Parting thoughts in the Big Data space: Data = revenue hope

By Greg Bright

Allanoke Consulting & Analytics

Albuquerque, New Mexico, USA


I have enjoyed passing along some of the many lessons learned from my years in the trenches of the media business. I would like to leave a few parting thoughts as I conclude my run as a blogger for INMA and a marketer, scientist, and techie for the news industry before heading off to a new position in a different industry.

The value of data cannot be overstated. The ability to combine transactional information, online stories, pageviews, event time and length, and the next event to third-party data purchasers of demographic and location information provides the ability to predict and therefore recommend content.

However, when used internally, this information also provides the tools to tailor your publications, allocate resources, and set your own digital advertising and search optimisation strategies.

The importance of Big Data continues to grow, but classic marketing techniques are still relevant.
The importance of Big Data continues to grow, but classic marketing techniques are still relevant.

The era of gut-and-intuition product development is over. Gut and intuition can’t respond as quickly as needed in the era of the one-minute news cycle — especially when you see your publication’s peak usage is at 6 a.m. 

Let the data drive the software. Let the software algorithms and machine-learning tools build recommendations and present them to the digital user. Use the same online learnings to adjust each printed version. In the end, the data can build a level of personalisation that matches the consumer rather than the personalisation (and personality) of the editing staff.

Data isn’t perfect. Humans and problems — like typos, lazy data entry, and the complexity of a mobile and ever-moving customer base — force an approximation into the analytics. Some data aggregators take months (or even years) to react to consumer moves (like my move to New Mexico, where my address still isn’t Google searchable after 1.7 years).

Another example is with loyalty card-driven data; my grocery card is still tied to my Virginia phone number and address. There has been no NOCA (National Change Of Address) updating by the grocer. I hope the company isn’t stocking its store in northern Virginia based on my new food tastes in New Mexico.

All that said, the data is directional. Use it directionally. Design your creative around direction not precision. Accept that it isn’t perfect but use it to guide you!

Marketing classics still work. Despite the endless barrage of “digital, digital, digital,” there is the need to market to both your key targets as well as the masses. Think about it: If digital is the answer, why are the pure-play digital companies marketing on broadcast (both TV and radio), outdoor, print, and direct mail? It’s simple: They work.

Digital tends to be a self-selected and self-confirming user interaction. The targeting of the two major ad networks is a look-a-like process. If the user is searching for Porsche, the network is going to serve Porsche cars for sale until the cookies expire. It isn’t smart enough to know the real search was for background information on the person, Ferdinand Porsche.

The digital world rushes to the perceived target. The result is that your advertising finds clones of your customer base until you capture all the clones and customer growth stops. You then end up reselling to an existing base with costly reacquisition costs.

Using classic, though target-aware, mass marketing techniques, you are always reaching a large pool of potential customers. Be smart in managing the costs and the frequencies that you reach into the mass pools, but reaching them is required to capture market share.

Connecting the digital and physical worlds is essential. As noted in my last blog post, connecting the physical and digital worlds is a critical element to successful product sales, growth, and engagement. A low-cost connection is the use of an e-mail address; however, this isn’t always possible. Site registration helps, but most publishers allow multi-use of a registered e-mail address.

How can the Daily Miracle tell if it is my father-in-law or me accessing the site? He gave me his e-mail address and password, and the company behind the Daily Miracle doesn’t seem to mind that multiple IPs and multiple devices are accessing the site. My searches are then combined with his, and we end up trying to data profile two personas into a single data point (a single customer).

I suggest using a third party to bring the digital and physical worlds together. There are several that focus on the needs of the media industry. Reach out to them to help with the selection that is appropriate to how you manage your data and marketing analytics, and how you execute your cross-channel/platform efforts.

Here are my two cents on the state of the business model:

At the most basic level, the traditional media business model is based on generating enough revenue to sustain your business and satisfy shareholders by 1) having consumers pay to read (subscription fees) and 2) having businesses pay to place their messages (ads) alongside news content to reach a large audience at a low cost.

Unfortunately, both basic model inputs are changing. One, because of the proliferation of free sources of news. The other because their business model was disrupted, and their use of media has changed.

To continue as a viable business, the revenue streams feeding into the media model must change. The companies must produce products or offer services beyond the news on paper or pixels. On the consumer side, consumers now have unlimited and virtually free access to (almost) all the news content they want whenever and wherever they want simply by paying Comcast’s, Time-Warner’s, or other Internet service provider’s monthly access fee.

Think of the ISPs as the digital circulation department (with no revenue share back to you). Metered access and paywalls can put you back into the paid subscription business but must be done with considerable planning and caution. A wall without consideration of the long-term enterprise must be considered.

I often ask this: If 50% of your US$300/year print subscribers took advantage of the US$10/year digital rate, could you survive? What would happen if 75% converted? How about 100%? Consider the value of the content and the cost of content creation and infrastructure, not just the cost of delivery in your rate matrix.

The advertising side of the traditional model is under even more pressure than the readership side. Multiple fronts have collapsed the advertising revenues to a mere shell of the pre-Internet size. We in the media tend to focus on our own business model and what happened to it.

However, we need to shift our vision and look at the situation from the advertiser’s perspective. We often overlook the Amazon/eBay impact to advertisers. Their survival required them to rebuild their own business models and, in particular, when viewed from the media perspective, how they allocated their marketing budget.

In their fight for relevance in an increasingly digital shopping world, is traditional media spending needed?

The answer is simple and painful: They redirected traditional media spending to fund their own transitions to coexist in the digital frontier. The little businesses shifted to their “guy” who could work Facebook and Google Ad Networks.

The big boxes struggle is well-documented. Will they ultimately become small “showrooms” with fulfillment handled by drone/truck delivery to your doorstep? Think Tesla: small storefronts and no dealership lots. Order one and you get a phone call or e-mail that your car is ready.

There is hope! Retailers are learning the 10 zillion impressions they can get don’t turn into sales and have stopped some of the digital waste, but we need to reinsert ourselves into their business plans as a larger plank in their marketing budgets. Use your data to show the retailers value. And while you are at it, review how advertising is placed on your own Web site.

Have you inadvertently let a business bypass your internal (digital) ad sales by allowing local businesses to schedule their own Google Ad Network buys on your site? Typically, you sell your own “O&O” inventory at much higher rates (appropriate for the provided audience) than what a business can spend for mere pennies in a Google Ad Network ad that you may allow through your digital ad-serving platform. Make sure you aren’t allowing a backdoor to your site that lets the advertiser onto your site.

About Greg Bright

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