In today's digital economy, companies see the revenue potential offered by data monetization and are striving to capitalize on it--preferably before their competitors do. This is particularly evident in the publishing industry, where some companies are already achieving incremental success by leveraging existing data about their consumers to generate new revenue streams. However, the majority of companies still need to determine how they want their organizations to leverage consumer data. More importantly, they need to consider how to synergize data trends emerging around both their existing base of consumers and a target demographic that may present new revenue opportunities, all of which is going through a degree of disruption in the market.
Adding to the complexity around this goal is a blurring of the lines surrounding digital publishing. Book distributors are transforming into digital content software companies, media companies are expanding into music, and magazine companies are utilizing television to capture new markets. There is a clear recognition by publishers that they need to expand channels and markets to keep the attention of consumers who have unprecedented choices for digesting content today. Some publishers are forging ahead and leveraging this blending by enabling an omnichannel technology platform strategy that foundationally addresses some of the criteria to reach this goal. However, those firms that haven't started to plan for this strategy will quickly find themselves behind the curve if they don't develop a vision for what their organization needs to look like in the digital economy.
Below are some recommendations for executives-both for those starting to invest in data monetization strategies and for those who are unsure how best to begin the process.
Develop Your Business Position and Vision
Business position and vision around data monetization are typically developed by the C-level executives within publishing organizations. These are the people who own the funding for the investment. Defining a vision can be a challenge for executives because the industry is evolving so rapidly that they can't keep pace with what the possibilities are. Many become overwhelmed and develop "analysis paralysis." Enlisting ideas and insights from both internal and external professionals can be helpful to moving the vision forward and creating a sense of urgency for change.
Some questions that need to be answered during this "Envision" stage include: What does it mean for our current customers if we want to be different from where we are today? And, what new demographics/market/service do we want to reach and target? To provide an example, consider a magazine publisher that has a demographic of readers that are between 40-60 years old. Executives might decide that the company needs to reach millennials if it wants a future. The vision could include offering content to reach millennials, while at the same time not diversifying too much and perhaps adding a video series to complement its traditional content, so the magazine's current readership-base doesn't decline as the firm reaches out to newer market segments.
Define Data Monetization Strategies and Tactics That Support Your Vision
Once the high-level vision is established, executives must then focus on data strategy and tactics. Here it's important to remember that the consumer of the content comes first and should be top-of-mind. A better customer experience generates stronger engagement. Following are some common directives:
- Connect emotionally with consumers. According to an article that appeared late last year in the Harvard Business Review, those who are "fully connected" emotionally are 52% more valuable to brands than customers who are "highly satisfied." Connecting emotionally also promotes sharing, which can generate referrals to the brand.
- Commit to evolution and factor in changing demographics. The solutions will never be complete but instead, will continue to evolve. For example, if you're targeting millennials, consider that they'll have different wants and needs next year, in five years, etc.
- Consider mechanisms for two-way validation of content (gamification techniques, for example), so the firm can develop a continuous stream of feedback that might shed light on additional monetization ideas to generate revenue.
- Envision the potential revenue ecosystem around topics of interest and other types of content your audience might be interested in that are synergistic to your current offering (e.g., home equity loan offers for consumers reading home improvement publications, or offers to purchase picture frames for customers also buying photographs online, for example).
- Determine what advertising revenue you need, if any, to meet your business goals, and what "placement" of content will generate the greatest yield for "click through" revenue.
Ultimately, take some chances and don't be afraid to fail. Choose 2-3 monetization ideas and go for it. Specifically, develop a minimum viable product that provides some value you can establish momentum with and build onto, rather than spend a long cycle time on a multi-year roadmap to develop a "perfect, yet untested" solution that your customers may not like and will likely evolve. The most successful publishing companies place their bets in a few logical places, learn from those minimal investments, and build from there. Agility and time-to-market are critical, and for some, the technology platform they have already invested in enables them to take chances without any additional significant investment. So, be decisive and move forward.
Make Sure Your Underlying Technology Platform Enables Your Strategy
An adaptable and expandable technology platform, typically implemented by the chief technology officer or chief information officer, will enable data monetization strategies to become a reality. Most publishing companies have to invest to some degree in modernizing their current platforms to take advantage of newer, enabling technologies in the market today. Application Programming Interfaces (APIs) that link separate systems are also critical when it comes to data monetization strategies. They serve as a conduit to tie new use cases together (think back to the photograph and framing example).
The technology piece is important because, foundationally speaking, the historical data is already in your system, and it can be leveraged. You can use it to predict what's likely to happen with your current customers based on the way they're consuming and leveraging content. Combining this effort with analysis typically done by the chief digital officer or chief marketing officer to understand emerging trends and identify associated content synergies, is also important. In many cases, the C-Suite will seek out partner organizations, which have experience across multiple industries in digital and data transformation, to bring in effective approaches from other industries that inform development of these strategies.
There is no exact science when it comes to successful data monetization strategies, but you have to know what your business vision is, have the insights or seek help to evolve it, appreciate what level of disruption might enhance this vision, and be willing to take some chances. By doing so, top line growth across your content revenue ecosystem will eventually evolve and grow. This envisioning is occurring not only in the publishing industry, but also across other industries, and it is driven by the demand of the consumer/enterprise for an enhanced experience. The outcome leads to greater user engagement and delight and in some instances, more emotional connectivity with customers. Creating a content ecosystem that offers multiple consumer benefits, across an array of topics, will eventually deliver on the business results desired. Considering the alternatives, it is the only way forward for sustained success in this digital economy.
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