The Strategic Use of APIs

Looking for change, challenge, growth? Increased innovation across your organization? New content models and revenue? A new audience acquisition strategy? The ability to knock out the competition? Then think about giving third party developers to access to your content and data in a structured and open manner via APIs -- Application Programming Interfaces. APIs represent a way for publishers to develop new sources of revenue by increasing content distribution fueled by technology and bringing outside ideas in.

Consider Twitter and the constellation of products created by third party developers in its orbit. Twitter provides users up-to-the-minute content on a continuous basis and generates ad revenue through sales of promoted tweets. Twitter is a relate-able and familiar model to publishers.

By allowing third party developers access to its content, Twitter invited innovation from the outside in, increasing the use and value of its content and boosting its revenue. Third party development using Twitter’s API makes Twitter even more useful and draws a larger user-base to its content. Twitter’s ongoing evolution holds valuable lessons for those producing and distributing content.

Innovation, Increased Data Use, Expanding Audiences - APIs provide external talent the ability to develop novel useful new pathways to your content which increases data use and revenue and helps companies innovate and evolve past its competition. Providing access to content and data in a structured and open manner for third party development provides the opportunity to design entirely new ways for existing customers as well as new customers to experience content.

Successful publishers understand the importance of aligning content to the capabilities new technologies bring. It’s a tough job since publishing as an industry has traditionally under-valued and under-funded R&D and struggles with accepting external ideas. APIs represent the next step in developing new ways of presenting and pricing content as well as meeting the expectations of an audience which is constantly growing in technological sophistication.

Monetizing APIs, Controlling Access to and Pricing Content -APIs offer endless possibilities to monetize content which are limited only by the imagination of app developers. Technology exists for controlling the access to and securing content as well as the tools necessary for monetizing it.

Old-timey revenue and pricing models publishers are already familiar with: ad-supported, transactional and subscription as well as somewhat newer models like DaaS (Data-as-a-Service) can be implemented in conjunction with systems for tracking and billing for data usage.

APIs and Expectations - Across industries and businesses APIs are redefining how companies develop their products and conduct business and the steadily escalating growth of APIs will influence and shape expectations about how content is accessed, used and priced.

-- Nancy Ciliberti

Learning from Start-Ups

Monitoring what's going on with online start-ups is not only a great way for me to identify interesting new data-driven products and new market opportunities, it's also a touchstone for assessing how the publishing industry is doing relative to the best and brightest online innovators. Here are just three recent examples, each interesting to me in a different way:

Mixpanel, an undeniably hot and respected web analytics company recently gave an interview where the founder proudly stated that, "The next leap we're taking is being able to tie data to an actual user." If that sounds like an audience database, that's because it is. And the publishing industry has seen the opportunity in creating comprehensive user/subscriber profiles for years now, and poured significantly resources into this effort. And based on the audience database projects we've been involved in, I am pleased to report that many publishers are well on their way to databases that will truly be cutting edge in the targeting and insight they can deliver.

Another hot new start-up, Retailigence, does one thing: it helps big companies put their store inventory data online. This isn't a new concept; companies like Milo have been offering similar services to smaller retailers for years. But what is intriguing about Retailigence is that it is selling to big companies, those with big SAP applications and the like. The lesson here is that even the largest companies, those with the resources and the incentive to do it themselves, will still turn to a third-party vendor for a well-crafted solution that helps them quickly address a business need. And with all that product data (and information on what is selling where and how fast), one has to wonder if Retailigence has a data opportunity at least as large as its software opportunity.

Finally, here's an elegant data product that solves a small but important problem: how can online retailers easily offer discounts to senior citizens, college students and active duty military personnel? It's something that is done so routinely in bricks and mortar retail that nobody thinks about it. But online, it's next to impossible to do this in a seamless, hassle-free way.

Enter SheerID, a new database that helps automate this process for online retailers, right inside the shopping cart. The need is clear and the concept couldn't be simpler. What jumps out at me is that something like this is just being addressed in 2012 - a powerful proof statement that for all the amazing innovation and progress we've seen on the web, there are sizable infrastructure opportunities still to be found, and many of these opportunities will be data-driven.

