Niche publishers see market research as new revenue source

Niche publishers all claim they know their audiences inside and out, and they are building out new ways to trade on that knowledge.

On Tuesday, Dec. 4, Pride Media, the publisher of Out Magazine, The Advocate and Pride, will announce it has acquired Community Marketing & Insights, a market-research firm specializing in LGBTQ communities; Quartz, after years of conducting market research on its own, is now conducting user research for top-spending advertisers; and Fatherly, which uses an internal research team called Fatherly IQ on projects across the organization, is busy hunting for a person who can helm market-research programs, which it plans to use as a carrot to attract more advertisers.

Market research offers niche publishers a way to further ingratiate themselves to marketers and agencies; in cases where it has a direct relationship to an advertiser, market research gives them access to an entirely new budget.

But figuring out how independently they should run and ensuring that the research offers real value to clients pose long-term challenges. Advertisers and agencies all see promise in these new publisher initiatives, though they need more work done.

“Publishers are all saying they can do this,” said Natalee Cecil Geldert, brand media director at PMG. “But for some of the niche publishers, the breadth and depth they can get into is very top-line.”

By acquiring CMI, Pride Media bought itself access to a lot of new business leads. While Pride and CMI did have some overlapping customers, consumer research usually comes out of an entirely different budget, which gives the publisher a separate way to connect directly with a major client. It also starts conversations from an entirely different angle, giving publishers a new context to deploy the marketing services teams many have been busy developing.

“It opens us up to new customers,” Pride Media CEO Nathan Coyle said. “‘Advertisers’ is too narrow a word. CMI already does business with foreign governments, major nonprofits. That has nothing to do with consumer marketing. That’s exciting to me from an enterprise perspective.”

But research is also a great thing to package with advertising, which creates a big question for publishers: Should research be sold as a standalone product, or included as an ingredient in a larger package, typically centered around media?

Coyle is determined to position it as a standalone product — the first Pride salesperson to sell a research-only offering to an advertiser will get a bonus, Coyle said — but some publishers are happy to go the other way. Quartz has been conducting audience research for years, but about a year ago, it launched a partnerships team designed to serve advertisers spending seven-figure sums to reach Quartz’s audience. Many of those clients asked about ways to unearth insights using Quartz’s audience, so now Quartz works with them to help shape research programs it conducts throughout the year. It looks to run six to eight such projects per year, in addition to the research it conducts on its own, according to Ernesto Henriquez, Quartz’s director of insights and brand strategy.

And because it sees the research as a good branding opportunity of its own, Quartz makes sure that it’s very clear where the research comes from. “There’s always some recognition that it’s produced by Quartz,” Henriquez said.

Fatherly sees the opportunity in a similar way. It is looking to expand Fatherly IQ, a kind of insights arm that many different sides of the organization use, including editorial, sales and audience development.

And while the publisher hasn’t ruled out the idea that it would sell research as a standalone, it currently likes creating programs that lots of departments can use; understanding how parents use technology, for example, will be just as useful to an editor developing a content strategy as it will be to a creative services department trying to figure out a branded content pitch.

“I don’t know if we want to compete directly with the Kantars of the world,” Fatherly CEO Michael Rothman said. “What we have is a more differentiated offering precisely because it’s bundled.”

Unlike the low-margin, highly competitive world of branded content, a small market-research team can land big deals and execute them at relatively low cost. Involved market-research programs typically command a six-figure price tag, which can be executed by relatively small teams. CMI, the Pride Media acquisition, consists of three full-time employees, though it has a number of regular contributors; Quartz Insights, the team that conducts its own research, consists of four full-time employees. Pride Media CEO Nathan Coyle said he thinks that consumer research could eventually wind up delivering 10-15 percent of Pride Media’s revenue, which is currently dominated by advertising.

Publishers are spinning these teams up in part because every player in the digital media ecosystem is trying to make themselves more useful to advertisers. That includes agencies, who are leaning on publishers to help them surface insights on their clients’ behalf.

Being able to furnish insights is especially important for niche publishers, particularly because it helps to make the case that a brand should be spending more time trying to connect with a particular audience, said Jess Sanfilippo, vp and group media director at 360i. “It is not enough to simply throw your dollars towards a niche media property and consider the box checked on establishing an authentic and meaningful engagement with their audiences,” she said.

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