Features

Can Big Data Truly Save the Publishing Industry?

Written on
Jun 5, 2013 
Author
Richard L. Tso  |

ADOTAS — It’s no surprise that publishers are struggling these days. With industry staple Time Warner selling off its publishing arm Time Inc. and Newsweek ceasing its print edition last December, publishers are scrambling to find the right mix of strategies and revenue streams to stay afloat. In a recent story, I mentioned about how the rise of digital publishing, coupled with lackluster subscription models and the absence of sustainable revenue channels, have pushed the publishing industry into a tailspin.

For publishers, advertising revenues are just one piece of the monetization puzzle needed to help sustain editorial pursuits. Big data and insights into customer usage are now offering publishing houses the ability to dig a bit deeper into potential cross-sell and upsell opportunities for existing customers, and one company, Scout Analytics, is aiming to help fill the revenue gap for publishers not made up for by ad sales.

Scout Analytics has helped optimize $2 billion in annual client revenues, as reported by AdExchanger. The company’s goal has been to help increase its customers’ revenues 10-15% each year, with particular focus on paid subscriptions in addition to advertising and commerce channels. Scout’s total website user base among its sell-side clients currently reaches 200 million registered or paying accounts, gleaning valuable aggregated optimization data to test, learn and provide solutions to publishers.

“In the age of digital media and big data, [we] make calculating the monetary value of every user straightforward,” said Matt Shanahan , SVP of Strategy at Scout Analytics, “which means a publisher can directly measure and track their revenue model based on their actual audience composition and behavior.  For a digital audience, the loyalty distribution is typically comprised of 70 to 80% fly-bys, with fewer than 5% fans.  In a recent analysis, an audience of two million unique visitors per month had 65,331 fans and approximately 17 million fly-bys per year.”

Publishers like the Financial Times are working with Scout to help leverage critical data and insights that can be used to bolster revenues.

“Transparency about usage is critical in building and maintaining strong customer relationships,” said Simon Lord, Head of B2B Marketing of The Financial Times. “Scout Analytics puts valuable usage data directly into the hands of our sales and support teams to help our customers derive more value from their subscriptions. Prior to Scout Analytics, our client-facing teams needed to wait days for answers about customer usage.  Now, analytics and insights are available on demand, enabling more productive conversations between our sales team and customers.”

Today, Scout Analytics announced a new closed-loop renewal performance management solution for subscription-based publishers. Managing the cost of renewals and up-sells is critical to profitability, comprising 10-20% of a contract’s annual value. This new product gives publishing executives an at-a-glance revenue performance dashboard containing actionable predictive analytics to maximize reader lifetime value. New features include:

  • Renewal Performance Dashboard: Color-coded report on recurring revenue over a specified time period, enabling business leaders to track performance based on renewals, churn, and new MRR.
  • Renewal Performance Calculator: Explore historical customer data to accurately ID, communicate and analyze sources of churn and growth.
  • Renewal Performance Analysis: Links renewal resolutions to renewal predictions for a true closed-loop system to continuously improve predictions and renewal revenue.

“What matters most for profit is revenue capacity and contribution from the loyal, profitable audience,” said Shanahan. “Publishers need to scrutinize the key performance indicators used to manage their operations. Most importantly [they] need to establish a set of metrics that are revenue performance indicators.  For example, revenue capacity and contribution of a loyal audience directly correlates to profitability whereas monthly unique visitors and page views do not.  To build a profitable audience, publishers need to track and understand the monetary value of each audience member, and then drive their audience development strategies to optimize average revenue per user.”





Richard L. Tso is a reporter for Adotas and an avid writer covering the intersection of technology and advertising, fashion and music. With over 12 years of experience in the Advertising, Marketing and Public Relations industries, Richard has held executive positions at global agencies and technology companies and is founder of the interactive communications firm Pseudosound Consulting LLC. A classical cellist and painter, he believes that sometimes sound carries more weight than words. He is a graduate of Stanford University.

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