Lost in Translation: User Data and Publishers

What is the main asset for publishers? The old-fashion editor would say that it is the content. A journalist would suggest that it is the readers. Both of them would be right, but we should not forget about the user data.

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Surprisingly, many publishers do forget about that. They proudly talk about how many users they have, how much content they produce, and how many clicks they collect. Moreover, they are ready to give up the users and their data to a third party.

For example, assume I open a news site and see Amazon’s (or some other) ad banner. I click on it and automatically leave the news site, because I am redirected to Amazon. What does that mean for the publisher of that news site? He will get a few pennies for directing me to the advertiser’s site. That’s it.

But what does he lose? First, he loses me, a user. I left the news site and ruined its statistics. The publisher earned revenue only from the first stage of my engagement in a purchase process — and it wasn’t even a lot of money. Moreover, the publisher earns an affiliate commission only if I purchase something from Amazon within 24 hours. If I do it later than that, the publisher will not receive anything.

Second, I will be reluctant to click on Amazon’s ad banner in the future, because I already know Amazon from my previous experience (having clicked on the banner). If I like Amazon, I will visit its website without the help of an ad. Furthermore, Amazon will send me personalized offers. This means that future ad banners will be ineffective, and the publisher’s revenue will go down.

Last, but not least, the publisher gave my data to the advertiser. Maybe the publisher knows my reading and/or watching habits. But he doesn’t know where and how I prefer to spend my money and how much I have. He also doesn’t know my email and other information, because he gave up the opportunity to receive this data by redirecting me to an advertiser’s website.

Large publishing companies like Yahoo and AOL understand that the content is not the only asset. Rather, it is all about user data.

This is why brands are slightly afraid of Google’s “buy button.” According to Alistair Dent, head of product strategy at iProspect UK, “… buying directly from Google means consumers potentially don’t visit retailer sites, reducing customer stickiness. It also means Google has access to data about the customer that a retailer doesn’t.”

Those publishers who are not making use of their user data, and who keep trying to make a profit only from content, will definitely have problems.

At the start of the Internet advertising evolution, advertisers paid for impressions, which is how the “click era” started. Now we see that the “sell model” has begun to grow, and it will be the dominant model in the future.

E-commerce business is a smart business and it is looking for user data.

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