Media executives reveal which technologies they plan to buy this year and why exhibiting a more audience-centric approach than recent years and an overall desire to take back control of their own destinies.
By Peter Houston and Denis Wilson
The starting point for publishers’ technology budgets this year appears to be based on the recognition that today more than ever, success will follow from strong, direct relationships with audiences. As a result, publishers are looking for tech tools that yield audience growth, engagement, and above all valuable insights. Marking a change from the publishing industry’s previous platform- and ad-driven mindset, publishers in 2018 are also looking most closely at technologies that will help them reduce an over-reliance on scale-based advertising revenues. What has emerged is an “audience intelligence” model that aims to provide uber-qualified leads that marketers can’t get elsewhere, directly monetize audiences through subscriptions, or a combination of the two.
This year’s technology shopping list is topped by Audience Analytics. Tools to improve Audience Engagement, SEO/SEM and Social Media performance sit together in joint-second place. Taken all together, it’s clear that finding, understanding, and retaining audience is the objective. And with Paywall & Subscriptions Management making the top ten this year — last year it wasn’t even in the top twenty — there’s a clear pivot in the industry toward user-generated revenue.
Overall, the survey results also show a wide spread of spending intentions. There doesn’t appear to be a single, fashionable technology bandwagon that publishers are jumping on and the absence of a dominant technology tells the story: Publishers are focusing their technology strategies back on their own businesses in 2018. Burned by over-reliance on the algorithmic whims of the tech giants, they are done with chasing their tails around the problems created by other people’s platforms. Now, publishers want technology that will help them deal with challenges on their home turf.
Methodology: This report is based on the 2018 Technology Plan to Purchase Survey, which was conducted in April of 2018. Executives from consumer, B2B, scientific/technical/medical (STM), and non-profit/association publishing organizations participated in the survey. This report is based on a segment of 93 respondents that work at media companies that earn $1 million or more in annual revenue.
Investment in “Audience Intelligence”
The primacy of audience analytics and engagement tools in purchasing plans is a clear signal that publishers are getting over the endless race for scale required to keep digital display advertising viable. It’s clear publishing and media companies desperately want to understand and nurture their key assets – their audiences – better. Better user profiling will power more effective marketing offers and more sophisticated ad targeting and lead-generation capabilities.
A Shift to User-Generated Revenue
The long-game for investments in audience development technology for many media and publishing companies is revenue directly from readers. Audience analytics, insight, and engagement tools paired with strong data management capabilities will buoy subscription sales efforts.
Recognizing Inefficiency is a Real Problem
Efficiency is clearly a big challenge that publishers hope to solve with technology. Workflow & Project Management was one of the top technologies publishers will buy in 2018. Taking this a step further, publishers actually see increased efficiency as a revenue catalyst: Tools that streamline or even automate content distribution allow editors and marketing staff to focus on creating value, opening up revenue opportunities in new formats or serving new audience segments.
Taking the Power Back
Tying together our survey respondents’ audience-centric focus, ambitions to develop reader revenues and drive for efficiency, there is a newfound passion for self-determination. Publishers burned by the Duopoly’s hold of the digital ad markets and Facebook’s fickle newsfeed policies want to get their audience back on home turf. They are ready to spend to bring readers back to their own properties and to keep them there with more tightly targeted, relevant content that they can get anywhere else.
Top 10 Technologies Publishers Are Shopping For in 2018
The Audience Looms Large in 2018
Publishers are putting their audiences first when it comes to technology spending. Investment in audience-focused tech is targeted at extracting better audience insights, promoting engagement, growing traffic, and ultimately, the direct audience monetization that comes from deeper reader relationships.Audience Analytics (tools to track/manage/visualize audience insights) was rated the top technology investment for 2018, chosen by 34% of respondents. The top pick indicates spending targeted on better tracking audience behaviors and interests, managing all of the related data, and extracting insights.
In recent years, many publishers have worked hard to get their data into a single repository, but have then struggled to make this data actionable. It’s now clear publishers are eager to implement technologies that make their data more accessible and monetizable.
Publishers are hopeful that they can use the granular insights they have on their audiences as a competitive advantage against the large-scale marketing offerings of the likes of Google and Facebook. Especially in a post-GDPR world, where opted-in and known individuals will be more valuable than ever, publishers seem to have new traction and Audience Analytics tools promise to be a key weapon.
For example, predictive analytics tools that harness artificial intelligence are being employed to identify buyer intent among B2B audiences. This can, in turn, enable publishers to deliver targeted advertising and account-based marketing on behalf of clients, yielding better results and higher CPMs. Similarly, in the consumer publishing space, Hearst is using product-oriented content and analytics tools to reveal consumer intent and sell more effective and profitable ad campaigns.
Admittedly, Audience Analytics is not a discrete technology and is often built into other technologies that help extract audience insights, such as Data Management Platforms, Business Intelligence, and Content Analytics. Case in point: while not in the top 10 as a standalone category, customer data platforms (CDP) have risen in the buying ranks and become a popular solution for publishers to better track cross-platform user behavior and identify, nurture, and monetize valuable audience segments.
