Data democratization moves publishers into new positions of first-party power
The dawn of a new day in data is a make-or-break opportunity for publishers to get it right in digital, with advantages in their favor unlike any others in decades.
As regulations and consumer interest in privacy make third-party data less valuable, and with the oncoming deprecation of third-party cookies, the rich vein of customer understanding that accompanies first-party data is worth more than it has been—perhaps ever—in the age of digital.
In fact, I’d argue that publishers are about to enjoy one of the biggest advantages they’ve ever had because they now hold the gold: first-party data.
And it’s about time. Publishers need to leverage what has been there all along in their datasets which would give them a distinct advantage for building out their advertising prowess: the highly specific first-party data that reflects the loyalty they have earned from consumers and which could become the key to new products—and new revenue streams.
Publishers sorely need this too, since the rich dollars they once earned off newsstands, subscriptions and national ad campaigns have receded ever back further into the past as digital native publishers have emerged and many traditional publishers haven’t learned to compete. Now, with third-party cookies going away and the primacy of first-party data, they can move into a position of power where they can have more value than just being “ad vehicles.”
Publishers can retool themselves to take a holistic view of all their data across all channels and do a bunch of things really, really well.
In fact, they can even compete with advertiser brands to develop direct customer relationships, having learned from what retailers figured out during the pandemic—customer experience and loyalty is everything. Now it is media brands’ turn to get this right.
At their side is a new breed of customer data platforms, or CDPs. These specialized data managers have emerged to help megapublishers, just as they already have done with brands to centralize and leverage their data. They include Action IQ, Amperity and Tealium, to name just a few.
What publishers have is content and reader loyalty, and what they need are new revenue streams from imaginative and novel experiences that they can offer their audiences.
They could offer newly tailored newsletters, emails, social channels and product offerings—or live experiences that they learn their subscribers are looking for—and only they have the first-party data that provides the actionable insights into what will work with their audiences and, in turn, that can serve the advertisers that want to reach those audiences.
“Publishers and a lot of other industries are realizing that their direct connection to customers is the key to their success,” Tamara Gruzbarg, Head of Customer Insights & Strategy at ActionIQ, recently told me. “Understanding first-party customer data helps companies demonstrate to consumers that they understand them, and they can really drive loyalty this way. And loyalty translates into direct revenue.” ActionIQ is one of these emerging CDPs and has beat out such legacy marketing clouds as Salesforce to win big-name media world clients like the New York Times, News Corp, Condé Nast, Pandora and Shopify (along with an impressive roster of nonmedia companies like Morgan Stanley, American Eagle Outfitters and e.l.f. Cosmetics).
From the publishers’ side, CDPs are very promising and this shift to new ways to use data for publishers could be a lifesaver:
● It gives them a unified real-time view of customers. For too long, brands have been obsessed with spinning up Snapchat, TikTok and new social channels, trying new video features, or testing the waters on ecommerce and affiliate links—frequently without understanding who they are attracting and how customers are really engaging right now. With a CDP publishers can know who is doing what, where and when within their universes. Every time a subscriber comes to the site, they can see: Is the subscriber engaging with different types of media? Is she listening to podcasts? Does he prefer audio versions of articles? All these signals create a much richer profile and give publishers much more information to act on about the engagement level and interest of a reader—as well as more to sell to advertisers.
● It lets them focus on engagement and personalization. The more publishers understand their customers, the more they can improve engagement, and the more attractive their platforms become to partners and advertisers. More precision in identifying audience segments and how they react to particular products equals more opportunity to market to those readers. Publishers that have multiple media properties can bring all the data together to create larger segments across several properties (say, WSJ.com, Realtor.com and Barron’s for News Corp, or the New Yorker, Esquire and Vanity Fair for Condé Nast). Bringing together customer behaviors and affinities makes them more valuable to advertisers.
● It keeps them out of legal hot water. A CDP allows publishers not only to unify data but build the right governance around it: Who has access to which data across business units, and at the same time operationally make it streamlined and efficient so they can run campaigns globally across different business units.
● It lets them work faster and smarter. Esfand Pourmand, senior vice president of global subscriptions at News Corp, put it this way in a recent webinar on the topic he did with ActionIQ: “A year ago, we were very channel-specific. ActionIQ allows us to centralize our operations and think about our customer, agnostic of which channel they're on to understand how that customer flows through our products.”
● And most important: It drives new revenue streams, even new potentially nonmedia products. If advertisers understand a media brand has a large segment of people interested in a topic, they can create new products and services that feed these kinds of audiences. Imagine Condé Nast creating fashion products and services that satisfy a particular interest set or partner with product brands, retailers and service providers for offerings that might be attractive to the target group. Pourmand of News Corp had thoughts there as well: “In addition to leveraging the use of our audiences across business units, it allows us to think about the right products to build for those audiences and that's really exciting for us. I think that's the next step.”
For years publishers had legions of expensive human CDPs—people at high salaries who might take days or weeks to build SQL queries to provide the kind of return that shines a light on the business—and yet they weren’t truly considered “core” to the business. Digital CDPs can deal with those very complex problems and datasets in real time and at scale.
But doing it all right is hard as hell. It involves painful stuff like rewriting the paywall meter, moving systems to the cloud, fixing the data infrastructure, etc., etc., etc. Not to mention ongoing investments in R&D, endless A/B testing, and more. As Nick Rockwell, former CTO of the New York Times, says about the process of going from 1 million to 4 million subscribers in 4 years with the help of a CDP: “It was a lot of work, and migrating each data flow was painstaking work. But it was worth it, and we ended up with a single source of truth for almost everything… That really transformed our understanding of the business and our ability to test and learn.”
None of this is cheap—but it’s shaping up to be worth it.
Pourmand of News Corp has framed it this way: “As we test our way into it, the KPIs that we're moving are proving the model. Our efforts around customer engagement, subscription growth, activation rates, retention rates——we're hitting our goals with this approach. And when you have your data centralized, you rely on that to feed all the other channels.”
One of the most powerful things that CDPs bring to publishers is the democratization of data and insights across the organization. “You don't have this bottleneck of SQL programmers that need to spend time writing queries and running reports and presenting it to the business,” says Gruzbarg at ActionIQ. “You don't need to have specialized skills to get to the data and understand the insights and activate them. Anybody that works with customer data, it could be customer service, editors, anybody who wants to see how people react to certain things, can get the data and act on it.”
In a customer-centric world, first-party data (and the new revenue streams it promises) remains the most valuable data of all. For the media brands that get it right, they could well reassert the strength they haven’t had since the late 90s, empowering them to take advantage of what only they have.
