November 1, 2022

Bloomberg an Example of 1st-Party Data Done Right

It’s been a couple of weeks since Bloomberg revealed that it was removing 3rd-party programmatic advertising from its site. In an Adweek story:

The business news publisher Bloomberg Media will stop serving open-market third-party programmatic display advertising on both its website and mobile app, beginning Jan. 1, 2023, according to chief executive officer Scott Havens.

The publisher will also discontinue its use of vendors whose recommendation products divert traffic away from the Bloomberg website, such as Taboola, its current content recommendation vendor.

This has been presented as an opportunity to create a better user experience for readers so they’ll return, engage more, and hopefully become paid subscribers. And that’s a nice benefit for sure, but if we’re being serious, it’s not the real reason this was done.

As I wrote a few weeks ago:

Bloomberg has a ton of valuable data. Its audience is comprised of some of the wealthiest people on the planet. The readers run the biggest businesses in the world, influence more purchasing, and likely purchase more luxury goods compared to most other media companies. So why would Bloomberg ever want to allow someone to underpay for that?

Open-market programmatic advertising lets marketers be lazy. They don’t have to talk to anyone and can target their ads as much as they want. So, a marketer can sit down, pick Bloomberg as their target, put a bid in, and then wait for the impressions to rack up.

Now you can’t do that. So if a marketer wants to get on Bloomberg in front of this highly influential audience, they’ll be forced to have a conversation with someone at Bloomberg. And that’s what B2B media companies have had to do forever.

As an aside, I’ve been digging into monetizing data for the past few weeks for premium members. Become one here so you can never miss a future issue and access the complete archive.

AdExchanger spoke to Bloomberg Chief Digital Officer Julia Beizer, breaking down how Bloomberg did it and what it hopes to gain. According to the story:

Dubbed “Audience Accelerator,” the tool was built in house. Bloomberg created its own data lake with information about its 450,000 subscribers and 5 million registered users. The publisher uses that data for its own targeting algorithms and lookalike modeling. A few advertisers have already run test campaigns using the data.

The Bloomberg audience data in its data lake includes self-identified info, such as job title, industry and seniority, along with people’s reading habits, and can be used to target ads on Bloomberg’s sites and for post-campaign analytics.

This is the secret sauce to the entire first-party data discussion. There are effectively three categories of readers:

  • Anonymous
  • Known
  • Known+

The Anonymous reader is someone who reads things on the site, but you don’t know who they are. The Known reader is someone you know, but there’s little consumption behavior. And the ultimate goal is to create as many Known+ readers that you both know who they are and what they are consuming.

As is reported in the AdExchanger story, this helps Bloomberg in two ways:

  1. It can connect the proper advertising to the right person
  2. It can connect the right audience with the right content

Both are unbelievably powerful for different reasons. When it comes to advertising, it is powerful to deliver the correct ad to the right person at the right time. I go back to the podcast interview I did with Industry Dive’s Sean Griffey, where he said:

An example I always give of that is that we could tell people when COVID wasn’t the most important topic that CFOs were reading about, we can point to the week that they stopped reading about covid first and read about something else. If you say to marketers, hey, now’s the time to change your campaigns from COVID and working from home to budgeting, that’s really powerful. A media organization that focuses on data can do that.

Being able to show an advertiser when sentiment has changed means they can provide updated creative on a rolling basis. This closely connects the ads to the content, boosting performance.

At the same time, connecting the right reader with the right content increases the likelihood that someone will become a paid subscriber. People pay for what gives them value. And if you can ensure that people see what is most valuable to them—and then hit them with a target marketing message—they are far more likely to pull out their credit card.

That’s what makes this approach so bright. As Beizer told AdExchanger, “our first use case was hoe to optimize the subscription business.” In other words, it ate its own dog food. So how could Bloomberg confidentially sell this first-party data to marketers if its own marketers weren’t also using it?

This is the future of advertising on the internet. I don’t care what new 3rd-party targeting is rolled out. The cat’s out of the bag, and publishers realize how idiotic it was to give up control of their audience to ad tech vendors. And so, as time passes, more publishers will introduce their offerings to marketers. And, as time goes on, marketers will get more comfortable buying directly from these publishers.

But not everyone will win. As I asked during one of my existential writing moments, would your readers miss you if you were gone? If you’re chasing pageviews with derivative content, it’s unlikely you’ll have any actual, actionable data. Deliver value to your readers, and you’ll see it returned with data.

Dotdash Meredith struggles

There’s a great story on Flashes & Flames about Dotdash’s struggles integrating Meredith. In it, Colin Morrison wrote:

In an email to staff, Vogel admitted the post-acquisition integration and transition to Dotdash systems was taking longer than expected and would not be complete until about now: “Our migrations have taken longer than we initially thought to ensure we did them properly. It’s the internet, that’s how it goes sometimes, no matter how hard you try. What matters is that you try.” The Dotdash Meredith CEO also told employees that revenue had dropped in July for the second consecutive month. It will be interesting to see how confident he feels when the third quarter figures are published next month – and whether he will admit to indigestion from the Meredith deal.

This stuff is hard. And it’s tough when dealing with the number of sites and content Meredith has. But, as I wrote a couple of years ago:

The next step is to have a similar technology stack. According to a reader who used to work at Dotdash, the migration to Dotdash’s tech stack and CMS can take anywhere from 3-6 months.

But once that happens, the site is completely templatized. This allows Dotdash to spread the cost of doing new work across multiple sites. If a new template is created for one site, that same template could, theoretically, be used on other sites.

In a shareholder letter published in May, IAC Joey Levin said:

Last week, we completed the first migration, Health.com, with immediate results. Health.com now hosts 30% fewer ads and the site loads 5x faster – a materially better experience for both readers and advertisers. Fewer, better, faster ads enhance performance for each advertiser, and while we took a quick hit to revenue, the increased ad yield brought us back to neutral within a week, the fastest recovery we’ve ever seen. The best and highest-paying advertisers reward the publishers that clear out the junk. Migration of the remaining properties should now quickly follow.

That’s the long-term play here. First, it can make the sites faster by removing a ton of junk ads and still get back to neutral revenue quickly. A faster site means more users will visit the site since Google rewards fast sites. And that, ultimately, means more money.

Do I think Dotdash Meredith will struggle over the next 6-12 months? Without a doubt in my mind. The ad markets are rough right now. But I remain convinced that the acquisition of Meredith was the right play for Dotdash. And as Morrison writes in the piece:

That’s why we might expect Dotdash Meredith to divest, demerge or spin-off People magazine. What is probably – still – the most profitable magazine in the US sells 3m copies weekly. It might be worth at least $1.5bn (1x revenue) perhaps to the TV networks or video streaming companies Barry Diller knows so well.

That would certainly fit Neil Vogel’s “we don’t do sports, politics, or news.” Only time will tell us how it all plays out.

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Also… My friends over at Aging Media are hiring an Executive Editor to oversee the strategy and expansion of its editorial teams across five brands. I’ve long been a fan of the Aging Media team and think this would be a great opportunity. Check out the job here.

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