What Keeps Digital Publishing Execs Up at Night? Part 2: Over-Relying on Advertising

Having discussed monetizing the mobile channel the series of blogs on conversations from the Digiday Publishers Summit continues with another challenge that publishing execs are grappling with:

Over-relying on Advertising as the Sole Revenue Model

What’s the most common revenue model in digital publishing? It’s advertising, of course.

Why is that problematic?

It’s not just that, as discussed in a previous blog,  display ad CPMs on mobile are very low (compared to desktop). But it appears that display ad CPMs in general are under downward pressure, supported by this quote from The Economist’s Tom Standage:

“The Economist has taken the view that advertising is nice, and we’ll certainly take money where we can get it, but we’re pretty much expecting it to go away.”

Why?

When something is commoditized, its perceived value goes down. So, given how much the Internet is flush with content, it is no surprise that CPMs are falling because the perceived value of content is lower.

So, what do publishers say they must do?

At The Economist, Tom says it is selling subscriptions to busy readers who don’t have time to scour the whole Internet to learn what they need to know. Instead, The Economist’s value is that the reader learns what they need to know in a compact format, whether that is in the print edition or mobile app.

It is also banking on thought leadership, i.e. organizing conferences and papers that can be sponsored. At Lyris, we would call this a niche publishing approach – getting the right, compact information to the right targeted audiences. Our CEO John Philpin talks about this in an article for Adotas, writing,

Any business that wants to pursue ‘true differentiation’ needs to establish a product that, in the mind of the consumer, is markedly and undeniably different.”

At The New York Time Digital, it is called “Services.” At the Digiday Summit, Paul Smurl, general manager of core digital products for The Times also emphasized his conviction that publishers must reinvent their revenue channels and go beyond advertising to secure their future. He shared his excitement about the new “Services” that save their audiences time and effort, for example:

  • A new cooking site that offers a one-click option to purchase all of the recipe’s ingredients and have them shipped to you.
  • Or a travel channel that publishes curated, high-value travel vacations and makes it easy to book them.

Bottom-line, there is so much content on the Internet already that publishers must reinvent themselves to go beyond advertising.

Here’s our team’s take.

Very similar to the examples from The Times and The Economist, Lyris and the clients we serve in the publishing industry are big believers that value is produced by bringing the right content to the right recipient at the right time through the right channel.

It’s about taking a page out of the playbooks of Facebook and Google, who are masters in content distribution and creating relevant experiences.

And, it doesn’t take an army of programmers to do this. Thanks to machine learning intelligence and with the help of the Lyris Audience Messaging platform, publishers large and small are able to let automation work for them.

The key is that we’re living in the age of data and analytics-driven intelligence. An interesting glimmer of just how key data is to the future was shared by the speaker from ABC at the Digiday Summit. Namely, Disney is working on consolidating its audience data into a common DMP platform so that it could perhaps be shared between Disney brands one day in the future in order to drive more targeted display advertising. The better the data, the more fine-grained a sponsor or advertiser can target an audience.

Likewise, there are publishers that talk about banding their data together in a data co-op to achieve similar scale across multiple publishing empires. While all this is still focused on advertising, the more powerful data can help these publishers defend themselves against the looming future where the Facebook and Google IDs could become the only relevant display ad targeting IDs that matter, as the speaker from ABC hinted.

Lyris’ Strategic DOs and DON’Ts:

  • DO look for ways to reinvent your publishing model and how you provide value to your audience.
  • DO drive your niche publishing and distribution strategy based on the richest audience data you can gather.
  • DON’T neglect audience messaging automation to the ‘Channel of One’ as part of your strategy – it would only be at your own peril.
  • DO appoint a Chief Audience Data Officer to work tightly with the monetization team to design value-based programs for your audience.
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Cross-posted from the Lyris connections blog.

What Keeps Digital Publishing Execs up at Night? Conversations from the Digiday Publishers Summit, Part 1

Was it night-time skiing? Or partaking of certain vision-enhancing activities that happen to be legal in Colorado?

