How analytics is helping SBS market to a digitising world

Looking to build on a recent jump in viewership, SBS teamed up with UNSW’s Media Engagement and Analytics Lab to better understand its customers and marketing mix

Brands face significant challenges adapting to a digitising marketing landscape dominated by a handful of media giants, making optimised marketing spend a growing priority. For many, effective engagement in a digital-first world will require understanding the evolving customer lifecycle and perfecting a multichannel approach.

This goal led to a collaboration between UNSW Business School’s Media Engagement & Analytics Lab (MEAL) and the Special Broadcasting Service (SBS) to better understand SBS’s customers and marketing needs. Professor Maggie Dong, Head of the School of Marketing and Lead Chief Investigator at MEAL, recently spoke with Jimmy Nguyen, Marketing Analytics Manager at SBS, about the emerging challenges in marketing and analytics that spurred the collaboration.

“The marketing landscape has undergone significant transformation over the past two decades, driven by technological advancements, changes in consumer behaviour and the rise of new advertising platforms,” Mr Nguyen said. Marketers are still working out how to address the “nomadic consumer” in an increasingly decentralised media landscape, particularly for television and other traditional media.

“The TV landscape is fragmented, so consumers now have more choice than ever and are constantly hopping between different streaming platforms, such as Netflix, Disney+ and Amazon Prime,” he said. “This creates a more competitive landscape for platforms like SBS, which rely on a no-subscription-fee model to keep audiences engaged and loyal.”

Companies worldwide face these challenges amid a proliferation of touchpoints through which media firms interact with and seek to engage their customers, such as chat, email, social media and wearable technology. “Offering a compelling omnichannel experience used to be the bleeding edge of media service providers,” Mr Nguyen said. “Now, it’s a requirement for survival.”

Doing more with less in a changing landscape

Mr Nguyen highlighted the massive transformation in the media sector driven by a 20-year shift from traditional to digital marketing. Buy and spend in digital media has seen continuous growth, topping US$13 billion annually in Australia, while it has declined in traditional media such as print, TV and out-of-home advertising.

“Digital media dominates, forcing brands to navigate a highly complex advertising landscape,” he said, noting that digital marketing is expected to hold 80% of the advertising market share by the end of this decade. Moreover, brands must work with mammoth advertising platforms like Google and YouTube, which control about 50% of the market and continue to grow that share.

“With limited budgets, [brands] must leverage technology, optimise campaigns, prioritise impactful activities and maximise ROI [return on investment],” Mr Nguyen said. “It’s a very challenging and complex advertising environment to operate in, so we try to optimise when and where we spend our advertising dollars.”

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At the same time, the media customer lifecycle is evolving, presenting another set of challenges for brands. “The journey generally includes multiple touchpoints across various media both online and offline – with key stages, in a nonlinear path,” Mr Nguyen explained. “Media companies interact with customers through a variety of channels, such as social media, email newsletters, mobile in-app notifications, and help centre feedback via voice or text.”

To keep up with these changes, companies are increasingly exploring the use of artificial intelligence (AI) in content creation to generate marketing materials, creative videos and art at scale. “AI personalisation is going to provide incremental returns, where you target an individual in terms of their preferences and serve them the right content at the right time. We see that working for a lot of media companies, including SBS. AI analyses extensive data to tailor offers and communications to individual preferences and behaviours, using predictive modelling to deliver the right message at the right time. It’s reducing the human effort, but we also need to maintain relevancy, authenticity and creativity,” Mr Nguyen said.

A data collection conundrum

The growing value of hyper-personalisation in a digitising world has highlighted new difficulties around collecting and analysing data, including integration difficulties, cross-device tracking issues, privacy concerns, and the complexity of modelling the customer journey. “The mobile/digital landscape is growing in force and increasing the importance of personalisation,” Mr Nguyen said. “We need to know the customer, in different places and at different times.”

The necessity of a multichannel, multi-touchpoint marketing approach has made it harder to “track the entire customer footprint” through accurate attribution of such third-party marketing data, he explained. Recent policy changes at Meta, Google, Apple and YouTube on data compliance and transparency tracking have heightened these concerns.

