Digital transformation through data has been added to Bookmarks.
Digital transformation through data
How news and media companies are delivering more value with insights
Deloitte conducted a global data transformation study to understand how news and media companies are leveraging audience data to better engage readers and generate revenue.
Digital innovation has reshaped the news and media industry. The transition from print to digital started more than two decades ago, and the changes to news and media companies during this time have been dramatic. Few publications still exist as print-only editions anymore. Almost all major print and broadcast news outlets now maintain digital versions.
To capitalize on this evolution, news and media companies are harnessing the power of their digital platforms to generate insights on reader behavior in ways that were never before possible. By applying these insights with increasing sophistication, companies are improving both reader engagement and online revenue performance.
How much value can news and media companies drive with this data, and how do they do it? Deloitte conducted a global study to understand how news and media companies are leveraging audience data to increase engagement on their digital platforms and drive value through the monetization of those platforms.
Setting the stage
Audience data is top of mind for news and media companies. Both advertiser and reader expectations put pressure on news and media companies to become more data-informed. Readers want great content and user experiences, and advertisers want a clear understanding of reader interest to reach potential customers. Many news and media companies have invested in technological capabilities to effectively use their audience data to address these demands. In fact, some leading news and media companies have even repositioned themselves as technology companies with news products—a striking shift from just a decade ago. At the center of these efforts is a common goal—to translate a deep understanding of the reader into a competitive advantage in the digital news world.
Audience data is used by news and media companies around the world to understand and communicate with readers. This global emphasis on data is leading to increased consumer awareness of data usage and tighter data privacy regulations, such as the European Union’s General Data Protection Regulation (GDPR). Although the long-term impact of GDPR and other impending regulations is unknown, the intent of the regulations is to protect consumers. News and media companies that prioritize data governance and compliance with these new regulations and engage in the public conversation are positioning themselves to thrive.
How news and media companies are creating value with audience data
News and media companies collect, analyze, and activate audience data across three operational objectives:
- Improve overall reader engagement
- Increase direct-paying relationships with readers
- Drive revenue from advertisers
Each of these operational objectives is defined by a set of use cases:
Improve overall reader engagement
Quality reader engagement is crucial to acquiring and retaining readers and increasing share of attention. Without an abundant and engaged readership, a news and media company cannot secure the subscription and advertising opportunities it needs to survive and thrive. Reader engagement requires understanding how and why readers engage with a digital news platform to optimize the reader experience. In fact, news and media companies adept at using audience engagement data drive higher recirculation, time on site, and visit frequency than their low data maturity counterparts.
Increase direct-paying relationships with readers
The shift to subscription and other non-ad-based revenue models is causing many news and media companies to think of readers as consumers. Much like an online retailer, these news and media companies use data to:
- Understand reader behaviors, needs, and lifetime value
- Identify when readers are likely to purchase subscriptions
- Tailor products and services to better serve readers
News and media companies that successfully build valuable direct- to-consumer relationships with their readers not only see the near-term benefits of increased revenue but also reduce operating volatility through long-term, recurring revenue streams. News and media companies adept at using data in subscription and other consumer revenue models increased reader retention, conversion rates on paid products, and overall revenue per reader.
Drive revenue from advertisers
News and media companies gather unique and reliable first-party audience data to counteract the scrutiny of third-party data and ensure compliance with user privacy regulations. The study showed that advertisers want to collaborate with news and media companies to uncover rich reader insightsfrom that data to craft effective audience-based and contextual campaigns. Leading news and media companies know their readers better than anyone, and they create content to attract and retain those readers. They do not develop digital platforms simply to serve advertisers, but they can drive additional value by acting as advisors in the creative and campaign development process.
Thinking about digital transformation...
Getting the most out of these use cases requires an advanced level of data maturity that many news and media companies are still working toward. Improving data maturity was a strategic priority for all of the news and media companies that participated in the study, but the road to transformation requires a clear direction and deliberate choices about where to focus.
The Data Activation Framework sets out three critical stages to digital transformation, and the accompanying Data Activation Guide details actionable steps news and media companies can take across these stages to increase their data maturity:
Charting the path forward
Based on study survey results, only 9 percent of the news and media companies that took part in this study were defined as leading,the highest maturity level. These best-in-class companies successfully use audience data to drive revenue, and they record market-leading financial performance.
While leading companies capture additional revenue-generating opportunities related to audience data, many news and media companies invest in audience data simply to sustain their current readership. In such a challenged industry, news and media companies are understandably focused on pursuing the best path to improve their data maturity—now is the time to act.
About the study
As part of this study, Deloitte held interviews with more than 80 individuals across more than 50 news and media companies from 16 countries across the globe. Study participants spanned: