The Open Agenda

Hello,

Here is a an abstract from a recent study by IBM: “Beyond advertising: Choosing a strategic path to the digital consumer.”

Yes, even the boffins at IBM have an extremely valuable point of view – more value perhaps that many industry commentators from directly within media and Entertainment.

Thanks to Michael Gass for bringing it to my attention.

Abstract

Digital formats such as social media, online video, mobile communications, gaming and advanced TV enable companies to simultaneously meet transactional and brand-building objectives. Four primary trends blur the boundaries between traditional brand advertising and direct marketing:

* Consumer adoption of new distribution formats – Consumer behavior has changed forever: They are more digital-savvy, willing to provide personal information in return for perceived value, and increasingly ready for permission-based advertising.
* A shift in advertiser spend – Spending is moving from traditional advertising toward measurable, interactive marketing. Combined with spending contraction in the new economic environment, this requires smarter advertising, and doing more with less.
* Digital migration of platforms – Traditional boundaries are fading, creating opportunities for innovative business models for content platforms.
* Emergence of new capabilities – Game-changing moves, by both new entrants and existing players, are driving new types of industry innovation, challenging existing business models and accelerating the pace of change.

In response, media and entertainment (M&E) companies need to move beyond traditional advertising: the scenario of the future is consumer centricity. Becoming consumer centric requires a combination of granularity – the ability to target desired consumers while measuring results – with cross-platform integration.

Yet content owners, media distributors and agencies have not sufficiently responded to these changes, partly due to significant hurdles. Investment decisions are being hindered by new format uncertainty; the lack of cross-industry standards across formats, processes and especially metrics; and significant internal challenges including siloed operating models that limit delivery of cross-platform campaigns and a “data glut” that fails to provide real insight.

Enabling consumer-centric marketing
No matter where M&E companies focus first as they move toward consumer-centric marketing, they must start now to test new models. By combining elements of granularity – from impressions to insight – and cross-platform integration, four distinct business models will continue to evolve over the next five years (see Figure 1).

Regardless of the chosen path, being competitive and overcoming substantial hurdles will require a fundamental change in capabilities. New capabilities across four areas hold paramount importance as traditional advertising gives way to consumer centricity: creative, insights, collaboration and workflow.

* Creative – From media-centric development to cross-platform innovation. This requires experimentation across platforms and consumer participation in the creative process.
* Insights – From disparate data to greater insights. The future requires insights to be seamless and more granular, leveraging tools such as integrated campaign dashboards to enable decision making.
* Collaboration – From proprietary models to open collaboration. A new set of partnerships – such as peer collaboration between cable companies or content collaboration with ad networks – is needed across the evolving ecosystem to exploit opportunities, enable scale benefits and deliver efficiencies.
* Workflow – From manual and analog to automated and digital processes. New tools and applications can deliver end-to-end processes, from automated micro-versioning to digital inventory optimization.

As the industry heads toward consumer centricity, participants are taking divergent evolutionary paths based on their legacy stronghold positions. How quickly any company reaches consumer centricity will depend on its starting point, business mix and its ability to innovate. Most will likely start by focusing either on deepening their ROI capabilities, or driving cross-platform integration, rather than both. But even companies picking a more deliberate, gradual strategy need to explore new models along both dimensions now to sustain and protect their revenue in the future.

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