Big Data
Data is the new content: How publishers can use Big Data to increase revenues
Big Data revolutionizes publishing business
Executive Summary
Qualitative enquiry with 15 German publishers
Period of data collection: May/June 2014
Authors: Dr. Alexander Henschel, Marc Ziegler, Alexander Schumm About this report
Publishers generally own valuable sets of data, but mostly not being adequately monetized. Out of 25 currently possible Big Data use cases along the publishing value chain, less than one fourth are
applied by interviewed publishers
Publishers, consequently applying Big Data technologies for processes optimization and digital portfolio enhancements, have a higher digital revenue share (>40%) and, as a rule, achieve above average profits. Especially international B2B publishers, such as Thomson Reuters, Reed Elsevier and Wolters Kluwer are Big Data pioneers in the publishing industry with EBITDA margins between 20-30%
Indicators that differentiate Big Data leader from the rest are:
Clear and consistent Big Data roadmap for implementation of new technologies/tools
Development of various, closely interlinked Big Data use cases along the value chain
Utilization of predictive analytics tools to identify upcoming opportunities
Dedicated data analytics teams, centrally organized and reporting to CEO/CDO
Continuous investments in digital infrastructures and process optimization
Seeing opportunities in monetizing data products
This report describes opportunities how publishers can make use of Big Data technologies to achieve cost savings and exploit new revenues opportunities along the value chain
Publishers own a treasury of data, but do not use it as
an asset
What is Big Data and which part is important for publishers?
For publishers Big Data results in an availability of more data from various sources in a higher frequency and the capability to gain real-time business insights
Data collection, access and storage via multiple touch-points become increasingly important for publishers. However, these processes can be outsourced if potential provider meets high data security standards
Data analytics and visuali-zation of gained insights should become core
competencies of publishers
[1] (Apache) Hadoop is an open-source software framework for storage and large-scale processing of data-sets that is being used within most Big Data systems/applications
Source: goetzpartners At a glance Variety: Share of un-structured and semi-structured data amounts to 90% of all collected data Volume: Continuously growing data-sets exceed capacity of conven-tional databases Velocity: Increased data velocity increases demand for collection, storage and proces-sing in real-time Decision-relevant insights at an as-yet unknown level DATEN- SOURCES ERP CRM Social Media E-Mail Web Analytics Real-time data Records of staff … External analytics BIG DATA
CHARACTERISTICS BIG DATA ARCHITECTURE
Data access &
data storage Data analytics Application/ visualization
Data
collec-tion from va-rious sources
Hadoop[1]
for better data access Faster in-me-mory data storage Data Mining/ Discovery Pattern Recognition Predictive Analytics Visualization & discovery of trends and correlations Integration of gained insights in applications BIG DATA RESULTS
Future core competencies of publishers
Big Data provides levers to accelerate the process of
digital transformation
Increased data availability and analytics capabilities across all fields of business, Big Data provides levers along entire publishing value chain
Big Data accelerates the digital transformation process and serves as a driver for expansion into new fields of business
The addressed potentials can only be exploited by combi-ning various Big Data tools; an accompanying change management program is also mandatory
At a glance
Big Data has two levers in general … Optimization of business processes Tool-based atomization of processes Adoption to changed value chains 2 . O p e rat io n al E xc e lle n ce 1 . S tr at eg y Development of new data-driven revenue models Increased value
creation within existing revenues models through targeting and personalization
These use cases support key drivers for digital transformation efforts
Revenue driver
Significant boost of reach Increase Customer Experience Data-driven journalism
Reduced time-to-market Revenue boost
Content-Monetarisierung
Developing new revenue sources Mindset, organization, processes Mindset shift
Strategic partnerships Digitalization of structures & processes
… that provide use cases along the entire value chain Content production Content aggregation Content transformation Multi-platform- distribution Monetization User Engagement B ig D at a u se c as e s al o n g t h e e n ti re v al u e c h ai n
Key levers of Big Data for digital transformation
The multitude of Big Data use cases along the value
chain requires prioritization
Potentials, use cases and impact of Big Data in publishing houses
Use of Big Data is currently low in publishing industries, scattered along the value chain
Driven by further digitalization and dedicated Big Data tools for publishers, Big Data use cases will increase
significantly
1] see use cases on following use cases Source: goetzpartners At a glance Big Data Use today Potentials within next 3 years Impact Reduction of time needed for research and article creation Gaining lead on competitors with respect to information and time Reduction of
manual work Significant boost of reach Increased sales through highly targeted customer approach Increased content consumption, reach Use Case 1[1] Automated text body sugges-tions based on algorithms Example Predictive Analytics to identify upcoming, trending topics Automated content adoption to multiple devices Highly targeted campaign delivery based on user and behavior analytics Identifying and targeting of “valuable” customers for up- and cross selling cam-paigns Identification of Social Media Multipliers (opinion formers) within social network goetzpartners has identified over 25 Big Data use cases in the publishing business
Use Case 2[1] Use Case 3[1] Publishing
value chain production Content
Content & service aggre-gation Content transfor-mation (Web, Mobile, Apps, E-Edition) Cross platform distri-bution and consump-tion Content moneti-zation User engage-ment / Social Media
= Big Data potential
Consistent use of Big Data results in a more
successful digital business
Publishers, consequently
applying Big Data technologies for processes optimization and digital portfolio enhancements, have a higher digital revenue share.