The ”next best option” for understanding marketing attribution, he said, is the use of media mix modelling – statistical analysis that quantifies the impact of various marketing activities on business outcomes by looking at a range of variables and attributing sales to relevant channels, both offline and online. SBS has adapted its media modelling to reflect the modern media consumer lifecycle, leveraging a mix of paid, shared, owned, and earned media channels, ranging from digital platforms to traditional and out-of-home marketing. However, this heterogeneous mix makes it harder to measure what’s working and what isn’t.

“It’s crucial to evaluate the effectiveness of campaign strategies across various channels in terms of reach, conversion, short-term engagement and long-term customer retention, as well as time and resource cost,” Mr Nguyen said. “For example, SBS uses all channels available to reach consumers and wants to know which ones are working more effectively. But it’s difficult to understand the contribution of each touchpoint and attribute conversion to a single one.”

Teaming up to retain audiences

These changing dynamics left SBS facing pressing questions about how to bolster its marketing approach, and in 2022 a new challenge presented an opportunity for addressing them.

The Australian men’s soccer team had reached the top 16 in the FIFA World Cup for the first time since 2006, and the hybrid-funded broadcaster had exclusive rights to air the tournament. The December 2022 Socceroos match against Argentina drew 1.7 million viewers and prompted more than 1 million new-user registrations for SBS and its On Demand platform, according to Mr Nguyen.

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The broadcaster was determined to engage those new users and convert them into loyal customers. It also wanted a way to systematise this process so that when viewers come to SBS for a major event or a promoted “hero” show, it would know how to retain them beyond the first month – a key marketing milestone.

SBS ultimately turned to MEAL, which focuses on media service innovation and audience engagement to help industry partners retain and engage audiences in an era of digital convergence and omnichannel marketing. The teams collaborated on two research questions: one about predictive indicators to help identify customer churn, enabling firms to take proactive measures, and one on the effectiveness of machine learning-based, hyper-personalised interactions within an omnichannel environment.

“We wanted to look through the audience from a segmentation point of view and identify the loyal customers that we should look after, as well as those with the potential to become loyal. Part of the work is trying to retain customers and keep them coming back,” Mr Nguyen said. “This was a great opportunity to collaborate with the university on one of the most important questions for us: how do we retain our customers so that they’re on our platform instead of Netflix or other streaming platforms?”

Amplifying reach and returns

According to Mr Nguyen, the collaboration led to several significant findings for SBS, including that viewers using connected TV and set-top boxes were likelier to remain loyal than those accessing content via web browsers or mobile devices. “This indicates that larger screens tend to deliver better retention performance. These insights enabled SBS to optimise advertising spending by focusing on specific types of devices with higher engagement potential,” he said.

MEAL and SBS also found, key to the broadcaster’s focus on retaining users early on, that new users and hero-program watchers are more likely to stay within the first month, but not within the first quarter, suggesting the strategy of “golden timing”. “Specifically, the first month after new-user registration could be the honeymoon period, nudging hero-program watchers to explore other programs in two or three months’ time and preventing exit,” Mr Nguyen said.

“Our preliminary findings indicate that users with diverse genre-watching behaviours are more likely to retain in both the short and long terms,” he added. “I think that’s good news and something we want to explore further. It’s aligned with the uses and gratifications theory, which tells us different types of media and content fulfil different customer needs.”

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A key goal for SBS was to get more value from its allocation of marketing dollars by combining channels. According to Mr Nguyen, a strategic finding from the project was the importance of media mix modelling in evaluating the effectiveness of its marketing channels. “Understanding how it works individually and together, for both offline and online channels, will provide us a much better way of allocating our marketing spend and give us a better return on our investment,” he said.

Importantly, these benefits are applicable beyond SBS. “By analysing the effectiveness of various campaign strategies across different channels, marketing managers can optimise their approach to achieve higher levels of engagement and reduce customer attrition. Furthermore, the insights derived from studying feedback from churned customers will enable the identification of potential areas of improvement in the customer experience, helping media companies retain and build lasting loyalty among their user bases,” Mr Nguyen said.

UNSW Business School’s Media Engagement & Analytics Lab (MEAL) help industry partners retain audiences, embrace differences and engage audiences in the era of digital convergence and omnichannel marketing. The MEAL lab differentiates itself by basing its research and analytical insights on the Peppers and Rogers (1997) methodology of the “5Is” combined with machine learning techniques to help industry partners improve audience engagement.