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10 Factors Changing *Our Media and Our Lives

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Information about 10 Factors Changing *Our Media and Our Lives
Business & Mgmt

Published on October 20, 2008

Author: maremel

Source: slideshare.net

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10 Factors Changing Our Media and Our Lives Gigi Johnson Faculty Director, EMEP 2008 UCLA Anderson MBA ’88 President, Maremel Ventures, Inc. Lecturer, UCLA Anderson October 2008

Bets on the Futures

Power in New Hands/Voices Founded 1994 Mkt Cap: $18 bn (was $37 bn) Founded 1998 Mkt Cap: $117 bn (was $142 bn) Launched PC 2003 Founded 2003 Sold for $580MM Founded 2005 Sold for $1.65 bn Founded 2/04 Microsoft paid $240MM for 1.6% 10/07

Times of Transformation New trusted aggregators of attention/time – new “Keystone” alliances Opening of closed doors – new intermediaries/disintermediation, new creators Uncertainty changing deals, challenges in planning for an increasingly uncertain future

New trusted aggregators of attention/time – new “Keystone” alliances

Opening of closed doors – new intermediaries/disintermediation, new creators

Uncertainty changing deals,

challenges in planning for an increasingly uncertain future

More Transformation Commoditization and repackaging of content Generational behavioral and time changes Jolts to advertising models – online and measurability shifts Big-picture technology partnership and distribution bets bigger than individual title success Diverging futures of exhibition & creation Creative Class expansion as cost to create and distribute plummets Connection as Content and Time Use

Commoditization and repackaging of content

Generational behavioral and time changes

Jolts to advertising models – online and measurability shifts

Big-picture technology partnership and distribution bets bigger than individual title success

Diverging futures of exhibition & creation

Creative Class expansion as cost to create and distribute plummets

Connection as Content and Time Use

Maximize Economic Rent by Slicing Time and Space Rights Location Time Shifting Multiple Use Multiple Media Example Venue None 1 No Theater, sporting event, concerts Venue Yes 1 No Theatrical movies Home None 1 No (Historically) Television Home None 1 No Radio Home Yes Some No Rental Home Video/DVD Home Yes 1 No Digital download services with time limits (Movielink, etc.) Home Yes Yes No DVD; books, newspapers; DVRs (digital video recorders, like Tivo) Any Yes Yes Yes Downloaded Digital Music and Video

Pipe Battles, Round One: Cable/Satellite Faceoff Maremel Ventures Page

Resulting Concentration of U.S. Distribution Pipes (million subs) Maremel Ventures Page Comcast Time Warner Charter Cox Cablevision Echostar Dish DirecTV 24.1 13.3 5.4 5.2 3.1 13.8 17.0 = 81.9 million = 72 % of households Source: NCTA 12/07; DirecTV and Echostar 3/08 More Concentrated Cell Phones: AT&T 71.4 mm Verizon 67.2 mm Sprint Nextel 52.8 mm T-Mobile 30.8 mm End of 2007: 16% of HH only had cell phones 13% had landlines but got nearly all their calls on their cells 1/3 under age 30 only have cell phones Source: National Health Interview Survey, conducted by the CDC 12/07

(million subs)

More Concentrated Cell Phones:

AT&T 71.4 mm

Verizon 67.2 mm

Sprint Nextel 52.8 mm

T-Mobile 30.8 mm

End of 2007:

16% of HH only had cell phones

13% had landlines but got nearly all their calls on their cells

1/3 under age 30 only have cell phones

Source: National Health Interview Survey, conducted by the CDC 12/07

10 Value Shifters Major Shifts in Consumer Appetites/Reduced Predictability Shifts in Discovery vs. Scarcity – Reregulation + Technology (pipe + storage + creative tools) Brands and Extensions: Key Cueing Capital as Excess Fuel Consumers as Prince-makers (P2P/Web2.0) Battle of Open Source and Interoperability Data as Power, Value, and Opportunity Advertising Shift toward Direct Response Global Opportunities Opening and Untapped New Battles for the Home and Heart

Major Shifts in Consumer Appetites/Reduced Predictability

Shifts in Discovery vs. Scarcity – Reregulation + Technology (pipe + storage + creative tools)

