Carnegie Mellon University MSEC 2004 Leading provider of e-Marketing tools Sep. 23, 2003 S. Cho, C....
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Transcript of Carnegie Mellon University MSEC 2004 Leading provider of e-Marketing tools Sep. 23, 2003 S. Cho, C....
Carnegie Mellon University MSEC 2004
Leading provider of e-Marketing tools
Sep. 23, 2003S. Cho, C. Lu, J. Park,
J. Weinberg, C. Yang, H. Yang
Carnegie Mellon University MSEC 2004
Carnegie Mellon University MSEC 2004
OUTLINE
• Brief History
• Business Strategy
• Business Model
• Financials
• Competitive Structure
• Value Chain
• SWOT
• Information Technology
Carnegie Mellon University MSEC 2004
Brief History (1)Brief History (1)1995~1997 : Starting Business to revolutionize Internet advertising
1995 • Poppe Tyson formed DoubleClick as its new media division.• Kevin O'Connor and Dwight Merriman started Internet Advertising Network
(IAN); e-mail White Pages directory
1996 • Poppe Tyson bought IAN and merged its know-how with DoubleClick's client
network and O'Connor became CEO of the new DoubleClick. • Developed DART (Dynamic Advertising Reporting and Targeting)• Partnership with AltaVista
1997• Launched DoubleClick Direct, a results-based advertising network
Carnegie Mellon University MSEC 2004
Brief History (2)Brief History (2)
1998~2000 : IPO & Broadening services through acquisitions growth
1998• IPO and expanded its client network from 60 Web sites to 1,300.
1999• NetGravity was merged with DoubleClick's Technology Solutions
division• Branched out into database marketing by acquisition Abacus Direct
(90 million buyer profiles and 1,800 merchants) • Became the target of a Federal Trade Commission privacy
investigation into its data-collection methods.
2000 • Began working with regulators to develop online privacy policies.
Carnegie Mellon University MSEC 2004
Brief History (3)Brief History (3)2001~ present: : Rethinking its strategy and restructuring
2001• Acquired @plan, FloNetwork, and L90's ad-serving software• IPO DoubleClick Japan • Launched Diameter and Internet marketing research• Laid off more than 350 employees in 2000 and 2001
2002• Refocused on providing e-marketing tools and technology • Sold Media business, email List Services and acquired
MessageMedia
2003• Recast as marketing technology company • 1,500 advertisers and publishers, 300 email marketers and 1,800
Abacus Alliance members
Carnegie Mellon University MSEC 2004
Business Strategy
• Vision : Leading provider of e-Marketing tools
• Mission : “Making marketing work better”
• Help clients acquire new customers cost effectively. • Help clients retain and grow profitable customer
relationships.
Carnegie Mellon University MSEC 2004
Business Model – Infomediary
Marketers
Ad Agencies Web Publishers
• Marketing solutions• Marketing Data
• Marketing solutions• Marketing Data
• Marketing solutions• Marketing Data
Clicks
Carnegie Mellon University MSEC 2004
Business Model - products and services (1)
• Full Suite of Marketing Solutions
(Source: DoubleClick.com)
Carnegie Mellon University MSEC 2004
Business Model - products and services (2)
Marketing Automation Increase the efficiency of marketing
planning, tracking, and analysis
MediaVisor,
DoubleClick
Ensemble
Online Advertising Offer ad management and serving solutions for marketers, agencies and web publishers
Site Directory
DART (DFA, DFP)
Email Marketing Help clients manage and grow powerful email programs and enable high performance.
DARTmail Premier
Self Service
Strategic Services
Direct Marketing Help marketers target the potential consumers, lower the costs and increase the performance
Abacus Catalog
Alliance
Abacus BtoB Alliance
Marketing Analytics Help clients measure performance within and across channels.
ChannelView
SiteAdvance
Data Management Provide marketers with the tools to
harness customer data for effective campaigns.
