The Truth Behind Personalization: Why It Doesn't Solve Publishers' Biggest ProblemApril 27, 2017
By Keith Sibson, VP of product and marketing at PostUp
Go to any digital publishing conference and you are sure to hear people talking about the importance of personalization. This is fueled by the current hype around artificial intelligence (really, machine learning, which actually dates back to sonar research in the 1960's). The problem here is that personalization doesn't solve the major problem that publishers face today: how to create sustainable direct relationships with readers.
Publishers tend to talk about their audience in terms of monthly unique visitors. However, if a publisher has 10 million monthly uniques, that's not the same 10 million people month-to-month. On average for publishers, 43 percent of site visitors in a given month will never come back. This traffic does generate revenue, but what use is personalization for a site visitor you know nothing about and does not return?
The real challenge that publishers face today is that a large portion of traffic is anonymous and comes from search or social networks, Facebook in particular. Facebook feeds are how the majority of people are consuming media today, and its traffic share is growing. Users see an interesting article in their Facebook feed and click to read the story on the publisher site. On average they will consume an additional 0.2 pages, then click back to the feed to be entertained somewhere else. An average Facebook visitor will generate less than four lifetime page views (or approximately $0.04 in advertising revenue). Despite Facebook's much vaunted treasure trove of data, publishers see none of it — that data is for Facebook's advertiser clients.
Personalization does nothing for this nameless traffic because Facebook has the monopoly on first party data. Publishers don't really own this "audience," Facebook does. And what to do with this large volume but low value traffic when personalization cannot be effective?
At its best, personalization can boost or extend engagement among your already engaged audience, but it fails to solve a more existential problem that publishers must face: how to overcome the loss of revenue and audience ownership due to distributed content. While personalization is a buzzword that may sound good on stage at conferences, it's not a revenue panacea as vendors would have you believe. Publishers have to consider if it is worth it for their teams to spend time and money developing a personalization program that only a fraction of their audience will actually experience. A 20 percent lift in engagement sounds great, until you realize it only applies to the 30 percent of your traffic that is already engaged and has enough data to generate a personalized experience.
Instead of (or at least in addition to) chasing personalization, publishers should adopt a more vital approach to growing their owned audience. By converting "drive by" anonymous visitors into known subscribers via their email address, publishers can earn the right to distribute content directly to their audience's digital doorstep. Historically, this is how the publishing business model worked: physically sending content (and ads) to an owned audience. Email is the home address of your audience on the Internet, and it represents an invitation to the inbox that exponentially increases the "marketable window" for each audience member. Unlike platforms, email allows you to distribute content directly to your audience at a time of your choosing, along with ads of course. From delivering native content and display ads to sending sponsored content and premium subscription offers, email is an excellent avenue for publishers to diversify their revenue in the digital era. Email is versatile enough to serve as an enabler for any business model, because publishers own the first-party audience data.
In the platform era publishers do not have a monopoly on distribution, and monetizing Facebook scraps will likely not sustain a digital publishing business. Personalization tries to increase revenues on a base of already engaged audience that is constantly being eroded by platforms. Priority number one for publishers should be to grow the engaged audience. A great place to start is to focus on converting your anonymous traffic into known email subscribers.
Keith Sibson is VP of product and marketing at PostUp (@postupdigital) and has over a decade of experience driving product-led growth at companies large and small. He holds a PhD and BSc in Computer Science from Glasgow and St. Andrews Universities, respectively.
The views and opinions expressed in Marketing Maestros are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.
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