Brands and Extensions: Key Cueing

Capital as Excess Fuel

Consumers as Prince-makers (P2P/Web2.0)

Battle of Open Source and Interoperability

Data as Power, Value, and Opportunity

Advertising Shift toward Direct Response

Global Opportunities Opening and Untapped

New Battles for the Home and Heart

#1: Time and Predictability Twists Return – Investing for anticipated behavior Advertising Based historically on predictable audiences Selling access to eyeballs, evidenced by historical consumer behavior and extrapolation Matching time with needed messaging at that time for coordination and resulting product sales Mass Media => Mass Behavior

Return – Investing for anticipated behavior

Advertising

Based historically on predictable audiences

Selling access to eyeballs, evidenced by historical consumer behavior and extrapolation

Matching time with needed messaging at that time for coordination and resulting product sales

Mass Media => Mass Behavior

US: 10 Hours Per Day Consuming Media Source: Veronis Suhler Stevenson, MPAA

Share of Time: Primary Currency Source: Veronis Suhler Stevenson, MPAA

U.S. Share of Wallet: Almost $850/person/year Source: Veronis Suhler Stevenson; MPAA

Shifting Seas and Shifting Revenues

Significant Economics of Time and Money: DVD Maremel Ventures Source: MPA

DVD – 2005 – “Suddenly In Transition” “ It’s the beginning of the mature phase of the DVD market,” Buena Vista Home Entertainment president Robert Chapek, Variety July 20, 2005 “ The DVD party isn’t over, but it’s 2 a.m.” Morgan Stanley analyst Richard Bilotti, Hollywood Reporter , July 29, 2005 “ [We need to] manage the transition [to online distribution] so it is additive.” Tom Rothman, Chairman, Fox Filmed Entertainment, November 3, 2006 (UBS Conf Call)

“ It’s the beginning of the mature phase of the DVD market,”

Buena Vista Home Entertainment president Robert Chapek, Variety July 20, 2005

“ The DVD party isn’t over, but it’s 2 a.m.”

Morgan Stanley analyst Richard Bilotti, Hollywood Reporter , July 29, 2005

“ [We need to] manage the transition [to online distribution] so it is additive.”

Tom Rothman, Chairman, Fox Filmed Entertainment, November 3, 2006 (UBS Conf Call)

DVDs – Quick Plateau

DVDs 2007 into 2008 Revenue down 3% ‘07 Sequels: 25% of units (vs. 18% ‘06) Only 10% of DVD sales high def, 2/3 Blu-Ray before finale of conflict Top selling DVDs used to sell 20MM units; now selling half that Time Warner has seen avg. DVD price drop 15% 3Q07: 5% decline in revenue on 12% increase in units ‘ 08: New release unit prices flat; library <$5 Maremel Ventures

Revenue down 3% ‘07

Sequels: 25% of units (vs. 18% ‘06)

Only 10% of DVD sales high def, 2/3 Blu-Ray before finale of conflict

Top selling DVDs used to sell 20MM units; now selling half that

Time Warner has seen avg. DVD price drop 15% 3Q07: 5% decline in revenue on 12% increase in units

‘ 08: New release unit prices flat; library <$5

Viewing Instead To… Cable (esp. during Writers Strike)? Broadband? Expansion or substitute? Esp. for Millennials Mobile TV? Not yet in US to the degree ‘expected’

Cable (esp. during Writers Strike)?

Broadband?

Expansion or substitute?

Esp. for Millennials

Mobile TV?

Not yet in US to the degree ‘expected’

Cable Channel Expansion Maremel Ventures Page Source: Screen Digest, FCC, NCTA 1994: Launch of Digital Satellite 1997: Launch of Digital Cable

… but we’re watching 15-16? Maremel Ventures Page

..and in few pockets…fewer hands facing advertisers… Maremel Ventures Page Turner ABC/ESPN MTV Networks Discovery Fox NBC Scripps 10 10 19 13 30 6 5 Cartoon TBS TNN TNT CNN TCM Boomerang Disney ESPN Toon Disney SoapNet ABC Family Jetix VH1 Comedy MTV Nick TV Land Spike Noggin CMT Logo Animal Planet En Español TLC Science Military Discovery 19 regional Fox Movie FX Fox News Fox Sports Nat Geo Fuel SPEED Fox Reality CNBC CNBC world MSNBC Bravo Mun2 SciFi USA Food HGTV DIY Fine Living GAC

