Embrace the Digital Transformation for  Media with SAP: Maximize Profit Throughout the Content-Audience Value Chain
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Embrace the Digital Transformation for Media with SAP: Maximize Profit Throughout the Content-Audience Value Chain

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Consumers demand their content in any format, ...

Consumers demand their content in any format,
any time, and on any device, be it tablet, Web
browser, mobile, or print. There are 1.5 billion
smartphone and tablet users worldwide, and this
number is expected to grow to 5 billion users
over the next couple of years. These trends are
impacting content sales and business models at
an incredible pace as audiences increasingly
demand solutions for their specific needs, rather
than just bare content or information.

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Embrace the Digital Transformation for  Media with SAP: Maximize Profit Throughout the Content-Audience Value Chain Embrace the Digital Transformation for Media with SAP: Maximize Profit Throughout the Content-Audience Value Chain Document Transcript

  • SAP Point of View Embrace the Digital Transformation for Media with SAP Maximize Profit Throughout the Content- Audience Value Chain May 2014
  • Publishing in the Digital Age Consumers demand their content in any format, any time, and on any device, be it tablet, Web browser, mobile, or print. There are 1.5 billion smartphone and tablet users worldwide, and this number is expected to grow to 5 billion users over the next couple of years. These trends are impacting content sales and business models at an incredible pace as audiences increasingly demand solutions for their specific needs, rather than just bare content or information. Media companies consequently have to focus on improving real-time insight into their consumer and audience preferences, managing cost by leveraging digital supply chain, exciting consumers with a personalized content experience, and providing relevant and targeted advertising. SAP is committed supporting media companies to achieve: • Compelling content experiences for consumers on any device, at any time • Integrated, cross-platform advertising, from order to delivery • Digital distribution apps with in-app commerce • Real-time insight into consumption behavior • Increased performance in managing rights and royalties agreements SAP’s digital media solution provides a holistic, end-to-end solution across the entire publishing segment. From content creation, to management of physical and digital distribution, ad order taking and placement, sophisticated e-commerce and subscription management, revenue recognition, and advanced analytics – the solution, delivered via cloud or on premise, addresses the complete customer relationship lifecycle required to thrive in the transformational media world. Executive Summary ©2014 SAP AG or an SAP affiliate company. All rights reserved. | 2
  • The Current Market Reality New Revenue Streams • Fight audience erosion and declining circulation revenue • Bundle digital and physical offerings • Exploit deep libraries of content – the long tail – at margins that simply were not possible in a wholly physical distribution model Customer Relationship • Overcome disinter- mediation and build direct customer relationship • Serve fragmented audience efficiently • Establish audience insight • Move from single transactions to relationships Business Agility and Efficiency • Fast service innovation • Constantly redefine the core value proposition for digital audience and advertisers • Seamlessly integrate with back-end systems, social platforms, and other resources The media and publishing industry is being driven by four critical forces: Multichannel Publishing and Advertising • Leverage new digital pricing and subscription strategies • Single platform to manage sales and reporting across multiple advertising channels • Streamline digital advertising process to increase efficiency and revenue per order Our Understanding ©2014 SAP AG or an SAP affiliate company. All rights reserved. | 3 Higher revenue per employee in organizations that are using information to identify strategic and competitive advantages Source: SAP performance benchmarking 20%
  • Transform from a product-centric mass media to an agile, audience-centric and profitable digital content hub. Challenges in Media Cloud Real-time computing B2B/B2C Social Big Data Mobile Personal computer WWW Audience relation and insight Individually customized content Pervasive content Shift to digital content consumption Distributed computing Internet self-service Multichannel Scalability limitations Application silos, data sprawl Service-level challenges Technology Debt Technology Value End of Life Our Understanding ©2014 SAP AG or an SAP affiliate company. All rights reserved. | 4 40% of executives worry that their organizations will not keep pace with technology change and lose their competitive edge. McKinsey study, 2013
