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Pugpig Media Bulletin: How subscription-based businesses and the shift to first-party data are revolutionising media

Subscriptions and first-party data are allowing Bloomberg to remake their relationship with advertisers. Could it do the same for you?

2nd November 2022

Bloomberg and other premium publishers are leveraging first-party data to cut out ad middlemen. Photo by Julian Hochgesang

In the Pugpig weekly media bulletin, Pugpig’s consulting services director Kevin Anderson distills some of the best strategies and tactics that are driving growth in audiences, revenue and innovation at media businesses around the world.

Bloomberg’s ‘philosophical’ shift leads it to divorce ad middlemen

At Pugpig, we talk about how we believe that publishing is important and has a great future, and this edition of our Media Bulletin, we see that, even during periods of economic uncertainty, publishers are pushing the envelope of innovation whether in developing new content formats or improving the returns and resilience of their businesses.

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Bloomberg enjoys a privileged position with its 450,000 subscribers and 5 m registered users, and advertisers want to reach that audience. Reader revenue and the shift to first-party data is providing publishers like Bloomberg a “position of strength”, says Digiday, allowing it remake its relationship with advertisers. First it ended its relationship with native advertising platform Taboola. That “(sent) a clear signal to the rest of the market: the publisher won’t put ad dollars before its users,” Seb Joseph at Digiday said.

It can afford to move way from easy money like Taboola because it has built a first-party data platform called “Audience Accelerator”. That data and the relationship that Bloomberg has with its audiences, its subscribers, are incredibly valuable. “Whatever happens, it will come back to us figuring out what we can do well for our users and our clients. Those two questions are our steers for figuring out how we navigate this huge change in the industry,” Julia Beizer, chief digital officer at Bloomberg Media, told Digiday.

They will guard that data and those relationships jealously because they are so valuable, which led them to shift from selling ads on open auctions to private marketplaces. More advertisers are coming to Bloomberg directly, and open auctions came to account for only 5% of their revenue so the decision was easier to make.

As Digiday said, Bloomberg is a premium publisher operating at scale serving well-heeled business consumers. It is an open question of how these strategies can scale down. Certainly, building a bespoke first-party data platform as Bloomberg has done is an option only open to the largest publishers, but there are a growing number of first-party data platform providers that could provide this service to smaller publishers. And the shift to reader revenue and first-party data is a much broader set of changes across publishing. For many other publishers, the other challenge will be hiring or developing the skills to manage subscription or membership and first-party data strategies.

If you want to take advantage of these strategies, but need some help, get in touch with Pugpig Consulting Services at info@pugpig.com. We have a growing network of consultants with a range of skills including revenue optimisation that can help you optimise your subscription or membership revenue and develop a first-party data strategy.

Inspiration from an impatient innovator

Many publishers found that they had to accelerate innovation initiatives during the pandemic as audience behaviour shifted radically. José Antonio Sánchez, audience editor for El Tiempo in Bogotá, Colombia, told INMA that he learned during the pandemic “not to be afraid to speed up your plans”. Last week we talked about A/B testing, and Sánchez discussed the wide range of experiments that he has run and is running.

He once ran a study on how driverless cars would affect media consumption in developing countries. He admits it was one of his crazier projects, but it is still an interesting question.
With the support of consultants and Facebook and INMA’s Audience Accelerator Analytics programme, the paper developed a system that would predict what content was best to put behind their paywall that would lead to the greatest number of subscription conversions.
He is currently using artificial intelligence and machine learning to find out about the preferences of Colombian readers abroad based on uses and gratification theory.

Inspired yet? The only question that remains is what experiment you will run to serve your audiences better or to win more subscribers or members. Get in touch because we would love to hear about them.

Paywalls shift from hard and soft to dynamic

One of the trends that we will highlight in our upcoming State of the Digital Publishing Market report will be personalisation. In practice, that has meant different things for different publishers. It might mean personalised content in a newsletter or it might mean a personalised digital content experience for registered users.

However, there is another way that personalisation is starting to remake publishing: dynamic paywalls. Leveraging AI, dynamic paywall technology adapt content offerings and subscription calls to action based on the habits of each user so that they are more likely to convert. For instance, an avid sports reader might see a subscription solicitation after reading a lower number of sports stories than other topics, as an example provided by Faisal Kalim at What’s New in Publishing. And he added that FIPP’s annual Innovation in Media report said that dynamic paywalls were the “hottest new tool” because they were driving “significant, sustainable reader revenue”.

However, dynamic paywalls can do even more, delivering pitches that are more tailored to readers’ habits and to readers more likely to convert. The technology develops propensity models using factors such as “frequency, recency, depth of read, preferred content types, and favoured devices” to generate a propensity score that relates to the readers likelihood of subscribing. And the technology is being used by business publishers like the Wall Street Journal and Bloomberg but also general news publishers like Switzerland’s Neue Zürcher Zeitung.

And as publishers collect more first-party data, solutions like dynamic paywalls will only get smarter. And for all these reasons, while there might be storm clouds on the horizon for economies around the world, we at Pugpig know that publishing has a bright future.

Industry News

Here are some of the most important headlines about the business of news and publishing as well as strategies and tactics in product management, analytics and audience engagement.