2 min read

Challenges for digital media in the era of data-driven businesses

By Petr Nemeth

The rapid development of the technology is profoundly changing our society, businesses and even ourselves. Media is, without doubts, the sector that has been dramatically affected by recent advances in the technology. In the chronological order, there was a significant emergence of online news portals at the beginning of 21st century, ruining many newspapers and magazines. Followed by YouTube and other video streaming services, whose proliferation caused major headaches to all traditional TV broadcasters, killed brick-and-mortar video renting industry and turned the video-distribution market on the head. Seeking new revenue streams, many big media houses reshaped their strategies and adopted digitalisation policies and started developing own digital divisions. However, as social media emerged in late 00’s, Facebook and Twitter, in particular, the new challenges even for newly-coming digital media keep steadily rising.

Weak brands

Successful online media portals after its emergence gradually built strong brands and were enjoying a surplus of somewhat cheap direct traffic, as users usually had a couple of top-of-mind online portals they were regularly surfing at. Given the fact, that such traffic could be easily monetised via display advertising or paid press releases, investments into digital media promised substantial long-term profits. However, in the last couple of years, the trend somewhat turned around as online media brands are being weakened by an increasing number of gate-keeping services such as social media, news aggregators or recommendation engines. So, instead of accessing favourite online media brands directly, using such gate-keeping is leading to weakening the brands. Furthermore, as traffic distribution algorithms are rather obscure, digital brands are losing control on their audiences.

Loss of direct traffic audience

Weaker brand from the web analytics perspective is resulting in profound changes in traffic source distribution, shifting from direct – i.e. someone typing URL into a browser address bar – to referrals, social shares, organic searches or even paid promotions. As a result of this shift, online media are increasingly at to mercy of such gatekeeping services. Clear prove to this statement is a recent change in Facebook’s post display algorithms, causing a significant drop in audience reach for organic posts. To maintain previous reach levels, publishers had to employ paid promotion, which is indeed further jeopardising once-positive business cases.

Changes in content consumption

With more content, sources and channels available, the typical consumption behaviour is changing towards less-time-less-content pattern. Social media, in particular, get along with this trend as more news are consumed in the form Facebook posts, Tweets or even Instagram photos. For the media on the other hand, as more content is being consumed outside owned channels, it is increasingly difficult to reconcile even the basic performance metrics.

Proliferation and demand for data analytics

Expanding and increasingly diverse nature of data sources operated by digital media drives the demand for data platforms as well as the proliferation and demand for data analytics in the media business. Given the fact, that it is difficult to reconcile even the basic media performance metrics and the fact that digital media must quickly adopt data-driven business processes, the key component of such data platforms is flexibility, i.e. ability to accommodate all those diverse data sources. Moreover, with lagging revenues from online advertising and fierce competition, cost-effectiveness in another important factor.

Dataddo is helping on-line media with pursuing their data-driven decisions
In Dataddo, we built our data platform with a simple objective – being able to work with any online data source providing it has an API – regardless the shape or form on the one hand, and on the other hand is easily interoperable with any existing IT infrastructure businesses might have. This makes Dataddo platform suitable for digital media in particular, as we are able to accommodate the great diversity data sources, that digital media are usually working with and indeed have the flexibility to swiftly implement any newly emerging. Dataddo platform is operated in cloud ensuring cost-effectiveness and thanks to the well-thought user interface can be operated even by non-tech users.

Tags: Data Strategy