Unlocking the Value of Data
Tim Armstrong, Director, Digital Capability and Data, NOVA Entertainment
Tim Armstrong, Director, Digital Capability and Data, NOVA Entertainment
As we feel the full force of the economic winds we anticipated in 2023, there is one thing that remains constant for all businesses, that is change. Many radio businesses find themselves in a position where their core broadcast assets continue to perform strongly, all the while the potential growth opportunity across digital obfuscates their vision of a cross channel future state.
What we can see as an approach to 2023 is a difference of opinion that emerged about what exactly will our 2023 approach be? Will we go on the defensive and protect revenue, take on offensive approach to capitalise on known areas of opportunity or will we attempt a balance of both? In the wake of a black swan event in COVID, landing ourselves in a globally challenging economic environment, then taking the opportunity to pro-actively change is likely going to pay dividends.
Traditional radio businesses have historically been high margin businesses, however as the medium has evolved over time and demand for accessibility of content via digital platforms increased there is no ignoring the fact that digital streaming and in a number of cases podcasting requires an operating model and cost base that leads to a reduced margin. What is important to note is that the traditional radio broadcast is very stable and consistent– both from an audience and revenue perspective.
As a radio business in Australia, we have consistently taken a share of revenue that is greater than our share of audience. The challenge has become how do we build a sustainable and scalable digital operating model which delivers the same or ideally greater success. Here is the catch, when we look at our businesses they revolve around people, technology and data are the enablers and process to tie it all of that together. The current economic environment adds complexity to this, how do we manage to sustain momentum in a year where being defensive feels like our safest bet. The simple answer would be slow and steady, however in a fast-moving environment this is easier said than done.
Data plays a significant role in this. As we look around at our peers across other businesses and some industries, there is a constantly growing narrative around data.
1. Availability - Data that has been acquired or collected over time
2. Accessibility - How we locate, select and retrieve data
3. Usability - Data becoming a core tool in the decision-making process
It is always interesting when people comment about how much data you must have. In a changing world the quantity of data is good but its quality that really drives value.
Whilst honest but fair, like many more traditional businesses our data maturity was previously low, this is nothing we or any business should be ashamed of, the start of any change project is likely to be uncomfortable but serves as optimal starting point.
Over the last couple of years, we have been able to entrepreneurially re-allocate existing expenditure and, in some areas, gain incremental investment which has allowed us to re-architect our customer data ecosystem. This was the logical starting point. We acknowledged that improvement in that ecosystem was not only going to satisfy short term needs to have more insights about our listeners and what they consume but build towards a longer-term model that would allow us to provide informed opportunities where our advertisers can connect with specific audiences for a premium. It is worth noting that the overhaul of our customer data ecosystem included considerations and provisions that we made in anticipation of significant changes within the Australian privacy landscape.
In a changing world the quantity of data is good but its quality that really drives value.
We should at this point caveat or call-out that before we progress further radio is still an incredible strong and robust medium, and is not broken. The opportunity we see is tied to the possibilities which are now present with advances in digital technologies and increased digital consumption.
Over the last couple of years, the potential that we identify within our business has become larger and clearer. Whilst we have done a lot there is still plenty more to do and the key to our progress over time has been the ability to architect what we plan to do in a way that correlates to tangible business value. Let’s be honest. We work in an industry where we are constantly looking for the next shiny thing or tying ourselves in knots over endless acronyms, focusing on value can be easier said than done.
Data is one thing which is changing and improving the radio industry over time. In the longer term, the opportunity is for data to play an integral role when it comes to making informed decisions and injecting a greater intelligence into decision making. If ever there was a case for quality over quantity, then the audio industry is a prime candidate for this.
The ongoing challenge for many has been where to start. Most of our businesses continue to increase cadence to keep pace with the market whether that is our listeners, competitions and/or advertisers. Therefore, the margin of error becomes narrower, and the measurement of outcomes becomes crucial, failed projects will impact the ability of the business long term to invest in such transformative projects.
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