Subscribe or die: The likely impacts of 'zero-party data' strategies on brands and publishers

Subscribe or die: The likely impacts of 'zero-party data' strategies on brands and publishers

In 1999, New York chef and all-round troubadour Anthony Bourdain’s famous article was published in the New Yorker, ‘Don’t Eat Before Reading This’. A prime example of the behind-the-scenes revelations that would form a large part of his career, advice included avoiding fish on Monday (citing that it had sat since Friday in all manner of conditions), why you should avoid anything with hollandaise, and why if you’re going for brunch you’ll be so hated by the chef that you’d best hope it’s also bottomless.

Needless to say, this ruffled a lot of feathers. Scores of chefs around the country were furious, upset to have been tarred with the same brush as some unscrupulous commis chef. Others of course displayed faux-outrage, knowing they had to be seen to be upset, while inwardly devastated that their four day old fish might not sell like it used to. And despite Bourdain’s efforts in the decades that followed, urging people to ignore his old advice and see the advances in food practice - in some circles, his mantra still sticks like over-cooked salmon to the pan.

That’s because like all good stories, it captured the imagination – it’s hard to not root for the heel-turned-hero saviour, shining a light on the work of the devil. It’s a strategy that’s worked since the beginning of storytelling – good versus evil, and making sure good wins. Life, however, doesn’t always work out that way. And much like 1999’s New York food scene, brands and publishers are going through a similar experience when it comes to how data is captured and used.

We’ve got all manner of heroes telling us how the way data is used, and the quality of data is beyond awful. We’ve got the unscrupulous commis chefs, cooking up with all manner of ad fraud or willfully turning a blind eye so long as the KPI is hit. And we’ve got the well-behaving actors, who in trying to educate have made themselves, in many places, pariahs and enemies of the state. However, we know that brands and publishers are well-aligned in terms of what needs to happen – data transparency, quality, and deployment, need to improve.

Cochrane... publishers are getting much better at gathering data on a zero-party basis

Lots of publishers have figured this out well, and through a mix of gating content, subscription models and more, are gathering high-quality profile data on a zero-party basis – wilfully given in exchange for service, and are seeing better performance due to the personalisation and customisation on offer as a result. Better on-page performance in terms of dwell time drives greater monetisation opportunities – and high-quality data is extremely desirable for brands to target.

Simultaneously, brands are also looking for ways to capture this data – the rise in acquisition of DTC products like Dollar Shave Club is driven in part by revenue, but also by the rich data profiles of the subscriber base. For large consumer packaged goods (CPG) companies – typically the acquiring party of such businesses – these represent major opportunities for cross-selling. If, for example, Unilever can use Dollar Shave Club data to also sell subscribers Domestos, Ben and Jerry’s and Dove, then that one subscription’s value grows immensely. We can also be confident that this is part of the drivers for the likes of EasyJet plus – these are key data points and profiles that can be easily monetised. It’s very easy to forget that the Easy brand family has dozens of operating brands, including everything from hemp to dog walking.

The commonality in both brand and publisher approaches have been the simple value exchange – the ‘Netflixisation’ of products and services are designed to offer something either more affordable or something preferable, to a more ad-hoc arrangement.

This has been the case in the B2B world for decades where premiums for rolling optional contracts are common, but the transition of this model into B2C still offers a lot of opportunity.

The subscription is likely to remain the most common way of gathering zero-party data in the coming years, with the model seemingly having a long way to burn before reaching saturation – with a recent study showing only 10% of US consumers report ‘subscription fatigue’ – a term used for having too many subscriptions to manage, which has been the liferaft phrase of choice for legacy business on legacy models.

As such, for brands and publishers alike, the next step will likely be the continuation of ‘packaging’ products and services – a DTC Unilever/P&G box, supplying you with everything from stock cubes to ice cream, could well be the big showdown in years to come – and quiet market consolidation suggests the fight is coming. For publishers, a glimpse at the fall of Quibi and the rise of Disney+ tells us all we need to know about the power of a well-filled subscription box for a conglomerate – and the dangers it has for a comparatively content-thin independent.

Enabling brands to activate that data and offer high-value audiences will remain a key part of the ecosystem – most likely, seeing CPMs grow for these audiences, but booked volumes decrease – with more inventory surfacing to the open exchange, and the revenue generated from it decreasing. In other words, a polarised marketplace of super premium and dirt cheap. This means that for publishing groups, if they wish to control their own destiny, the pressure is on to develop these high value audiences now. If instead publishers wait for a unified identity log-in, they could quickly see their runway disappear before the technology is ready and adopted at scale.

As the zero-party data trend continues, we’ll see data strategies thinking more laterally, especially at brand and publishing group level – looking to activate across business units, and grow share of spend across multiple product categories. However, for independent brands and publishers, they could quickly see opportunities and margins disappear. As has always been for the smaller fish, finding friends and partnerships with the sharks and whales will continue to offer them the best chance of survival.