Home Publishers With Content The Draw, Scout Analytics Wants Publishers To Charge For It

With Content The Draw, Scout Analytics Wants Publishers To Charge For It

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scoutA variety of publisher analytics firms are analyzing the yield of the digital publisher today.  But for Scout Analytics, which is based just outside of Seattle, it’s not about better advertising yield as the end game.

The 40-person company lays claim to the optimization of well over $2 billion in annual client revenues according to CEO Mark Upson. He adds that his company’s goal – and its track record – has been to increase customer revenue 10-15% each year with particular focus on paid subscriptions in addition to advertising and commerce channels.  With a total website user base among its sell-side clients reaching 200 million registered or paying accounts, Scout has achieved significant scale to test, learn and provide solutions to publishers says Upson.

AdExchanger spoke to Upson recently about his company and the digital publishing landscape.

AdExchanger: There’s this publisher-side notion today about the “holistic yield management” of ads, content and commerce. What’s your take on all of that?

MARK UPSON: To us, the content is the draw and then comes how to monetize the content.

We’re proponents of if your content is good, you should be charging for it – in addition to having advertising.  It’s all about how differentiated your content is, how you’re building your audience and is your audience recurring. You could have a ton of unique visitors, but if they’re not recurring uniques, it’s not a long-term growth business.

As we see it, you have to pour so much money into just trying to keep people coming back to your site that if it hasn’t become a destination for them, it becomes challenging for you longer term.

How does this relate to the way you serve clients at Scout Analytics?

We have traditionally covered two areas.  First, we are looking at purely subscription businesses, both B-to-B and B-to-C, and helping publishers increase their [customers’] total lifetime value.

We focus in on everything from where you’re putting up a registration wall or a paywall to, in some cases, retention marketing, cross-selling and so on.  That’s really our core business model and includes clients like McGraw Hill and Reed Elsevier.

Then we’ve got the folks who have a mixed model, such as Haymarket and Penton, who are two examples of a combination of pay[wall] and ad supported properties.

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So, will all media go behind a paywall eventually?

I believe that all unique content will ultimately go behind some type of wall.  Now, it may just be a registration wall, because the publisher wants to get your information so it can market it to you more directly.  Also, if the publisher can get you into an email stream, they can do more tailored advertising to you.  At the same time, the publisher can start to cross sell you on commerce or events.  So if you have unique content, you almost have to put it behind a wall of some sort.

I think you’re seeing that even in local newspapers that are going with a pay or “reg”. Otherwise, the resources of the publisher are going to become thinner and thinner, in which case their content can become less unique.

What about B-to-B publishing in particular?

From a B-to-B publisher perspective, you have two paths.

One path is some companies will go heavily after event-based models and leverage their traffic to drive more events. UBM is a great example. We work with them on UBM Electronics on that exact thing, on optimizing event audience and revenue from events.

Other folks are going the subscription route where they’re saying our content is valuable enough.  They may not charge enough for the subscription to cover their cost and then profit; but, they may supplement it with advertising and have a blend.

Controlled “circs” (from the magazine world, where qualified readers receive a free subscription) have to go one way or the other over time, because as [the magazine] moves online there’s much more competition for the ad dollar.

We do not believe, particularly in B-to-B, that ads alone is going to survive.  It will be ads plus events or ads plus commerce or ads plus subscription.

Some publishers are claiming that programmatic media is killing them.   Agree?

I think programmatic buying is somewhat of a crutch for not having a really well-thought out co-branding, advertising strategy and connecting in with your audience.  It’s trying to fill spaces on your page through programmatic buying. I just don’t think it’s a winning strategy.  You’re alienating your audience and taking them out of your experience.

Your whole goal was to create a unique experience for them with unique content and now they’re getting the same experience they’re getting from another site and it’s not necessarily a positive experience.

It’s all about your brand.  If you’re not protecting your brand, it’s going to backfire on you.  The small amount of revenue you’re getting through that stream is not worth losing your audience.

