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Saving Posts by Making Markets

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Advertising via print media, especially mail, has been falling. This talk describes a new kind of interactive stamp that rewards people for sharing their preferences. It bridges any kind of printed medium and mobile, and enables one click purchases. The result could help print ads compete with search ads, social ads, and mobile ads.

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Saving Posts by Making Markets

  1. 1. © 2013 Van Alstyne et. al. Saving Posts by Making Markets Marshall Van Alstyne Boston University & MIT Twitter: @InfoEcon mva@bu.edu, marshall@mit.edu Postal Vision 2020 Washington, DC April 11, 2014 © 2014 Van Alstyne, permission granted to redistribute so long as all copyright information is preserved. Geoff Parker Director, Tulane Energy Institute gparker@tulane.edu Tushar Shanker Boston University tshanker@bu.edu
  2. 2. 1st Class + Std Mail ~ 70% Rev, 90% Vol $4.8B loss in 2012 ($15.9 including mandatory health and retirement) Source: USPS Financial Report 2012 Form 10-K
  3. 3. Twitter: @InfoEcon 3 PlatformEconomics.org Source: USPS Financial Report 2012 Form 10-K
  4. 4. Twitter: @InfoEcon 4 PlatformEconomics.org
  5. 5. Twitter: @InfoEcon 5 PlatformEconomics.org You’ve just paid $15 to see Ironman when you’re presented with… Unsolicited car ad Unsolicited preview Which ad makes you happy?
  6. 6. Which ad makes you happy?
  7. 7. Twitter: @InfoEcon 7 PlatformEconomics.org Consequences of ads that don’t make people happy.
  8. 8. Twitter: @InfoEcon 8 PlatformEconomics.org Digital Ad Revenue Crosses $10B Source: Internet Advertising Report 2013 Puzzle: mail ads are declining but digital ads are rising?
  9. 9. Twitter: @InfoEcon 10 PlatformEconomics.org User Advertiser Google Platform 1. Users declare interests 2. Advertisers buy attention 3. Google refines its matching algorithm Platform User Advertiser Wash… Rinse… Repeat… Preferences + Interactivity + Feedback
  10. 10. Twitter: @InfoEcon 11 PlatformEconomics.org
  11. 11. Twitter: @InfoEcon 12 PlatformEconomics.org Even broadcast is going interactive.
  12. 12. Twitter: @InfoEcon 13 PlatformEconomics.org We Need… … to let recipients express their preferences… … interactivity… … feedback to drive improvement… … to route flows of mail, of data, of money…… partnerships with industry … … a business model.
  13. 13. Twitter: @InfoEcon 14 PlatformEconomics.org ALL BUILT AROUND PAPER? … doing all this…
  14. 14. Twitter: @InfoEcon 15 PlatformEconomics.org Consider a new kind of stamp
  15. 15. Twitter: @InfoEcon 16 PlatformEconomics.org Sender Recipient Content Date Recipient gets this!
  16. 16. Twitter: @InfoEcon 17 PlatformEconomics.org  ☐ ☐
  17. 17. Twitter: @InfoEcon 18 PlatformEconomics.org  ☐ ☐
  18. 18. Twitter: @InfoEcon 19 PlatformEconomics.org Win for Recipients • Gets Voice! • Archival, on-demand retrieval of ad content and coupons • Green, less landfill • Get buy-it-now option • Bi-directional: Can request info, declare intent to purchase home furnishing, schedule oil change, try new restaurant • Get Paid!
  19. 19. Twitter: @InfoEcon 20 PlatformEconomics.org Win for Mailers • Learn what they like and what they don’t • Like permission based ads, much higher response rate • Can reward for forwarding ads to friends and family • Notification of delivery, opening, interest in product, interest in seller • Physical mail becomes portal to mobile access • Can motivate behavior, not just clamor for attention
  20. 20. Twitter: @InfoEcon 21 PlatformEconomics.org Win for USPS • Avoids Do-Not-Mail • Can charge more for unwanted mail • “Move Updates” at the press of a button • New source of revenue from escrowed funds • Closes data feedback loop enabling value proposition relative to Google and Facebook • Enables electronic commerce • Data layer creates platform for ecosystem of biz partners
  21. 21. Twitter: @InfoEcon 22 PlatformEconomics.org Platforms get enormous value from 3rd party developers Most firms can only concentrate on most valuable apps Profits increase when others add to platform’s “Long Tail” USPS can have its version of MS Word / PowerPoint / Excel and let business do everything else. These are ecosystem partners
  22. 22. Twitter: @InfoEcon 23 PlatformEconomics.org Challenges • What about elderly access? – DMA: Trend is extremely favorable – Works for any device with web access & camera – Can pre-load app & starter account on mobile devices • How handle rollout? – Use public records: driver’s license, voting, phone records, even direct mail lists – Advertising pays for rollout and even motivates adoption – Solves problem of hybrid mail • What happens to unclaimed coupons? – Simply expire and can be reused • What happens when people claim coupons but never buy? – Advertisers will figure this out fast!
  23. 23. Twitter: @InfoEcon 24 PlatformEconomics.org Opportunities Total Ad Market $167B Total E-Commerce Market $225 Television Desktop Internet Mobile Internet Newspapers Magazines Outdoor Radio Cinema 135%
  24. 24. Twitter: @InfoEcon 25 PlatformEconomics.org Opportunities
  25. 25. Twitter: @InfoEcon 26 PlatformEconomics.org Australia Austria Belgium Canada Cypress Denmark Portugal Spain Sweden Switzerland UK USA Opportunities Finland France Germany Greece Hungary Iceland Ireland Italy Luxemburg New Zealand Netherlands Norway
  26. 26. Twitter: @InfoEcon 27 PlatformEconomics.org Australia Austria Belgium Canada Cypress Denmark Portugal Spain Sweden Switzerland UK USA Opportunities Finland France Germany Greece Hungary Iceland Ireland Italy Luxemburg New Zealand Netherlands Norway
  27. 27. Twitter: @InfoEcon 28 PlatformEconomics.org Redeemable Information Coupons … let recipients express their preferences… … provide interactivity… … feedback to drive improvement… … route flows of mail, of data, of money…… partnerships with industry … … a business model.
  28. 28. Twitter: @InfoEcon 29 PlatformEconomics.org For more on Redeemable Information Coupons • How to Strengthen Ad Mail by Building a Digital Information Market. (Van Alstyne, Parker, Tushar) OIG RARC report 14-002 Dec 11, 2013 http://ssrn.com/abstract=2377476 • An Economic Response to Unsolicited Communication (Loder, Van Alstyne Wash) Advances in Economic Analysis & Policy 6(1) (2006) http://ssrn.com/abstract=1762212 Strengthening Advertising Mail by Building a Digital Information Market December 11, 2013 Report Number: RARC-WP-14-002 WHITE PAPER
  29. 29. © 2013 Van Alstyne et. al. Saving Posts by Making Markets Marshall Van Alstyne Boston University & MIT mva@bu.edu, marshall@mit.edu Postal Vision 2020 Washington, DC April 11, 2014 Money Geoff Parker Director, Tulane Energy Institute gparker@tulane.edu Tushar Shanker Boston University tshanker@bu.edu © 2014 Van Alstyne, permission granted to redistribute so long as all copyright information is preserved.

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