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Time Inc. hopes to use its consumer data to learn new tricks. On Aug. 7, the publisher plans to announce the launch of PetHero, a program where for $20 a month, members can get, in addition to pet toys and products, discounts on health care for pets.
PetHero, the first business oriented around services rather than content that Time Inc. has launched under CEO Rich Battista, is part of a shift by the company to mine its audience data for new business opportunities.
Its titles, which include People and Sports Illustrated, used to keep their customer data to themselves. But over the past year, the company has centralized that information and combined it with data from its ad-targeting platform, Viant, and third-party sources, for use by Time Inc.’s consumer marketers and advertisers.
“Time Inc. is like a direct marketer’s dream,” said Jen Wong, COO of Time Inc. “Going direct to consumer is different than an advertising play, but it’s in our DNA. Think about the infrastructure we built for our advertisers. We use that infrastructure, too.”
The hunt for more consumer revenue comes as the company (and other legacy publishers) struggles to modernize its print-based operation. Its revenues declined 8 percent year over year in the first quarter of 2017, and after a months-long bidding process, it decided not to sell itself, instead putting three titles on the block shortly thereafter. The company has also stepped up its push into brand licensing.
Time Inc. said it has information on 130 million current and former customers such as address and credit card information and what they read and look for online — data it can mine for patterns or trends that could suggest business opportunities.
“There’s a lot of information across our customer base that tells us a lot more information about who these people are and what they are, and what kind of content they want,” said Leslie Dukker Doty, the evp of consumer marketing and revenue at Time Inc. “That will allow us to do brand extension and extend our [average revenue per user].”
For example, Time Inc. might consider a female Sports Illustrated subscriber who reads about fitness and weight loss on other Time Inc. titles to be a candidate for the Cooking Light Diet, a meal plan and food service. A Real Simple subscriber whose browsing history suggests she has children might get offers to install Cozi, Time Inc.’s personal organization app. Having that information reduces Time Inc.’s cost of acquiring customers for these services.
Time Inc. plans to use its customer data to target advertising, too. For example, the same people who would be targeted for PetHero could also be available to marketers like pet product brand Purina to target.
“It’s a smart move on their behalf,” said John Wagner, the group director of published media at the media agency PHD. “The first-party data they sit on is so valuable, and not many other publishers out there have jumped on that.”
Time Inc. and other publishers are still a long way from being able to offer the kind of targeting at scale that Facebook and Google can. Wagner said he expects more publishers will go down this path, but added that they’ll face challenges. “The digital natives have the head start,” he said.
Publishers have had the opportunity to centralize their customer data for years, but they’ve put it off as long as ad revenue has grown dependably.
“For a long time, magazine publishers knew [that audience data] was something they had, but they weren’t willing to pay the money necessary to combine the audiences,” said Ava Seave, a principal at Quantum Media, a media consulting firm. “You have very little revenue per person [in digital media]. You have to justify why you’re collecting all this data just to get another 99 cents per month out of someone.”
Time Inc. hopes that better ad targeting will help grow its digital advertising revenue, which totaled $119 million in the first quarter of 2017, as well as reader revenues. PetHero, for example, has a big potential market, with 44 percent of Americans owning a pet, according to Gallup, and Time Inc. claiming to reach 100 million pet owners or lovers in the United States.
The main challenge for publishers trying to modernize their consumer marketing operations is merging different software systems so they communicate in real time, though, said Don Nicholas, CEO of Mequoda Systems, a magazine subscription consulting firm.
Wong and Doty said the company is still in the process of bringing together all its systems, information and data. But they said it’s running smoothly enough that the company has identified other, as-yet unspecified opportunities, which it expects to launch later this year.
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