News publishers struggle to tie data to business strategy. Resource-centric focus leads some astray, as more data doesn’t equal more revenue. Based on the original theory of digital disruption, I propose a novel approach to figure out what data news publishers really need.
The CEO of a large European publisher asked me: “Is data our new core business or just one of many resources?”
At the time, in February, his company struggled with a decision about whether — and how much — to invest in a new data platform. His team met vendors, benchmarked with peers, but continued to struggle:
How much data do we really need?
Thinking of new privacy regulations, new policies by tech platforms, and changing consumer attitudes, will data be the source for competitive advantage in the long-term?
Another CEO, of a mid-sized media company, walked me through a data strategy approved in 2018. Two years and a few million dollars later, he had a data department staffed with a few scientists, engineers and analysts, a data lake, a 360-degree view of customers, and fancy-looking dashboards. But what was the overall business impact?
The initiative proved more complex than expected, tied key managers’ time, and required tremendous effort across departments. Ultimately, the value was hard to measure. Late last year, the company signed up a management consultancy.
The CEO wondered: “What return on investment can we expect and when?”
These publishers are no exception.
Four steps to align data and your business model
I offer this practical framework on how to tie your data to business strategy: focus on maximising the value you generate for your customers so you can fix the business model — and then ask how data analytics might help.
The plan in four steps:
1. Analyse your business model by mapping customer value chains — the series of activities customers perform to accomplish their needs and wants. These activities generate either value or cost for customers.
For example, these are two main categories of online news media customers:
A subscriber value chain: Search for news > Visit news sites > Try content, features > See subscription offers > Buy subscriptions > Use content, features > Renew subscriptions
An advertiser value chain: Identify segments > Plan campaigns > Produce ads > Target ads > Optimise campaigns > Document results
2. Research and analyse the required resources and skills needed to create value or reduce cost for customers at each activity. How can analytics help? What data do you need for those analyses?
The result is a list of customer-centric use cases for your data at the most critical customer activities.
3. Compare this to the resources and skills you are currently holding at your company and spot the gaps. Where is the biggest room for improvement? Where is the business opportunity?
The gap analysis helps to scope your data gathering priorities. In my experience, a Pareto-like rule in which 80% of the business impact will come from 20% of the data sources and analytics tools applies.
4. Consider how best to obtain the resources and skills that you are missing. Focus on the 3Bs. You can either Build them yourself, Borrow (i.e., partner with another company), or Buy.
Research, benchmark, or find advice on what technology, people, and investment are necessary to generate the value you seek, as well as the estimated time to see this value. This helps build a business case for your data initiative, prioritise actions, and plan the roadmap.
When it comes to the business of news, data might not be the new oil, but it is certainly the primary lubricant easing value creation for customers.