Much has been written about the importance of Big Data and how it can be used to impact and optimise strategy.
Vast troves of data can be parsed and analysed to uncover new opportunities previously buried within the data.
Once completed, these opportunities can be coalesced and integrated into a strategy plan that quantifies the optimal level and allocation of acquisition and retention investment dollars, and translates them into an annual budget and predicted return in circulation, top-line revenue, and bottom-line cash flow.
At this point, most news media companies stop and congratulate themselves on a job well done.
Not so fast.
Stopping at this point is a massive mistake. A substantial execution gap exists between the completion of that budget and true optimisation.
By stopping once the optimised plan has been approved, most news media companies miss out on the final, most important step of optimisation, which is tracking. This is an activity that effectively “closes the loop” on the optimisation process.
Ignoring tracking is the equivalent of running a marathon and then choosing to veer off the course in the 26th mile with the finish line in sight and instead head home. Yes, the last mile in any race is the longest and sometimes the most painful, but it is also the most important.
Such is the case with tracking. If you have come so far to optimise, why stop so close to the finish line and miss the opportunity to complete this final critical activity, which makes the entire process so valuable?
What are the excuses news media executives offer as to why they don’t track?
At Impact Consultancy, we ask this question often, and here are some of the most common explanations we hear from news media executives, along with our responses:
- “The needed data is unavailable or too hard to collect.”
This comment is understandable, as many executives struggle to know what data to collect. But our experience is that almost 100% of the data needed for optimisation resides deep within a news media company’s IT systems. It is only a question of unearthing, consolidating, and using it in the right ways.
- “I have bigger day-to-day priorities than tracking.”
This is a fair response, as most circulation executives are fighting fires on a daily basis just to keep the trains running on time, so those issues attract a disproportionate share of mind over long-term optimisation. But you are not the only one who can be doing the tracking, which leads to …
- “I don’t know what to do with the data once I have it.”
This is also a common answer, and the most reasonable. At Impact, we have asserted for many years that it does not usually make optimal sense for you to optimise because the expertise needed to know what to do with the data does not typically reside in-house. (For more information on this topic, please read our July 2015 blog article, “Great data — like great content — should not be free.”
- “I already know what the data is going to say.”
This is a huge fallacy. Almost without fail, we hear this at the start of practically every engagement. However, the proper analysis uncovers realities and opportunities that truly surprise the client, usually in the area of where their investments in acquisition and retention are generating and destroying value.
- “It is too complex to change anything, so why bother?”
This is also a large fallacy. While it may feel as though nothing can be changed because the problems are so embedded and complex, nothing could be further from the truth. Change is available – news media companies simply need to make the commitment to change along with a blueprint to know which changes to make.
What should news media executives be acknowledging about tracking?
As a result of these excuses, news media companies that choose not to close the loop through tracking suffer from an entirely new set of problems. Rather than explaining away why tracking cannot or should not be done, what they should be acknowledging are the following realities:
- “I am not exactly sure how I am doing during the year.”
Without tracking, it is impossible to measure the performance that matters throughout the year. As will be explained later, the most effective and responsive tracking occurs monthly, so if a formal tracking system is not in place, how is it possible to know how any strategy is performing?
- “I don’t know if further action is needed to make our plan.”
Building on the prior point, if it is impossible to measure performance, it is certainly not possible to know whether any further changes in strategy are needed throughout the year to fill any performance gaps that may arise.
- “I can’t adjust my tactics to get to the right answer.”
Similarly, a lack of tracking capability makes it impossible to know whether or not to tweak certain tactics in a given strategy to meet its projected performance.
- “I can’t test new ideas that have come along.”
In spite of the best laid plans, new opportunities and challenges present themselves throughout a year, and there are likely to be a subset of them worth testing. However, if you don’t have an institutionalised, consistent way to measure the performance of those tests, you are basically guessing as to their effectiveness.
For all of these reasons, with Big Data available as a viable tool, there is no excuse to not close the loop.
How can I close the loop?
If you recognise the critical importance of tracking, the next question is to determine how to implement it, starting with the selection of the optimal tracking system. Any effective tracking system must possess the following characteristics:
- Sophistication: A worthwhile tracking system must track advanced circulation and acquisition metrics. Rates of return (including all of its drivers – acquisition cost, net margin, retention) must be tracked dynamically so a news media company can assess how its investment dollars are performing and understand why it is over or underperforming.
- Timeliness: A worthwhile tracking system runs every week or month so news media executives can see the performance of their acquisition campaigns from the prior week as well as on a year to date basis. Timely information means executives can make quicker changes to strategy and tactics.
- Micro-targeting: A worthwhile tracking system should track at the lowest, most actionable levels, e.g., not just by acquisition channel, delivery frequency, or zip code, but by delivery frequency within an acquisition channel, by acquisition channel within a zip code, etc.
- Efficiency: A worthwhile tracking system is completely automated, so a circulation staff no longer needs to spend any time manually collecting data. Instead, staff will have more time to actively manage and improve its circulation business.
- Consistency: A worthwhile tracking system extracts and calculates the same data every time, so executives will always have an “apples-to-apples” comparison and thus avoid the human error that occurs when different employees pull different sets of data manually.
- Benchmarking: When a newspaper is part of a large chain, a worthwhile tracking system should provide a benchmarking report that shows key metrics across all newspapers using the system. With this capability, exemplary and underperforming newspapers can be identified at a glance.
- New releases: As new metrics, segmentation schemes, visual views, and approaches are identified, a worthwhile tracking system should incorporate these into its system.
When it comes to optimal performance, do you want your company to be considered truly great? Here are the standards we use to categorise a news media company:
- Good companies use analysis to create thoughtful, integrated strategies and budgets.
- Great companies do all of the above and constantly check back to see how they did.
- Truly great companies recognise the iterative nature of the entire three-step process and do it over and over again.
Based on our experience, almost all news media organisations fall into the first category, i.e., they generate one-off analysis to try to create thoughtful strategies and budgets. However, it is rare to find the great company that checks back sufficiently (once a year is nowhere near enough) to determine whether a strategy worked.
And the truly great companies are the ones that understand the critical importance of the entire optimisation loop. These companies are extremely rare.
At a truly great company, the optimisation process is akin to a carousel. When riding it, you travel a great distance, but once you travel the furthest from your starting point you are right back when you started, ready to begin another loop.
If you ask yourself whether you want to strive for excellence, you are missing the point. Today’s cut-throat environment is such that you need to strive for excellence.
Optimisation is no longer optional. And if you have run the marathon race with the finish line in sight, don’t let the imposing nature of that last mile intimidate you. Yes, you are tired, but the payoff from finishing the entire race is well worth the effort.