The new herald times

Analytics influences business decisions in the news industry

By Ed Crouch

As the sheer number of new marketing channels grows, newspaper publishers continue to face excruciating pressure from all sides. Circulation keeps declining. Advertisers want more value. New competitors emerge with alarming frequency. The customer base has become increasingly fragmented, rendering the notion of a “traditional newspaper audience” virtually obsolete.

Despite these challenges, competitive newspapers are fighting back. The availability of cost-effective, user-friendly analytic technologies gives newspapers an advantage in the ongoing battle for advertising dollars. In addition to helping newspapers combat churn and increase circulation, these analytic technologies can bridge the gap between a newspaper’s ink-on-paper product and its Web-based offerings.

Many newspaper publishers have discovered that their Web sites attract new readers faster than their traditional products. The Web sites also generate raw data that can be converted into usable customer intelligence that publishers can leverage to develop new products, increase overall circulation and maximize advertising revenues.

Today’s advanced analytics can easily retrieve information from a variety of sources, including internal operational systems, external databases and third-party relational data warehouses. The information can be merged into a manageable stream and presented in a visual form that’s easy to understand. The benefits of modern analytics include:

• Enhanced data available to support marketing initiatives, especially customer contact history data.
• Streamlined model development to improve marketing campaigns.
• Lower customer acquisition costs.
• Higher levels of customer retention (churn reduction).
• Improved service and quality.
• Increased revenues and margins.

Newspapers with analytic capabilities in place can mount aggressive marketing campaigns to keep and attract subscribers, as well as learn more about them as individuals. The customer intelligence generated by analytics also helps savvy newspapers attract advertisers who are willing to pay a premium for widespread exposure in publications that reach readers who are ready to buy products and services.

Modern analytics also enable a publisher to implement integrated profile and response modeling and analysis based on US Census Bureau data, ZIP code and lifestyle segmentation – which allows the newspaper to focus on the needs and preferences of its readers.

By crunching millions of data points into usable customer intelligence, advanced analytics set the stage for opportunistic marketing initiatives triggered by changes in customer behavior that indicate a propensity to purchase certain types of products or services. These changes can include first-time purchases of baby items, home renovation products or seasonal clothing.

Advanced analytic solutions also provide multiple interfaces and tools to serve the diverse needs of all marketing team members, from casual business users to serious power users. Quantitative analysts can take high-level overviews and drill down to specifics, or they can start from the tiniest of details and work their way up to the big picture.

This “single version of the truth” unites users across the organization, creating a comprehensive view of customer behaviors. It also enables the newspaper publisher to tailor promotions and contact channels to match customer expectations.

Advanced analytics create measurable competitive advantages that translate into higher circulation, increased Web traffic, improved revenue, lower costs and higher profits. As the competition becomes more intense, analytic technologies empower smart publishers to substitute hard science for guesswork and hunches.

Consider this data point from a recent IDC Internet advertising report: Internet advertising – including search, display and rich media units – is projected to grow from US$16.9 billion in 2006 to US$31.3 billion in 2011*. It is evident that this growth will come at the expense of traditional media. Therefore, the shifting of advertising dollars from old media to new media will accelerate as Internet advertising expands three times as quickly as overall advertising.

For newspaper publishers with a robust online presence and solid analytic capabilities, this trend represents a clear opportunity to thrive and grow in a new environment.

But the key to success in this environment is the ability to routinely convert millions of data files into customer intelligence so it can be used to achieve critical business objectives, such as higher circulation, reduced churn, improved quality, increased ad revenue and greater profitability.

* Source: IDC. Weide, Karsten. US Internet Advertising 2007 - 2011 Forecast Analysis: Funding the Consumer Internet. IDC document # 207106. June 2007.

Bio:

Ed Crouch is an Account Executive at SAS. He specializes in the communications, entertainment and media industries. ed.crouch@sas.com