Traditional monetisation models of digital publishers are under stress. In 2023, the Association of Online Publishers and Deloitte reported that publisher revenues were up just 0.1% YoY. Advertising revenue has historically been the primary source of revenue, but this was down by double digits. In its place, growth in subscription revenue of 18.3% helped media brands make up the difference.
Cookie deprecation, the dominance of walled gardens, and privacy regulation have put immense pressure on advertising-led monetization models. Unable to fully leverage their content and audiences, they have struggled to maintain and grow ad revenue streams.
Unsurprisingly, revenue diversification is therefore at the forefront of minds at online publishers for 2024. In a recent survey from the AOP and mediarithmics, “Developing new revenue streams” was the most important priority reporting by media brands.
The opportunity awaits for those willing to re-orient their strategy around first-party data. By focusing on understanding and owning audience relationships, publishers can unlock new paths to sustainable growth.
Investing in robust first-party data strategies is crucial for publishers with revenue diversification ambitions. With good first-party data on their audience, publishers can:
For advertising, first-party data is key to making inventory more valuable to brands. Granular audience segments based on real audience data allow for precise targeting and campaign optimisation. Publishers can demand higher CPMs and increase fill rates by packaging their audiences up into more relevant segments for brands.
Once they have the data, a key challenge for media brands is in creating the single customer view that commercial teams can use to create audience insights when responding to advertiser briefs promptly with clear pre-campaign plans.
Legacy Data Management Platforms (DMPs) are limited in their use here, as they are not built to handle 1st party data. A Customer Data Platform (CDP) can support first party data use cases and allow any team to query their audience data without the need for support from the data team.
First party data can support subscription models in increasing subscriptions, retaining subscribers and maximising subscriber engagement:
1st party data can help marketers at media brands to acquire new paying subscribers. It can enable A/B testing of different signup flows, pricing page layouts, email messages, and other parts of the subscription funnel to identify what converts readers most effectively. It also helps publishers to personalise marketing campaigns. For example, data on how a user has interacted with the site and previous marketing communications can be used to personalise future email and advertising messages. Finally, it can provide insights into what free content drives audiences through to metered pages or locked articles requiring a subscription.
By analysing usage data of existing subscribers, publishers can build models to predict subscribers most at risk of cancelling and deploy targeted retention campaigns.
First-party data allows us to understand what content is resonating with subscribers so relevant user-level recommendations can be offered to keep them engaged. Editorial strategy also benefits, as content can be aligned with trending topics amongst a publisher’s most engaged users.
With retailers increasing their media offering, we are seeing media brands adopt e-commerce ambitions too. In addition to affiliate marketing programs, some media brands are looking to build niche commerce sites related to their content focus. 1st party data can help to tailor product recommendations to each user based on their purchase history and areas of interest. It can also be used to personalise comms on off-site channels such as email and display ads to increase sales.
Maximising the potential of first-party data requires the right technology. A customer data platform (CDP) consolidates data from all touchpoints to build unified customer profiles. Identity resolution connects data across devices and channels to the same individuals to create an accurate view of the customer.
With customer lifecycle and engagement mapped out in one platform, publishers can activate data across business functions. Audiences can be segmented for ad targeting, content recommendations, churn analysis, campaign measurement, and more. As new privacy laws take effect, CDPs can future-proof audience data and direct publisher-consumer relationships.
Leading publishers recognise first-party data as the key to diversifying revenue streams. By investing in robust strategies centred around customer insight, they are strengthening engagement, loyalty and lifetime value - achieving sustainability and growth even as the media landscape transforms.
