John Seely Brown and John Hagel of Deloitte have published research indicating the topple rate – the rate at which big companies lose their leadership positions – has more than doubled over the past 40 years. Today’s “winners” are in precarious positions. Inability to adapt to relentless change and the fast pace of today’s society mean that market leaders hold an ever shrinking window of dominance. Innovate or die has never been more appropriate.
The digital media industry is no exception, despite the perception that some elements of the industry have stagnated. What are the changes we can expect this year in media? I have highlighted the six shifts that I think will have the biggest consequences for the next twelve to eighteen months. Understanding these trends is important so that you can know how to take advantage of this change and help your company be ahead of the curve.
1. Big Data Has Arrived
Already, big data is the talk of the digital world. Web analytics is rightfully seen as a planet that’s part of a bigger data solar system. Everyone is looking for that next great advantage from leveraging massive and/or disparate data sets to have a holistic view of customers, of transactions, and of ever richer advertising segments. We can show you the amazing benefits of doing so and understand how to take a thoughtful approach.. However, don’t automatically run off and tell everyone in your organization that you need big data or else. Consider this very thoughtful article written by Caribou Honig that emphasizes BUSINESS strategy over data strategy.
2. Leveraging Advanced Statistics & Predictive Analytics
While big data cubes with mashed-up data from various sources is all the rage, we have already helped several media customers overcome barriers to expensive data integrations by combining and running statistical analytics scenarios against their disparate data sets. This can take the form off better definingdefining user segments and ad sales profiles, optimizing your marketing channel spend, and efforts to drive subscriptions, or better predicting your avails and inventory. You can read more about it here and here.
3. Managing the Hurricane of Digital Information
Five to six years ago, digital data and analytics information was considered so valuable, any data was good data. People begged to know “everything” and wanted to track, measure, and report on literally everything. It started to rain data. Those rains turned into hurricanes and floods followed. Despite our evolved approaches to data usage that flood has never receded. Many organizational decision makers are suffering from a massive data hangover. I have personally seen this play out over and over in the client organizations we work with. One client in particular held a weekly metrics call that was ineffective for two reasons. First, every potential stakeholder or decision maker was on the call and the size of the audience alone was impossible to cater to, much less capture any active attention from the audience. Second, the data owner presented 100+ slide decks with far too much irrelevant information. He wasted his time putting the material together and the audience wasted their time dialing in. What was needed instead was a more selective, targeted audience with more selective, relevant data. For example, this person could have held a separate call with ad sales and only shown data that was relevant to sales customer prospects.
With all the continued talk today of big data, some understandably cringe. But big data can co-exist with crisp informed decisions by contextualizing that data. That means feeding the right data to the right role at the right time. If you are a digital ad sales person, impression data and segment personas don’t need to be intermixed with detailed data such as testing roadmaps, content performance, marketing plans, and site uptime statistics.
4. Revisiting the Validity of Digital Metrics: One Step Back Two Steps Forward
De Beers had it figured out. They took what was essentially a commodity in diamonds and created such demand through the brilliant marketing of the 4’C (Cut, Color, Clarity, Carat). Publishers and others stewards in the industry are attempting to work the same magic with digital ads. Both 3MS and Adobe are working to create a more common language for ad inventory & metrics across various digital media to make ads easier to compare and thus easier to buy. Google even announced a recent initiative related to a digital GRP. 3MS in particular wants to create a Digital GRP or aggregate audience-based comparison metric rather than relying on gross ad impressions. You can read more about the initiative here. The move appears to some to be a step back from the rich capabilities that digital offers to provide better or more granular metrics. But beyond unique visitors and page/video views, no other digital metric has claimed status equivalent to a digital GRP. Will that finally open the door to universally embracing other metrics?
5. Increasing Interest from Advertisers for Profile-Based Inventory
Advertisers demand value and want to reach their target audience. For this reason, media publishers are attempting to create metrics that demonstrate value in the process. But descriptive and relevant user profiles and segments will be increasingly important to the digital buy. I realize that some media companies hesitate to break out their inventory by audience type. Invariably they will run short on the popular inventory and be running remnant on the less popular categories. But differentiation has benefits as well: It can also drive opportunities for increased CPM on high demand areas and help your organization really understand where it needs to invest in larger quantities of differentiated content. Finally, media companies can experiment or further implement integrated packages in new and attractive areas such as social or second screen.
6. Ad Revenue, Paywalls and Monetization –Yes it’s Still a Problem
How effective are your different content categories or offerings at driving ad revenue? You still might not have a crystal clear answer to that question. And despite the recent news that digital ad revenues hit $31 Billion in 2011, for digital news organizations, an even bigger issue is looming on the horizon: paywalls. Many organizations such as the Wall Street Journal and New York Times have used paywalls for some time. But others have elected to take the plunge this year and erect a straight or modified paywall. Others still, such as Gannett, are looking to expand the practice. There are numerous consequences to consider. For example, if you are using a modified paywall (a model that allows a set number of articles for free before a paywall), do you relax the rules for social visitors because you want to enlarge the presence of that user profile on your site? Secondly, there are very real consequences from an ad monetization perspective and from a customer satisfaction perspective. Can subscription revenue make up for the potential lost ad revenue that a paywall introduces? With subscription success rates in the single digits, how many quality ad impressions will your organization be chasing away?
These represent a few of the most critical issues we can expect to see and hear more about in coming months. We will discuss these in more depth but I’d love to hear your thoughts as well.