Building and packaging digital products

Using Analytics to Drive Revenue

Introduction – Mather Economics

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• President and Founder, Mather Economics

• Extensive expertise developing pricing strategies through customer specific predictive modeling

• VP of Business Development• Former Sr. level executive with

Dow Jones, Gannett, and McClatchy leading audience development and marketing efforts.

Chris ChristianMatt Lindsay

• Director, Digital Services• Doubled ESPN Insider Digital

subscription services to over 750,000 paying subscribers

Kent Schacht

Mather Economics: Firm Overview⋙Founded In 2002 to bring leading practices in applied

microeconomics to businesses⋙Extensive experience in yield management for media companies⋙Focus on advertising and subscription revenue optimization⋙35 Employees ⋙Based in Atlanta, offices in New York, Europe

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Client Portfolio⋙Newspaper Publishers⋙Magazine Publishers⋙Digital Subscription Businesses⋙Instant Lottery Game Manufacturer⋙Satellite Broadcasting Company⋙International Hotel Company⋙Cell Phone Service Provider

⋙Telecommunications Company⋙Cable Television Companies⋙Temporary Staffing Agency⋙Electric Utility & Power Coop⋙Multinational Financial Services Firm⋙Leading Fast Food Chain

Digital Media Revenue Optimization

Media Evolution: Coverage, Platform Change, Revenue Model Does NotNewspapers : Content sold in a bundle∙Focus on classified revenue∙Focus on advertising revenue∙De-emphasis on direct-to-consumer revenue

Magazines: Content unbundled∙Focus on rate-base, advertising revenue∙Paying for subscribers

Media Evolution: Coverage, Platform Change, Revenue Model Does Not

⋙Digital: Opportunity for depth, niche coverage∙Heavily reliant on reliance on advertising∙Traffic moving to mobile, along with lower CPMs

Media Evolution: Coverage, Platform Change, Revenue Model Does Not

Today: Trying to Put the Genie Back in the Bottle – At Least Partially

⋙Direct to Consumer products emerging throughout the digital media landscape

⋙Diverse revenue models offer more predictability

Because the Digital Revenue Model of Choice in the Future Will Contain D2C

⋙Self-sustaining digital growth

⋙Diverse content, evolving with platform growth

⋙Traditional Thinking: How to Increase Digital Subscription Revenue⋙Investment∙Product development∙Marketing initiatives∙Platform

⋙Business model disruption∙Meters∙Paywalls∙Hope and pray

The Secret Weapon - Data⋙Revealed behavior through data analysis has replaced stated preference⋙Gives digital media companies the power to make truly informed business decisions∙Product∙Price ∙Marketing

⋙Integrate direct-to-consumer revenue with ad sales revenue

-- Derrick Harris, Gigaom.com March 4, 2015

⋙Promotion⋙Programming ⋙Product ⋙Pricing

Mather’s Focus: Using Data to Fuel the Four P’s

⋙Use data to make smarter decisions about what content is produced and posted

⋙Know exactly what each piece of content is worth

⋙Factor in CPM, subscription conversion, impressions, traffic

Programming

⋙Build product offerings based on audience behavior and likelihood to engage

⋙Package digital subscriptions outside of the bundle tradition∙Focus on how users engage with content

⋙Present products to customers based on how they’re able to be monetized∙Aim users into the appropriate funnel based on how they bring value

Product

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sports:footballsports:rosenblogsports:columnistsnews:localsports:baseball:cubssports:basketballsports:breakingnews:nationworldsuburbsnewssports:collegesports:hockeysports:smackblognews:opinionsports:baseball:whitesoxbusinessnews:local:politics

⋙Focus on the demand curve

⋙Segment pricing based on audience and value∙Airline model – price based on a number factors, one-size does not fit all

⋙Different content has different value to different types of users∙Technology allows for targeted messaging and experience

Pricing

⋙Data analysis builds efficiency and maximized yield based on preferred KPI∙Build subscriber base∙Build subscription revenue∙Build ad revenue

⋙A/B Testing ⋙Segmented offers by customer value

Promotion

⋙Every media company is full of customer data∙Data is like oil∙Refining into action

⋙The key to monetization:∙Program∙Product∙Price∙Promotion

⋙The future is bright – quality content will always have value

Summary

Thank Youmatt@mathereconomics.com

chris@mathereconomics.com

kent@mathereconomics.com