SOURCE: Scout Analytics

Scout Analytics

November 10, 2010 09:05 ET

New Research From Scout Analytics Shows Publishers Have Uplift Potential of 20-30 Percent for Average Revenue per User

Demand Map™ Illustrates How Aligning Subscribers' Engagement Profile With Licensing Provides Immediate Revenue Boost for Digital Publishers

SEATTLE, WA--(Marketwire - November 10, 2010) -  Scout Analytics™, the leader in revenue optimization for digital publishers, today released new research around paid content. The research revealed that publishers have the potential to increase their Average Revenue Per User (ARPU) by 20-30 percent by simply aligning licensing with a subscriber's level of engagement. These findings identify low-cost revenue growth at a time when the cost of new subscriber acquisition is rapidly increasing.

In digital media and information, engagement is the unit of monetization. Not only do publishers want to grow engagement, they want to maximize the revenue from engagement. A measurement commonly used in gaming, telecommunications and other markets, ARPU represents total revenue of a service provider, divided by the number of subscribers. For digital publishers, ARPU can be leveraged to understand revenue efficiency of their existing business model in monetizing engagement. During Q3 2010, Scout Analytics studied eight unnamed publishers in multiple vertical industry segments and found all of them overlooked revenue optimizations in one of three categories: license tiering, license enforcement and/or new license types. On average, by matching licensing with subscriber's level of engagement, the publishers studied could boost revenue by as much as 20-30 percent.

"In digital media, revenue data and engagement are unnecessarily uncoupled," said Eric T. Peterson, CEO of Web Analytics Demystified. "Fortunately leading-edge technology providers like Scout Analytics are doing the heavy lifting for these organizations, developing revenue optimization models based on user engagement. This focus on user engagement is unsurprisingly providing a significant return on the analytical investment over relatively short time horizons."

Research Methodology
The publishers included in the research were selected randomly from more than 60 existing customers. The research was based on 60 days of online usage data from each publisher. In addition to tracking page views, the data analyzed included firmographic, technographic, and revenue details.

The findings of the research came from a proprietary revenue-to-engagement analysis called a Demand Map™. The Demand Map uncovers pricing disparities across subscribers by evaluating and visualizing the unit cost of engagement. Additionally, the Demand Map identifies correlations between high and low unit cost of engagement such as industry, geography, and other factors. Each subscriber is categorized into one of four profiles ranging from churn risk, normal engagement, up-sell opportunity, and cross-sell opportunity. 

The Findings
The research showed that while pricing had been planned to match engagement profiles, the actual revenue to engagement profiles were significantly different. The research showed that proactive alignment of license to engagement profiles can result in 20-30 percent potential uplift in ARPU. The research identified three alignment scenarios common in all eight publishers.

Across publishers, it was common to see a wide distribution of consumption and devices per license (i.e., license reach). In most cases, the mismatch is a higher than expected use of the service and represented a significant up-sell opportunity by tiering licenses more effectively.

The research showed that terms of use violations occur at a higher rate than most publishers assume. Both individual user and site licenses are susceptible to unlicensed use. Some of the highest demand comes from these subscribers and represents immediate revenue opportunities.

The research also showed that digital publishers could increase revenues by licensing for specific value propositions. Specifically, data showed that industries using a publisher's service to make derivative services are not licensed properly. Other findings included identification of new value propositions that could be packaged and licensed at a higher value.

"Scout Analytics' goal in this paid content research was to establish a methodology for increasing a publisher's ARPU," said Matt Shanahan, SVP of strategy for Scout Analytics. "We expected to find that each publisher's revenue optimization opportunity would be unique. What we found is that optimizing revenue performance of the existing licenses is common, repeatable and actionable. License optimization has an average of 20-30 percent ARPU uplift potential and can be identified with 30 to 60 days of data."

About Scout Analytics
Scout Analytics is the leader in revenue optimization for digital publishers. Scout Analytics' unique SaaS allows publishers to predict, target, and monetize visitor engagement. Scout Analytics is a venture-backed company headquartered in Issaquah, Washington. To learn more about Scout Analytics, visit www.scoutanalytics.com or call 425.649.1100. Follow the Scout Analytics blog at http://blog.scoutanalytics.com.

Contact Information

  • Media Contact:
    Kristina Molfino Lanpheir
    Kulesa Faul Inc. for Scout Analytics
    650.340.1992
    Email Contact