1 KEEP CHALLENGING March 2014

The Consumer Halo in Media and Entertainment

2 KEEP CHALLENGING October 2014

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big table and everyone mucking in, all tasting from the same pot.” Hence the jumbly, just-pulled-on clothes.

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Today’s consumers are increasingly interweaving their physical worlds with their virtual lives (and vice versa). The websites they visit, devices they use, and social networks they build online all create ‘Code Halos’, or digital profiles about their interests, persona, and tendencies. This creates massive opportunities for entertainment companies not only to create tailored entertainment experiences, but also to deliver them more precisely and efficiently than ever before. In this white paper, Cognizant will share how one studio is starting to realize the benefits of the consumer halo, by combining data sets and generating new insights in their CRM program through a pilot analytics project.

Endorsements copy to come

Paul Roehrig leads Cognizant’s Center for the Future ofWork. Prior to joining Cognizant, Paul was a PrincipalAnalyst at Forrester Research and held a variety ofpositions at Hewlett-Packard and Compaq ComputerCorp. Paul has a degree in journalism from the Universityof Florida and a doctorate from Syracuse University.

Ben Pring co-leads Cognizant’s Center for theFuture of Work. He joined Cognizant afterspending 15 years with Gartner as a Research VicePresident analyzing enterprise technologies andthe development of Cloud Computing. Bengraduated with a degree in philosophy fromManchester University.

Malcolm Frank is Executive Vice President of Strategyand Marketing at Cognizant, one of the world’s leadingtechnology, consulting, and business process servicescompanies with over 175,000 employees. Malcolm hasauthored articles in several leading industry publications

in Finance by Treasury & Risk magazine. He earned a B.A.in economics from Yale University.

Think about everything you do with yourmobile phone and tablet nowadays: connectwith friends and colleagues, read books, play

get directions, buy products… and even work.

devices. Now add in all the data beinggenerated by “things” like cars, televisions,airplanes, even toothbrushes.

Every click, swipe, “like,”buy, comment,deposit, jog, and search produces somethingwe call a Code Halo, a virtual self. Code Halosare important to us as individuals, and nowthey are becoming critical for businesssuccess. In fact, market leadership in morethan a dozen industries has already violentlytransitioned because of the impact of CodeHalos.

This book explores the Code Halophenomenon and describes how the “digitallives”of people, things, and organizations arechanging the rules of business.

Download the CodeHalos iPad app

Howthe

digitallivesofpeople, things and organizationsare

changingthe

rules of business. APlaybook

For Managers.

THE CONSUMER HALO IN MEDIA AND ENTERTAINMENT 3

Introduction Big Data. That’s the term we hear so much in today’s consumer economy, describing

the sheer volume of data accessible to companies. Social Media, mobile devices, and

cloud-based storage have propelled big data from an idealistic concept into what we

know today. Year after year, human consumption of

data grows at an ever accelerating rate. In 2009, an IDC

study estimated that 800,000 petabytes (0.8 zetabytes)

of data were generated1. By 2020, the amount of data

in the digital universe will grow to 35,000 zetabytes, a

figure that was inconceivable to most people a decade

ago. While information has been accumulating for a long

time, the rate of growth has exploded as computers

and digital devices—especially connected devices—have

become ubiquitous. Where, in the late 90’s/early 2000’s

a household might have had one family computer, now

individual family members have a personal

computer, a smart phone, tablet, smart watch, and are even wearing smart

glasses. Today’s consumer is über-connected. News, business, and social

communication are constant, so the portability and “always on” notion of

our devices are deemed a necessity to those consumers. Everything we

touch now has the ability to collect data about us.

As the consumer has been busy trying to keep up with the rapid pace

of media by using more devices, granting access to online profiles, and

linking everything together, he is leaving behind a trail of digital breadcrumbs. We call

this trail a “Code Halo”. The Code Halo has the potential to reveal significant amounts

of useful information about a particular consumer’s

preferences, habits, and inclinations. Code Halos help

avoid misdirected messaging and poorly focused

channels, while optimizing marketing programs and

creating highly specific, highly granular messaging

that hits the target market with precision. Better yet,

when properly implemented, a Code Halos program

will continue to sift through data, find correlations,

gather insights, and strengthen continuously over time.

