Data services: Make it a "must have" not a "nice to have," said Executive Forum panel
"Ad revenue has been jolted by mobile," said Hart. Citing Google's recent financial report, she said the company's growth rate for ad sales has declined. Digital ads are growing, she continued, but the average price of ads has dropped because the shift towards mobile ads; mobile ads costs less than desktop ads.
The conversation soon turned to data and business intelligence and how to make it into a successful operation. The key message: make your data and business intelligence product necessary.
"There is this relentless commodization of data products," said Kotulski. "But, is your product nice to have or a must have?"
Baskerville laid out the opportunity plainly: Ad-driven initiatives can hit the ground running faster, but data and business intelligence have more stability. He said to investors, these business look more attractive over time.
Building a subscription-based data or business intelligence service is not an easy task, noted the panel. To clients, an initiative may be off-putting. "Six-figure corporate subscription changes the dynamic," said Kotulski. But the panel has seen the value first-hand.
Sollinger described Financial Times' business intelligence service, Deep View. Deep View merges its weblog data with its adlog data, giving advertisers a deep knowledge of its readers. Advertisers can find out who has seen their ads, who has clicked through, plus their title, industry, geography and time of visitation.
If you add even more data, said Sollinger, you can charge 10 to 15 percent more. One of the keys for a successful service is to keep adding information services, including new data sets and new insights, said the panel.
Not to be overlooked is getting the right staff for these services: a staff that takes a product approach, that has a software background, that feels the need to innovate, said Kotulski.
Baskerville agreed. "Does your senior management have the ability to develop and execute?," he said. "It's not going to work if your organization only knows how to sell media. Find partners. Hire top talent. Don't make it a flavor of the month."
When asked how publishers covering unstable industries can make subscription data and business intelligence services attractive to clients that don't have the budgets, Sollinger noted that it wouldn't be easy.
"Nothing is foolproof," he said. "We lost a tremendous amount of business intelligence business [at a point], but they came back when the budgets were back. It was the first thing they came back to rather than advertising. You have to have the guts, have the confidence that it is a 'must have.'"
"Service businesses come back faster," said Kotulski. "Providing analytics to big customers is more valuable."
By Elizabeth A. Reid