Knowing your readership and attracting advertising revenue is as crucial for online publishing as it is with the paper-based publications.
In the past, the business model of many online publications was highly suspect. Access to valuable information was free and little consideration was given to how the sites would make money, although it soon became clear that revenue from banner advertisements was not enough in itself.
Making online publications more profitable is now a common goal. Some, like the Wall Street Journal online ( www.wsj.com), have chosen to leverage their strong brand and reputation by charging visitors who want to view its pages. Others such as the telegraph.co.uk, the online arm of The Telegraph newspaper, have turned their attention to e-commerce and are courting alternative revenue streams. These include areas such as holidays sold through the travel Web site, its fantasy football feature and an online betting service.
This move has led to an increased focus on business intelligence and customer analytics.
The Telegraph launched the Electronic Telegraph in 1994. Since then both the marketplace and telegraph.co.uk have changed dramatically. Telegraph.co.uk, which is owned by Hollinger Telegraph New Media (HTNM), now has 17 different sites. Topics that once formed subsections of the main Web site, such as sports, travel and money, have been spun out as fully-fledged commercially driven channels.
HTNM now delivers about 27 million page impressions a month and claims to have more than 1.5 million monthly unique users. The company wanted to boost e-commerce revenue and target these online readers with personalised services which meant keeping track of customer behaviour became a major consideration.
Previously HTNM had relied on a bespoke, in-house system based on Oracle and Perl to track and analyse user behaviour on its sites. It also briefly used a third-party tool, Net Genesis, but found it was not sufficiently flexible to meet its needs. The search for an alternative tool led the company to business and customer intelligence firm WhiteCross Systems.
"The big disadvantage of the old system was the amount of effort it took to maintain it," says technical director Andy Teesdale. The level of internal expertise and resources needed to support it was compounded by the lack of flexibility, which made it difficult to adapt to changing business requirements. In contrast, Teesdale says WhiteCross offered an outsourced model, which reduced the strain on internal resources and reduced the level of up-front investment required. It is also relatively simple.
WhiteCross began working with HTNM during the test phase of the sport.telegraph.co.uk Web site last November, in preparation for its launch that December. It has since been involved in the launch of all the other new channels.
HTNM started off by looking for general trends in customer preferences. It then began "segmenting" offers to groups of customers according to their profile and behaviour. The next step is to provide more personalised offers and information.
Customers that log on to the company's sites are "tracked" and their behaviour recorded in a daily log file. WhiteCross centralises the data from the various sites before analysing customer behaviour. It provides channel-specific and cross-channel analysis for all of the telegraph.co.uk sites on a daily, weekly and monthly basis. These reports are then published on a Web site later that day, where they can be viewed by authorised HTNM staff, such as channel heads and the marketing department.
HTNM also uses an outsourced tool from Gomez to measure the performance of its sites. Every 10 minutes the service tries to log on to each of the company's sites from different global locations and records the download times. This helps the company to see where the peak times are and help identify, and ideally avoid, bottlenecks. "The useful thing for me is putting the two together," says Teesdale. Gomez helps identify the peaks and WhiteCross helps to explain them.
"I think it improves your understanding of the customer base," says Teesdale. "If you understand them better you can better serve their needs."
He says it closes the loop, providing valuable feedback and helping the company to learn and improve.
Also, because the logging analysis is carried out offline, any problems with the WhiteCross service does not affect the availability or performance of its sites. This is a major consideration, says Teesdale, and has helped the company avoid troublesome service level agreements and unnecessary downtime. On the flipside, he acknowledges that this means the company does not get real-time data, although he says that getting the performance information in real time is more important.
Business development director Matt Duffy points out that advertising - including banner ads, sponsorship, listings and classifieds - is the key revenue stream for the company, although "e-commerce revenue is becoming increasingly important for us". As for charging for content, Duffy says the big question is "when is editorial unique enough to charge for?"
Having topic-specific sites and then using customer analytics and business intelligence to target users with more personalised services is helping to boost return on investment, he says. The company also hopes to increase registration levels and encourage customer loyalty.
"As the understanding of our users increases so too does our understanding of the business," says Duffy. "It is difficult to predict exactly how the usage of data analysis will evolve. However we do know that customer data and analysis is becoming increasingly important to our business."