Rich Data Products: Mumbo Jumbo or New Source of Revenue?

by Marianne Calilhanna

Sep 2005

What are they?

We've noticed a great amount of buzz this year over "rich data products." We also noticed a great amount of confusion regarding what exactly they are. The term means different things to different people, and leaves some people just scratching their head. Why this contradiction and confusion? Because "rich data product" is a new and evolving term, but the type of product it refers to has been around for years.

For some people, any product that contains some kind of interactive media is a "rich data product." When we asked around, William Pollak, president and CEO of American Lawyer Media (ALM) provided the clearest definition of the term: "Linked data where that linkage creates value for customers. The richness comes from the ability to link databases where customers can find value. More than one database must be behind the content. And for a publisher, a rich data product is where you can monetize that value."

Toni Nevitt, president, eMedia & Information Marketing at VNU Business Media, provides a broader definition, "Any tool or application or resource that helps someone do their job more effectively or efficiently. It's something that creates greater efficiencies in workflow."

We offer this description: A rich data product is one in which reference content from several sources is broken down into the smallest useful units, linked to other supporting content, and then included in productivity software. Such products are more appealing to customers than content-only or software-only products because they impact efficiency.

Whether or not you use the label rich data product for such products, it's a term that is gaining visibility as publishers race to get them on their customers' screens.

Why rich data products matter for publishers

A rich data product is really just another example of how publishers are repurposing content to satisfy customers' needs. The beauty of these products is that the playing field is still pretty open.

The big content aggregators have been developing rich data products for quite some time now. Lexis-Nexis, Bloomberg, Reuters, Factiva, Ask.com, Thomson, West—look at any of these web sites and you'll see rich data products. As an end user, it's not apparent that what you're seeing is a rich data product. And frankly, it doesn't matter.

Now that traditional publisher revenue sources like advertising and print subscriptions are under pressure, publishers are revisiting their content to find new ways to monetize it. Licensing through aggregators has been a great way for publishers to make some extra revenue, but typically that revenue was relatively small. Rich data products are an exciting alternative that both command attractive subscriptions and tie the customer even more tightly to the publisher through workflow, driving up retention.

Content digitization endeavors and increasing technology know-how make it possible for the publishers to develop their own rich data products instead of or in addition to licensing to the content aggregators. Investment in content databases and XML repositories are an essential factor in publishers being able to develop and offer rich data products.

A few examples

Following are a few examples of rich data products from publishers we spoke with recently. As you browse the web during your day-to-day routine, you'll realize there are many rich data products that you use frequently—Amazon, eBay, Netflix.

American Lawyer Media (ALM)

ALM publishes both online and in print. The American Lawyer magazine is the nation's leading monthly magazine for lawyers. Over the years, ALM has amassed a wealth of content in a variety of database formats, including XML. Via a subscription or pay-per-view model, customers can access ALM's content and search for expert witnesses, court reporters, verdicts, and more. What's going on behind the web site is a sophisticated linking of multiple databases that ALM has nurtured over the years. Click here to see an example of verdict search. Or visit http://www.americanlawyer.com/ for additional information.

PennWell Corporation

PennWell Corporation is a highly diversified, business-to-business media company. The company has a strong presence in the Oil and Gas industry and started publishing The Oil & Gas Journal in 1902. Over the years, PennWell has collected an astounding amount of data. Visit the web site, http://ogj.pennnet.com/, and you can access survey content, statistics, directories, international business reports, and more. PennWell's MAPSearch product collects data from multiple databases and allows users to dive deep into a staggering amount of detail: a pipeline's diameter, its owner, which direction it flows, storage terminals, refineries, and the list goes on. Additionally, the databases are "spatially enabled." By clicking on a power plant on a map, you see accurate geographic information in map form instead of columns and rows.

VNU

VNU Business Publications publishes leading business titles for executives in the music and literary industry. VNU's well-known Billboard.com web site draws from a series of linked databases. The highly successful and recently launched Billboard Chart Stars product is a great example of monetizing database information. Users can go to Billboard Chart Stars and browse through artists' names to select and purchase a complete chart history of that artist, including every major Billboard singles and albums chart on which the artist has appeared.

How do you get started?

You may have an arsenal of content ready for transformation into a rich data product, but you're not aware of it and it's a daunting task to begin. How can you really get started? Tom Cintorino, vice president of digital media at PennWell suggests auditing your editors and authors. "You may be sitting on some very rich content," stated Cintorino. "But until you've really identified what you have from your content experts, and what would provide value to your customers, that content is only allocated to non-rich data products."

Can small publishers really do this too? "Small publishers can indeed produce rich data products because they already have one of the most important assets—content experts, knowledge experts," explained Cintorino. Providing information that customers value and can search, review, and analyze is certainly the critical first step in rich data product creation.

Nevitt at VNU Business Media, said, "Scour the market. Look and see who you can partner with. Even larger publishers don't do it all by themselves. Open source technologies are available as well. What's most important is to first understand your market and your customers."

"The most important thing in developing a rich data product is understanding the needs of customers and then develop products to support them," said Pollak. "Generally writers create content. A bunch of writers are pulled together to create a book or a magazine. In the rich data world the end user pulls together data that's important to him. So what's important for the publisher is to look at how users are accessing the web site. Look at your web stats, how are users navigating the site?"

How do you measure success?

The confluence of data and publishing is the place where rich data products emerge. Unlike a physical book, magazine, or software, the rich data product is used differently based on users needs. So how do you measure success when the model becomes cost-per-value rather than cost-per-thousand? "You have to continuously test. Test pricing and test content value," stated Pollak. "The market is constantly changing. It's not like a magazine where people develop a habit. Customers ask themselves, 'is there another way to use this' or 'what else is out there?' At ALM we also sell our rich data products via subscription model and directly to aggregators. Yes, sometime we compete with ourselves, but it's important to test all options."

"It's easy to spend a lot of money for something that the market doesn't want," said Nevitt. "You need to scour your markets and research and test different product concepts and approaches. No one has figured all this out just yet."

Where do you go from here?

In the same way that a typical reader doesn't care about what happens in a newsroom, users of rich data products don't need to know what's going on behind your web site. In fact, they don't even need to know that the content you're offering is a rich data product. The most important things you need to do are to identify your users' unmet content needs, audit your current content assets, structure your content appropriately in an XML or relational database format, and figure out how users could benefit from incorporating your content into their daily routine.

When speaking with publishers who are demonstrating success in this endeavor, it is clear that the most obvious pitfall is bringing something to market without conducting a thorough market research. The technology is secondary to the business needs.

So if you sense a potential demand, go ahead and take the next few steps: analyze that demand, inventory your content, gather your knowledge experts and potential partners, and leverage open-source architectures. In short, bring strategy, content, and technology together to help your customers with their daily needs.