Tom Betts, Chief Data Officer of The Financial Times Group, UK, at right, and Jason Kint, CEO of Digital Content Next, USA, in conversation during the 70th World News Media Congress. Photo by Ricardo Lopes for WAN-IFRA.
“I think data is the only way of seeing the whole picture,” said Tom Betts, Chief Data Officer for the FT, during an on-stage conversation with Jason Kint, CEO of Digital Content Next, at the World News Media Congress in Portugal.
The FT believes in a successful balance of digital subscription and ad revenue – and their data strategy is crucial to this.
Here are some excerpts from their conversation:
Jason Kint: If a company is seeing 90-95% advertising for the digital side of things, do you see it succeeding?
Tom Betts: I can’t really see a scenario where advertising alone continues to pay the bills. The challenge is not the composition of the revenue but to find a model that will be sustainable and profitable in the long run.
Advertising, as a source of revenue, introduces volatility into the business. Reader revenue has brought more sustainability, which makes our business predictable and allows us to invest in user experience and things that matter to the reader.
“We do not focus on only advertising or only subscription. The trick is to strike the right balance and blend the two, thus allowing us to think more about the needs of the consumer, with the security of the subscription relationship,” – Tom Betts, Chief Data Officer, FT
We believe in investing in experiences that delight our customers so that in the long run, we will have a more sustainable business, people will be more loyal and will develop a habit of reading the FT. All this would ultimately lead to more sustainable advertising.
When we look at subscriptions or advertising, we are perhaps doing it through a slightly different lens – a lens that is looking further out than today or tomorrow.
Kint: You’re the chief data officer; is data important to see the whole picture? What sort of data do you wake up to and go to sleep to?
Betts: I think data is the only way of seeing the whole picture. One of the things that often gets missed when we’re talking about the performance or the effectiveness of the products we are building is that we look at metrics and you forget about the context of the customer.
We focus very hard on building metrics and measurements which help us to understand the loyalty that we are building with the customer; so we’re talking about reader engagement, which doesn’t mean just sharing stories, commenting, tweeting or liking – those are indicators that someone is engaged with your brand – but what we look at is on a per reader basis the extent to which people are building loyalty and habit and their return rate to the website and if they are getting value for their money.
“That customer centric metric [reader engagement] – that’s the thing that I look at all of the time. But it’s also the thing that the whole company looks at because it’s a unifying goal in a business like ours where we’ve got two dominant revenue sources – subscriptions and advertising, with tangible potential tension between them,” – Tom Betts
This is also something the newsroom can be interested in and get involved in because it’s about improving the readers’ experience and measuring the extent to which those readers are establishing patterns of readership. So the newsroom like it, and we like it too on the commercial side. And it creates that kind of common way of us talking and communicating internally and galvanising our focus.
We have complete confidence that if we grow this metric – if we grow loyalty, and the extent to which our customers are getting value from our product – then we will achieve commercial success.
Kint: Google has culled data collection and tagged 75% of the top 1 million websites. Facebook has 7 million websites tagged to collect data. How do you look at your relationship with the platforms in terms of data? Do you have any ‘walk-away’ points or things you must have in relationship with the platforms?
Betts: The question for us, is that if we want to participate in those environments is ‘What are the conditions for success?’ And then we have to be in a position to build and manage a sustainable business with a sustainable future.
So when we are thinking about where and how we can distribute our journalism, given the role and importance of data to us in managing our business and in understanding the value our subscribers, our readers get from the journalism, we don’t think about ‘How does our app perform?’ or ‘How does Facebook perform or Twitter perform?’ We don’t think about those things in isolation. We want to see them as part of a broader picture of your media consumption so that we can understand where we need dial up or down our investments. We can only do that if we understand the whole, not just a the fragmented picture.
Therefore, when we are talking to the platforms about how to make news work in that environment, data is really important – access to the right level of information, so we can make those calls.
If a subscriber is consuming content through a platform, and if they can enable authentication, it helps us create a potentially better customer experience. But we need to be able to get the information back as to how that content is being consumed.
“Data is one part of the equation, but the other part of the equation is the ability to act on the information. It’s all very well to have some information you can look at, but what are you going to do about it?” – Tom Betts
The other thing that is crucial is as publishers, we should have the flexibility to put our content where we want, decide how much we put there and make decisions whether it’s going to be free or paid.
The thing that is fundamentally important is that direct relationship with the reader.
We’re in this movement towards more opportunity with first party data and there’s probably a system that will have to be changed to be in line with the GDPR. The way of advertising businesses is still very messy, especially the privacy regulations – it is all going to have to go.
Nobody really understands what’s going on in the digital marketing ecosystem. It’s incredibly hard to pull apart. And that’s one of the things, I think, GDPR is incredibly positive for.