Registration is Key to Increasing Share of Known Users

The magazine industry has been a leader in collecting valuable data on its readership and using it effectively to generate advertising dollars and highly targeted campaigns. Some of the largest media conglomerates have tens of millions of addresses in their databases, with hundreds of data points collected from surveys, contests, newsletters, external demographic providers, and other sources. This is truly a known audience at the household level with personally identifiable information.

Similar data is aggregated and applied against anonymous visitors to magazine websites and apps, and it is assumed the audience (if it is engaged enough) has the same features. That is probably a fair assumption and is probably enough to placate advertisers… for now. However, as advertisers get more savvy and demand more from a seemingly decreasing ad budget, third party and aggregate data may not be enough. The granularity of digital data is rarely at the address or household level.

These are some of the challenges related to first party data and its application to digital audience:

1. Third party data from data management platforms enhances the value of anonymous visitors, but does not generate the same yield as first party data.
2. Data is in aggregate and not tied to an actual person.
3. As the rate base continues to erode, the overlap of demographics and other customer characteristics between anonymous visitors and the print audience will continue to diverge.
4. The databases currently in almost every publisher’s data center are not actually connected to each other.
5. Ad blocker usage means some of the most engaged visitors will not generate any value, and the available inventory of those engaged users will decline.
6. Facebook may know more about a magazine’s own digital audience.

However, these are not insurmountable challenges, and perhaps a single tactic can begin tilting the advantage back to the magazine publisher.

Digital PII, Registration, and Paywalls

Magazines’ close cousins, newspapers, have witnessed a similar disruption from print to digital. While newspapers may lag magazines in their use of audience data to generate ad revenue, they are perhaps further down the path of growing and catering to a paid digital-only subscriber base.

Paywalls may be anathema to the magazine industry today, but that was the same reaction newspaper publishers had years ago until financial pressure gave them limited options. Now, newspapers are seeing double-digit growth in their digital subscriptions through the use of paywalls.

If paywalls seem too aggressive in 2016, registration may be the easier option to begin collecting email addresses, personal data and setting in motion the future digital user database. The key to a successful registration strategy is to have a fair value exchange between the consumer and publisher. (For example, offer access to 10 free articles per month or even a one-year subscription.) Also, encouraging the current print audience to register in order to access their subscription will connect the dots between online and offline databases.

The ratebase has been the foundation that publications have used to guarantee value and reach for advertisers. Many magazines in Europe are not tied to the ratebase (at least as tightly as in the United States) and have a strong subscription audience that accounts for a significant share of revenue.

Source: Mather Economics

Currently, only 6 percent of surveyed sites that have a digital subscription offer generate significant volume from known users. Over half of surveyed websites have fewer than 5 percent of their site traffic generated by known users. Collecting personally identifiable information and making it available to online marketplaces is the way to ensure publisher replicate the success from print advertising and compete against technology disruption.

 Yield Above All Else

Growing the share of the known audience is the key to effective yield management. Certainly, through machine learning, even a small share of known audience can help identify “look-alikes” in the anonymous audience. “Look-alikes” are great, but once an audience is truly known, publishers can decide how best to monetize each customer from a net revenue point of view. For some customers who use ad blockers, a paywall and heavy email marketing may be the only choice to generate revenue. For other highly engaged customers, free registration and highly targeted advertising may be the best way to generate value. In fact, simply creating an audience segment titled “user has PII” can greatly increase the price advertisers pay for inventory.

Yield management is how countless industries and companies have been able to maintain and grow their revenue. The first step is getting to really know your audience.

*All data is sourced from Listener, a digital data collection and analytics platform from Mather Economics.

Arvid Tchivzhel is director of product development at Mather Economics