Digital Disruption by Augustine Fou & Tery Spataro


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Digital disruption explores, identifies and examines cases in which digital is responsible for changing industries including book retailing, electronics retailing, publishing, advertising, video rental, music industry, medical, and education. Joint research by Augustine Fou and Tery Spataro and special thanks to Melisa Lopez.

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Digital Disruption by Augustine Fou & Tery Spataro

  1. Digital DisruptionBy Augustine Fou and Tery Spataro April 12, 2012 (c) Copyright 2012 Augustine Fou and Tery Spataro
  2. Newspaper Industry Real-time – “By the time the ad is printed and distributed in newspapers; the room for rent is already rented off of Craigslist.” Access – If I am moving to Dallas, I don’t have access to local Dallas newspapers. But I can go on Craigslist.” Newspapers Craigslist 2 (c) Copyright 2012 Augustine Fou and Tery Spataro
  3. Film Industry (Kodak) Once considered the most innovative company in the world, Eastman Kodak grew complacent in its success and failed to innovate. They sat idly by as digital completely replaced the entire industry. Today they are still trying desperately to sell their portfolio of patents. Film Digital (c) Copyright 2012 Augustine Fou and Tery Spataro
  4. Magazine Advertising Measurable – user clicks can be measured with online ads Larger impressions – no longer limited by print distribution online ads reach more users Print Ads Online Ads 4 (c) Copyright 2012 Augustine Fou and Tery Spataro
  5. Long Distance Phone More minutes are being spent through IP-based services like Skype, instead of traditional phonesDomestic long distance revenuesalso being displaced by “includedlong distance” with mobile phoneplans.Long Distance VoIP / Wireless 5 (c) Copyright 2012 Augustine Fou and Tery Spataro
  6. Video Rentals By eliminating the need to distribute physical DVDs via retail stores, Netflix was able to replace Blockbuster at 1/3rd the revenue. Source: go-Digital blog Online streaming will also rapidly replace viewing on physical media such as DVDs/Blu-RayDVD Rentals Streaming Video 6 (c) Copyright 2012 Augustine Fou and Tery Spataro
  7. Music Industry Music industry revenues continue the “smooth decline.” Singles – Customers no longer buy full albums; they download individual songs through digital.Compact Discs Music Downloads 7 (c) Copyright 2012 Augustine Fou and Tery Spataro
  8. Book Retailing Barnes & Noble X BordersPhysical Retail Digital Retail (c) Copyright 2012 Augustine Fou and Tery Spataro
  9. Electronics Retailing Best Buy X X Circuit City CompUSA• Amazon offers far larger selection than possible in physical retail• Amazon prices were the same or better on 96% of all products (Source: Barclay’s via BusinessInsider• Amazon offers free shipping on most items and no sales tax in most states. (c) Copyright 2012 Augustine Fou and Tery Spataro
  10. Tablet vs PublishingiPad Users Have Cancelled Already Do NotNewspaper Subscriptions Switched Subscribe to Digital to Print 11% Newspap Likely to er Switch in 31% Next 6 Months 31% Unlikely to Switch Not Sure to Digital 7% 20% “End of subscriptions. Over 40% of users surveyed by RJI will soon or already have cancelled a newspaper subscription. “ – Reynolds Journalism Institute, Morgan Stanley Research 10 (c) Copyright 2012 Augustine Fou and Tery Spataro
  11. AdvertisingFor every $1 taken out of traditional advertising, only 10 – 20 centsneed to be put into digital because it is that much more efficient. . Traditional Ads Digital Ads 11 (c) Copyright 2012 Augustine Fou and Tery Spataro
  12. Online Display Ads More effective - Search ad click rates are 10x – 100x higher than display; it is based on exactly what the user is looking for – keyword. Read More: Search Kicks Display Google (GOOG) overtook Yahoo (YHOO) in revenue within 3 years of launch. Search Ad Revenues is now 2/3rds of the online advertising pie. Display Ads Search Ads 12 (c) Copyright 2012 Augustine Fou and Tery Spataro