  • Key Industry Metrics SAP helps media companies optimize their business processes through the SAP performance benchmarking program. The following key performance indicators (KPIs) and best practices come from our benchmarking database and show a strong correlation – the ability to better implement these best practices will improve the resulting metrics. SAP’s solutions enable media companies to do just that. Source: SAP performance benchmarking Disclaimer: https://valuemanagement.sap.com/disclaimer Our Understanding ©2014 SAP AG or an SAP affiliate company. All rights reserved. | 5 Best Practice Low Coverage High Coverage Lower customer churn for organizations where analytical methods and a 360-degree view are applied to measure and optimize customer/member relationships Customer Churn % Higher revenue per employee in organizations that are using information to identify strategic and competitive advantages Revenue per Employee Lower days sales outstanding in organizations with higher maturity of customer billing, credit, and collections Days Sales Outstanding (days) Higher new product revenue as a percentage of revenue where new product ideas are captured from stakeholders through multiple channels (social media) New Product Revenue (% of revenue) Lower IT spend for organizations with a consolidated single solution/platform landscape IT Spend (% of revenue) +20% +24% -29% -22% -15%
  • SAP Solutions for Media Available in the cloud, on premise, or hybrid SAP HANA Compelling Content Creation • Marketing and brand management • Subscription management • Digital content sales • Billing and revenue management • Engaging customer experiences • Cross-platform advertising • Multichannel publishing • Audience analytics The SAP Solution ©2014 SAP AG or an SAP affiliate company. All rights reserved. | 6 The SAP digital media platform provides a comprehensive solution based on analyzing customers’ behavior and delivering personalized content to audiences across Web and mobile. It helps to: • Boost monetization of digital and physical media content with a modular implementation approach based on a flexible and scalable platform • Enable cross-platform advertising and multichannel publishing to streamline digital advertising sales across different channels With 15 years of product innovation, SAP offers a complete media suite, all under a single platform, providing companies the choice of one or more business modules to address their customers’ requirements. We believe our strategy and solutions will provide the enabling platform to support business transformation objectives in digital media. Media Content Monetization Multichannel Publishing and Advertising
  • Media Content Monetization Digital content sales The SAP Solution ©2014 SAP AG or an SAP affiliate company. All rights reserved. | 7 Traditional media business must underwrite digital innovation. Since traditional sales are flat, margins must be maintained by improving retention of profitable customers and optimizing the return on spending. This requires consolidating core processes and reducing distribution costs while creating offerings for new channels. Solution Capabilities Benefits • Maximize promotion return and brand value by planning and managing cross-channel marketing activities • Personalize consumer experiences through all touch points by repackaging content offerings and bundling digital and physical offerings • Track and rate usage events in real time • Manage print and digital subscription billing in a flexible way with seamless integration into financial accounting and revenue recognition • Build audience relationships with in-context, personalized treatments that are relevant for them in the very moment • Increased cash flow by making freemium customers into paying subscribers • New digital pricing and subscription strategies • Increased upselling and agile experimentation in rapidly changing markets • Improved and compliant handling and forecasting of recurring revenue with recognition of deferred revenue • Improved customer retention by providing personalized, relevant offers and messages consistently across channels
  • Media Content Monetization Digital content sales The SAP Solution ©2014 SAP AG or an SAP affiliate company. All rights reserved. | 8 Media companies need a content monetization platform that has the agility to support innovation and change. It has to be extensible, flexible, and integrate with social platforms and other resources that may arise in the future. It needs to be scalable to whatever volumes are required. CommunitiesWeb Mobile Phone, E-mail, Self-Service Customer Service Social Media Content Magazines, Newspaper TV, Video GamingE-books • User and order management • Subscription self-service • Search and navigation • Smart content search • Renewals • Campaign management • Subscriber management • Single copy sales • Customer history • Profiling, audience segmentation • Social media analysis • Invoicing (print/digital/usage) • Revenue deferral and recognition • Financials SAP HANA Platform and Technology • Customer behavior • Financial data analysis • Usage tracking Online SAPInformationandBusinessPlatform • Product bundles (print/digital) • Entitlements • Metered usage • Promotional and bundle pricing • Freemium models • Web content management • Digital fulfillment • Payment gate • Context-relevant personalization • Recommendations • Fulfillment • Circulation auditing • Subscription billing • Billing data analysis • Content analysis