No! That’s not what’s keeping publishers up at night – it’s the  top business challenges that they grapple with, and that the executives attending the Digiday Publishers Summit 2015 in Vail, Colorado almost unanimously lamented:

  • Monetizing mobile
  • Fighting or friending Facebook, Google, and other platforms
  • Over-relying on advertising
  • Content is not king
  • Maximizing existing investment in technology partners

The Lyris team including myself were at the Summit listening, sharing, and learning alongside the larger numbers of digital publishing execs there. We’ll explore each of their top challenges in a five-part blog series, starting with this one:

Challenge #1: How to better monetize the mobile channel

By far the biggest challenge that came to light is how to better monetize publishers’ mobile channels (e.g. apps) since display advertising CPM fees are just one third that of the fees that publishers can charge for their regular website.

Brian Morrissey, editor-in-chief at Digiday, dubbed it, “Mobile is eating the world.” Just about every publisher listed it as one of their top two challenges.

No wonder. For most publishers, the majority of their audience has shifted to using mobile devices. So the low CPMs threaten to decimate publishers’ incomes. Yet, the call for how to get the CPMs raised remained unanswered.

How Lyris helps publishers address the challenge

Publishers, you are looking in the wrong places! Guess what is the number one activity that consumers engage in on their smartphones? It’s checking email!

Marketing Land: Email is Top Activity on Smartphones, Ahead of Web Browsing & Facebook

Publishers in-the-know take advantage of email to engage their audiences while they are on their mobile devices. These publishers drive additional advertising revenue both within the emails and on their regular, mobile-first websites when more readers click through from the emails.

Lyris recommended DOs and DONTs:

  • DO take advantage of email – the channel that marketers every year consistently rate as the top channel for driving marketing ROI, far above social media.
  • DON’T merely blast email newsletters at your audience – nobody likes to read static newsletters.
  • DO partner with your email marketing provider and request their assistance to optimize audience engagement for you with the help of best practice audience messaging programs, e.g. welcome programs, preference centers, triggered updates, retention offers, and win-back.
  • DO maximize the relevancy of messages to each individual recipient by taking advantage of automated content personalization that intelligently assembles and delivers the exact content for each recipient that he or she is most likely to engage with.

 

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Cross posted from the Lyris Connections Blog

The central role of digital channels in the Omni-channel world

The original version of the chart below was created by Kevin Cavanaugh back in Unica days (Kevin’s now CTO at Allant Group). Still to date it’s one of the most popular pieces of thought leadership content I carry around with me on my USB drive everywhere I go. Folks in the audience often take pictures of this during presentations.

What it shows is that customers engage with our companies through so many channels and that some of these channels are more likely to be used during certain times in the customer lifecycle. For example, after learning about a brand via mass media commercials a prospect might grab their tablet to learn more about the product and then ultimately call the call center to ask further questions and sign up or purchase.

Channels of interaction over course of the Lifecycle

Channels of interaction over course of customer life cycle

Yet, over the years there has been a dramatic change. Kevin originally created this chart to visualize how critical it is to integrate online and offline channels for successful customer strategies. That is also how the chart was introduced in my book in 2008.

But today when you look at the chart you see an expanded number of digital channels at the heart of it. Digital is slowly taking over the chart. And the #1 take away from the chart today isn’t the online-offline integration anymore.

Rather, it’s that digital channels in themselves are an Omni-channel world ranging from website to tablet, phone, email, ad networks, social media networks, etc. Many of the most successful digital marketers today tie these digital channels together for continuous customer engagement. When a customer drops off from one channel, they continue the dialog with the customer on the next channel that he or she comes back on. That is assuming that the customer has at some point authenticated on each channel or device so he or she can be identified again.

Optimizing each of the channels and devices is bread & butter. But optimizing how they play together — that’s the Nutella on top.

One fun anecdote is that back when Kevin first created this chart we had question marks for the role of mobile in the customer lifecycle because the smartest phone around was still the Blackberry back then. It wasn’t clear at all back then how mobile would be used in the customer life cycle. Boy have we come a long way since then. Mobile is everywhere now.

Moneyball Meets Marketing: How the best-in-class actually use big data to increase digital marketing results

The movie Moneyball isn’t really about baseball. It’s not even about statistics. It’s about the way data can be used to challenge conventional wisdom, and its something those of us in the field of marketing metrics have known for a long time. And yet, too many businesses are missing out—for example they know that there’s a lot of buzz around big data, but instead of seizing the opportunity they ignore it.

That is to say almost all use data for creating nice dashboards by now, i.e. small data.

But many aren’t yet using the underlying big data and analytics to make the transition from one-size-fits-all marketing to behavior-based, personalized marketing programs. That is despite the fact that both marketers and customers stand to gain when interactions are more relevant, helpful, and real-time.

