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dunnhumby Head of Media John Butler interview

John Butler, dunnhumby
John Butler, Head of Communications and Media at dunnhumby (the company behind the Tesco Club Card) is speaking at the AOP Summit this Friday, 15th October at the Westminster Bridge Park Plaza.

Last few tickets available – now is your last chance to book.

We spoke to John about diversifying revenues, building loyalty and engagement, lead generation and whether publishers' readers' clubs are on the right tracks.

Is there still significant untapped potential for publishers to grow diversified revenues, outside of advertising?

The more you know about your readers, the more you can offer them. The offer model – versus the advertising model is a rich territory that is largely unexplored.

How can publishers create more bespoke products from what they already have? The vast trove of archived information, combined with the speed of technology surely could provide an entirely new user experience.

Why use a history book to understand any subject if I could look at the Guardian’s collected writings? I don’t think publishers think deeply enough or flexibly enough about ‘products’, because they have an editorial, not a reader, mindset.

One of our speakers at a recent event on data said that "publishers should become more like Tesco", do you agree with this statement, and would you say it is a feasible idea?

Putting the reader at the centre of every decision a publisher makes is critical – this is what Tesco does so incredibly well. It’s pretty clear that profit growth and dealing with digital as a threat to print is pre-occupying the industry. If one group simply stopped and interrogated what they were doing from a purely consumer-centric point of view, that group would put itself way ahead of the others.

Our principle function at dunnhumby is to drive customer-first driven decisions using strong data that represents actual (not claimed) behaviour. So, in this regard, I agree with the statement that publishers should become more like Tesco.

A number of publishers have, or are setting up data and lead generation divisions, how significant will this be as a source of revenue for publishers going forward, and what are the major issues around maintaining privacy and user trust?

What you do is more important than who you are for purposes of marketing. Demography (name, address, height, age, weight) is neither predictive of what will sell nor useful in understanding why something sold. Keeping the strictest confidentiality and governance in place is the most important thing – no trust, no brand, no brand, no business.

These divisions will only be successful if they use the right information and ask the right questions of it. Demographics and psychographics have limited value versus what a consumer actually reads and purchases.

The attributes around readership (e.g. I read about football, global politics and my horoscope) are far more predictive of what I read or what I will choose to read in your publication or in others.

A number of publishers have set up readers clubs to boost engagement in the past 6 months - how would you say publishers are positioned to compete in this space?

They are positioned to compete in readers clubs easily enough, since they own the readers. But I think it’s worth challenging how well they know their readers.

From what I understand, the Guardian is considering something they would charge between £50 and £100 for:

  • Priority booking and discounted prices for live/online events e.g. political debates, museum/gallery viewings, literary readings, talks by Guardian journalists, tours of the Guardian office and even a special members’ room at the building
  • Offers and deals e.g. early bird festival booking, discounts for galleries, cinemas, clubs etc, high street discounts
  • Involvement in The Guardian e.g. online Q&A with reporters, a feedback forum, “dedicated postal/email address for providing individual feedback to the Guardian”, opportunity to sit in on editorial meetings
  • Community”, eg. online forum, local groups, members’ badge for readers’ blog comments
  • Additional editorial content, eg. weekly/monthly highlights newsletter, “story-behind-the story” articles
  • Welcome pack, with t-shirt, mug and book

A few things spring to mind:

  • This model appears oriented only to a small, premium segment
  • Less expensive, more frequently purchased items tend to work at-scale
  • Knowing what these less expensive items would be requires a deeper understanding of the reader’s current behaviour (why they read what they read when they read it – and what they do with it)
  • On Macy’s we mass personalise their catalogue (producing something like 9,000 different versions) which I believe has individual print runs far larger than most UK newspapers. Why could you not do that for the newspaper print model?
  • I challenge whether the Guardian knows its readership well enough. The media has changed, readers have changed (and continue to). How different is this from what the Guardian of ten years ago would have done?
  • Most important, this is a reverse loyalty model. Rather than rewarding loyalty, the Guardian are creating a premium self-selected club and demanding loyals pay for it. Finding a way to reward the behaviour you seek will lead to success, not making people pay for something the Guardian thinks (but I’d challenge) don’t actually know their readers want

John is speaking on the 'Show me the Money' Panel at the AOP Summit on 15th October - read the full programme / join the panel's discussion on LinkedIn
(AOP Members only).

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