The phase-out of third-party cookies will dramatically affect broadcasters’ digital ad revenue unless they act soon to develop first party data strategies to replace them, according to industry groups. To continue radio’s digital revenue growth spurt requires coming up with an action plan now, getting executive level buy-in, and establishing a point person, according to Alison Neplokh, VP of Innovation & Strategy at the National Association of Broadcasters.
The pending cookie-apocalypse will require media companies to collect and analyze their own first party data to continue the practice of behavioral targeting of digital ads for their clients. If Google phases out third-party cookies in two years as planned, local media stand to lose 40% of digital revenue – totaling more than $3 billion for print and broadcast media digital ventures, according to research conducted by Borrell Associates for the NAB.
The numbers are sobering to say the least: broadcasters stand to lose $2.1 billion per year in revenue or 40% of their digital advertising income. That amounts to $1.1 million per television station on average, and $735,000 per radio cluster.
“It’s a big problem and something that we have to pay close attention to and have strategies for,” Chris Fehrmann, VP of Digital Products at TV station owner Tegna said at last week’s Borrell Miami local media conference.
“The real message is do something, do some analysis and ask more questions,” said Tom Sly, VP of Enterprise Strategy at the E.W. Scripps Co. The time to get started is now, he said. And if you already have a plan in place, put it through a battery of tests to make sure it works properly. “We've got time right now, probably 16-18 months,” Sly said.
Radio Better Positioned Than TV
With all of the contesting, polls, and newsletters it has conducted over the years, radio may be better positioned to successfully transition to first party data than TV. “Radio has done an amazing job throughout the years of contesting and [conducting] surveys and capturing data,” Fehrmann said. “And there's some radio groups doing great things now to start using that data for first party audiences and targeting. It’s an area I think TV broadcasters can learn from. We learned a lot in the NAB Pilot on how we can start using those tools to engage with our audience.”
Using First Party Data To Increase Audience Engagement
First party data is not just for advertising. It can also be used for audience development and engagement. That was the focus among the radio groups that participated in NAB Pilot’s First-Party Data Direct-to-Consumer Accelerator. Hubbard Radio leveraged eight years’ worth of listening sessions history to its radio station streams to develop strategies aimed at increasing online listening. Salem Media Group tested its ability to use different engagement tools and promotions to see what helped to grow specific first party data segments from both new and existing first-party members. And Beasley Media Group had stations craft and send three targeted email newsletters each month, in addition to the monthly email to the station’s entire database, to see if it would increase page views.
John Clark, Senior VP of Emerging Technology for the NAB, and the Executive Director of Pilot, says it’s important for radio companies to appoint someone to oversee their first party data initiatives. “Identify someone to own the organization’s data strategy and empower that person,” he said in a Q&A with Seth Ressler, Digital Dot Connector at Jacobs Media. “What we saw during the project was that having someone who had overall responsibility for data initiatives across departments or organizational units made a huge difference. First-party data crosses all departmental boundaries.”
While TV giants like Tegna and Scripps are able to devote massive resources to their first party data initiatives, that doesn’t mean smaller broadcast companies can’t get their own data gameplan going. “You don't need a data scientist,” Sly said. “Sometimes people can be too data-centric, and not be focused on managing the people side of it, managing the politics, and getting things done.”
Comments