Cartoon

TBS

TNN

TNT

CNN

TCM

Boomerang

Disney

ESPN

Toon Disney

SoapNet

ABC Family

Jetix

VH1

Comedy

MTV

Nick

TV Land

Spike

Noggin

CMT

Logo

Animal Planet

En Español

TLC

Science

Military

Discovery

19 regional

Fox Movie

FX

Fox News

Fox Sports

Nat Geo

Fuel

SPEED

Fox Reality

CNBC

CNBC world

MSNBC

Bravo

Mun2

SciFi

USA

Food

HGTV

DIY

Fine Living

GAC

Maremel Ventures Page SOURCE: NIELSEN MEDIA RESEARCH, FEB. EACH YEAR

Timeshifting Gaining

TV Embedded Messaging to Keep Viewer Attention

#2: Scarcity & Discovery Challenges Changes in Scarcity vs. Discovery Minimal limits to distribution pipelines Barbell affect – really big or niche Realities of the “Long Tail”

Changes in Scarcity vs. Discovery

Minimal limits to distribution pipelines

Barbell affect – really big or niche

Realities of the “Long Tail”

US Regulation: Opening Choice; Transferring Wealth Consent Decree of 1948 &quot;Paramount Case“ – separation of film production and exhibition -- breakup of the US “studio system” Financial Interest and Syndication (1970) Federal Communications Commission ruling separated production and distribution rights in TV (aka “FinSyn” ), split company, allowed small production firms to grow Repealed over time, finally eliminated in 1995 “ Betamax Case” (1984) United States Supreme Court ruling -- Universal City Studios et al. (including Disney) vs. Sony Corp. Allowed that copying content to “timeshift” is legal for home use Established liability shield to manufacturers

Consent Decree of 1948

&quot;Paramount Case“ – separation of film production and exhibition -- breakup of the US “studio system”

Financial Interest and Syndication (1970)

Federal Communications Commission ruling separated production and distribution rights in TV (aka “FinSyn” ), split company, allowed small production firms to grow

Repealed over time, finally eliminated in 1995

“ Betamax Case” (1984)

United States Supreme Court ruling -- Universal City Studios et al. (including Disney) vs. Sony Corp.

Allowed that copying content to “timeshift” is legal for home use

Established liability shield to manufacturers

Recent Regulatory Drivers 1996 US Telecommunications Act results in billions of dollars of broadcast properties changing hands Digital Millennium Copyright Act (1998) Secured IP for another 20 years (most content Jan. 1, 1923 onward), for a total of 95 years Established rules for copyright infringement processes on Internet Limits liability for copyright infringement for “common carriers” Grokster Case (2005) US Supreme Court unanimously agreed that Internet peer-to-peer systems are not protected from liability by Betamax case

1996 US Telecommunications Act

results in billions of dollars of broadcast properties changing hands

Digital Millennium Copyright Act (1998)

Secured IP for another 20 years (most content Jan. 1, 1923 onward), for a total of 95 years

Established rules for copyright infringement processes on Internet

Limits liability for copyright infringement for “common carriers”

Grokster Case (2005)

US Supreme Court unanimously agreed that Internet peer-to-peer systems are not protected from liability by Betamax case

“ Wired” 2004 Concept – The Long Tail

Explosion of Consumer Options Result? Propagation of New Distribution Channels Big “Discovery” problems, especially with new content “ Scarcity” no longer a benefit for channels or content Not more time nor advertiser pie Increased fragmentation of viewing audience and advertising dollars

Result?

