Hubert Burda Media
Creating the third revenue stream in publishing
Hubert Burda Media is a private, family-owned printer and publisher based in Germany for more than 100 years. With global reach and deep transformational challenges shared by other publishers and media companies around the world, the Munich-based firm turned to the Acquia Platform and its Lift suite of optimization and personalization tools to turn anonymous “users” into known customers.
The challenge for Hubert Burda Media can be summarized in a paragraph that has been written for many publishers over the last two decades:
As readers shift from print to to digital channels, traditional revenue streams are drying up for newspaper and magazine publishers. Increased cover and subscription prices can make up for declining newsstand sales and circulation numbers in the short term, but this isn’t a sustainable strategy as audiences move from print to digital devices at an ever accelerating rate. Traditional advertising and issue sales are shrinking faster than can be offset by new revenue from online subscriptions and the sale of digital advertising growing from 20-30% year over year.
Publishers like Hubert Burda have long experimented with a range of solutions and technologies to adapt to the promise of the Internet and absorb the impact of digitally distributed content on their business models. Digitizing from a print to an online model has not been enough and the publishing industry clearly needs a third revenue stream, one that comes from readers. But who is “the reader”? What do they like? What do they read? What do they spend their money on? Until now, it has been difficult to capture that information. Hubert Burda Media has stopped guessing and started to get to know its readers and their tastes with the powerful combination of new business thinking, the Burda-built “Thunder” distribution of the open source content management system Drupal, and the personalization technology Acquia Lift. With Acquia’s technology behind it, Burda has started converting anonymous users into known customers.
“We had the readers, and now we have the tools. Drupal and Acquia are helping us turn 52 million anonymous readers into addressable consumers.”
— Ingo Rübe, CTO Hubert Burda Media
A new generation of musicians, notably Jonathan Coulton and Ryan Leslie, have been the pioneers of using audience engagement as the key to unlocking the third revenue stream. They prosper by spending the time and effort to identify their fans, communicate with them to understand what they want, and then produce new ideas and products based on this knowledge. They then use the digital channel to sell the tailor-made results direct to their fan base.
The changes at Hubert Burda Media, according to Matthias Möller, reflect this type of business thinking: “The biggest challenge has been to change our focus and the mindset of everyone from senior management down to our product managers and editors. Product managers have always been measured by ad revenues, which are falling away. Their main performance indicators were page impressions and unique visitors. Their aim, therefore, was to optimize the content they publish to improve these Google Analytics numbers. As ad revenue declines, so does the relevance of these numbers. We needed a new way of thinking to create a third revenue stream from our customers. So it follows that once we understood this, we had to challenge product managers and editors to think from the customer’s perspective instead of about the content. Who is our customer? What do they like? What do they read? What will they buy? If we know this, we have a lot of context about how to best serve them and how to monetize the relationship.”
In this context, a new set of KPIs come to light, like number of known customers and the conversion rate at the anonymous/known user identity wall.
Hubert Burda Media uses the Drupal distribution it developed and maintains, called “Thunder”, combined with Acquia Lift (as well as a few other technologies, see below) to drive two main approaches to third-stream-engagement and personalization. Thunder is a customized version of Drupal for publishing and media houses. Burda has not only built it, it has also open sourced it and invited other publishing houses large and small to use it and contribute their own improvements to it. It standardizes editorial workflows, adds freemium versions of services from a number of partner technology companies important to media--video transcription, online quizzes, for example--and more. The aim is to make Drupal Thunder the shared standard for media and publishing houses around the world.
ENGAGING ANONYMOUS USERS
Segmentation & Personalization – On its digital magazine properties like InStyle, Burda engages broadly with anonymous users based on information about them gathered through a browser cookie. The data includes which content they consume, which products they use, and the context of their usage –how they got to the site (from a search on Google, a link on Facebook, etc.), have they visited before, how frequently they visit and how engaged with the content, and what kind of media and topics they prefer. Based on past data and usage patterns, looking at what anonymous visitors view lets Burda make educated predictions about what content could interest the reader in the future.
For example: there are several types of reader personas interested in the topic of dieting. Visitors interested in content about diet for losing weight represent the persona “I want to lose weight by eating less.” There are users who are interesting in dieting content in the context of health, fitness tips, detox and exercise. They represent the persona “I want to be fit”. These and other personas can be assigned to various segments based on patterns and paths revealed by Acquia Lift. Visitors on subsequent visits to a Burda site will see personalized content on the homepage that is tailored to their interests, based on the behavior of other users within their segments. Efforts are also underway to understand the interests of visitors referred to the site by different referrers. For example, visitors arriving from a Google search result might ideally see different content than those who arrive via Facebook, despite the semantic content of the original referring link being similar.
