How the traditional media company can (and must) compete ... · The traditional media company must...

Remaking the “traditional” media company

How the traditional media company can (and must)

compete on customer intelligence

Created by and for Michael S. Quinn. Please do not distribute without prior approval.

Summary

1. The traditional media company must compete in the emerging

media marketplace to deliver acceptable value to its

shareholders…and to survive

2. The emerging marketplace most values the “intelligent”


2. The emerging marketplace most values the “intelligent”

delivery of the most relevant content and the most effective

offers to consumers

3. “Intelligence” (and therefore relevance and effectiveness) will

continue to increase over time

4. Increases in intelligence will be supported by the growth of

both addressable technology & customer intelligent data


Summary

5. Traditional, large-scale media companies must compete (and

win) on “customer intelligence”…as their technology partners /

rivals will win on “addressability”

6. The traditional media company must “refuse to lose” on


6. The traditional media company must “refuse to lose” on

customer relationships and intelligence.

7. Ceding the customer relationship will result in the media

company’s disintermediation from the “marketer”, who

contributes to over 75% of the media company’s revenue


Summary

8. The companies that succeed in developing proprietary

customer relationships & intelligence will create significant LTV

for their shareholders

– These companies will enjoy a more equitable “balance of power” (and


– These companies will enjoy a more equitable “balance of power” (and

revenue) with their technology / distribution partners

– These companies will “trade” access to their intelligence in return for

ongoing access to the intelligence generated by their technology

partners’ addressable platforms

9. A roadmap exists for the traditional media company to engage

their customer TODAY via the on-line environment

– The customer-intelligent media company will “earn” insight into its

customer’s “affinity” by engaging each individual in enhanced

experiences with their most trusted & beloved brands


Summary

10. The time is now

– Traditional media companies still have control and/or access to the most

engaging, trusted and relevant content (and offers)

– The technology / delivery companies are still struggling with


– The technology / delivery companies are still struggling with

addressability and have not yet focused their full attention on customer

intelligent data


Questions for further exploration

� A consumer-centric view of the media landscape may begin with “my TV”, “my PC”, “my smartphone”, etc. As a result, we must explore the potential role of “my channel”…a consumer designed, multi-stream, content experience that is platform agnostic� What are the capabilities that will empower “my channel”? Who will emerge to service these

capabilities? How will the roles of the current “players” evolve to support, or thwart, these services?


capabilities? How will the roles of the current “players” evolve to support, or thwart, these services?

� An “Open Market” model of the media landscape exists, where “choice” and “transparency” rule the functional and economic value-chains. In this model, consumers will be able to choose their content and offers (independently), with “revenue” and “expense” as part of their decision making process� For what consumers and for what content experiences will the “Open Market” model initially

emerge? Will the “financial exchange” be a literal financial exchange, or a virtual exchange akin to those currently operating in social gaming?

� What are the hybrid models that are most likely to create scale in this model? How will growth of the “Open Market” model effect new and existing “players”?

� What are the many dimensions of “customer intelligent data” and what interactions will inspire consumers to confidently engage in the sharing of this data…in an environment of appropriateness and trust?


Increase shareholder value

Shareholder Equity

$7B

Revenue

$10B

Re-making the traditional media company: Business objective

Typical shareholder

economics for the

Current F P/S for the large-scale media company is unacceptable in today’s market

Shareholder value = <$1, per. $1 revenue

Opportunity is the multiple, not the top-line!


economics for the

large-scale media

company

Cu

sto

me

r in

tel.

/ d

ata

/ r

ela

tio

nsh

ip

high

Value = Multiple = Level of customer intelligence, data & relationship


Forward looking P/S$1 $10

Cu

sto

me

r in

tel.

/ d

ata

/ r

ela

tio

nsh

ip

low

“Forward looking P/S” = current price per. share / forward looking sales per. share (actual Q1 thru Q3 sales + trended Q4 sales). P/S for VNU, IRI

and WPP-GY are not public and are estimated based on comparables.