  13. Consulting Dr. Google Percent of Internet users who have looked online for information about 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Digital [information & tools] will give consumers the opportunity to completely manage individualSource: Pew Research Center’s Internet & American Life Project,August 9-September 13, 2010 Survey. N=3001 adults and the margin medical needs.of error is +/-3 percentage points for the full sample. Margins of error forSub-populations are higher. 13 (c) Copyright 2012 Augustine Fou and Tery Spataro
  14. Sharing Medical ConditionsConsumers manage medicalneeds while sharing theirinsights with other patientsbecomes a treasure throve ofdata on disease management,health and wellness. 14 (c) Copyright 2012 Augustine Fou and Tery Spataro
  15. Digital Adoption By Doctors• Physicians are slower to adopt to digital for professional use with patients.• But Physicians will tweet a surgery for educational purposes. Top concerns that may hold physicians back from interacting with patients online. “Four hours, a team of medics and 100 tweets: The reality of open-heart surgery shared with the world on Twitter.” - Claire Bates Physicians & social media for professional use.Source:; created by 15 (c) Copyright 2012 Augustine Fou and Tery Spataro
  16. Immersive Teaching Classroom Teaching vs Khan AcademySource: 16 (c) Copyright 2012 Augustine Fou and Tery Spataro
  17. So What? Do you wait till digital disrupts you? …… or do you proactively innovate now to build sustainable competitive advantage? 17 (c) Copyright 2012 Augustine Fou and Tery Spataro
  18. Dr. Augustine Fou – Chief Digital Strategist Dr. Augustine Fou is Chief Digital Strategist of Marketing Science Consulting Group, Inc., a company he founded over 11 years ago. He is an industry-recognized thought leader in digital strategy, search and social media marketing and former Group Chief Digital Officer of Omnicoms Healthcare Consultancy Group. Dr. Fou teaches social media marketing to executives at Rutgers University’s Center for Management Development. He is a frequent panelist, moderator, and keynote speaker. He writes a monthly column on Integrated Marketing for Dr. Fou completed his PhD at MIT in Materials Science at the age of 23. He started his career with McKinsey & Company. and can be found on @acfou. slide shares - bio - 646.867.0826 | 18 (c) Copyright 2012 Augustine Fou and Tery Spataro
  19. digital strategist, entrepreneur, digital agency executive, author, researcher, behaviorist, investor, adviser, mentor, professor Bio || Twitter || LinkedIn || The Book || Pinterest || Slideshare 19 (c) Copyright 2012 Augustine Fou and Tery Spataro
  20. Stuff I Did Digital Experiences & Shopping – cheeky overview of the buyer’s decision making process using digital, the future of in-store retail and use of digital experiences. Digital Strategy – a look at digital strategy a usages for innovation, communication and promotion. Fashion Intelligentsia - research report I did to provide insights into how fashion minded women acquire information for shopping. This report was voted the best of Slideshare. The Changing World of Digital - looks at digital communication from a historical perspective and identifies the way the consumer changes from passive involvement to participant. Healthy Digital - explores who the natural and organic consumer is and identifies their digital behavior. Community During Crisis – what Governments can learn from the Boulder Community’s usage of Social Media during the Boulder Fire. Digital Marketing Strategy vs Tactics – Asking strategic questions, forming ideas and identifying tactics. The Other Side of the Box - the story about a cat, box and perception. “The Other Side of the Box” a book about perception, a cat and quantum thoughts. 20 (c) Copyright 2012 Augustine Fou and Tery Spataro
  21. Melisa Lopez – Digital Media Director Melisa has over 7 years of experience in ecommerce, digital media marketing, and Internet strategy consulting as founder of MR Roses Flower Co, and WPS Digital, a digital marketing company. Melisa Lopez is a former Client Analyst at Goldman Sachs. Melisa earned her MBA from Florida International University, and a Professional Certificate in Digital Media Marketing from New York University. She is a magna cum laude, Bachelor of Arts in Economics, of Universidad San Francisco de Quito Melisa can be found on @carmenmel LinkedIn: 21 (c) Copyright 2012 Augustine Fou and Tery Spataro