Experience is Everything: Q&A with Digital Expert Chad Ghastin
Chad Ghastin has worked for companies as varied as The New York Times, MasterCard, and Nickelodeon, implementing and optimizing their audience development and lifecycle experience strategies. He’s also helped influence a generation of upcoming digital leaders through his graduate-level course in CRM and customer experience management, which he taught at New York University.
Now, as an NYC-based consultant, he advises both startups and established companies on developing their customer experience strategy and monetizing their digital products and services. We recently caught up with Chad to speak about the importance of first-party data, the changing consumer mindset, the requirements needed to provide predictive personalized experiences, and more.
SAILTHRU: How are publishers changing the ways in which they use first-party data?
CHAD GHASTIN: I see two trends. One is the increased emphasis on real-time, behavior-based data analytics and marketing automation. The other is a shift toward subscription-based business models.
Leading publishers have established an in-house audience development team or are using a service provider that is dedicated to mining, analyzing, and modeling first-party audience behavioral data. In the best examples, publishers are using multi-channel behavioral data to drive predictive marketing automation and deliver one-to-one experiences that increase engagement, loyalty and advertising revenue.
They realize that first-party data allows both their business and advertisers to reach highly profitable addressable audiences that “blind” cookie-based targeting can’t deliver
I’m also seeing more ad supported publishers launching paid subscription-based products. With the long decline in the ad generated revenue stream and the explosion of programmatic and adtech providers, it’s attractive for publishers to pursue recurring revenue from paid products that excludes the “middleman.” . For example, Digiday now offers a premium subscription product, called Pulse, for $395 a year.
Where are publishers missing opportunities to leverage their first-party data?
The number one missed opportunity is not making audience development and content personalization a business priority. An owned addressable audience that can be empirically quantified and monetized is all too often a latent business opportunity. With the abundance of economical, open source data analytics and content personalization tools, it’s easier than ever before to engage your audience on a one-to-one level with predictive and highly personalized content.
As ad revenue continues to decline and advertisers struggle to effectively measure ROI from social media, it’s imperative that publishers leverage owned first-party data to sustain and grow their revenue.
Many publishers have struggled with maximizing their data, instead selling off the data assets to third party advertisers. Where should publishers start with improving their data?
Begin with the end in mind. Create a framework demonstrating how you will use first-party data points to support both the business and the audience goals. For instance, building an addressable audience of subscribers to a personalized video newsletter can increase both premium video ad revenue and deliver a highly curated brand experience.
Focus on the holistic reader experience and map the behavioral and preference data points to the added-value experiences you can deliver. One simple approach is to design a reader lifecycle journey and overlay the data points and business rules that will drive the experiences based on actions taken or not taken. Most of online experiences can be automated or predictive and tested for ongoing experience optimization.
Only ask readers for preference data that you plan to use. Otherwise, you risk frustrating your audience when you don’t deliver on their personalization expectations.
How do media companies need to change their thinking if they want to generate more of their income from subscriptions?
Media companies need to stop thinking that enormous audience scale is the primary way to generate sustainable revenue. They need to shift their mindset to that of niche e-commerce retailers and lifestyle subscription-based providers. This is accomplished by mining and segmenting first-party audience data to develop and test new paid products that go beyond core news and entertainment.
For example, The New York Times has been successful with their Times branded Cooking, Travel and Talks lifestyle products. Both go beyond the core news product and serve as standalone revenue sources, and arguably, make the brand a one-stop lifestyle destination.
How have companies such as Netflix and Amazon changed customers’ expectations of media companies?
They’ve set a high consumer expectation for “always on” personalized experiences and consumer control across all industries. As a result, the personalization and customization of content and experiences has become a table-stakes consumer expectation, particularly with younger generations that crave socially interactive experiences.
Established media companies with a high percentage of Baby Boomers in their audience need to develop or invest in new media ventures that align with the needs and desires of younger generations. They need to allow these audience members to customize their experience, voice their opinions and co-create content.
What technologies need to change for media companies to transition to a subscription-based model?
Data analytics, business intelligence, and publishing and marketing automation technology are always advancing. You’re seeing more open source, flexible and lightweight solutions becoming available. This makes it quicker and easier for media companies to know their audiences and extract value from their first-party data.
Most ad-supported media companies are still using traditional CRM platforms to push news and content at their audiences via email, SMS and mobile apps. This push model hasn’t changed because consumers still want to receive the latest news and media companies don’t see the need to invest in the technology that moves beyond this basic value exchange. With the shift to paid subscription models, media companies will have to consistently demonstrate value to retain subscribers and create unique personalized experiences driven by data analytics and marketing automation platforms.
What other technologies will publishers need to use more effectively to become true B2C companies?
Email is still a major driver of qualified referrals for most publishers. However, It’s rare to find publishers that offer fully customized content in one email newsletter. In fact, many publishers send newsletters at the list level, forcing their subscribers to receive multiple newsletters.
Mobile is also yet to be fully optimized. In the news space, mobile is predominately used as a means for breaking news push notifications that offer little brand differentiation.
To be successful in the future, publishers need to shift their marketing approach from this push approach to a one-to-one personalized content marketing approach. This includes investing in online communities that go beyond anonymous comments. A reader community allows people to join affinity groups, participate in gamification initiatives and even co-create content. Long-term, this delivers a competitive advantage in reader loyalty and provides a learning lab for new product development and testing.
What about cultural changes?
As mentioned, there needs to be a shift from pushing media to providing contextually relevant experiences. Every process needs to be evaluated with the reader in mind including, staff training. Simply put, leaders need to ask themselves if their culture allows them get closer to their readers, and create products that generate sustainable revenue.
In any subscription-based business, nearly everyone touches the consumer along the journey. To succeed, everyone needs to be held accountable for customer engagement and retention. That means shared business and performance goals based on audience retention and lifetime value.
People will always be the most critical factor for success. People create processes and business rules that enable the technology to create automation efficiencies and business intelligence. A continuous cycle of learning and optimization needs curious and empathetic people to function properly and succeed.