Greater intelligence on readers can also be used to optimize the creation and distribution of content. Better audience understanding is especially useful for offering highly-relevant — and in some cases personalized — content to readers. This creates a better user experience for the audience and the greater engagement that publishers covet.
Speaking of which, right behind Audience Analytics comes technology that supports increased Audience Engagement. These are solutions that keep visitors on the page longer – such as, commenting, polls, quizzes, and social widgets – and are being prioritized by 28% of respondents. While individually these types of engagement tools might only have an incremental impact, orchestrated together they can help to create a more “sticky” experience on publishers’ sites. With the objective in mind to attract and hold audiences on their owned properties, publishers might up their experimentation with engagement tools.
Social vs. SEO
Despite the ups and many downs social platforms have dealt publishers in recent history, spending on tools that support social media activities has not gone away by any means. Investment in technology to optimize social performance was tied at second place with Audience Engagement and SEO/SEM spending, all chosen by 28% of publishers surveyed.What has really changed is a shift to seeing social media, not as a way to support revenue generation effort on third-party platforms, but to build an audience. Publishers are finally catching up to the idea that Facebook is not a publishing channel… it’s an audience development tool. And with SEO/SEM rising in the rankings, a broad audience development strategy is emerging, mixing social and search to improve content discovery and engagement. “We are driving social media campaigns to increase SEO ratings, engage new prospects, and reinforce our brand to existing customer base,” explained one survey respondent.
Although search optimization has never been off the table for publishers, it has been playing second fiddle to social media. Google’s jump back to the top traffic referrer spot at the end of last year has focused a lot of minds on the need to re-energize their SEO/SEM tech toolkit. And increased spending in support of the quest for more search traffic is further evidence that publishers are no longer willing to rely on traffic from the major social networks.
Focusing on Owned Properties & Subscriber Revenue
In addition to tools that support audience insights, engagement and growth, publishers are also looking for ways to get a better grasp of their own properties and directly monetize the audiences they attract.Content Analytics tools, such as Chartbeat, Google Analytics, and Parse.ly, once again made a strong showing, (chosen by 24% of publishers), indicating an emphasis on monitoring and improving content performance. Content Management Systems featured in the top 10 for the second year in a row, speaking to the need to optimize onsite experience as well as content distribution. And Email Marketing, a key strategic plank in the drive to bring audiences home, was tied as the third most popular technology publisher will buy in 2018 (down only slightly from the #2 spot in 2018). Open-ended comments highlight the importance email plays in reducing dependence on social media. “Email is the one area we can really own…we don’t have to be dependent on the ever-fickle Facebook and Google…there is more long-term growth potential with email.”
Perhaps even more noteworthy are a few of the newcomers to the top 10. Paywalls & Subscriptions was the fifth most popular technology (tied with CMS) while surprisingly the unglamorous Workflow & Project Management category tied for third. (More on Workflow & Project Management in the next section.)
Paywall and Subscription solutions, in particular, represent publishers’ move to purchase technology solutions that drive revenue directly from their knowledge about and relationship with readers. This chimes clearly with ever louder calls to reduce the reliance on ad-funded models and develop a greater focus on subscription income. Investments in paywall tech are an acknowledgment that publishers will continue to struggle with reader revenue until they limit access on a premium or metered content basis.
Paywall software is also increasingly associated with audience data solutions as publishers look to develop “smartwall” capabilities that use machine learning and behavioral data to create offers dynamically based on the individual. Integration with audience databases is also a key feature of subscription sales and although they are outside the top 10, customer-focused data solutions CRM, CDP and DMP all make it into the top half of the technology-to-buy list.
Top Tech Publishers Expect to Drive Revenue in 2018
Publishers Focusing on their Own Houses
To gain deeper insight into the technology publishers anticipate will actually be the most impactful in the coming year, we asked publishers to identify the single technology purchase they expect to generate the greatest revenue growth. Our first key finding from this question showed that there really isn’t a single killer revenue driving technology for publishers—the top response getter received only 9% of the vote. The top four technologies are shown above and a couple conclusions can be drawn.The failure of one technology to take a clear lead in the revenue stakes could indicate a reaction against past technology-driven fads. It could be an indication that investments made to chase income from distributing content on third-party platforms or support the pivot to video have delivered less than impressive returns.
Instead, this year, publishers appear to be looking more closely at their own businesses and targeting their technology spend at solutions that meet specific operational or audience needs. The level of detail in some of our survey comments supports this view. One publisher justifies spend on SEO technology with a highly specific objective: “Unlike our flagship website, we will be trying to acquire intent-driven, long-tail searches instead of branded ones, and that will be a big change requiring different technology and monitoring.”
