Starving at the feast

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  • 1. Starving at the feast
    Why big media is struggling to be part of the advertising boom
  • 2. Media industry is brand new
    radio
    TV
    intenet
    storytellng
    outdoor
    books
    pamphlets
    newspaper
    Print press
  • 3. More media is being produced, for cheaper, than ever before
  • 4. More money is being spent on advertising than ever before
  • 5. Technological change creates media growth across all mediums
    More demand for advertising from new products and services
    Unless technlogy is a replacement for old technologies
    Printing press versus scribes
    CD vstape
    DVD vs CD
  • 6. Economies of scale
    Big media businesses are formed
    Newscorp
    Disney
    Time Warner
    etc
  • 7. Control access to media
    Restrict access to competitors
    Control legislated channels (airwaves)
    Create scales of economy that thwart new entrants (printing presses, distribution, shelf space)
    Distribution = market power
  • 8. Imperfect information for advertisers
    Measurement models drive behavior
    Circulation vs readership
    Bundling of content vs actual reads
    Bulking up advertising per user (actual share of voice is not on the page)
    Creates and grows from market inefficiences
  • 9. Imperfect information for audience
    Hard for new media options/competitors to launch
    Cost to launch (advertising on existing media)
    Access to airwaves or shelfspace
    Audience options are limited due to lack of knowledge of alternatives
  • 10. Scarcity drive profits
    Limited choice enables greater audience on a platform
    Requires lowest common denominator content vs highest quality content
    Cheaper to produce content
    More audience and limited ad breaks equals more profits
  • 11. Welcome the internet
    Distribution From control to anarchy.
    Imperfect information From lack of data to in-depth data.
    Scarcity From limited ad space an audience to unlimited adspaceand audience.
    From limited content to unlimited content.
  • 12. Distribution
    Internet erodes government power to create monopolies
    Reduces switching cost between media to zero
    Allows anyone to be a media company
    Glut of choice becomes the challenge (disovery) vs scarcity
  • 13. scarcity
    Audience utilises multiple media platforms per day due to low switching costs
    Harder to sell audience specifically as can be reached on other mediums (high substitution)
  • 14. Near perfect information
    Advertising was sold on wastage
    Targeting and event based advertising (CPM, CPC, etc) reduce cost of advertising reach
    Only pay for actual benefit received
    Advertising spend (in theory) more effective
    Total reach
    wastage
    price
    target
  • 15. Choice requires better content
    Better = more relevant for you right now
    Butterfly enthusiast can publish blog in butterflies
    Other butterfly lovers love the content but not relevant to most
    Butterfly lovers also buy BMWs – so BMW can advertise there too OR employ CPC OR employ affiliates
  • 16. Reach vs Relevance
    Google model based on relevance of ad based on what user is looking for
    Relevance is better indicator of success than reach
    CPC is best indicator of relevance
  • 17. Throwing away the rate card
    Google give advertising away for free!
    Other media charge you to show your brand
    Google only charges you if user clicks on your advert (CPC)
    There is no google rate card
    Auction based
    Keywords can be over R100 per click (and still more effective than traditional media)
    Law of large numbers ensures google make a LOT of money
  • 18. Targeting
    User tracking is now consistent
    Cookies
    Sessions
    Etc
    You can use data to target
    Demographic
    Behavioral
    Targeting audience can happen on any site and across sites
    Retargeting
    Targeting makes ads more effective
  • 19. Ad Networks and low cost of sales
    Cost of sales is dropping to zero
    Makes it easier to buy and sell advertising
    No more “unsold” media
    Revenue maximization versus yield management
  • 20. Deal
    Buyers
    Sellers
    Advertiser
    External “Sales House”
    Deal
    Direct Sales
    Agency/ Ad Network / Affiliate Network
    AdWords (+ access to GCN)
    AdSense
    Workflow (DSM, freewheel does as well)
    Billing systems (eg SAP)
    CRM (egSalesforce)
    Dart Search
    Google AdX
    Buyer info
    Seller info
    Adsense Backfill
    MSN
    Email
    DFA /
    other
    Planning tools
    (Aprimo, Unica)
    Publisher Website
    Adservers DFP / other
    Private Network
    eCPM
    (optimize)
    Other Ad Exchanges
    AdECN
    RighMedia
    OpenX
    Advertising.com
    Adapt (optimize)
    SSP: Seller Optimizing
    (Rubicon, Admeld, Pubmatic)
    DNB,
    Adify, etc)
    Media Buyers
    (vivaki, Atom, cadreon)
    Ad Networks
    Vertical, Horizontal,
    targeted , performance
    Google CN
    Video serving with DRM, etc(egInstream, Freewheel
    Creative Optimization
    (Teracent, Adready)
    Demand Side Platforms
    (DataXu, Turn, InviteMedia)
    Video players
    Freewheel, Brightcove
    Verification Attribution
    (DoubleVerify, mPire)
    Analytics(Omniture, GA, etc)
    Mobile Ad serving
    Data optimization
    (Bizo, Quantcast, adchemy)
    Data Exchanges
    (Bluekai, eXelate, Rapleaf)
    Behavioural Targeting
    Ad Planners (eg Google Ad Planner, Comscore, Akamai)
    Data suppliers and consolidators (eBay, Expedia) (Business Objects, SAS, Claritas)
    Implementation, migration & Integration
    Marketer Services
    Exchange Brokering
  • 21. DATA
    Key next battlefront for media owners
    War may be lost before its even begun
    Google
    Microsoft
    Opportunity to match targeted audience to premium advertiser and command superior yield per ad spot
    CPC?
    CPM