Three Steps to Effectively Monetizing Data

When I write about 1st-party data, I often talk about it as this Holy Grail that will revolutionize your business. But as someone actively going through this process, it can be challenging for stakeholders to understand just how impactful the data can be.

As I wrote last week:

B2B media companies have always valued 1st party data because they had no choice. They needed to prove to partners that they had the right readers and that these people were likely to make informed purchasing decisions. If you couldn’t prove that, advertisers were far less likely to spend with you.

Where I think many operators struggle is with visualizing the end state. They may understand that 1st-party data is essential and may even know that they can monetize it, but how do they develop a strategy to monetize data effectively?

I think about it in three steps.

Step 1: Data Strategy

There are two broad-level questions you are asking yourself here.

First, what is the data that you are looking to collect? I operate in the world of b2b, so the core information I care about is two-fold:

• Declarative data that is provided to me by the reader, including industry, job level, and function
• Consumption data that I glean by tracking what the reader does on my site

But the data for your business might be fundamentally different. So it is essential to be very clear about what information you want. The best way to ascertain that is to talk to your partners and understand what information they need to feel more confident about advertising with you.

In the case of b2b, it’s what I listed above. But in the case of last week’s example of a food recipe site, it’s different information. So it might not be much declarative data, but instead, be a very well-defined taxonomy for the consumption data.

Either way, you need to sit down and articulate what information you need, and the only way to do that is to understand what your advertisers will want to pay for.

Second, once you know what data you want, you need to understand how to use that data. And specifically, I am talking about developing a strategy and determining the tools required to use the data.

1st-party data allows you to segment your audiences. And so, you need to figure out how you will do that. How will you empower your marketers or operations people to use the data?

This is where many media companies make their mistakes. They hear all these buzzwords about “big data” and “data lakes vs. data warehouses” and buy the wrong tool. Or, they buy something that requires a ton of customization (or build it), and then there’s a need to have people on staff to support the tool. Tools are meant to work for us, not make us work for them.

That doesn’t mean you won’t need people to work on the tool. But what’s the person doing? If it’s executing advertising campaigns, that’s a win for you. You need people to manage this. You’ve lost if it’s downloading segments and sending them to people to upload into another tool. You have people there to support a tool.

This needs to be part of your data strategy because once you pick a tool and integrate it, it becomes increasingly annoying to try and leave the said tool. It’s possible, but there’s a risk of losing data—not to mention the extra time required to learn it.

Step 2: Productization

Once you have the data strategy figured out and you’ve started to collect it, the next step is to determine what sorts of products you will create that access that data.

Last week, I gave the following example:

You can then get a sponsor for each of those tags. However, the product isn’t a banner ad on the site or newsletter. Instead, you create a segment in your database for every person that clicks on the pumpkin pie recipe. Then, some period after clicking that link, they can receive a drip dedicated send that offers them a factory coupon for pumpkin spice.

Only people who engaged with the pumpkin spice recipe will receive that dedicated email. This helps the advertiser because they’re targeting buyers who are most likely to buy that spice. It helps the reader because they receive an actual coupon for something they needed for the recipe—and hopefully, a dedicated send that doesn’t bother them. Plus, because it’s a coupon, McCormick can track how it performed and see if it was worth the investment.

As I said in that piece, this is only possible if you have the correct data about your audience.

But what other products can you offer your advertisers that use this data? This is where it, once again, helps to understand the expected outcome of the advertising campaign.

In a b2b world, it’s leads that partners want. And so, you want to develop products that provide leads to your partners. However, this is where the quality of your data can play a big part here. If you can build ultra-deep segments, you can identify exactly who your advertiser is looking to target. The above example might only hit a couple of hundred people, but it’s the right people.

And so you’ll want to figure out which revenue products you need to create. It can be as simple as the following:

• Gated article pages
• A white paper download
• Webinars
• Targeted dedicated sends
• Live events

The point is to understand what you have available and how each product relates to the other.

Step 3: Sales Strategy

This brings me to the third step… Sales strategy.

How you sell this data is unbelievably essential and is different from slapping banner ads on the site. So therefore, it’s necessary to take your data strategy and productization and develop a plan for how you will take this to market.

I’m a broken record, but this will be unique for your business. There are some things you can glean from this piece, but ultimately, how you will sell your different products depends on what you can bring to the table.

But a core part of this sales strategy is that you want to try as hard as you can to create integrated packages over a set period. This means offering a variety of touchpoints rather than looking at things as individual line items. This helps you in two ways. First, you’re not judged on a single execution and have the opportunity to fix something if it doesn’t work. Second, you can help your partners down the funnel.

Here’s an example of what a package might look like for a b2b brand:

1. You publish a series of articles, and your sponsor says they’re interested in reaching Directors of Marketing
2. Any Director of Marketing who reads that article receives a dedicated email promoting a webinar that the partner sponsors
3. Any Director of Marketing who watches the webinar receives another dedicated email promoting a white paper by that sponsor
4. Anyone who downloads that white paper is invited to an event for free and meets the client in exchange

You might look at this and say, “but wait, that’s a lot of steps. They won’t get a lot of leads.” And that’s okay. These Directors of Marketing will have seen multiple touch points with that sponsor’s branding and they will have given lead information across multiple pieces of content. This is a sales-qualified lead if I’ve ever seen one. Even better, these people have engaged with a lot of content and attended an event.

But that doesn’t mean everyone who fell off over the previous steps is less important. They may not want to buy right away. At the end of the campaign, you’ll create a report that gives information about who read the content, attended the webinar, and downloaded the white paper without giving contact information away. So, you might say, “Director of Marketing at Microsoft,” even if you don’t say it’s an exact person.

By selling this way—and focusing on the quality of the person at the bottom of the funnel—you can give a lot less to your partners while also giving them an immense amount of value. Marketing-qualified leads are low value compared to sales-qualified leads.

And that’s it. These three steps are what it takes to create a legitimate, data-driven sales business. But it takes a lot of time. And it requires you to start with your data strategy. But once you get there, the monetization becomes unbelievably exciting.

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