As assumptions are confirmed or re-evaluated, the

results will become ever smarter and more valuable

to the company.

Endorsements copy to come

Paul Roehrig leads Cognizant’s Center for the Future ofWork. Prior to joining Cognizant, Paul was a PrincipalAnalyst at Forrester Research and held a variety ofpositions at Hewlett-Packard and Compaq ComputerCorp. Paul has a degree in journalism from the Universityof Florida and a doctorate from Syracuse University.

Ben Pring co-leads Cognizant’s Center for theFuture of Work. He joined Cognizant afterspending 15 years with Gartner as a Research VicePresident analyzing enterprise technologies andthe development of Cloud Computing. Bengraduated with a degree in philosophy fromManchester University.

Malcolm Frank is Executive Vice President of Strategyand Marketing at Cognizant, one of the world’s leadingtechnology, consulting, and business process servicescompanies with over 175,000 employees. Malcolm hasauthored articles in several leading industry publications

in Finance by Treasury & Risk magazine. He earned a B.A.in economics from Yale University.

Think about everything you do with yourmobile phone and tablet nowadays: connectwith friends and colleagues, read books, play

get directions, buy products… and even work.

devices. Now add in all the data beinggenerated by “things” like cars, televisions,airplanes, even toothbrushes.

Every click, swipe, “like,”buy, comment,deposit, jog, and search produces somethingwe call a Code Halo, a virtual self. Code Halosare important to us as individuals, and nowthey are becoming critical for businesssuccess. In fact, market leadership in morethan a dozen industries has already violentlytransitioned because of the impact of CodeHalos.

This book explores the Code Halophenomenon and describes how the “digitallives”of people, things, and organizations arechanging the rules of business.

Download the CodeHalos iPad app

Howthe

digitallivesofpeople, things and organizationsare

changingthe

rules of busines s. APlaybook

For Managers.

1 http://www.emc.com/collateral/analyst-reports/idc-digital-universe-are-you-ready.pdf

By 2020, the amount of data in the digital universe will grow to 35,000 zetabytes, a figure that was inconceivable to most people a decade ago.

The Code Halo has the potential to reveal significant amounts of useful information about a particular consumer’s preferences, habits, and inclinations.

Impact on the marketplace

At the Crossroads, complex algorithms are inseparable from the connections found between people, technology, and organizations2.

Code Halos utilize a concept called ‘The Crossroads’—a point in time where growth of traditional industry leaders is challenged, outpaced even, by growth among competitors leveraging data-

driven analytics to their advantage (See Figure 1). This concept is particularly evident in the media and entertainment industry, where companies like Netflix, Google, Amazon and Hulu are already differentiating themselves in the filmed entertainment, broadcast, publishing, and information services segments.

Netflix initially gained popularity by bringing movies to the consumer in a more convenient fashion. However, they have blossomed into an entertainment juggernaut by being meticulous about metadata, and combining that data with customers’ viewing habits. They invest significantly in continuing to hone an algorithm that delivers more relevant and personalized programming to their customers3. Amazon’s early selling points were similar to Netflix in that their customers could purchase books and other consumer goods conveniently and inexpensively. However, for years they have also been tracking and collecting data on their customers, mining it to drive consumer purchases through compelling recommendations. Furthermore, they used this competency as leverage in driving contract and pricing negotiations with publishers and content providers. Google has a well-documented history of data collection. While this has, from time to time, attracted controversy among competitors (remember Microsoft’s ‘Scroogled’ campaign?), Google has successfully grown their email product to hundreds of millions of active users by creating a personalized experience for their customers. Hulu uses data as a differentiator to deliver personalized advertising to their customers4. Despite a smaller (but growing) user base when compared to the major television networks, Hulu’s ability to collect data about viewer activity and preferences allows them to target precisely which

viewers will receive which message. In an interview with the New York Times, Jean-Paul Colaco, Hulu’s former Senior Vice President for Advertising5, said “in the future, I know you’re more of a diet-conscious person and can send you more ads for diet drinks.”

The compelling commonality between all of these examples is that these companies are relatively young when compared to their industry rivals. Amazon (’94), Netflix (’97) and Google (’98) seem like industry veterans being founded in the 90’s while Hulu was only just founded in 2007. If a startup can demonstrate this type of

success with data, one can be optimistic about the opportunities an established, historically successful company has to do the same—and to win at ‘The Crossroads’. It just doesn’t happen without thought and planning. In order to be successful, a Code Halos initiative must be deliberate and methodical, and receive full support from the highest level within the organization.