Why is it that many marketers aren’t yet taking advantage of big data analytics, especially in digital channels that are a natural fit, such as the web, mobile and social media? An answer to this question (and many more) is to be found in the results of the 2013 Big Data for Marketing survey from Trip Kucera, at the Aberdeen Group. Here’s what they found:

  1. There’s too much information in too many places: 35% of organizations say that integrating multiple data sources is a challenge.
  2. They don’t understand the benefits: 30% are having a hard time understanding how marketing analytics could be used in their companies.
  3. They lack the talent: 30% are having problems finding the right people with the right kind of knowledge of marketing analytics.

So what’s keeping your organization from leveraging big data in your marketing?  I’ll be taking part in a webcast featuring more results from the survey, along with Trip Kucera and Graeme Noseworthy, Big Data for Marketing, Media & Entertainment. Register for the webcast to join us and find out how the best in class in the survey incorporate data analytics into marketing programs—and how you can, too.

 

Announced today: IBM Marketing Center

IBM today announced the new IBM Marketing Center — an all-in-one solution that combines digital analytics data with real-time marketing execution. Marketing Center provides A/B testing, website personalization, email marketing, and more.

For more information and to download the data sheet see the product’s web page at ibm.com/marketing-solutions.

What I find most exciting here is that digital analytics and marketing are glued together in a single application: i.e. there is no room for a chasm between analytics and action anymore!

Strategic Roadmap for Digital Marketing in 2011: eBook for Marketing Execs

15 authors, 15 articles. Free, yet with priceless insights.

Learn from marketing thought leaders how to engage with customers and create value for stakeholders in a complex digital world. Covers digital channels, marketing techniques, accountability and technology. Truly a must-read resource for every CMO!

One-click Download from CustomerThink.com (no registration required)

With many thanks to our producer, publisher, and my co-editor, Bob Thompson at DigitalMarketingOne.com and CustomerThink.com

And, of course, all my gratitude to our 15 authors, bloggers, consultants whose insights into digital marketing strategy make up this ebook.

Together, we set out to puzzle together the silo’d niches of digital marketing into one coherent strategic roadmap. The resulting strategy advice could maybe be summarized as follows (and I hope I am doing justice to all my co-authors):

  1. Derive digital strategy from your overall marketing mission and the role that you want digital to play in it
  2. Pay attention to the special nuances of each digital channel but also fuse the channels together into a cross-channel approach
  3. Do the opportunity with digital marketing justice by making appropriate use of its biggest strength: intelligent interactivity
  4. Consider the additional contribution that digital channels and analytics can have on your online-offline customer sales and marketing programs
  5. Get more of what you want (e.g. revenue, budget, etc.) by investing in marketing accountability and ROI optimization
  6. Derive technology strategy from your overall digital strategy

 

 

News today: IBM announced the new IBM Coremetrics Digital Marketing Optimization Suite

The following is cross-posted from the original at the IBM Unica blog.

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Exciting news for our IBM Unica NetInsight OnDemand customers and really all marketers: IBM today announced the new IBM Digital Marketing Optimization Suite which accomplishes three great “coming-togethers”. Namely, the following:

1. Combines the Best of IBM Coremetrics and IBM Unica NetInsight OnDemand

Since IBM’s acquisition of Coremetrics and Unica our web analytics teams have been merged together like a deck of cards to make the best use of the combined development and best practices expertise. Our combined team now takes care of both IBM’s on demand and on-premises offerings and customers for web analytics.

And as previous competitors, it was much to my surprise that we had been very like minded in the decade leading up to this merger. Both Unica and Coremetrics had been working in parallel to make sure web analytics delivered not just reports for optimization but also provided individual customer insights for refining relevancy of marketing messages.

2. Fuses together: Customer Profiles, Analytics, and Digital Marketing Execution

The next great coming together I see for our customers in the IBM Coremetrics Digital Marketing Optimization Suite is the tight integration between LIVE Profiles, Web Analytics, and the IBM Coremetrics Digital Marketing Applications such as IBM Coremetrics LIVEmail and IBM Coremetrics Intelligent Offer. This tight integration is the secret sauce that enables our users to execute more relevant digital marketing campaigns driven by analytics. The IBM Coremetrics suite inherits this product design from the Coremetrics side where this combo had been available for years while other vendors were merely talking about it in Powerpoint presentations.

