Digital Landscape

1. Interactive and Digital Marketing 26th of September 2014 Digit@l Landscape Dr Lukasz Piwek

2. EMAIL SEND (every minute) 205 million SEARCHES (every minute) 2 million (every minute) PHOTOS UPLOADED AND SHARED 500 million

3. SALES (every minute) $83,000 LIKES (every minute) 41,000 TWEETS (every minute) 278,000

4. (2014) PEOPLE CONNECTED TO INTERNET 2.97 billion PEOPLE SHOPPING ONLINE (2013) 2.3 billion ONLINE SALES ARE WORTH (2013) £588 billion growing by 19% every year

5. Cost of International Space Station $135 bln

6. the Internet! and digital technology! have changed ! the (economy) rules network effect disruptive digital economy transformed business models new criteria for value

7. “When a network effect is present, the value of a product or service is dependent on the number of others using it.” Shapiro & Varian (1999) Information Rules network effect for example! software distribution and use social networks telecommunication online auctions 1

8. telecommunication

9. PEOPLE WITH SMARTPHONES GLOBALLY 1.8 billion ADULTS WITH SMARTPHONES IN UK 80% EVERYONE WILL HAVE SMARTPHONE BY 2025

10. social networks Twitter hijack

11. Case: #McDStories Jan 18th 2012 ‘Meet the farmers’ campaign with hashtag 1600 negative posts within 1 hour Hashtag pulled within 2 hours

12. Case: #McDStories

13. Case: #WaitroseReasons Sept 17th 2012 reasons for shopping in Waitrose

14. Case: #WaitroseReasons

15. Case: #AskBG Oct 17th 2013 just after large price hike from British Gas

16. Case: #TescoTweets (fail) Jan 17th 2013 twitted in the middle of horse meat scandal

17. how to respond to hijack?

18. defend itself “Last Thursday, we planned to use two different hashtags during a promoted trend – #meetthefarmers and #mcdstories. While #meetthefarmers was used for the majority of the day and successful in raising awareness of the Supplier Stories campaign, #mcdstories did not go as planned. We quickly pulled #mcdstories and it was promoted for less than two hours. Within an hour of pulling #McDStories the number of conversations about it fell off from a peak of 1600 to a few dozen. It is also important to keep those numbers in perspective. There were 72,788 mentions of McDonald's overall that day so the traction of #McDStories was a tiny percentage (2%) of that. With all social media campaigns, we include contingency plans should the conversation not go as planned. The ability to change midstream helped this small blip from becoming something larger”.* *McD Comment to Business Insider

19. engage

20. apologize

21. or employ new social media manager… “A British Gas advert for a social media senior manager, a job that comes with a salary of up to £60,000, also attracted attention. The successful candidate, the advert says, will have a detailed understanding of Twitter and Facebook and "implement social media best practice and innovation”*. *The Guardian (18/10/13)

22. we have to rethink how messages reach consumers?

23. Two-step Communication Model (adapted from Katz & Lazarfeld, 1955) brand marketing mix elements brand messages influential message consumer consumer consumer may not be relayed if counter to norms and values brand messages and interpreted meanings

24. brand marketing mix elements brand messages influential message consumer brand messages and interpreted meanings consumer consumer may not be relayed if counter to norms and values Network Coproduction Model (adapted from Kozinets, 2010) direct influence interaction

25. Amount sex.com was sold for, the most expensive domain name ever $85 million

26. 2 new ! business ! models

27. 8 out of 10 most valuable brands are digital-oriented* *according to Brand Directory (2014)

28. BRAND VALUE TOP 10 according to Brand Directory (2014) £64 bln £49 bln £42 bln £38 bln £33 bln

29. BRAND VALUE TOP 10 according to Brand Directory (2014) £32 bln £28 bln £27 bln £27 bln £25 bln

30. 2 new ! business ! models with example being

31. MONTHLY USERS GLOBALLY (2014) 1.23 billion 17.2% global population MONTHLY USERS IN UK (2014) 24 million 37.5% UK population BRAND VALUE (02/2014) £6.1 billion 56.8% increase from 2013 FOUNDED 2004 REVENUE (BLN $) (data: Facebook) 8 6 4 2 0 2009 2010 2011 2012 2013

32. FOUNDED 2004 REVENUE (BLN $) (data: Facebook) 8 6 4 2 0 2009 2010 2011 2012 2013 Product (?) social network communication tool content sharing tool gaming space Price (?) free advert-based profit (but you give away your personal data) Place (?) virtual, the Internet, web Promotion (?) purely based on ‘network effect’

33. digital economy disrupts ! traditional models 3 with example being! physical vs digital media industry “the Patent Wars” new-wave of corporational acquisitions long-tail marketplace

34. media industry

35. PHYSICAL vs DIGITAL ALBUMS SALE IN US REVENUE IN BILLION U.S. DOLLARS (data: RIAA) CD albums Digital albums $10b $5b $0b 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

36. digital ! era! losers games and video rental! 528 stores, 4190 employees! went completely bust music & entertainment! 238 stores, 4350 employees! lost long legal battle against downloads went bust and nobody wants to buy it now physical media ! sale tactics sell CD sell DVD rent CD rent DVD

37. digital media sale tactics freemium premium preview trial subscription digital rental embedded advertisement pay-as-you-go streaming-without-ownership digital ! era! winners

38. “the patent wars”

39. Number of patent claims potentially at stake in each smartphone 250,000

40. Alternative to “the Patent Wars”? Tesla Motors are opening their patent portfolio to accelerate adoption of electric cars.* *http://www.teslamotors.com/blog/all-our-patent-are-belong-you

41. Alternative to “the Patent Wars”?

42. VALUE OF PLANET MARS $14,000 VALUE OF PLANET EARTH $5 quadrillion according to ! astrophysicist ! Greg Laughlin,! based on mass,! age and type

43. corporational! acquisitions

44. 166 acquisitions £8.5 bln (2011) £7.2 bln (2013) ( ) £2.5 bln (2014) 168 acquisitions £12.5 bln (2011) £3.2 bln (2014) £1.65 bln (2006) 49 acquisitions £19 bln (2014) £2 bln (2014) £1 bln (2012)

45. long-tail marketplace

46. traditional product digital product average cost optimal units sold average cost long tail units sold

47. Three forces of emerging ! long tail marketplaces source: Anderson (2006), p. 57 Democratize production Long Tail toolmakers/producers Democratize distribution Long Tail aggregators Connect supply and demand Long Tail filters

48. new criteria! for value 4 user base first - money later (e.g. ) consumer friendly sales tactics page views/attention user demographics beta versions crowdsourcing (e.g. )

49. SPEND ON ADVERTISING (2013) $652.1 mln SPEND ON ADVERTISING (2013) $2.5 bln vs. PROFIT IN 2013 $35 bln $37 bln PROFIT IN 2013

50. quick adoption to landscape changes loss of control (e.g. Twitter hijack) privacy and data protection intellectual property chaos online piracy challenges

51. (data: Times) AVERAGE NUMBER OF USERS PIRATING WORLDWIDE PER DAY Game of Thrones Breaking Bad The Big Bang Theory Orange is the New Black True Detective House of Cards Masters of Sex Modern Family Fargo Homeland 0 75000 150000 225000 300000

52. One last thing… Imagine you find a great resource for this course. ! Write down the names of up to five people on the course that you'd send it to. ! Write your name (first and surname) followed by the names ! of these people on a sheet, and hand in please.

53. cyberpsychology! and consumer! behaviour coming first week of December

54. thank you lukasz.piwek@uwe.ac.uk @motioninsocial get those slides on motioninsocial.com/digital_landscape