2 Code Halos, Frank, Roehrig, Pring, March 28, 2014f3 http://www.theatlantic.com/technology/archive/2014/01/how-netflix-reverse-engineered-hollywood/282679/

4 http://www.nytimes.com/2012/04/17/business/media/hulu-the-online-tv-site-adds-original-programming.html?pagewanted=all&_r=0 5 Jean-Paul Colaco has since left Hulu, and now works for Vessel

4 KEEP CHALLENGING October 2014

The Crossroads Model: Winning with Code Halos

Ionization Spark Enrichment Crossroads After the Crossroads

Company B Winning the New

Code Rush

Company A The Extinction Event

Company A Focused on Assets

Company B Focused on Code

Halos

Mar

ket

Cap

ital

izat

ion

Figure 1

Code Halos utilize a concept called ‘The

Crossroads’—a point in time where growth of traditional industry leaders is challenged,

outpaced even, by growth among

competitors leveraging data-driven analytics

to their advantage.

Case Study: Consumer Insights at a Major Studio

A significant advance in the big data revolution is just how rapidly companies are beginning to adopt aspects of the Code Halos concept. Over the past 18 months, Cognizant has been actively shaping how its clients manage the influx of consumer information—including a wide array of new vendors and tools—as well as the challenges of aligning new and existing business models with consumerized data (See example in Figure 2). A recent project at a major Hollywood studio tasked Cognizant with providing an in-depth segmentation study of the studio’s digital customer, including strategic recommendations on segment utilization, visualizations of the psychographic breakout, and profitable audience engagement tactics. Some key business questions included:

• How are customers consuming content?

• How can we measure engagement across brands, devices, countries, etc.?

• What are the most profitable consumer behaviors?

• How do we drive our audiences in high ROI directions?

• Who are our customers and what do they care about?

Figure 2

Travel Personal

Sports

News & Information

SocialMusic & Video

Shopping & Entertainment

Dan’s Code Halo

PERSONAL

• 32 year old Digital Marketing Manager

• Recently Married

• Adrenaline Junkie

• Loves Movies & Traveling

• One of Six Children

PROFESSIONAL

• MBA from UCLA

• Previously was Financial Auditor ofMedia & Entertainment Firms

• Consistent High Performer

GEOGRAPHIC

• Based in LA for past 3 years

• Lived in UK for 2 years

• Originally from Orlando, FL

• Frequently takes beach andski vacations

THE CONSUMER HALO IN MEDIA AND ENTERTAINMENT 5

This studio is in the early stages of developing a comprehensive digital fingerprint for its customers, mining its data warehouse for insights into behaviors and patterns (See Figure 3). Various customer data points are captured through many different sources, including web traffic, video playback, e-commerce, CRM response data, sweepstakes and newsletter signups (to name a few). Individually, each of these sources can tell a story about the studio’s customers. However, the real value is derived from combining this data together and mapping as much as possible to individual users. This mapping process is where Code Halos become a reality. When the studio is able to take a step back and analyze a multitude of reports generated from this layering of data sources, executives and business units are able to make strategic decisions with increasingly sophisticated information.

This customer profiling allows the studio to be more targeted with marketing, more focused with recommendations, and truly understand the interests and preferences of its customers. The resulting shift in marketing spend should also increase the revenue associated with more relevant targeted products and smarter up-selling to the customer. The studio will also be able to improve the customer experience by sending more targeted communication on a cadence that fits each customer profile. For highly engaged customers, they may get more emails with detailed messaging for specific campaigns. For less-engaged customers, they may only get occasional sale messaging for mass campaigns to entice action.

In addition to marketing, Code Halos are giving this studio insight into how much its customers are worth. Additional work is being done to create a segmentation model based on predefined business rules around the data the studio currently holds. This segmentation process will value different activities and data touchpoints as a way to align customers into relevant groups. These groups will give the business an idea of who its customers are, how many are associated with different characteristics, and what their average value to the studio looks like. These values will help the studio make decisions for marketing and even content creation.

