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By Domenic Venuto
Recently, over coffee, a senior executive from a national magazine publisher asked me how the media meltdown was treating me. Acknowledging it was grim, we lamented the decline of print advertising, the shutting of titles, the pullback in spending, the massive number of layoffs affecting friends and colleagues and bankruptcy filings of newspapers around the country.
This conversation reminded me of a meeting I had several years ago with the chief operating officer of a national publisher who asked me what they could be doing better online to grow audiences, increase print subscriptions and attract more advertising. I was overwhelmed with the challenges that faced the organization and the magazine industry at large. There were so many broken pieces I didn’t know where to start or what I could tell him that would help ease his anxiety. Print editorial needed an education about the possibilities of online; technology systems needed upgrading and fine-tuning; the sales team needed unity; the organizational structure needed changing to integrate online; and senior management needed patience to see digital strategies yield results.
The industry has come a very long way in the past few years. Magazine publishers have been systematically addressing these problems. They have been slowly gluing the digital pieces to their print backbone, occasionally breaking off a piece to reattach it differently.
While there is always more work to do improving digital experiences, creating engaging applications and extending brands to new platforms, the industry has come a long way. I can also tell we are entering a new period of industry development and advancement.
Data is now sexy. Very sexy. At the same time that publishers were looking to capture market share online they realized they sit on a gold mine of information that isn’t used anywhere near its potential. The customer data they were collecting in different databases across their organization and, sometimes with third parties, would allow them to better monetize their smaller audiences, not just for advertisers but for themselves.
The switch was flicked early last year. Suddenly publishers turned their attention to data. They became interested in building unified customer databases, repositories that captured a 360 degree view of the customer and consolidated behavior across brands and distribution channels. Whatever the phrase, it is behavioral targeting on steroids. All efforts focused on consolidating information about a user’s online activity with their offline behavior. For example, connecting print subscription databases with online registrations or website activity and call center interactions.
The data was always there, but no one was looking at it beyond customer demographics, page views and uniques. Publishers realize that the scarcity of consumers’ attention, rather than the abundance of content, is where additional value lies. It is a subtle distinction, but one that is driving projects to connect a subscriber’s print subscription with their online activity (e.g. site visits, newsletter sign-ups, application registrations, etc.) and call center interactions.
There are several benefits to this consolidated-data view of the customer:
• Improve targeting of users for advertising (increase CPMs) and/or better subscription management—the ability to identify print subscribers online and entice them to renew, step up or cross-sell other titles/products.
• Develop and introduce new products targeted to users predisposed to that offering.
• Reduce customer service costs by consolidating and streamlining self-service functions.
• Personalize content and editorial served to the user based on their behavior. For example, as an Entertainment Weekly subscriber, I am served more entertainment news when I visit CNN.com.
Publishing aside, financial companies, CPG and retailers are also extremely focused on data. They collect data from every customer interaction—television ads, mailers, Web visits, call center calls, deposits, coupons—and connect the data dots between customer touch points to understand the effects of each interaction on the acquisition and retention lifecycle. By measuring and analyzing each touch-point they strive to minimize acquisition costs and increase wallet share.
Creating one view of the customer across online and offline channels isn’t an easy task, but the investment will yield significant results. If publishers don’t consolidate customer behavioral data across channels, new market entrants unencumbered by organizational silos, legacy systems and antiquated databases will leave them behind.
There are publishers working on these projects right now and expect to go live within the next 12 months. While this economic climate has everyone focused on immediate results, don’t push complex data projects to the bottom of the list. In fact, given the lead time required, now is the time to invest in data projects that will increase your customer base and revenue per customer. The outlook for the industry may look bleak right now, but given the progress made it isn’t as overwhelming as it once was.
Minsiders columnist Domenic Venuto is SVP and Head of the Media and Entertainment Practice with the New York City office of Razorfish. He can be reached at domenic.venuto@razorfish.com.
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