The limits of data

The collection and deployment of data is, in theory, at the heart of just about every business these days. This is a natural outgrowth of software eating the world, because once it digests the world, it burps data. And as seen by the tech giants, data, particularly when married with networks, can be a nearly impregnable moat. Alas, the dynamics are different in most businesses.

The collection and manipulation of data is key to building sustainable media businesses. Knowing more about your audience and customers is critical to any business. Data about an audience allows for higher value ads, whether sold directly or programmatically, and is the cornerstone of the biggest growth areas for many publishers: subscriptions and commerce. And yet, data is a challenge for many media businesses, particularly niche media.

Scale still has its advantages. Data is one of the most obvious. The more data you collect, the more signals you can derive from it. More data isn’t necessarily more accurate, but more data is more likely to lead to better insights. Often executives will breezily affirm themselves “data driven.” In reality that means data is used to justify already made decisions and ignored if it points to a different course of action than the preferred one.

This is a normal state of affairs. In The Plague Year, Lawrence Wright writes about how the U.S. government’s inept response to the pandemic was hobbled by health officials paralyzed by incomplete data (thanks in large part because of the Chinese government’s secrecy). Decisive action was needed, but the federal health bureaucracy dithered. “Let the data guide us” became an excuse for inaction at a time when action was what was most needed.

For the last 9 months, I’ve done consulting with several niche publishers. One thing that comes up time and again is the challenge of using data in smart ways. The problem tends to come down to simply not having enough data to have confidence in the direction it is leading. If you have a membership with a few thousand people, you don’t have much information to go off. Your numbers can get skewed easily and lead to hasty (and incorrect) decisions. Many tools and platforms are built for having far more data in order to optimize. For niche publishers, that’s not possible.