“Old” media value chain (functional)

Consumers

“Programming”

Nielsen

Arbitron

Net Ratings

Scarborough

MarketersContent

providers

Media Network

“Programming”

$The

“Aggregator”


Consumers

“Old” media value chain (economic)

Predominantly “free”

Marketers

Media NetworkThe

“Exchange”

Content

providers


Predominantly “free”

Consumers

5% $s

Traditional “diversification” strategy: Content production

MarketersContent

providers

Media NetworkThe

“Exchange”

5% $s

Content

providers


% corporate

revenue.

Traditional

media company

Emerging diversification strategies: New marketing services

5%

Consumers

Content

providers

5%

MarketersContent

providers

Media NetworkThe

“Exchange”

Content

providers


Sell direct the

customer

Expand marketing

solutions

Fundamental “emerging” value chain for media

ConsumersMost

relevant

Content & offersOther

Intelligent

Intelligent MediaThe

“Optimizer”

Most

effectiveContent

providers

Content

providersContent

providersMarketers

Content & offersIntelligent

marketing

solutions


Missing link: Customer intelligent data

Consumers

Most

relevant

experiences

given

earned

Offers Relevant

Content Trusted

Data Customer Intelligent

Technology Addressable

espied

given

As addressability grows, Customer Intelligent Data is still the “lagging” ingredient in the emerging media value chain.

Although technology can espy some behavior, it cannot earn the trust of consumers to learn about affinity, intent, etc.

The companies that deliver trusted content and relevant offers have the most to offer customers in exchange for intelligent data.

Customer intelligent data: Example

EACH CUSTOMER’S Examples

Affinity for…

Content

Offers

Products

Services, etc.Services, etc.

Addressability via…

MSO

Telco

On-Line

Email

Address

Phone #s

Name, DOB

etc.

Transaction tools… Credit card

Motivators…

Age

Gender

Family composition

Income

Ethnicity

Psychographic, etc.


Vision

Mission

Re-making the traditional media company: Guiding principals

Make the media company fundamental to the delivery

of the most relevant content & offers to consumers

Make the media company the most intelligent about the

wants and needs of its individual customers

Values

1. Engage customers in an ongoing relationship with their most beloved (and trusted) media properties

2. Incent each customer to share their affinity for their most desired content, offers, and products

3. Reward customers for sharing the information required to best address them across delivery platforms

4. Grow (and manage) each customer relationship (and data) across time, properties, and platforms

5. Cultivate a customer-centric culture and refuse to lose on customer relationship & intelligence

6. Partner with the best delivery platforms, for meeting the needs of our customers to experience

relevant content (& offers)…when and where it matters


Imminent risk for the traditional media company:

Disintermediation from the customer relationship

Consumers

MSOs, Telcos, ISPs, etc.

Content

providersMarketers

Content

providers

Media Network

“Programming”



If technology /

delivery companies

become the most

intelligent about

consumers, they will

also become the

first touch-point for

marketers and

content providers

Today, on-line platforms are the best conduit for

engaging customers in a proprietary relationships


Customer

On

-line

On

-line On-line can bi-pass

the delivery


Content

providers

Media Network

Content

providers

Content

providersMarketers

the delivery

company allowing

the media company

to engage

customers with their

most “beloved”

content, “trusted”

information, and

“valued” offers

Network of Customer Relationships

Properties

Watch

Win

Save

Sample

Learn

Share

Connect

Support

Customer

Customer

Experience

Customer

Engagement

Organizing the transformation process

Customer

Insight & Management

Partner

Engagement

People

Business parameters / KPIs

Mission & vision

Client Internal 3rd party


Vision

Mission

CULTURE: Critical to the transformation

Make the media company fundamental to the delivery

of the most relevant content & offers to consumers

Make the media company the most intelligent about the

wants and needs of its individual customers

Values

1. Engage customers in an ongoing relationship with their most beloved (and trusted) media properties

2. Incent each customer to share their affinity for their most desired content, offers, and products

3. Reward customers for sharing the information required to best address them across delivery platforms

4. Grow (and manage) each customer relationship (and data) across time, properties, and platforms

5. Cultivate a customer-centric culture & refuse to lose on customer relationship & intelligence

6. Partner with the best delivery platforms, for meeting the needs of our customers to experience

relevant content (& offers)…when and where it matters


Moderately disruptive scenario: Choice

ConsumerMost

preferred

Choice

Content & offers

Scenarios that

introduce choice (ex.