Efficiency is the New Black
Though the responses to the revenue-driving question were widely distributed, there was one especially noteworthy and surprising showing: Workflow & Project Management solutions rose to the top of the revenue list with 9% of respondents selecting it. The fact that publishers see workflow solutions as providing the biggest opportunity for revenue growth indicates that operational inefficiency is viewed as one of the biggest blockers to income generation. Coupled with the fact that Workflow & Project Management technology came out of nowhere to make a number 3 appearance on the overall top technologies list (Chart 1), and we think publishers are sending an important signal.This push for efficiency is likely in response to the explosion of platforms publishers are expected to distribute content to and the multitude of product lines they’ve launched in recent years. While many publishers have diversified their revenue lines, process and infrastructure haven’t always followed suit.
The link between efficiency and revenue is summed up beautifully in a comment from one respondent. “We need to enhance our options to improve revenue.”
Survey comments point to a desire for the better workflow to “reduce associated staff time” and support broader efforts to optimize content creation and curation. “Our current system is preventing us from producing enough accurate and quality content,” said one respondent. Disparate systems – 10 in one case – are hampering efforts to streamline processes and, in some instances, digital activity is outgrowing existing solutions.
A publisher using Dropbox to store assets for more than five years now intends to invest in a solution to speed up content management with custom searches. “Our library has gotten too large to do a reasonable search for assets…”
Technology that makes collaboration and content creation in multiple formats easier was also highlighted. One respondent is looking for software that will provide “good editorial tracking and versioning… ease file sharing and commenting.”
Meanwhile, solutions that support new product lines, such as events, podcasts, video, account-based marketing, and more, could be on the docket as well as publishers seek to fortify their organizations.
What Publishers Hope to Achieve with Technology in 2018
Mining for Data
When asked what motivates their technology investments, publishers drove home the point that they’re clearly focused on wringing more value out of their data assets. Indicating the business objectives they hope to achieve through buying new tech, “making audience data more actionable and monetizable” was the number one pick, prioritized by 47% of survey respondents. This is in line with the dominance of audience analytics in spending plans, indicating that technology strategy and business strategy are well aligned.The desire to attract a new audience through search and social that was apparent in spending plans was also mirrored in business objectives, with “increasing website traffic” selected as the second highest priority (chosen by 45% of respondents).
Comments from survey respondents underline the importance of upping audience intelligence. “Our readers’ behaviors onsite are invaluable to our advertisers if we are producing the right content. We are looking for technology partners to help us leverage that to grow our audience and our revenue.”
The ability to efficiently collect, share, and activate audience data has a direct line to revenue in the eyes of publishers. As another survey respondent put it: “It’s not about just growth anymore. It’s about further monetizing the existing subscriber base and audience we have.”
Making data more actionable also means breaking audience insights loose of the data crunching part of the organization and putting it in the hands of the masses. As one survey respondent indicated, “democratization of data” will lead to “faster, better decisions across the business.” Publishers often lament the struggle to implement a data-driven culture but should be mindful that getting non-data experts to look at and act on data often requires support in the form of user-friendly analytics dashboards, training, and working groups.
Which Emerging Tech Will Change Publishing?
Artificial Intelligence, IoT, and Voice Pique Publishers’ Interests
Taking a step back from the demands of 2018, we asked publishers which emerging technology they expect to have the greatest impact on the publishing industry in the next 3 to 5 years. Respondents ranked each emerging technology, from Voice Assistants to Virtual Reality, with 5 being the greatest impact and 1 being no impact on the publishing industry.The weighted average for each of the eight emerging techs identified was in a fairly narrow band between 2.5 and 3.6. While none earned the “game-changing” designation, Artificial Intelligence (for the purposes of content generation as opposed to content recommendations or predictive analytics for example) was signaled as the most potentially impactful emerging tech. With a weighted average of 3.6, publishers expect AI-driven content generation to have a significant impact on the industry.
With publishers feeling the pressure to create more content with limited resources, delegating some of the nuts-and-bolts content creation to bots would be a welcome relief. Some first movers such as Reuters, The Washington Post, and the Associated Press have begun to experiment in this space, but time will tell how effective and accessible this capability will be for media and publishing companies at large.
The Internet of Things also ranked high in terms of impact on the media business, which itself will be reliant on AI capabilities to support the next explosion of platforms content will populate. Some publishers have started to test the IoT waters, from lifestyle wearables to industrial devices.
Voice Assistants also ranked well, unsurprising given the surge in sales for home assistants by tech giants Amazon, Google and Apple. Publishers have ventured into this new format, but most are likely waiting to see clear business cases before plucking down for supporting technologies and resources.
Taken together, AI, IoT, and voice assistants are a triumvirate of technologies that represent a greater interaction between computers and humans. While this space may not be an immediate revenue driver, publishers should look to experiment early.
Meanwhile, “Cool tech” such as Augmented Reality, Virtual Reality, Chatbots, and Blockchain were all recognized as having some potential to impact the industry but it remains unclear how they will be applied profitably. For example, most VR efforts have been sponsored by the VR headset manufacturers themselves.