www.astech-intermedia.comThe Newspaper as “Infomediary” Kim Leserman, Media Insight Group Tom Ratkovich, ASTECH InterMedia
FORCES DRIVING CHANGE INOPERATING LANDSCAPE FOR VENDORS
The New Operating Landscape More savvy consumers Determining what they will pay - easy access to information LESS! - shop price/compare productsProliferation of products Market share fragmentationBrand loyalty disappearing More advertising clutterFight for „mind share‟ Diminished effectivenessConsumers tuning out Vendors spending more to achieve lower salesStrong negative impact on Cutting cost everywhere vendors‟ bottom line
Increased Focus On Cost-Effectiveness Profit BleedLower Ad Effectiveness Advt. $$$
Examples Are Everywhere Experimentation with technology - auto dialers/automated messaging Explosion in direct mail Pressure to improve targeting capabilities - Geographic and demographic Growing popularity of e-marketing - Success of Belo Interactive’s e-marketing database - E-Bay success (not just an auction site!)
Addressing TV Bureau of Advertising“There is renewed focus on ROI and a tremendous pressure for competitive advantage.” “In our environment, we have to find ways for our advertising to work harder.” David Rooney, Director of Media Operations DaimlerChrysler
THE ROLE OF THE “INFOMEDIARY”
The Concept ExplainedRequired reading: Net Worth” (John Hagel and Marc Singer) - revolutionary new business model connect buyer/seller - permission marketing to bypass traditional advertising - root of privacy backlash: confidentiality concerns vs. pragmatic concerns over who benefits - consumers very willing to share personal data
Infomediary Role Information Intermediary: - trusted (third party ) personal „agent‟ for consumer - help capture/manage (not sell) consumer data - entrusted with complete view of customer - use it to strike best bargains on their behalf - complete protection of their privacy - shift focus from serving advertiser to serving consumer - act only in the best interest of the client - optimize relationship between buyer and seller
Infomediary Role Interact primarily via Internet: - infomediary provides a „technology toolkit” - customer communicates/controls permission via ongoing manipulations of dynamic preferences menu - client can specify which types of goods/services and which vendors at any point in time - marketing messages/offers delivered by e-mail via infomediary to protect client‟s privacy
The Traditional Advertising ModelChanging Your Perspective.
The Merchant Community • Fragmentation/Targeting/BypassChanging Your Perspective. • Migration to ROI as key metric in ad expenditures • Seeking mechanism to optimize communications through channel integration and consumer intelligence
The Evolving Business ModelChanging Your Perspective.
The Newspaper as Infomediary • Opportunity to become the matchmaker between:Changing Your Perspective. • Consumers with specific consumption intentions, and • Merchants desiring to satisfy them • Why? • Trust • Consumer and merchant relationships • Channel integration
The Newspaper and “Trust” • Generally among highest of media concernsChanging Your Perspective. • Must be impeccable • Does brand strength = trust?
The Newspaper and “Relationships” • Consumer “touch points”Changing Your Perspective. • Wide range • Under-leveraged • Merchant relationships transformed • Control of data, channels lead to partnership • Sales organization must also evolve
The Newspaper and “Channel Integration” • Only entity capable of integrating newspaperChanging Your Perspective. distribution with direct mail, email, etc. • Potency of this advantage related to customer knowledge • Greater in markets where subscriber knowledge, penetration high • In other markets, data acquisition is key
Getting Paid: The Right Revenue Model • The “Communication” modelChanging Your Perspective. • Paid for message delivery via all appropriate channels • Consumer intelligence adds value beyond traditional model • The “Customer Development” model • Paid for delivery (and fulfillment?) of customer • Risk/reward creates high profit opportunity • Relevant for some markets, not all
Changing Your Perspective. The Daily Telegraph (UK)
The Road Map • Build the information infrastructureChanging Your Perspective. • Enhance interactivity • Ensure privacy • Diversify communication channels • Transform the account team • Invest in the brand to build TRUST
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Group A: The Competitive Environment • What other entities might usurp the Infomediary opportunity?Changing Your Perspective. • What are the advantages and disadvantages of each relative to you? • How should the newspaper industry position itself against these competitors? • What happens to the industry if we are not successful?
Group B: Consumer Interactivity & Data Acquisition • Create a “Data x Channel” matrixChanging Your Perspective. • Identify data elements that have economic value; to whom? • Propose relevant data acquisition mode • Outline data use policy
Group C: Getting Paid • How should the revenue model evolve?Changing Your Perspective. • Are there categories for which the “Customer Delivery” model is particularly relevant? • Will the newspaper culture ever accept such a model?
Group D: The Organization • What are the major roles of the organization?Changing Your Perspective. • How do the traditional roles of advertising, circulation and marketing evolve? Do the typical manager positions remain? • Outline an org chart • What skill sets are required of each and how should they be developed?
Group E: TRUST • How trusted is the typical newspaper relative to other media?Changing Your Perspective. • Are there entities with whom consumers are more likely to share personal data? • What steps can the newspaper company take to enhance the perception of trust, credibility and integrity in the market?
Group F: Instituting Change • Who must champion this evolution?Changing Your Perspective. • List the major transitory steps that must occur for it to take place? • In what order? Over what time frame?