AI and marketing: the benefits for a pay-TV provider

Pay-TV providers can use AI to personalize their marketing campaigns, resulting in greater conversion than using segment-based marketing. Some types of campaigns actually only make sense when they are personalized.

NAGRA Insight Team
Sep 7, 2018 · 3 min read

Example: a personalized upsell campaign
Let’s take for instance a campaign where the target is to upsell a premium subscription package to existing users. AI algorithms will determine which package each subscriber is most likely to buy and select the subset of users where the benefit is likely to outweigh the campaign costs.

It will then select the most effective communication channel (call, on-screen promotion, SMS or email) to engage individually with each subscriber, taking into account the cost of the channel and the estimated upsell revenue. Those highly likely to convert can be called, as calls convert better but are more expensive. Those less likely to convert can be sent an SMS or an email, which is much cheaper. Those unlikely to convert should not be contacted at all, to avoid annoying them with unsuitable communications.

Conversion increases when the algorithms determine which upcoming content is most likely to resonate with the user’s personal taste: you want to highlight — by phone or in an email — a golf event in a premium sports package if they love golf and avoid mentioning Formula 1 if they never watch it.

This provides better results than a segment-based approach, where marketers divide users into a small number of segments and tailor their content and delivery to each segment.

Measuring the impact of campaigns
Measuring the impact of campaigns is critical in order to establish what works and what doesn’t, and to decide how much to spend on future campaigns. The best way to establish a campaign’s impact is to select a small subset of the campaign target audience who will not be targeted (the control group) and to compare their response to those who are targeted. Analyzing the relevant KPIs for both groups provides a quantitative measure of the campaign’s impact.

For an upsell campaign, you probably want to measure ARPU and the average number of upsells in the campaign population versus the control group. The impact can be broken down by user segment, and segments that did not convert can be eliminated from the target in future campaigns.

What usually converts best is a combination of popular and personalized content.

Personalized marketing to increase retention, usage & revenues

This approach can be applied in many different ways. You may want to increase SVOD usage to reduce churn to pure OTT providers. Or re-activate SVOD users who have seen everything that they like and could discover easily. Or drive the usage of a new, little-known service, such as catch-up TV, and increase usage on your 200+ linear channels. All of these can be achieved more effectively with taste-based recommendations.

Only data science and artificial intelligence can help you to create impactful, personalized actions for millions of subscribers — this is a task that is impossible to do manually or using simple ad-hoc rules. Consistently combining these types of campaigns has a substantial impact on the bottom line and also on customer satisfaction. Behaviors have changed, and people are impatient: they are only happy with communications that are relevant to them. Personalization is no longer optional, it has become mandatory.

NAGRAInsight

We are TV specialists, data scientists and engineers, part of the Kudelski Group. We help content distributors drive their business using data.

NAGRA Insight Team

Written by

Feel free to reach out: insight@nagra.com

NAGRAInsight

We are TV specialists, data scientists and engineers, part of the Kudelski Group. We help content distributors drive their business using data.

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