IntroductionIn order to test Lynotech’s value proposition we’ve conducted several personalinterviews not only with potential customers but also with other signiﬁcant players inthe digital advertising industry like Google and Agencies. We tried to ﬁnd out if there isa real need, what other needs hadn’t we identiﬁed, and the difﬁculties to get to themarket.Potential customers quickly started talking about their necessities and how unsatisﬁedthey are with current solutions and what would they need in order to succeed, whichmakes us think there is a big market opportunity. Other related players in the Industrylike Google or Agencies focused on the technical and environmental difﬁculties to carryout our project, which we also think points out that there is an opportunity for ourdifferential approach.
Personal Interviews European Display Advertising EcosystemMedia Group AgencyLocal NewspaperGeneral ManagerDigital ManagerAd Sales Manager Google
Personal Interviews¤ Google Manager ¤ Agency Manager Guillermo Ramos and Paul de Mulder Luis Fajardo, Guillermo Ramos and Paul de Mulder May 4th 2012, Madrid. 1,5 h. May 11th 2012, Madrid. 4 h.¤ Premium Publisher ¤ Premium Publisher National Media Group Corporative Director Local Newspaper General Manager Luis Fajardo, Guillermo Ramos and Paul de Mulder Scheduled May 21st 2012 Via Google Hangout May 11th 2012, Madrid. 1,5 h. ¤ Premium Publisher¤ Premium Publisher Local Newspaper Advertising Sales Manager Local Newspaper Digital Manager May 17th 2012 Paul de Mulder, Valladolid. 1h Scheduled May 21st 2012 Via Google Hangout ¤ Premium Publisher¤ Amazon Data Warehouse Manager Largest Spanish Blog Publisher CEO Full team Scheduled May 23rd 2012 Madrid May 17st 2012, Via Google Hangout
Google Manager¨ Local premium publishers may have a big opportunity with our approach: big online advertising players don’t reach local advertisers and currently there is no online advertising product for them. ¨ Local newspapers have the local audience and a local sales force, and Lynotech will provide them with products suitable for local market.¨ National premium publishers will have to ﬁght against the rest of the players involved in the online ad market (for example AdSense) for the same advertisers and with inferior targeting technology but higher quality advertising inventory.¨ The project is not technically easy, specially if we consider to allow different customers share their data to drive higher incomes.
Agency Manager¨ The market opportunity exists, as premium publishers have the necessity of increasing their online advertising revenues and they’ll only achieve this by developing a system that helps them know their users and start selling “audience” instead of “space”, and to deliver better contents and services to their audiences to achieve higher user engagement, better trafﬁc, and more ads.¨ There’s been several attempts to develop similar solutions for publishers, but current advertising ecosystem has prevented them from succeeding as it reduces the part of the market value they manage and capture, and therefore their proﬁtability. Any similar solution would be boycotted by current agents, leading to damages on premium publishers short term incomes (not only in digital advertising but also in other medias like paper).
Agency Manager¨ Don’t let other market agents ﬁgure out Lynotech’s intentions to disintermediate the display advertising market in order to avoid their pressures and countermeasures. He suggests to keep a very low proﬁle (zero promotion and communication to the market). Refer to Lynotech’s solution as an audience analysis tool that helps premium publishers gather users insights from their audiences to deliver better contents and new editorial services.¨ In order to impose to the market an advertising solution like the one proposed it’s important to add as many premium publishers to the project as possible before it goes live. It needs to become a standard as soon as possible and without advance in order to protect publishers from any possible attacks from other agents involved.
National Media Group Corporative Director¨ Publishers need a solution like the one proposed by Lynotech. Users knowledge will be critical for media survival and publishers haven’t moved yet. There’s a market opportunity, but Lynotech has to move fast.¨ Advertising market is depressed, so publishers are right now concerned about gaining audience and inﬂuence, as these will be the drivers for revenues when the market grows and the economic crisis is over. Lynotech should not only focus on advertising but also on helping publishers gain inﬂuence and increase their audiences based on users insights: new services, better contents, etc.¨ Proprietary data: every single user insights and data generated in premium publishers sites must be owned by publishers. They must be the only ones to decide what to do with it, and Lynotech must offer them different solutions for their different needs.¨ It’s critical to be compliant with all European users privacy laws, or even more strict, as premium publishers brand could be seriously damaged in case any privacy scandal takes place.
