This week, we spoke with Dave Zahner, SVP at 5x5 Data Coop, to dig into the strategies they’re seeing publishers adopt when it comes to first-party audience development.
Welcome Dave. Let’s dive right in: How does knowing your audience relate to revenue?
The first thing I would say is that every publisher strives for one thing when it comes to their audience, content, or revenue: attention. This, of course, comes from building trust and loyalty long before attention starts to convert into ad dollars, event sign-ups, subscriptions, etc. But how? It all starts with getting to know your audience better.
The second thing is that publishers think functionally about the components of rev ops - advertising, newsletters, subscriptions, events, etc - but often in isolation. Data is an enterprise’s greatest asset, so all of these stakeholders should be working together and sharing what they know. Otherwise, they’re impeding the ability to truly understand how users are interacting.
What are the main publisher challenges when it comes to monetization?
Most publishers are looking to monetize media across a myriad of channels; for instance from print to digital; and across programmatic and direct sold. But if they only know who 5-10% of their traffic is, the volume of available inventory they can sell at a premium is severely limited. If they can build a first-party data strategy that allows them to see closer to 30%-50% of their traffic, they can suddenly sell significantly more in each channel.
Common strategies to diversify monetization beyond on-page ads include having ads in a newsletter, encouraging premium subscribers to access content behind a paywall, or driving sign-ups to an event. However, the challenge lies in knowing how best to market each of those additional products to each user to achieve all of these monetization goals.
Let’s take form abandonment as an example. You might know that a user has visited your newsletter/premium content/event landing page five times in the past week without making a transaction. If you only know the IP address, or have a cookie on that user, you can only retarget them in a few channels, let’s say display, or maybe paid social.
But if you have access to other data points - such as hashed emails, verified mailing addresses, LinkedIn profiles or MAIDs (mobile IDs) - this opens up a whole new set of channels to retarget. By working with a data enrichment partner, you can supplement your existing data set with new insights to unpack each monetization opportunity across your sites.
By working with a data enrichment partner, you can supplement your existing data set with new insights to unpack each monetization opportunity across your sites.
What do publishers need to know about their site traffic?
When building a monetization strategy around any type of media/campaign, you need to ask the following questions: Do you know and understand the customer journey? What is the level of engagement per customer or per segment? Is it possible to apply an 80/20 rule, i.e., can you state which 20% of traffic is driving 80% of revenue, and subsequently, are you nurturing them sufficiently? Also, are you working to acquire more audience that looks like that 20%?
What is more valuable - demographic or behavioral data, or both?
First, different publishers need to know different user attributes. Second, their advertisers will also have different requirements. So the short answer is both, and working with a data partner who can provide the two is crucial.
For example, if a leading business journal publishes mostly B2B oriented content, that doesn't mean all their advertisers will be purely B2B. One advertiser may sell high-end real estate, targeting those with job titles of director and upwards, who are likely able to purchase a million-dollar condo. By layering in behavioral data, you can also start to pinpoint users who have been actively researching real estate in San Francisco, for example. So aside from better understanding how users are interacting with your site, the big piece here is understanding what they’re doing when they are not on your site.
The more you know about that person, the more you can monetize that session in a direct, earned or owned environment - combining demographic and behavioral data to create a bespoke identity graph that translates into a premium first-party audience ripe for targeting.
How can you use this data to unlock audience curation capabilities that you as a publisher can own, manage, and drive revenue from?
If we go back 10 years, marketers relied on handing over their seed audience of 100k users to a walled garden (e.g. Facebook) and trusting that ‘black box’ (a closed ecosystem that doesn’t show how or why audiences are being selected) to find the right lookalike audience.
Using the same example as above, the real estate advertiser only wants to target high-end and in-market users in a specific geography. The risk of relying on lookalikes is this: Let’s say John Smith is in the onboarded audience, does live in San Francisco, is in-market, and has a job role of director or upwards. And let’s say John also has an interest in photography, classic cars, and running marathons.
Inevitably, the walled garden will not only find, but worse, include many people from San Francisco who love running and photography or classic cars, and who might be the CEO of a company. What’s missed though, in both cases, is the in-market signal for real estate purchase.
The result is wasted ad impressions, which means wasted ad dollars, or worse, disgruntled users. In contrast, the first-party audiences we see today are much higher fidelity and more efficient.
“the first-party audiences we see today are much higher fidelity and more efficient.”
At 5x5, we have such a huge variety of fresh and historical data, as well as B2B and B2C data, that the sheer volume and accuracy of insight we unlock for publishers means they are no longer reliant on that lookalike black box.
Instead, they can curate their own bespoke audience. For example, one publisher recently gave us five million customer records across five key industries. As well as successfully matching to 90% of those users, we were also able to tap into our identity graph to find 19 million more prospects with that exact combination of industry and job title, increasing their Total Addressable Market (TAM).
What makes us so complete and fresh is the true nature of our cooperative, with hundreds of different partners (not just publishers) contributing first-party, observed, deterministic data for all members to use.
To learn more about how 5x5 supports publishers and platforms develop first-party audiences strategies, drive monetization, and support new product and revenue stream creation, email us at publishers@5x5coop.com.