Especially B2B media companies, who have consistently
transformed their business based on data-driven products and business models, achieve the highest margins in the industry.
Further indicators that
differentiate Big Data leaders from the rest are:
Consolidated, company-wide data collection, storage and processing
Significant investments in Big Data tools
CIO on Board level
Chief data scientist that orchestrates data teams of various use cases
Highly active and consistent digital transformation
Successful digital business based on Big Data
Digital revenue share (in % total revenues)
E B IT D A -M ar g e in % "Big Data-Leader" in B2B media business with own innovative big data products
"Big Data-Leader" in newspaper business who consistently use Big Data tools for process
optimization and monetization
NYT obviously belongs to the peer group of heavy Big Data users, but has started transformation later than other leaders
Digital revenues and EBITDA margins of selected publishing houses
Source: goetzpartners, company information = Revenues in MEUR 2013
3.786 2.070 264 1.880 879 9.197 3.565 7.121 2.801 1.156 844 396 0 25 50 75 100 40 -20 20 10 30 0 Axel Springer Gannett Thomson Reuters Wolters Kluwer Reed Elsevier G+J 564 Financial Times Group 1.812 Schibsted
Guardian Media Group NY Times
Ringier
Tamedia NZZ
About goetzpartners
Advisory for strategy, M&A and transformation
goetzpartners is an independent advisory firm for all key issues of entrepreneurial activity:
strategy, M&A and transformation. This unique approach makes clients measurably more successful. Worldwide, some 250 professionals working out of 12 locations in 9 countries support these activities.
goetzpartners ranks among the 10 biggest German advisory firms (Lünendonk®). In
WirtschaftsWoche magazine’s “Best of Consulting 2014” awards, the company took first place in the “Project Excellence” category.
250 professionals
Offices: Munich, Düsseldorf, Frankfurt, London, Madrid, Milan, Moscow, Paris, Prague, Zurich, Beijing and Shanghai
Industries:
TMT
Energy
Industrials & Automotive
Healthcare
Financial Institutions
Retail & FMCG Facts & figures
Disclaimer
This study is copyright-protected. The reproduction, rental or any other form of distribution or publication, including in extract form, is subject to the consent of goetzpartners. This report is based on public information taken from different sources. In preparing this report, the authors have relied upon and assumed, without independent verification, the accuracy and completeness of information from these public sources. The authors point out that, if only limited, partly outdated, and/or inconsistent information was available on the topics covered in this report, they amended this information by own analysis and assumptions. The authors accept no liability whatsoever for the accurateness of these analysis or assumptions. This report should not be used as sole source of information for any decisions related to the topics covered in this report. Any information taken from the report should be verified independently and completed by information from additional sources.
Munich l Düsseldorf l Frankfurt l London l Madrid l Milan | Moscow l Paris l Prague l Zurich | Beijing | Shanghai goetzpartners Prinzregentenstr. 56 80538 Munich T +49 – 89 – 290 725 – 0 www.goetzpartners.com Dr. Alexander Henschel Managing Director henschel@goetzpartners.com Marc Ziegler
Head of Digital Business