FIRST-PARTY DATA
Strategies for publishers to monetize first-party data
In a post-cookie world, first-party data is critical for maintaining a competitive edge in digital publishing. However, digital publishers should not aim to simply fill the gap left behind by third-party data but rather proactively look to leverage first-party data’s untapped power.
Analysis carried out by McKinsey projects that the publishing industry will need to replace up to $10 billion in ad revenue following the demise of third-party data. It’s no surprise that 95% of UK and US publishers have already started to build out monetization strategies underscored by first-party data. Though only 28% have as yet successfully established and implemented this new approach.
To stay ahead, publishers need to not only be collecting first-party data but proactively harnessing its insights to maximize the value they draw from their content and their audience. This article explores five different strategies for monetizing publisher first party data.
Build a more effective and personalized subscription funnel
First-party data offers unbeatable insight into reader behaviours, preferences and engagement with content. Using first-party data, digital publishers should be able to hyper-personalize subscription funnels to maximise their efficiency and drive conversions. By pushing content that publishers know aligns with their reader’s interests, they boost the chances of converting and acquiring them as a subscriber. Especially since 71% of consumers now expect companies to deliver personalized interactions.
Effective use of first-party data goes hand-in-hand with the roll-out of dynamic paywalls. Moving away from a one-size-fits-all approach means creating an individual-first acquisition strategy driven by first-party data that culminates in a dynamic paywall, only when that individual user is primed and ready to subscribe.
Increase CLV with data-driven deep and long-term engagement
Personalization has a significant return on investment. The power of first-party data extends beyond acquisition into subscriber retention and therefore plays a vital role in determining CLV (customer lifetime value). Successful subscriber retention is predicated on long-term investment in their loyalty, habitual behaviour and engagement.
Publishers should look to use first party data to enhance user engagement with their output, leveraging key insights to offer personalized and relevant content recommendations that continue to pique their interest. These personalized customer journeys are essential for securing a long-term, and therefore high-value, relationship with subscribers.
Further, first-party data can help digital publishers delve deep into the customer life cycle, building a detailed and granular understanding of where the most value lies and where it is being unnecessarily lost. Using critical data insights into their readership, publishers should be able to effectively:
- Identify the most valuable segments of their audience and capitalize on this opportunity.
- Preemptively identify and win-back at-risk subscribers to reduce churn.
- Recognize valuable up-sell and cross-sell opportunities.
Leverage first-party data to identify new revenue opportunities
First-party data is an invaluable source for new ideas. Ideate potential products, monetization streams and up-sell opportunities by studying user interactions and engagements. Leverage user insights to inform your business development strategy and diversify your value offering.
For example, it may be possible to pivot an existing content stream into a paid product, just as the New York Times did with its crossword. This not only creates a new cross-sell opportunity for existing subscribers, but another vertical through which to acquire new subscribers.
Expand reach
First-party data not only gives insight into existing readership, but also into potential audiences. By analyzing existing users’ interests, characteristics, and interactions with content, publishers should be able to draw out common features, interests and behaviours of their audience. That results in an in-depth knowledge of what platforms or channels these individuals are most likely to use, and what articles will attract their attention.
Using the enhanced knowledge of their existing readership gathered through first-party data, digital publishers can then gain an understanding of how to attract brand new readers from within their target demographic. This can manifest, for example, in highly targeted and focused ad campaigns on channels that are aimed at very specific segments of their casual readership.
Strike lucrative advertising deals
75% of surveyed publishers are optimistic about how privacy changes will impact their relationships with media buyers, putting the negotiating power in their hands.
An intimate understanding of niche segments of your audience is gold-dust for advertisers, allowing them to deliver hyper-targeted marketing campaigns tailored to your readership. This is a key way to monetize publisher first-party data: selling an audience and the understanding of their wants and needs, rather than website real-estate.
If collected strategically and comprehensively, first-party data can create lucrative advertising opportunities. It’s essential that publishers shape data collection strategies to build a broad and detailed picture of their audiences, delivering the insights relevant to what an advertiser might look for. Progressive profiling of users builds out granular knowledge of publishers’ readers over time, continually enriching understandings around their behaviours and interests. This intimate understanding of your audience will drive up average CPM because you can facilitate hyper-targeted ad campaigns that speak to ‘tightly defined audience segments.’ For advertisers, the credible environment publishers provide, alongside the loyalty and trust inherent to subscriber relationships, is a winning formula.
First-party data puts the power in publishers’ hands
The ‘cookie-pocalypse’ is set to bring about seismic changes in the digital sphere. Fortunately, publishers are in a strong position to weather the transition away from third-party data. The key to staying competitive lies in harnessing the power of first-party data to drive conversions, deepen engagement, and push for maximum CLV. Publishers should also not shy away from diversifying their revenue streams and content offerings. Instead, they should opt for an audience-led approach that is fundamentally underscored by first-party data insights.
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