As media organizations respond to consumer demand for a more personalized experience, how well they acquire, analyze, and utilize big data is going to factor heavily into their continued success.
Personalized Media: It’s All About The Data
Data has always driven business decisions. In an era in which companies compete based upon customer experience, TV stations and other media providers must manage what can amount to terabits of information securely, swiftly, and efficiently. As some CEOs have begun to out, it needs to be a financially driven team effort.
In my last column, I cited a statistic showing the connection between an organization’s success and customer satisfaction. Patrick Jehu, a principal at Deloitte Digital and a keynote speaker during MFM’s annual conference, Media Finance Focus 2017, reinforced that message with the following market research findings:
- Customers tend to mention a good brand experience to an average of nine people, but will talk about a bad one to 16 people.
- Customers who have the best past experiences spend 140% more compared to those who have the poorest past experiences.
- Customers who have positive customer experiences will likely remain customers for five years longer than customers with negative customer experiences.
- Delivering great experiences reduces the cost to serve customers by as much as 33%.
It should come as no surprise that, as Jehu stressed in his remarks, “Customer personalization has to be the end goal of the game.”
Anticipating The Viewer’s Needs
Outstanding customer service and sales reps who can anticipate what the customer wants greatly influence consumer loyalty; that’s obvious just from our own personal experiences. Netflix has demonstrated how that kind of winning formula can apply to television. The company reports its customers typically watch four out of every five shows recommended to them.
A recent AP news story explored the provider’s formula for success, which includes “a legion of Netflix ‘taggers’” who screen every program, tagging different elements that are then “crunched and continuously refined by the company’s secret-sauce algorithm.” Netflix combines this information with the known viewer habits of each of its 100 million accounts to serve up the movies and TV shows that are likeliest to interest them.
That’s not to say broader promotions that mimic broadcast TVs traditional “tune-in” advertising won’t continue to play an important role. However, when it comes to using personalized communications tools like texts and emails, customer satisfaction will be won or lost based upon how well a provider’s recommendations suit the user.
For example, a recent SmarterHQ study of millennials found 70% disliked irrelevant “batch-and-blast” emails even more than they disliked than high shipping costs, irrelevant ads, or websites that are difficult to navigate. That’s saying a lot.
Ways in which TV and other media businesses can find and use data to grow audiences was a common thread woven throughout many of the sessions at MFM’s annual conference. When talking about revenue diversification, Robert Saurer, VP of consumer marketing at GateHouse Media, described how publishers are taking advantage of information such as knowing a customer’s interest in particular sports teams to offer a premium package of content featuring in-depth coverage of that favorite team or sport.
Julie Foley, director of affiliate relations for media marketing consultancy Second Street, recommends using contests as a means of learning more about a reader’s, viewer’s or listener’s personal interests. In one example, a local newspaper worked with several local travel businesses to offer a vacation getaway contest.
Using a contest to acquire data lines up with advice provided by Ryan Spoon, SVP of digital product, design and audience development at ESPN. “If you’re being asking to do work, there needs to be a goal that serves as the reward. In the case of a sports fan, the more information they provide us about their interest in a particular sport or team, the more they will be rewarded with news and video content that’s tailored to their interests.”
Spoon also reminded conference attendees that it is just as important to know what the consumer doesn’t want. “Both sides of personalization matter when it comes to the content you serve.” GateHouse’s Saurer noted that one of the most impersonal offenses, one that is still being committed by publishers, is asking readers to sign up for newsletters every time they visit a website, even after they’ve already done so.
Once organizations have the data, they — and their advertisers — need the right analytical tools for optimizing its value. For programming decision makers like ESPN’s Spoon, “There are two North Stars for metrics. One involves measuring by minutes as a proxy for usage [versus how many times a user visits the site]. The other is knowing how many of your monthly users are visiting you every day.”
From the beginning, advertisers have counted on media providers to provide analysis that can inform their buying decisions. As the BIA Kelsey report I referenced in my last column observes, enhancing TV ratings with third-party “Big Data” about viewers’ buying interests “adds substantially to the local TV value proposition” by permitting targeted advertising.
The report also points out that better measurement and targeted advertising will allow local TV broadcasters to be “more competitive with digital pure-play platforms and would see greater revenue growth in better monetizing their broadcast audiences.”
Recent market estimates suggest some additional urgency for the industry’s embrace of programmatic advertising solutions that capitalize on “big data.” According to eMarketer’s latest forecast, programmatic TV ad spending will grow by 75.7% to $1.13 billion this year and that figure will climb to nearly $4 billion by 2019.
These findings also underscore the importance of owning your viewer and user data.
The Finance Department’s Role
The axiom “sometimes you have to spend money to make money” certainly applies to managing customer data. In addition to their investment in marketers with analytical skills, organizations may want to consider cognitive technology to help with personalization of content served in advertisements or on social sites. It’s being touted as a game-changer for both sales and marketing.
From acquisition, to storage, to analysis, to access, to security, every facet of big data is costly. It’s also an essential component of a company’s continued success.
For these reasons, Nexstar CEO Perry Sook believes a company’s finance executives should have the ultimate responsibility for the company’s data programs. Sook challenged MFM conference attendees to take charge saying, “You are the ones we count on for delivering accurate data with Wall Street. You know how to do it well and you should be the people in our organizations who own it.”
You can learn more about what Perry Sook and other speakers at MFM’s annual conference, Media Finance Focus 2017, had to say in the July-August issue of MFM’s The Financial Manager magazine. A digital copy will be available to non-members on our website for another week or so.
Big data’s role in the future of media also promises to be woven throughout sessions slated for MFM’s upcoming Media Outlook 2018 conference, which will be held in New York next week on Tuesday, Sept. 12, from noon to 6 p.m. The event’s speakers will include Paul T. Sweeney, U.S. director of research, senior analyst-media & internet for Bloomberg Intelligence and Netflix co-founder Mitch Lowe, CEO of MoviePass. Seminar co-chairs, Brian Ignatowski from ESPN and Stuart Benson of Helios and Matheson, have also assembled expert panels to address the latest developments in social media strategies and shed more light on the fast-growing world of digital gaming.
As media organizations respond to consumer demand for a more personalized experience, how well they acquire, analyze, and utilize big data is going to factor heavily into their continued success. I look forward to hearing your thoughts on how the industry’s financial management community can help their companies achieve that goal.
Mary M. Collins is president and CEO of the Media Financial Management Association and its BCCA subsidiary, the media industry’s credit association. She can be reached at[email protected] and via the association’s LinkedIn, Twitter, or Facebook sites.