of Rosetta forecasts
• Client is now the market leader in its category with consistently growing subscriber base, revenues, and profits