Database marketing
Apllications Database
marketing Strategy
Carnegie Mellon University MSEC 2004
Total operating revenue
67,926138,724
258,294
505,611
405,647
300,198
123,610
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
• Operating revenue sources
- Technology: internet marketing solutions
- Data: data analysis, research and collection
- Media: internet advertisement sales
Financials – Operating revenues
(in thousands)
Projected:$250,000
Carnegie Mellon University MSEC 2004
Operating revenue sources
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
1997 1998 1999 2000 2001 2002 2003 Q2
Technology Data Media
68.8%
31.2%
• Technology = 68.8%
• Data = 31.2%
• Media = 0% (sold by the end of 2002)
Financials – Revenue sources
Carnegie Mellon University MSEC 2004
• Operating expense sources
- Sales and marketing
- General and administrative
- Product development: in-house building up
Total operating expenses
42,01384,503
209,853
329,218
511,669
341,198
74,307
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
Financials – Operating expenses
(in thousands)
Projected:$150,000
Carnegie Mellon University MSEC 2004
• Sales and Marketing = 54.5%
• General Administration = 23.2%
• Product development = 22.3%
Operating expense sources
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
1997 1998 1999 2000 2001 2002 2003 Q2
Sales and Marketing General and Administration
Product development
Financials – Expense sources
Carnegie Mellon University MSEC 2004
• From 2003, the net income was converted to positive
• From 2001, the restructuring expenses were increased
Net income
(400,000)
(300,000)
(200,000)
(100,000)
-
100,000
200,000
Financials – Net income
(in thousands)
Carnegie Mellon University MSEC 2004
Competitive structure
• Solution S/W providers• Almost no suppliers• Due to in-house Solution
Suppliers
• Several competitors• DoubleClick dominates the market share
Buyers
Threat of Substitute
Entry Barriers
• Offline advertising• Traditional database system
• Solution technology • (patent such as DART)• Data expertise• Global network• Financial barriers
• Advertisers• Web-publishers• Direct marketers
Carnegie Mellon University MSEC 2004
Value chain
Inbound Logistics
Operations OutboundLogistics
Marketingand Sales
Services
• Cookies• Customer data
•Product development•Database management
• Technical solutions• Data products
• Sales• Marketers• Ad Agencies• Web Publishers
• Customer Training• Call center
Information Technology(DART, MediaVisor, Abacus, Ensemble, ChannelView)
Human Resource ManagementSales and Marketing 37%, Engineer 19%, Technician 29%, Staff 15%
Carnegie Mellon University MSEC 2004
SWOTStrengths Weaknesses
Opportunities
Threats
• Reliable & scalable technology• Large Database• Full suite of customer driven solutions • First mover – brand name• Global presence – 30 countries • Financial strength • Marketing experts
• Short term contracts• Revenue structure • Short experiences in the international market• Not proven business model• Relies on internet infrastructure
• Privacy issue• Opt-out option• Intense competition• Poor perception of the effectiveness of online ads• Regulations in spamming• Rapid change of business environment
• Online Ad spending growing• Increasing broadband users• Growing niche media usage• The amount of time and money spent online is growing
Carnegie Mellon University MSEC 2004
Information Technology – IT use
• Business resources
Information TechnologyBusiness
• Internet, Cookies
• Online banner
• Value added
• Data storage
• Database management system
• IT solutions
- DART, Ensemble, Abacus etc
• Targeted banner advertisement
• Global Internet
• E-Mail, Banner Ads, Usage stats
• Movie files, etc.• Distribution / Service
Carnegie Mellon University MSEC 2004
Information Technology – Strategic lever
Distinctive and Strategic technology
• Analyzing and gather click stream data
(Source: ConsumerReports.org)
Carnegie Mellon University MSEC 2004
Information Technology – Risks and Benefits
Risks
• Privacy issue
Benefits
• Better advertising: targeting, tracking and reporting
• Can offer comprehensive IT solutions from Database management to marketing plans and campaigns.
“ This Monday, we revealed that the Federal Trade Commission (FTC) began a voluntary inquiry into our ad serving and data collection practices,” - Kevin Ryan, President of DoubleClick Inc., Feb. 17, 2000. -
“ Web users have lost privacy with the drop of a cookie..” – Will Rodger, USATODAY.com-
Carnegie Mellon University MSEC 2004
Q & A
Carnegie Mellon University MSEC 2004
Thank you!