Why Newspapers Need Big Data Now
Jeff Bezos’ purchase of The Washington Post has stirred up discussions, perspectives and intrigue in the media industry. It also intrigues me as a big data professor and researcher at the University of Notre Dame and as a big data entrepreneur at Aunalytics.
Why? Because big data will be central to any digital strategy in media.
Here are a couple of my predictions around Bezos’ acquisition of the Post: Consumers will see personalization of content and targeted advertisements; relevant information will be matched to consumers seeking information; relevant recommendations will be served at the right time; and consumers will see “people like me” also read this or respond to a given message.
The Post will drive up revenue of its digital platform because of an enhanced pool of more loyal and engaged consumers. Further, advertisers will see value-added propositions via targeted content and messaging to the consumer and deeper consumer understanding will drive diversified revenue streams.
Broadly, this acquisition foretells that, just as the newspaper industry is changing with a digital revolution, the industry will change with the current big data revolution.
Content has a faster spread and absorption rate than ever before. And it is comprised of bits of data leading to the big data footprint.
A newspaper’s digital platform has the core attributes of big data — variety, velocity, volume and veracity. Data is being produced at larger and faster rates than ever before. It is from variety of sources and it can be “noisy.”
There is data about the consumption of the content, about consumers, about advertisements and even about the response to advertisements. There is also data about advertisers, about campaigns and data from website and app activity. Furthermore, there is data from social networks and social media.
This big data should be central to newspapers’ digital strategies.
While digital is driving a significant shift in traditional news delivery and consumption, big data will bring the consumer and the content closer. This will lead to enhanced consumer engagement further driving the new revenue models.
The newspaper companies that most quickly strategize around big data will have a faster realization of value and consumer engagement. It will be about getting the right content to the right consumer at the right time, leading to an enhanced experience that is personalized and value-based.
Unlocking the potential of adding value from targeted messaging is key to diversifying revenue streams for the newspaper industry.
The Model: Listening to the Consumer
Bezos’ purchase of the Post is central to all things data and digital. He transformed the traditional brick and mortar shopping industry with Amazon, giving power to the “click” of the consumer, while simultaneously learning from that consumer’s click.
Now Amazon specializes not only in the packaging and distribution of products, but also the personalized recommendation of products to each consumer.
We, as consumers, are accustomed to recommendations generated from data about our purchasing behavior and the behavior of other people like us whether it is a book on Amazon, a movie on Netflix, a music stream on Pandora or a restaurant recommendation on Yelp.
These recommendations are essentially generated by data-driven machine learning algorithms that find the subset of people who are most similar to each other’s given attributes around an activity, such as books purchased or movies watched. These algorithms score each of those activities based on their likelihood of relevance for a given person, providing the ranking of activities as an ordered set of recommendations for a given consumer.
The newspaper industry should adhere to this same consumer-based model. A consumer is interacting with the digital presence of the newspaper, be it on a website or an app. Content is the product being consumed. The consumer experience, interaction and consumption comprise the data around the content (akin to the movie or book or music in the previously cited models).
This data can then drive the personalized recommendations for content and an enhanced user experience, whether it is a news brief, an e-commerce opportunity or an advertisement.
The Point of Convergence
The digital transformation of newspapers is already changing the traditional print media, and big data will not only move it forward but will also begin to reshape consumer experience and engagement. We are at the point of convergence for digital and data.
The Post will likely experience this digital transformation driven by big data. This is profound. It is the march towards a truly consumer-centric digital and data transformation of the newspaper industry.
This consumer-centric understanding will enable the diversification of revenue streams for newspapers via benefits such as smarter advertising.
Are mid-market newspaper companies ready for this change? Are they ready to embrace big data? Will big data accelerate and diversify their digital strategies and revenue streams?
I believe it will, and the question to newspapers other than the Post is this: Are you ready to embrace this brief point in time of digital and data convergence and become part of the revolution?