So should you ever start to feel that all the good opportunities have been mined, or that you're falling behind the technology curve, take a good look around you. You're sure to find both re-assurance and opportunity just about everywhere.

Search Engines: From Indexers to Distributors?

A New York Times article this week, entitled "From Search, to Fetch," describes moves by both Google and Bing to get you to an answer faster. Called the "Knowledge Graph" by Google and "Snapshot" by Bing, you'll find that searches for certain types of information will now bring you a highly summarized presentation of key facts without needing to click on any of the links shown in the search results.

As the article concludes:

Both Microsoft and Google stress that these developments are but the first timid steps into a beautiful future - a future where search pages know what you mean, display exactly the information you want with one click, and even perform tasks for you. These companies are no longer happy serving only as the card catalog for the Web; now they even want to bring you the book.

More interesting to me, however, is that only in a small percentage of cases will Google (courtesy of Google Books) truly bring you the book. In the majority of cases, what Google will bring you is data. And where do these data come from? Third-party databases.

This is just one more example of search engines tacitly acknowledging the value of structured and semi-structured content. As importantly, Google is also acknowledging that some content sources are more dependable and trustworthy than others. Yes, Google is now featuring content that hasn't been selected by algorithms, but rather by humans basing their decisions in large part on the brand reputation of the content provider. Bing is presumably operating the same way.

Google so far is limiting itself to free third-party data sources such as Freebase, the CIA World Factbook and Wikipedia, among others. The data sources used by Bing aren't disclosed, but Snapshot reportedly is a bit more commercially oriented, providing summarized data on hotels, restaurants, bands, events, etc. I think it is quite likely Bing is already licensing some of this content from third parties.

The potentially great outcome is that with the arms race mentality of Bing and Google, one or both may start licensing more content in an attempt to offer the most compelling search experience. That's good for those publishers willing to be paid a large fee to make some or all of their content broadly available for free (and what a great ride that was for many publishers during the dot com boom). The losers in this scenario are those data products with commoditized content. For those publishers with expensive, specialized and proprietary content, it's a mixed scenario. Some may experience neither benefit nor harm. Others may find that exposing a taste of their data for free can yield tremendous levels of exposure that can drive new sales.

The way I see it, the search engines continue to evolve from information indexers to information distributors. And this could be a very fine evolution indeed.

Big Data: A Long Way from Plug-and-Play

One of the key markets for all the new big data analytics providers is marketers themselves, a group that should be a natural for turning deep customer insight into increased revenue. But are they ready? Well, according to a study by Columbia Business School and the New York American Marketing Association, although nearly all (91 percent) of marketers value and want to make data driven decisions, 29 percent report that their marketing departments have "too little or no customer/consumer data." Thirty nine percent of the marketers surveyed said their data is collected too infrequently and "not real-time enough." Two in five marketers admit that they cannot turn their data into actionable insight and about an equal number (36%) report that they have "lots of customer data," but "don't know what to do with it."

Researchers found that despite widespread adoption of digital marketing tools like mobile ads and social media, they are less likely to be measured for ROI. Eighty five percent of marketers are using brand accounts across Facebook, Twitter, Google+, and Foursquare but 14 percent of the social networking users are tying them to financial metrics. Fifty-one percent of marketers said they use mobile ads (in-app, or SMS) but only 17 percent of those using mobile ads are tying them to financial metrics. Forty one percent of email marketers measure their results with financial metrics. Overall, 60 percent of companies report that comparing the effectiveness of marketing across their different digital media is "a major challenge."

Forty two percent of marketers report that they are not able to link data at the level of an individual customer and 45 percent are not using data to personalize their marketing communications. Twenty-eight percent said they do not know which high-value customers to focus their marketing on.

Marketing success in the advent of Big Data means mapping marketing metrics to objectives aligned with corporate strategy, collecting and sharing data at the individual customer level throughout the organization, targeting and personalizing marketing efforts and measuring ROI across touch points. But marketing success in Big Data also depends on having the data in the first place. We're not all there yet, which is why the excitement around Big Data needs to be grounded in the mundane reality of where most marketers are today.

-- Nancy Ciliberti