Propagation of New Distribution Channels

Big “Discovery” problems, especially with new content

“ Scarcity” no longer a benefit for channels or content

Not more time nor advertiser pie

Increased fragmentation of viewing audience and advertising dollars

One example: migration from traditional broadcast radio Maremel Ventures

Another Example: Business “News” vs Instant Data Business magazines – significant drop in 2007 and YTD 2008 revenue & ad pages Business sections in newspapers – being dropped almost weekly in 2008 YET, Yahoo! Finance continues one of most profitable areas and Dow Jones is bought by News Corp. and customizing CNBC.com has exploded during this financial meltdown

Business magazines – significant drop in 2007 and YTD 2008 revenue & ad pages

Business sections in newspapers – being dropped almost weekly in 2008

YET, Yahoo! Finance continues one of most profitable areas and Dow Jones is bought by News Corp. and customizing CNBC.com has exploded during this financial meltdown

Issues down the Tail Discovery WOM? Social networks’ roles? Businesses of Aggregation of slivers? Customer Acquisition Cost must be less than Lifetime Value of the Customer, right?

Discovery

WOM? Social networks’ roles?

Businesses of Aggregation of slivers?

Customer Acquisition Cost must be less than Lifetime Value of the Customer, right?

Other Long-Tail Models? Ebay? Now with Bid4Spots to sell radio ads Peer-to-Peer 4 million songs on legal services 10 million plus on global hard drives Brightcove? YouTube? Joost? Akimbo?

Ebay?

Now with Bid4Spots to sell radio ads

Peer-to-Peer

4 million songs on legal services

10 million plus on global hard drives

Brightcove? YouTube? Joost? Akimbo?

Aggregation Gatekeepers Wal*Mart Comcast Regal/AMC Yahoo, Google Echostar, DirecTV Radio – 7 major program decision makers Books – 7 key purchasers Set Top Boxes – Best Buy, Circuit City, Cable Cos

Wal*Mart

Comcast

Regal/AMC

Yahoo, Google

Echostar, DirecTV

Radio – 7 major program decision makers

Books – 7 key purchasers

Set Top Boxes – Best Buy, Circuit City, Cable Cos

Aggregation Relationships Skype 276 million registered users worldwide Comcast 24 million basic cable subs Time Warner 13 million basic cable subs Dish/Echostar 14 million HH DirecTV 17 million HH Google 135 million unique users/month US Yahoo 138 million unique users/month US AT&T 64 million local lines; 14MM broadband subs; 71MM mobile subscribers Verizon Wireless 67 million subscribers (Verizon + Vodaphone JV) iTunes 36 million users Sources: Companies’ Info as of 12/07 or 3/08

Skype 276 million registered users worldwide

Comcast 24 million basic cable subs

Time Warner 13 million basic cable subs

Dish/Echostar 14 million HH

DirecTV 17 million HH

Google 135 million unique users/month US

Yahoo 138 million unique users/month US

AT&T 64 million local lines; 14MM

broadband subs; 71MM mobile subscribers

Verizon Wireless 67 million subscribers (Verizon + Vodaphone JV)

iTunes 36 million users

Alliances Around Aggregators Winter 2008

#3: Brands: Major Cues for Consumers; Risk Mitigators Brand Gardens – Using Brands to expand flank and defend turfs? Disney Mobile – all-Disney Mobile Virtual Network Operator --- with ESPN Mobile, not a success MTVN – extensive brand extensions Sequels, sequels, sequels

Brand Gardens – Using Brands to expand flank and defend turfs?

Disney Mobile – all-Disney Mobile Virtual Network Operator --- with ESPN Mobile, not a success

MTVN – extensive brand extensions

Sequels, sequels, sequels

Brands => Increasing Importance In A Fragmented World Who are the Brands? Bands/singers, athletes/teams, actors, few studios, niche networks Signaling of values and product attributes? Discovery through Brand Extensions? Risk to or borne by Brands? Return from use of brand? Emotional Relationships? Ringtones as “who we are” Trust?

Who are the Brands?

Bands/singers, athletes/teams, actors, few studios, niche networks

Signaling of values and product attributes?

Discovery through Brand Extensions?

Risk to or borne by Brands? Return from use of brand?

Emotional Relationships?

Ringtones as “who we are”

Trust?