The overall (total) value of each customer can be estimated using statistical and predictive analysis with all of their known data points. Rather than a simplistic linear extrapolation, we are mapping data points, activities and patterns into a predictive model that projects future value more realistically. For example, a new customer that clicks through on emails at a high rate, subscribes to one of the studio’s digital products, and attends a convention featuring a studio franchise

Figure 3

BEFORE AFTER

ANALYZED DATA SOURCES

1st Party

2nd Party

3rd Party

Owned Websites, Apps,

Products, Data Platforms

External Data Appends, Social Procured Data

Partners, Subsidiaries, Affiliates ?

6 KEEP CHALLENGING October 2014

In addition to marketing, Code Halos

are giving this studio insight into how much

its customers are worth.

may have a small actual dollar value in isolation. With our predictive model however, we are able to contextualize these characteristics and provide a better look at how much this person will actually be worth to the studio in the long run. Here, a series of discrete data points, otherwise compartmentalized in unrelated line-of-business silos, have been smartly aligned to identify high potential consumers for further targeting. The result is greater than the arithmetic sum of the parts. Code Halos are the magic glue.

SummaryThe best part about a Code Halos initiative is that both sides win. The customer receives a better, more personalized experience with more relevant and interesting marketing communications. The studio benefits from more efficient, targeted marketing campaigns that drive opportunities for additional revenue. As obvious as this may seem, companies often do not know where to get started or how to execute on a Code Halos type of initiative. In these instances it is best to start small and identify opportunities for pilot or proof-of-concept programs. While these may not answer all data questions overnight, they can provide a foundation for a more robust platform from which data can be extracted, cleansed, and studied. Once the foundation is set, layers can then be added over time to improve the sophistication and business value.

The bottom line is that Big Data is here to stay. The pipeline of information flowing from all of our devices isn’t going to slow down any time soon – it’s only going to grow. Companies are best advised to get in early and and claim their competitive advantage while industry peers are still trying to hone their strategy around data and analytics. The timing is right. Code Halo programs are still in their infancy at most of the major brands in entertainment. They aren’t simple to implement. In fact, they require significant thought and coordination to truly succeed. However, when implemented properly, Code Halos can be used to optimize marketing campaigns, increase profitability (through higher revenue and cost savings), and create better entertainment experiences for customers. In turn, these new consumer experiences will create important new revenue streams for those companies able to harness the power of Code Halos.

Figure 3

Code Halos can be used to optimize marketing campaigns, increase profitability (through better revenue and cost savings), and create better entertainment experiences for customers.

THE CONSUMER HALO IN MEDIA AND ENTERTAINMENT 7

World Headquarters500 Frank W. Burr Blvd.Teaneck, NJ 07666 USAPhone: +1 201 801 0233

Fax: +1 201 801 0243Toll Free: +1 888 937 3277

inquiry@cognizant.com

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Phone: +44 (0) 207 297 7600Fax: +44 (0) 207 121 0102

infouk@cognizant.com

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Phone: +91 (0) 44 4209 6000Fax: +91 (0) 44 4209 6060

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© Copyright 2015, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is subject to change without notice. All other trademarks mentioned herein are the property of their respective owners.

About Media & Entertainment Cognizant’s Media and Entertainment practice provides information technology, consulting, and business process outsourcing services for: broadcasting, entertainment (film, music and gaming), advertising and marketing and printing and publishing firms. The growth of digital platforms is causing significant change to these industries and Cognizant is working with clients to help meet these challenges while helping transform their businesses to run better and run different. Leveraging its deep domain and business consulting expertise, Cognizant serves all the major entertainment studios and the top broadcasting companies worldwide. We continually invest in defining what the future of work means for our industry by developing solutions through our Digital Media Lab and working in critical areas such as the Digital Content Supply Chain and Media Asset Management. Visit us online at www.cognizant.com/information-media-entertainment.

About CognizantCognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process outsourcing services, dedicated to helping the world’s leading companies build stronger businesses. Headquartered in Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industry and business process expertise, and a global, collaborative workforce that embodies the future of work. With over 100 development and delivery centers worldwide and approximately 217,700 employees as of March 31, 2015, Cognizant is a member of the NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world. Visit us online at www.cognizant.com or follow us on Twitter: @Cognizant.