Databases Don't Make Money
Scott Stines - IDEAS Magazine - Feburary 2000

Let the great debate about whether databases make money for newspapers end. They don't. Databases don't make money, but intelligent people translating database information into knowledge do make money. That is why more and more newspapers are using consumer and business databases to improve their products and services, create profitable new revenue, and maximize the return on their marketing investment.

So why has the debate about the value of database marketing in the newspaper industry continued on for so long? And why have so many newspapers failed to generate a return on their database investment? Following are some observations.

1. Start with business goals. If your newspaper's database initiative was called the "Database Software Project," it was probably doomed from the start. Database marketing is not a project, but a way of doing business; and software, like a database, doesn't make money. Decisions on what software to purchase should be one of the last items to address as part of your newspaper's database initiative. A newspaper's business goals and the strategies and tactics that support their achievement should drive successful databases.

2. Involve others. Database initiatives often fail because one department is viewed as the "owner" or "champion" of the database. The database focuses on a narrow set of business needs, or, worse yet, a particular database software feature or capability. Successful initiatives involve people from each area of the newspaper, which significantly increases the opportunity to pay back any database investment. Successful initiatives start by defining what information will be stored in the database and how that information will be used to support the implementation of circulation, advertising and product strategies.

3. Establish rules for handling data. Sometimes we invest more time developing database software specifications than establishing the business rules that will be used to acquire, update and maintain database information. As a result, we fill databases with lots of inaccurate information, then wonder why staff will not use it to support decision making. Successful database efforts establish a methodology and process that identifies the best sources for each data element in the database and describes how exceptions will be handled.

4. Establish realistic goals. Database initiatives often fail because no measurable goals are established for the effort or there are too many long-term goals. The first problem, no goals, creates obvious problems; but the second problem, too many goals, is more common with failed database efforts. By the time we finish our database software specifications, the software will do almost everything except serve us breakfast in bed. Successful database efforts establish achievable short-term goals that are focused on a specific business need that provides a meaningful payback.

5. Decentralize information. All areas of the newspaper benefit from access to timely and accurate information on consumers, businesses, customers and prospects. Successful database efforts provide employees at every level of the organisation access to the information they need to improve day-to-day decision making. Some newspapers have elected to centralized database information and require decision makers to ask, then wait for answers to their questions. Experience suggests that direct access to database information increases the opportunity to translate information into the knowledge required to improve operations and financial performance.

6. Little things make a difference. A national press association studying newspapers with circulation growth discovered that there was no single strategy or tactic responsible for circulation gains. The same is true for newspaper database initiatives. There are very few homeruns in database marketing, but most newspapers swing for the fences or start counting money before tickets go on sale. If you want to improve your newspaper's odds for success, tie your database to business goals, involve more people in the process, establish rules for handling data, set realistic goals and provide decision-makers with access to the information they need to succeed.

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