Back to the “walls”… What’s going to be the opportunity for advertisers given this transition behind a paywall or registration wall of some sort?

For B-to-B, it opens up some interesting opportunities, because once you have an ongoing relationship where you can actually market to a person, you can do very targeted marketing where the publisher can team with an advertiser to produce highly targeted advertisements through email and webinars they’re producing.

That example sounds like it would be relevant to both B-To-B and B-to-C…

I’d say the difference in B-2-C is how you market to the individual.  If I am consuming in support of my work efforts in B-to-B, I may be more open to some ongoing information coming to me.

B-to-C may be a little more challenging. You’re not trying to bring people into some type of event.  You’re giving them entertainment or giving them some other type of personal service that keeps them engaged.

What are the reach extension opportunities that exist for publishers? Has this concept changed at all?

There’s still a wide mix of publishers’ expertise in developing their audience.

Some publishers are buying – particularly B-to-C publishers – cookie data and then using that for extension and placing advertising accordingly.  On the B-2-B side, they’re still getting their arms around what to do with all the data.  So it all gets back to what is their strategy going to be –  more subscription traffic drives you into a certain mode and with more events traffic there’s a slightly different strategy.  And then commerce is something different again.

Do you buy the idea of the publisher becoming like a marketer?

Absolutely.   The publisher has to be a marketer because marketers are all about drawing you in and then selling you something.  They’re either drawing you in and then having you engaged in advertising, or they have an engaging commerce or some other revenue stream.  But yes, absolutely, they need to be marketers.  Building the content and then hoping people are going to come is not a long-term strategy.  You have to have a plan for once you get a relationship with someone. How do you cultivate that relationship without abusing it?

For instance, if you get their email address through registration and you’re just spamming them with low value content, that’s going to demean the relationship and you’re going to end up losing it.

What’s the reality of holistic yield management today versus what you envision in the future? 

As a publisher, once you establish [a relationship with a consumer], you now have a lot of channels in which you need to continue to enforce the relationship.  If I’m consuming on my phone or consuming on my iPad or at work, there should be a relatively consistent experience.

There has to be personalization that can occur, too, so that through my clicks you can identify what I’m interested in and feed me more of that  – or you have to allow me to personalize my experience.

At Scout, we’ve chosen to focus on that first-party cookie experience and that’s how we primarily implement it as – a first-party cookie – because the publisher needs to understand their own traffic, manage that experience, and make it a valuable, personalized experience with that consumer.  Put another way, how do you develop loyalty and then better monetize it.

That’s the biggest thing five years from now: you have tailored advertising, tailored offers – everything to meet the needs of that consumer’s experience.

What’s the revenue model for Scout Analytics?  Do you work on a project basis or a rev share or?

MARK UPSON:  We’re primarily on a type of rev share arrangement with publishers.  It’s a tiered pricing schedule based on the amount of revenue we’re optimizing.  We have annual contracts, subscription if you will, and we use our service to make sure that our customers are getting a great experience, too – Scout on Scout we call it.

Occasionally we also do some project work; for instance, doing a paywall analysis or registration wall analysis would be a project-based service.

Primarily we’re working on our long-term relationship with our clients so that we’re helping them continually increase both the customer satisfaction of their audience, and the revenue coming out of that audience.

A year or two from now, what’s a milestone that you’d like Scout Analytics to achieve? 

The market we’re going after is over a $600 billion market space and that includes B-to-B information, B-to-C, gaming services, consumer personal services – even service to maintenance contracts.  Those are all recurring revenue streams that we can improve.

In the future, Gaming is one opportunity where you have the transition from “freemium” to paid and trying to optimize the revenue. Also, for example, I have 12 different subscription services from music to cable and on down the line.  These subscriptions could be optimized, particularly around retention – this is an area we will continue to focus on.

Follow Scout Analytics (@ScoutAnalytics) and AdExchanger.com (@adexchanger) on Twitter.

 

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