  • The SAP Solution ©2014 SAP AG or an SAP affiliate company. All rights reserved. | 9 Media Content Monetization SAP customer success – Kalahari Improving the quality of customers’ lives Kalahari selected hybris from SAP because it was much more open, flexible, and customer-centric than other products considered. It provides an infrastructure to run a more nimble online business today and support future plans for expansion. Key benefits • Quick response to changing markets and consumer demands • Reduced site management and development costs • High scalability for rapidly expanding online operations “With hybris in place, we have a foundation to build upon that will free up our IT teams to focus on the more innovative edge of our customer offering going forward.” Michael Needham, CTO, MIH (parent company of Kalahari.com) E-commerce Africa and Middle East
  • Audience Monetization Multichannel publishing and advertising The SAP Solution ©2014 SAP AG or an SAP affiliate company. All rights reserved. | 10 Media companies have the opportunity to streamline digital advertising sales across platforms, understand and deliver personalized content to audiences across Web and mobile, and offer innovative packages that help advertisers reach their target audience. Solution Capabilities Benefits • Achieve integrated, cross-platform advertising, from order to delivery • Manage complete customer and order lifecycle for all different advertising channels with a single platform • Gain real-time insight into content and ads viewed • Empower sales teams with visibility into advertiser campaign performance and create personalized sales-related services based on advertiser needs • Streamline entire advertising production process across print, Web, and mobile channels • Reduce IT costs and complexity by consolidating point solutions across different advertising and publishing platforms • Increase efficiency per order by automating digital advertising workflow, leading to high savings per order • Improve sales effectiveness with advanced proposal management and insights to advertiser campaign performance • Improve customer upsell and cross sell • Achieve higher price point for inventory • Experiment agilely in rapidly changing digital markets
  • Agencies, Brands Web Mobile Content Consumers Audience AdvertiserContent Magazines, Newspaper TV, Video Ads, Commercials E-books • In-app advertising and commerce • Advertising sales and production • Management • Campaign fulfillment (integration to ad servers) • Smart packages (Web, mobile, print) • Promotional and bundle pricing • Mobile publishing • Advertising inventory • Multichannel content management • Advertiser management • Proposal management • Cross-platform advertising sales • Advertising production • Real-time advertising campaign performance • Real-time content performance analysis • Content publishing • Campaign performance • Billing and revenue recognition • Financials management • Partner and 3rd party settlement Media companies need an integrated, cloud-based, multichannel publishing and advertising platform to handle editorial, mobile publishing, ad production, and advertising sales across print and digital channels, with integration to ad tech systems for inventory handling and campaign performance. SAP HANA Platform and Technology • Context-relevant and personalized customer engagement and recommendations • Revenue and profitability analysis Audience Monetization Multichannel publishing and advertising The SAP Solution ©2014 SAP AG or an SAP affiliate company. All rights reserved. | 11 Business Platform Information Platform Online
  • 12 New Order is Placed CRM System Ad Servers Audience Monetization Digital advertising automation The SAP Solution ©2014 SAP AG or an SAP affiliate company. All rights reserved. | 12 Order Entry and Rating DOUBLECLICK YAHOO! OTHER AD SERVERS FINANCIAL SYSTEM “Order to online” time reduced by 48 hours Cost to fulfill dramatically reduced Inventory secured faster Single source of the truth (governance throughout the ad lifecycle) Errors dramatically reduced Benefits
  • SAP for Digital Media Delivering time to value and flexibility A key part of the SAP solution for publishers is flexibility in how you choose to consume our solutions. Your business is changing rapidly, projects need to deliver time to value in months, not years. The big, risky, and expensive solutions are a thing of the past. Today, SAP offers the flexibility of the cloud – a hybrid cloud to leverage your existing IT investments, SAP or not – and, if desired, on-premise solutions that provide unique competitive differentiators. This range of options is delivered with the power and agility of SAP HANA, all consumed via the mobile or desktop platform. The SAP Solution ©2014 SAP AG or an SAP affiliate company. All rights reserved. | 13 Cloud Bill McDermott, co-CEO, SAP On Premise Cloud/On Premise
