Future of news media: content, advertising personalisation – February 2018

By: Matt Lindsay
President Mather Economics

The advertising industry long ago realised the benefits of targeting audiences that are likely buyers of the products they are promoting. “Auto-intenders” is a designation given to those individuals who have indicated an interest in buying a car through their actions online.

Advertisers will pay a premium to reach a targeted audience relative to a general one.Advertising products that offer audience targeting have grown at the expense of other types of advertising that do not.

Publishers also need to adopt personalisation and targeted customer interactions to maximise both audience and advertising revenue.

Targeted subscription pricing is one tactic that has helped publishers replace lost advertising revenue. Different pricing by customers not only allows publishers to get more revenue from those customers who are able and willing to pay more, but it also enables them to retain price-sensitive customers who would usually stop their subscription due to a large price increase.

They retain those price-sensitive customers who will receive a price increase at some point in the future when they will be more likely to pay it. Targeted pricing is used by airlines, hotels, telecommunications, and other industries.

One-size-fits-all metered paywalls have a similar problem as across-the-board pricing strategies. They give all prospective customers the same experience, which is too much “free” content for some and too little for others. The opportunity cost in this case is lost digital advertising revenue and too few digital subscribers.

An Intelligent Paywall avoids the problem of significant digital advertising revenue loss by identifying those customers who are more likely to subscribe and targeting them with subscription offers.

Combining insights on the propensity for an individual to subscribe with an understanding of the advertising inventory that customer would provide if left to consume content without a subscription offer enables publishers to determine how best to monetise the interaction with the customer.

The more detailed and personalised those insights are, the more digital revenue the publisher can generate.

An important detail that is lacking in most digital data is the combination of digital advertising revenue with content consumption for individual customers. This is a result of the way advertising impressions and content consumption data are captured on most Web sites.

Audience tracking tools capture content consumption — typically the number of pageviews and unique users. Advertising servers capture and report data on delivered impressions, CPMs, and click-through rates.

The challenge for analysts is that these data sets do not merge easily, if at all, at the level of the individual visitor. The data must be merged at a “lowest common denominator,” which typically requires aggregation of the data to a day-site section or hour-site section.

Capturing data on content consumption, advertising impressions, and advertising revenue by the customer page view enables personalisation of the digital user experience. Publishers can decide what content is best to serve a customer based on her status as a subscriber, her appeal to advertisers, and her potential for future audience revenue by identifying what content will maximize total digital revenue.

Likewise, content can be valued using data on the advertising revenue and subscriber conversions it has produced. Newsrooms can make informed decisions on where to invest resources, what content to deliver to individual customers, and what aspects of the user experience are most important to a customer.

Personalisation of subscriber lifecycle touchpoints are able to improve acquisition, retention, and re-acquisition campaigns. Event-triggered communications can avoid subscriber losses by taking action when behaviour patterns by an individual change. In-case-you-missed-it (ICYMI) e-mails can send content of interest to a customer if he has not logged in to the site in a few days.

All of these are examples of mass personalisation made possible by detailed data and the automation of analytics and marketing communications.

The future news media business model will rely on maximising total revenue from its audience and its advertising inventory across all platforms. Understanding what content and which customers are generating that revenue is the first step. Understanding how to adjust the products, sales channels, and customer experience to maximize total revenue by individual is next.


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