Publisher Focus Moves from Pages to People

Following the customer segmentation path many large media companies are taking, USAToday.com will be the sixth major media firm to use Tacoda Systems’s Audience Management Software (AMS).

Advance Internet, CondeNet, Tribune Interactive, Forbes.com, and The Weather Channel's weather.com currently use the software in a mission to better leverage the value of their customers, and define new revenue channels.

Is customer segmentation all it’s cracked up to be? “I don’t think it’s a panacea,” admits Tacoda president and CEO Dave Morgan, former founder and CEO of Real Media. However, he suggests, “There’s a big move in publishing away from quantity to quality and away from pages to people; with that going on segmentation becomes essential.”

At first, the promise of AMS can seem a tad un-P.C. According to Morgan, it can determine the “monetary value of site visitors.” And just how can the price of an individual be set? The system compiles all user interaction and behavioral data within a single database (for instance, content affinity and specific ad exposure) from all digital marketing channels on a per-cookie/per-person basis. Pre-existing data like customer and subscriber lists can be filtered through to the same database, which is used in-house and owned entirely by respective clients. From there, marketing programs targeting particular audience profiles are automated.

“If I know someone is a once-a-week visitor to the Business Travel section, it’s captured,” Morgan elaborates, “or if they’ve been exposed to five AT&T ads, it’s included; this leads to the visitor’s actual value.” Based on the amount an ad campaign sold for, publishers can use this information to assess the ad revenue obtained through each individual user. The result? According to Morgan, many publishers find that 20-30% of their audience drives 70-80% of their revenues.

That’s all well and good, but setting a price for various customer segments is futile unless the findings are actionable. AMS allows for the second, most important step, which is targeting those potentially higher CPM customer groups. The system can target by Web server, email server, and can personalize communications.

“The albatross of the Internet,” comments Morgan, “is everybody knows that you can not only research; you can target. If you can’t target against the segmentation, it’s only going halfway.”

USAToday.com will use the software in ways similar to other AMS clients: to enhance targeting capabilities according to customer segmentation, enable delivery of newer ad units (such as session-style formats), and generally learn things about its audience it may not have known before.

This can enable publishers to develop new revenue streams based hard data, rather than mere inklings. For example, newspaper companies are finding that online classifieds are great for making money, but offer limited ad inventory because people don’t visit those sections every day. With the AMS software, publishers can leverage the knowledge of who’s visiting, say, the auto classifieds by allowing auto advertisers to target only those actively-looking potential car buyers in online sports or local news site sections. Or, customer segments deemed less-than-profitable, such as chat room users, can be required to opt-in to email communications.

Predicts Morgan, “only the most economically efficient publishers will survive.”

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