The media industry has seen some extraordinary changes over the past several years. Consumers are turning to digital media for entertainment and to consume information. The business models of existing media companies are changing and new companies are emerging to address the disintegration of media, leverage the increase in distribution platforms, and support the demands for programmatic media buying and sales. Media marketing in this environment seems more difficult than ever.
Customer relationship marketing (CRM)—or delivering personalized customer experiences—is the way for media companies to establish competitive advantage in today’s digital world. In this article we will focus on TV Networks as an example, but this can be applied to all media types. CRM has evolved from the traditional technology definition and “is more about creating a direct dialogue with customers, maximizing their lifetime value, finding new customers who behave like our best ones, and ultimately maximizing return on marketing spend and shareholder value” (Williams, 2014). Customer relationship marketing provides TV networks with the opportunity to meet their customers—lifestyle, age, buying behaviors, region, etc.—and provide scalable, yet customized experiences based on their profiles. Embracing CRM will enable TV networks to overcome major challenges in the industry today:
1. Drive TV Tune-In
The end goal hasn’t changed—getting more people to view shows. However, these shifts drastically changed the game for TV networks. No longer can they rely on brand marketing tactics alone to drive tune-in. These network marketers need to develop direct marketing proficiencies and start building direct relationships with their customers to see an increase in TV tune-in.
However, direct marketing skills are not second skin to TV Network marketers. And data sources—including Set Top Box—are not fully established, making it difficult for these marketers to leverage targeting and analytics to establish competitive advantage. Therefore, many competencies need to be developed in order to begin developing, executing, and measuring integrated marketing campaigns that truly drive tune-in traffic.
2. Optimize Advertising Sales
The single goal of optimizing ad sales is motive enough for media companies to become more customer centric. Because of limited viewer data and increasing alternative media that have more targetable CRM viewer data (digital), TV networks are challenged with better monetizing and optimizing ad space, especially around lower-rated programming (mid to long tail). Understanding and identifying customers (i.e., viewers) and their attributes, behaviors, and interactions across media creates a structure for TV networks to optimally price, package, and offer more targetable inventory for their advertisers, driving higher ROI and higher premiums for greater ad revenue.
A cornerstone of selling more ad space revolves around attracting more valuable viewers in a rapidly changing content distribution model. If media companies know their customers, they are able to reach out to them more effectively with promotions to increase tune-in, visitors, and readers, and therefore increase the attractiveness and value of ad space.
3. Push Relevant Content Through Registration (or Subscription) Strategy
Limited first-party registration/subscription data about your viewers, in addition to small panel-based third-party services (such as Nielsen), makes it difficult for media companies to identify customers/viewers on a one-to-one basis and identify customer segments. These companies have long relied on demographics or a limited set of digital cookie data to further define the characteristics of their audiences.
This challenge makes it difficult to market appropriate content or recognize the viewer at every touch point. This limits the ability to customize the experience or deliver personalized content to increase engagement or repeat viewership. Moving from the current state of having an anonymous audience to a known audience framework would allow for media companies to push the most relevant content, better engage audiences, and ultimately optimize ad sales.
4. Negotiate MSO/MVPD Contracts Faster and Better
Today’s TV networks have difficulty negotiating mutually beneficial contracts with Multiple Systems Operators (MSO) or Multiple Video Programming Distributors (MVPD). When these two parties can’t come to an agreement, the cable companies pull network content from programming. In a counter attack, the TV network will run advertisements with competing networks to educate subscribers about the contract struggle: “Did you know that CBS is going off the air if Time Warner doesn’t renew their contract?”
Why do these negotiations need to be so difficult? Cable companies don’t provide contact information for their customers to TV networks. Therefore, networks are unable to communicate directly with their customers about relevant content. For example, wouldn’t it be great if these networks had email access to customers to sell merchandise to loyal fans? Until TV networks start to develop CRM competencies and “get to know” their customers, negotiations with MSOs and MVPDs will be a painful process. CRM is the key to lower retransmission fees and closing negotiations better and faster.
5. Programming/Content Development
Rather than having focus groups, gut and third-party research decides which pilots to develop or “green-light” as is done today. However, data provided through CRM practices can enhance and quicken your decisions. With a robust pool of viewers or “customers” to communicate with, marketers can showcase new show or content ideas to a wide audience and gain viewers’ opinions. Leveraging this information, better shows can be created faster and marketed to the right audience. Netflix currently leverages this CRM strategy to develop original programming.
If your company is interested in evolving their customer strategy, download a free copy of our award-winning 2014 Marketing Imperatives today! We’re here to guide you though the transition and ensure your CRM transformation is a success.