  • Why SAP for Media? 2,000+ media customers worldwide Deep, industry-specific capabilities Help our customers create new compelling value for the digital audience Value the customer relationship Clear industry roadmap media companies use SAP 7 of the Top 10 Why SAP? SAP has deep expertise in addressing key issues of publishers across the globe ©2014 SAP AG or an SAP affiliate company. All rights reserved. | 14
  • The Value of Partnering with SAP SAP brings a strategic partnership with an unparalleled amount of experience and strong track record in the media and entertainment industry to assist you on your business and IT transformation journey. Whether a customer needs solutions in applications, cloud, mobile, analytics, or database and technology areas, SAP can partner and deliver. Why SAP? ©2014 SAP AG or an SAP affiliate company. All rights reserved. | 15 Integrated Big Data Stack SAP provides a single, integrated stack that supports the full range of Big Data solutions to meet customer requirements. In addition, we have a team of 100+ data scientists working with customers on some of the most sophisticated use cases. Proven Time to Value in Large-Scale Implementations The world’s leading media and entertainment companies, across every major segment of the industry throughout the world, continue to rely on SAP to enable them to offer a comprehensive customer experience. Key Breakthrough Innovations The SAP portfolio is based on the industry’s most innovative technology foundation – including SAP HANA, mobile solutions, analytics, and cloud solutions – to deliver business process optimization and efficiency at the lowest possible cost. Delivering Value to Media and Entertainment Companies Most of the world’s leading media and entertainment companies, across every segment, are reaping the benefits and running better with SAP software and services.
  • Summary and Next Steps Your transformation starts now InitiateEngageExperience Contact ©2014 SAP AG or an SAP affiliate company. All rights reserved. | 16 Next Steps What is clear is the need to move rapidly to capitalize on this once-in-a-lifetime transformation and not cede ground to the new entrants. To compete, you must not level the field, you must define it. the benchmarking process with a free value assessment at valuemanagement.sap .com/ with SAP in Design Thinking workshops. the solution yourself at the next SAP event near you. Visit the SAP global events calendar. your account team to schedule a meeting. Follow us on twitter: @SAP_Media
  • www.sap.com/contactsap SAP Statement of Confidentiality and Exceptions The information in this presentation is confidential and proprietary to SAP and may not be disclosed without the permission of SAP. This presentation is not subject to your license agreement or any other service or subscription agreement with SAP. SAP has no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation and SAP's strategy and possible future developments, products and or platforms directions and functionality are all subject to change and may be changed by SAP at any time for any reason without notice. The information in this document is not a commitment, promise or legal obligation to deliver any material, code or functionality. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement. This document is for informational purposes and may not be incorporated into a contract. SAP provides this information as guidance only to illustrate estimated costs and benefits of the predicted delivery project. These materials may be based upon information provided by you, information provided by other companies and assumptions that are subject to change. These materials present illustrations of potential performance and cost savings, and do not guaranty future results, performance or cost savings. SAP assumes no responsibility for errors or omissions in this document, except if such damages were caused by SAP´s willful misconduct or gross negligence. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions. © 2014 SAP AG or an SAP affiliate company. All rights reserved. (05/14) No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice. Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. National product specifications may vary. These materials are provided by SAP AG and its affiliated companies (“SAP Group”) for informational purposes only, without representation or warranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP Group products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty. SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and other countries. Please see http://www.sap.com/corporate-en/legal/copyright/ index.epx#trademark for additional trademark information and notices.