National Media Group Corporative Director¨ Premium Publishers won’t buy developments, they’ll buy products, so its basic to go to the market with a fully developed solution.¨ Premium publishers may be willing to share data with other premium publishers as long as it drives higher incomes for them, but it’s not fundamental in this point. That should be phase three, or four of Lynotech’s road map.¨ Lynotech’s proposal has a signiﬁcant impact on media group’s workﬂows. It has editorial and commercial implications that will force to change working methods in areas of the organization and persons with aversion to change. In order to address this issue we need a very high commitment from our customers.¨ It would be very helpful to count with some of the Spanish traditional editorial shareholders as Lynotech’s investors.
Local Newspaper Advertising Sales Manager¨ Newspapers don’t have digital advertising products suitable for local advertisers. ¨ In their traditional paper business model, local advertisers represent the biggest part of their incomes (even after the crisis), but nearly have no presence in their digital advertising because they cant offer them access to speciﬁc audiences. ¨ They still sell digital advertising the same way than ofﬂine advertising, basically spaces, because they cant do anything else. Therefore they agreed that Lynotech’s proposal would allow them to start selling local digital advertising, recovering a great potential market, and stop managing spaces and start managing audiences.¨ In his own words, "I would buy this service tomorrow if it was possible". Data ownership was essential for him, but also the commercial scorecard possibilities. He also pointed out that he would be very interested in some type of exclusivity agreement for his territory, in order to surpass his competitors in this new local digital market.
Amazon Data Warehouse Manager¨ Lynotech’s value proposition makes sense not only for premium publishers, but it’s also a need for other online players with digital advertising¨ Lynotech should start with simple techniques and tools that can deliver great results in minimum time (minimum viable product).¨ There will always be time to develop a more complex solution, but it’s basic to reduce time to market.¨ Try to use open source as much as possible.¨ Semantic techniques are complex to develop, so we should consider it later on.
Lessons Learnt from the Interviews¨ 1) Premium Publishers have the need of solution to their problems with Lynotech’s approach.¨ 2) The market has already expelled a similar solution because they we’re born weak. We need strong customers that can impose their standards to the market.¨ 3) Keep a very low proﬁle until the system is completely functional. Talk publicly about it as a “content enhancer” for Publishers.¨ 4) Try to add as many Premium Publishers you can in each market before going live.¨ 5) Don’t focus only in using user’s knowledge to increase advertising sales. For Premium Publishers gaining audience is at least as important as increasing revenues.¨ 6) There will be some forces inside Premium Publishers opposing to Lynotech’s solution because of the implications of the proposal and their aversion to change the way they work.¨ 7) Publishers are interested in some sort of exclusivity period by territory.
Value Proposition Modiﬁcations¨ According to the lessons learnt during the validation process with customers, and although it was part of our value proposition, we’ve decided to give equal importance to helping Premium Publishers increase and engage their audiences in order to help them deliver higher value advertising products.
Strategy Modiﬁcations¨ According to the lessons learnt during the validation process with customers, we’ve decided to keep the lowest proﬁle as possible in order to not alert other agents in the online display advertising market.¨ We’ve also decided to talk publicly about it as a “content enhancer” for publishers, keeping out of the conversion our advertising intentions.¨ We will approach traditional Premium Publishers shareholders for the ﬁrst ﬁnancing round due to their market knowledge and their ability to act as really smart money in this market.¨ We are considering guaranteeing an exclusivity period for our initial customers in their market territories.
Conclusions¨ The market opportunity exists, but we have to move fast. We have time, but we need to hurry up.¨ We will pursue Lynotech’s value proposition for the OEP, and hopefully for the real market.¨ We need to keep a low proﬁle strategy to avoid other agent’s countermeasures.¨ In early stages: ¤ our solution will be primary focused in tools integration instead of development in order to reduce costs and time to market (minimum viable product). ¤ we will focus on helping publishers know and understand their users to increase their audience rather than in advertising sales.