3. Adds a More Flexible and Open Data Architecture for Multichannel Analytics

Now, like D’Artagnan teaming up with the three musketeers, the new IBM Coremetrics Suite adds increased flexibility and openness to the trio of LIVE Profiles, analytics, and digital marketing applications. This is being achieved thanks to experience and technology assets coming from Unica NetInsight OnDemand. And it is a true 1+1 = 3 situation. Not only can marketers extend their analytical lens by combining online and offline insights (using the new IBM Coremetrics Multichannel Analytics add-on), but now they can also target digital marketing execution programs, e.g. through IBM Coremetrics LIVEmail, using the cross-channel picture of an individual’s interests.

The Result: Two Great Growth Paths for our Customers

All marketers have web metrics available to them. Competing on analytics requires us to be cleverer with our use of analytics than the next marketer.

Technology needs to be our “power arm” that helps get things done quickly that would be very tedious, expensive, and time consuming otherwise. The new IBM Coremetrics Digital Marketing Optimization Suite provides IBM customers with a “power arm” that helps them go beyond commodity web metrics and move towards digital analytics where discovering new opportunities with segments or individual prospects and customers means more strategic opportunities.

Our customers also have another growth path to go from analytics to digital marketing execution, and from there to integrations with their enterprise (e.g. to their Netezza data warehouse or their IBM Unica Enterprise Marketing Management system), and with the rest of their digital marketing eco-system, e.g. through the eco-systems of IBM Coremetrics LIVEmail (i.e. Email service providers), and IBM Coremetrics AdTarget (i.e. display ad networks).

Now the ball is in your court. How are you going to put all these multichannel analytics and digital marketing opportunities into the race for beating out your competition?

For Our Customers …

Existing NetInsight OnDemand and Coremetrics customers, please keep your eyes peeled for further information by email. Please register for the upcoming customer-only launch webinars. There is no requirement to move to the combined solution immediately. IBM plans on continuing support of the existing Unica NetInsight OnDemand and Coremetrics versions into the future, accompanied by the same industry leading service and support you have come to expect. IBM believes there are compelling components in the combined release that are meaningful and important to your business. In the launch webinars, you will learn about all the great business benefits that our Unica NetInsight OnDemand customers that upgrade will have available. For example, all customers can use their current and new release in parallel during their upgrade process.

For More Information …

Please keep an eye on Unica.com and Coremetrics.com as we will progressively publish more details in the next 10 days of about the new capabilities that our customers can expect. For now, see:

 

 

RPM, Revenue Performance Management: Will the Term Stick? By Lauren Carlson

Earlier on this blog I referenced an article by Steve Woods  from Eloqua on RPM, Revenue Performance Management. RPM is a relatively new term in the area of demand marketing optimization. Will it stick? As I was writing earlier, there seem to be so many terms already that describe B2B marketing automation. Why another one?

Lauren Carlson wrote a post on that topic is a good read.

So will it stick?

I like of course the idea of scientific, analytics driven, revenue optimization.

But I fear that the term is at risk because it is so broad.

Not marketing optimization

not customer optimization

but total revenue optimization.

So everybody is responsible for RPM, and if everybody is responsible the danger is that nobody takes responsibility.

 

In a world of credit cards, what’s the point of retailers’ savings cards anymore?

When talking about retailers’ savings / discount cards, the first thing the analytics industry used to point out was the benefit for customer identification. The card helped tie transactions to known customers or households and facilitated the range of well known customer analytics such as:

  1. Market basket analysis across transactions
  2. Shopping preferences segmented by any demographic information that was supplied when signing up for the card
  3. Loyalty analysis in terms of RFM and latency
  4. Response analysis to preceding marketing contacts
  5. Marketing targeting analysis based on past purchases

And so Wikipedia still says: “The store — one might expect — uses aggregate data internally (and sometimes externally) as part of its marketing research. These cards can be used to determine, for example, a given customer’s favorite brand of beer, or whether she is a vegetarian.”

[Read more →]

To Test or to Target? Where to Start for Best ROI?

The previous post had concrete recommendations for proving the ROI of behavioral targeting. Several smart reader comments brought together a pretty clear picture.

However, when I was meeting with a number of experienced online bankers in Europe recently, the question that I received was more difficult to answer than just proving the ROI of targeting.

Namely, the question was whether one can expect greater ROI from testing or targeting? Whichever promises greater ROI, shouldn’t that be where you may want to start?

[Read more →]