Why Are Some Publishers Selling Their Data?

Data businesses open up new revenue lines

Some media companies are finding that they can create new revenue lines by selling their data.

In a survey by Lotame of 300 US senior decision-makers at digital media and marketing companies, one-third of respondents reported that they’re selling their audience data.

“Publishers who choose to sell their data are often driven by one thing: increasing revenues,” said Jason Downie, chief strategy officer at Lotame.

A few publishers are turning to vendors to help sell their audience data to advertisers. Other publishers, like IBM's The Weather Company, are building their own data businesses.

For a publisher, a pro of having a data business is that it can provide a high-margin revenue stream that isn’t too labor-intensive once it is set up and running properly, according to Jeremy Hlavacek, head of revenue at IBM Watson Advertising. One of the drawbacks of publisher data businesses is that it can become difficult to create differentiated products that marketers actually want, since basic demographic data is already widely available, he said.

“Basic data is pretty commoditized and not worth all that much,” Hlavacek said. “More unique data products can fetch good prices and make for a good business, but they require meaningful investments.”

Another potential drawback of selling data is that some publishers worry that doing so will lead them to give away their audience to competitors, according to Downie.

“If they see their audience data as a leg up on the competition, they will be wary of sharing that data with anyone else and losing their competitive edge,” Downie said.