CONVERTING ANONYMOUS USERS TO KNOWN USERS AND CONSUMERS
The identity wall, building profiles, advanced personalization – Burda asks users to identify themselves by providing their email address–a piece of information many users are happy to divulge in exchange for access to attractive features like a newsletter, online quizzes and competitions, special content pieces, or eCommerce opportunities.
Once the “identity wall” has been crossed, Burda is able to engage with these known visitors and convert them to customers and consumers of more than just ads. In addition to their basic information (location, arrival, visit history, media preferences), once Burda can identify a known reader, they can earn even more about them from subscriptions to special interest newsletters, open rates and click-throughs, reading and purchase history, and more.
Over time, Burda learns more about known visitors’ habits and actions on other other Burda sites and can deliver content to match their interests. But this is only the beginning. With Acquia Lift and their knowledge about user personas in place, Burda can proactively engage with and respond to these users, stay in touch with them, and try out new upselling ideas or even totally new products on a known audience. The third revenue stream becomes a reality when Burda produces its own products in- house and uses its digital channels to sell its readers products that truly interest them.
The ultimate goal is to enable the company’s profit centers–the hundreds of Hubert Burda Media titles and brands around the globe–to generate the third revenue stream themselves by giving them a set of easy-to-use, self-service tools. To drive the cultural change within the organization from content-focused to user- focused thinking, new goals based on converting anonymous user to known customers have been formulated by the executive management team. Product managers and editorial staff are also provided with business intelligence reports that visualize site visitor usage and usage-contexts as well as providing new metrics, methods and insights that may challenge existing assumptions. Thus armed, the profit centers take over and are responsible for generating third stream revenue.
Revenue sources in the third revenue stream
Hubert Burda Media can both monetize known customer relationships in given segments and better serve those customers while better serving them with targeted information and offers at the same time. Using the Food & Fitness segment as an example, here are some third revenue stream possibilities:
Sponsorship, partner relationships, and affiliate revenue – Addressable consumers interested in diet and food topics are offered an exclusive food newsletter.
- Relevant brands or partners sponsor newsletters or campaigns.
- Sales of partner products and services generate affiliate eCommerce revenue.
Burda produces products in-house based on knowledge of its customers – When a segment reaches a critical mass of users, Burda can offer weekend seminars about diets and health, sports and activity packages, fitness cruises, makeovers, and more, creating revenue-generating opportunities through sponsorship, affiliate revenue, and product sales.
Value-add on existing products – For example, subscribers to the InStyle Box (a service that delivers a box of “must-haves in fashion, accessories, beauty, and lifestyle” four times a year) can be segmented according to their interests. Each segment’s users then receive a more valuable package, one that is tailored to their interests. The contents of the Food & Fitness-specific box are different than those of the Fashion & Trends segment, for example.
Hubert Burda Media builds on the open source CMS Drupal, supported by Acquia to create a digital publishing and third-engagement- stream platform that is leading the way in turning digital technologies and the internet to the advantage of publishing. Here is a selection of the technologies and systems used at Hubert Burda Media:
- CMS: “Thunder” – Drupal distribution for publishing (based on Drupal 8)
- User-data collection and enrichment, segmentation, analytics, campaign creation: Acquia Lift Single-sign-on authentication: Harbourmaster by Valiton
- Data storage and computing: Redshift from AWS Services
- Business Intelligence Tool: Tableau Desktop, Tableau Reader & Knime
- Newsletter Tool: Elaine from Artegic
Drupal and Acquia Lift: The Backchannel to the User
Thanks to Drupal and Acquia Lift, Hubert Burda Media is now able to better engage with its users and understand their interests. Through personalized content and offerings, Hubert Burda Media makes its digital titles even more valuable and interesting to its users, while opening up new opportunities for creating a third revenue stream for itself and its partners.
“Using Acquia Lift, we have a backchannel to the user. We use this relationship to build better, more accurate profiles, which in turn lead to the ability to deliver known users content and products that truly interest them ... recommendations and personalizations to achieve our business goals.”
- Matthias Möller, Director of Project Management, Hubert Burda Media Office of the CTO