SOVRN Holdings, based in Boulder, Colorado, works with over 100,000 independent websites, providing tools and services to help publishers understand, grow, and engage their audiences and generate revenue through programmatic advertising.
Last month, SOVRN CEO Walter Knapp flew in to London to speak at Digital Media Strategies 16 and, between sessions, we took the opportunity to ask how developing a deeper understanding of their audiences can help publishers increase the value of their sites.
The biggest challenge that publishers are facing today
Knapp said that over the last several years storytelling has been effectively democratised. He pointed to the number of hours of video that are uploaded to YouTube or to Facebook every minute, and the increase in individual articles that are published on blogging platforms.
“The WordPress blogging platform has seen a 45 percent increase in the number of articles published in each of the last three years.”
With people visiting around 200 million individual websites on a monthly basis, Knapp said the challenge facing publishers is that there is essentially an unlimited amount of information for people to consume. He explained that SOVRN’s approach to this challenge has been to ask ‘How do we help publishers make sense of who is engaging or interacting with the content that they are creating?’.
“Who are those people that are reading their content, how can they understand, not only their readership, but also how their readership compares to other publishers that are like them. Then, if they are interested, how can they make money from that?”
Knowing your audience unlocks their value
Knapp said the value in an audience lies in knowing who they are. He believes that although the technology side of the media business likes to use buzzwords and phrases that hide the fact, media is about human beings interacting with other human beings.
“It’s about understanding who those people are – are they a man or are they a woman, are they married or are they not married, do they have kids, what’s their income level, where do they live, what devices do they use?”
Consumer intent, which Knapp thinks ‘propels’ the media business, is created in the publishing domain when publishers create articles that spark interest or fuel a passion. But to access value, publishers need to know if their reader is planning a vacation for their family, purchasing a new car or deciding where to get married.
“Those are all sorts of things that you have to know to intimately understand the people that are engaging with your content. Once you understand that, on an individual basis, that’s when you can start to make money.”
Greater understanding of your audience helps you make more money
Knapp described the CPM pricing model, where media businesses will price advertising on a cost per thousand basis, as problematic. He explained that selling advertising on a website at a floor price of $5 per thousand doesn’t acknowledge that each of the 1,000 individuals that come to the site could be valued completely independently.
“One of the things that advertising technology has done over the last few years is effectively unbundled the CPM. Buyers, advertisers, can price on an individual by individual basis.”
He said that publishers pricing on CPM are undervaluing one part of their readership and overvaluing another. He explained that it’s only by understanding your readers on a granular level that you can really know what they are worth.
“If a person is in the market for an automobile, for a very specific period of time they could be worth $100 CPM. Another person, just a transient reader, might be worth 10 cents CPM.”
Understanding individuals means understanding intent
Knapp said the key to understanding individuals within an audience is to understand their intent as a consumer, and that their intent changes over time.
“People are in the market for a car about every three years, people get married probably once, people have their first child once. Knowing when that’s occurring, when that person is in that specific intent phase, is the exact time when marketers are super interested.”
This, said Knapp, is the marketer’s opportunity to change consumer behaviour.
“The biggest predictor of your future purchases is your past purchases. Understanding when that occurs is super important.”
Audience data helps editors make content more valuable
Knapp described a scenario where a publisher has one writer who writes an article that attracts 10,000 people and another who writes an article that attracts 100,000 people.
He asked ‘Which is the most valuable?’, adding quickly that there isn’t enough information to answer the question properly.
“If that first writer reaches 100,000 people, but they are a very low value audience, for whatever reason, that’s less valuable than someone that reaches 10,000 people in a very valuable audience.”
Knapp explained that understanding that difference allows publishers to make better decisions on what sort of content they want to create and what sort of audience that content will attract.
“That might make a difference to how you want to run your business. It’s understanding your business on a person to person basis rather than as a big blob.”
Understanding individuals helps publishers improve distribution
In 2013 there were roughly 2.9 billion people on the internet, growing to 3.2 billion in 2014, still less than half the estimated world population that should be online in the next few years. Knapp pointed out that those billions of people don’t tend to just go to one place to get their news or entertainment… they go to Facebook and Twitter or LinkedIn or Snapchat or Tumblr or Google Plus.
“If you look up the phrase ‘Social Network in Wikipedia, you’ll find 200 social networks… social networks around gay and lesbian issues, around academia, around people taking care of family members that have Alzheimer’s.”
Knapp believes publishers don’t only need to have their own presence, their ‘home base’, but to think about how they can take their content and put it into other distribution channels where people are congregating.
“It’s also important to understand the people who are interacting and engaging with you there so you can bring that back to produce better content… to learn from your readership and how people are engaging and how they are interacting.”
Developing an integrated understanding of the audience
Knapp said tying what people want together with how and when to get it to them and then how to monetise that, requires a ‘holistic’ understanding of the audience.
“We think about in terms of these three pillars. How do I understand who’s engaging with my content, how do I get distribution for my content and then, how do I make money from it?”
He described how a publisher creating content, video, audio, photographs or articles, and publishing that on their own website needs to also look off platform.
“I understand the people that are engaging with me, and I can start to be able to value that on an individual basis. Then I can take that content and put it into an atomic unit that I can distribute on to Facebook or Instagram or Twitter or LinkedIn or some other place.”
The information gained about how audiences interact and engage with that off-platform content can then be brought back to help create better content in the future.
Expand understanding with data collected from across the network
Knapp explained that SOVRN’s focus has been mid-sized professional and niche publishers.
“We did that very intentionally, it’s a really rich and interesting area. Think about ‘Gorillas in the Mist’ where you see people anthropologically in their native habitats… niche and really interesting websites.”
He explained that individual websites are their own ‘small microcosms’ and that the only way to get a really accurate picture of the audience was to look at it collectively.
“We think of our publishing partners as all contributing to the same collective. We’re across nearly 100,000 individual websites, on a daily basis those websites generate between half a billion and a billion page views and reach somewhere around 60 million people a day. On an unduplicated, monthly basis, that’s about a billion people and we see where they come from, what they do what sort of devices they use, what content they engage and with how frequently.”
Knapp said that an individual publisher on the SOVRN network can know more about the audience that they have attracted because they are able to understand those individuals more broadly.
“It’s not only your readership, the money that you make from your readership, the interactions that they have with you, it’s how you compare to your peers so that you can understand how to improve, where you are doing really well, strengths that you can lean into.”
Value from more than advertising
Knapp said that although SOVRN looks like an advertising–centric business it’s also about helping publishers understand their audiences better with a view to improving distribution and maybe even exploring other ways of generating revenue.
“We help publishers with advertising – display, mobile, native, video – but more than that.”
He explained that SOVRN is helping publishers get additional distribution for their content and that this could ultimately feed into the development of revenue generation through subscription models.
“People will understand which pieces of their audience they can sell content subscriptions to or create newsletters for, and other economic models that are not just advertising centric.”