Intelligence

Most

selectedContent

providers

Content

providersContent

providersMarketers

Choice


introduce choice (ex.

Hulu), will modify

the value chain.

Intelligence will still

be fundamental so

long as content and

offers are combined

via “the network”.

ConsumerMost

reasoned

($) + $

virtual economy

Highly disruptive scenario: Choice + transparency

The role of intelligence

diminishes, if offers

and content are

“chosen” separately.

This also requires the

deconstruction of the

current economic

exchange. “Which

Choice

The open

market

Most

consideredContent

providers

Content

providersContent

providersMarketers

virtual economy exchange. “Which

consumers will engage

in a truly open market

scenario (and for what

experiences)?” is a

critical question for

scenario planning.

Now, buying ads based on the data about visitors, rather than content

published on the site, , could drastically change how media companies

do business.

”The data is becoming the most important component for marketersThe data is becoming the most important component for marketers

and web sites,” says Omar Tawakol, CEO at Blue Kai.

“If we sell that data, it allows other sales teams to compete against

All scenarios need (and value) customer intelligence

“If we sell that data, it allows other sales teams to compete against

us,” says Greg Stevens, president IAC advertising. “But if it is worth if it is worth

million and millions of dollars, then hey, million and millions of dollars, then hey, maybe the paradigm has maybe the paradigm has

turned upside downturned upside down.”

Thursday, November 5, 2009


“Data will be the most ownable, transportable and insoluble expression of

intelligence” MICHAEL S. QUINNMICHAEL S. QUINN

Marketers will always reward those who make them “smarter”

I take care of those

who take care of me


Closing questions

� How many companies have greater contact with their customers than

the traditional media company?

� How many companies know more about their customers than the

traditional media company?


traditional media company?

� What happens when addressable technology companies (MSOs,

Telcos, etc.) are most intelligent about the customer?

� Are the answers to these questions acceptable to the traditional

media company?

� What are the implications for LTV?


Closing questions

� Assuming: Consumers become more addressable over time

� What data will “the media company” collect to be the most intelligent

about the needs of its customers?

� How will the media company manage this data, this intelligence and


� How will the media company manage this data, this intelligence and

this relationship?

� How will the media company incent its customers to share?

� How will the technology / delivery companies value this intelligence?

� How will this valuation impact the long-term balance of power

between media and technology partners?

� What could be the impact be on shareholder equity?


Closing questions

� What are we going to do about it? Today.


� What are we going to do about it? Today.


Just for fun

Huh?

About

A history of building businesses wherever he goes. His

approach to each challenge is the key to his success – Mike

has an instinctive ability to find the basic truth of any

business opportunity and to formulate an effective plan

around that understanding.

- Mark Laceky, VP North American Practice, NielsenOne of the most innovative, imaginative and dedicated

professionals in media. His ability to develop strategic

approaches that unify and serve the needs of multiple

stakeholders is remarkable.

- Mark Mitchell, Chief Customer Officer, Canoe Ventures

A fresh thinker who possesses a valued ability, as all good

leaders do, to rally constituents toward a common vision.

Mike is a leader who earns respect through creativity and a

Michael is one of the sharpest, most insightful strategists I

have had the pleasure to work with.

- Greg Warren, Starcom MediaVest

- Mark Mitchell, Chief Customer Officer, Canoe Ventures

Michael is one of the industry's high energy marketing and

innovation experts and transformed a fragmented business

into the leading retail network in the US.

- Gwen Morrison, President the Americas WPP / The Store

Michael brings out some of the best qualities in those that

work with him and is a trustworthy and insightful confidant.

Michael looks at every situation as an opportunity and is an

excited leader, who engenders respect and trust from his

team.

- Jonathan Rosenbaum, Managing Director, Rayclff Capital

Mike is a leader who earns respect through creativity and a

contagious enthusiasm that consistently lead to delivering

results.

- Ken Willis, Vice President, Pepsico (retired)


From the Boardroom to the boiler room, Michael quickly

navigates a group to the heart of the matter and then leads

to execution. His success at building a vision and strategy

for PRN speaks for itself, as does his his ability to see into a

new media landscape.

- Kim Norris, EVP Digital Strategy & Advertising, Cablevision

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