#4: Capital > Opportunities? 2007 -- Excess fuel in the system Private equity Pumped up stock prices Digital exuberance 2008 – Asset buying opportunities as tap gets muddy ? Tap not closed – VCs still funding 2 nd rounds

2007 -- Excess fuel in the system

Private equity

Pumped up stock prices

Digital exuberance

2008 – Asset buying opportunities as tap gets muddy ? Tap not closed – VCs still funding 2 nd rounds

Changing Risk Profiles Lower risk – media conglomerates – diversified public companies Increased uncertainty of future business models Impacts of Past Abundance of private equity and hedge funds = Transaction Opportunities to Transfer Risk through Financings and Partnerships

Lower risk – media conglomerates – diversified public companies

Increased uncertainty of future business models

Impacts of Past Abundance of private equity and hedge funds

= Transaction Opportunities to Transfer Risk through Financings and Partnerships

Gartner’s Hype Cycle 1. &quot;Technology Trigger” Breakthrough or other event Generates significant press and interest 2. &quot;Peak of Inflated Expectations“ Frenzy of publicity Over-enthusiasm & unrealistic expectations 3. &quot;Trough of Disillusionment” Fail to meet expectations Press abandons topic 4. &quot;Slope of Enlightenment“ Businesses experimenting Press stops covering 5. &quot;Plateau of Productivity“ 2 nd & 3 rd version tech/stable Benefits accepted & demonstrated Height: niche or broad www.gartner.com

1. &quot;Technology Trigger”

Breakthrough or other event

Generates significant press and interest

2. &quot;Peak of Inflated Expectations“

Frenzy of publicity

Over-enthusiasm & unrealistic expectations

3. &quot;Trough of Disillusionment”

Fail to meet expectations

Press abandons topic

4. &quot;Slope of Enlightenment“

Businesses experimenting

Press stops covering

5. &quot;Plateau of Productivity“

2 nd & 3 rd version tech/stable

Benefits accepted & demonstrated

Height: niche or broad

www.gartner.com

Gartner’s Hype Cycles

Gartner’s Technology Life Cycle Models

What about Old businesses…Flow to Films…What Do They Know? Source: HLHZ 5/07

Other “Shoes” to Drop Liquidity Morass – “Credit Crunch” Credit Cards, Retail Commercial Real Estate, Insurance…pain not over VCs stopping new funding in many cases Potential rethinking by advertisers of spending Consumer frugality in discretionary spending Commodity squeeze – oil prices up and now down, global food protests Political change from both – social, religious, attitude repercussions Maremel Ventures

Liquidity Morass – “Credit Crunch”

Credit Cards, Retail Commercial Real Estate, Insurance…pain not over

VCs stopping new funding in many cases

Potential rethinking by advertisers of spending

Consumer frugality in discretionary spending

Commodity squeeze – oil prices up and now down, global food protests

Political change from both – social, religious, attitude repercussions

#5: Consumers as Prince-makers P2P – Peer to Peer content creation and appreciation, aka Web2.0

P2P – Peer to Peer content creation and appreciation, aka Web2.0

Web 2.0: Connecting Consumers to Each Other Video & Photos & Webcams Blogging & Podcasts Message Boards – building community Fanfiction/Self-publishing E-mail Evites Mapping Fan Sites MMOG Tagging Documenting Lives

Video & Photos & Webcams

Blogging & Podcasts

Message Boards – building community

Fanfiction/Self-publishing

E-mail

Evites

Mapping

Fan Sites

MMOG

Tagging

Documenting Lives

Massively Multiplayer Games Lineage I & II (Korea) – 3MM max, 1.5MM est now Ultima Online – US – 250,000 max Everquest – max 250,000, 170,000 est now Asheron’s Call – Europe – 120,000 max Star Wars Galaxies – 170,000 subs World of Warcraft – 8.5MM RuneScape (UK based) – over 700,000 subs City of Heroes – 170,000 subs MUSH’s MUD’s

Lineage I & II (Korea) – 3MM max, 1.5MM est now

Ultima Online – US – 250,000 max

Everquest – max 250,000, 170,000 est now

Asheron’s Call – Europe – 120,000 max

Star Wars Galaxies – 170,000 subs

World of Warcraft – 8.5MM

RuneScape (UK based) – over 700,000 subs

City of Heroes – 170,000 subs

Avatars for Kids? Stardoll 1.1MM uniques Club Penguin – 6mm monthly uniques Doppelganger’s The Lounge Gaia Online 2MM uniques/month 1MM posts/day Habbo Hotel – 200K U/M Webkinz -- 6mm uniques/month

Digital Evangelism into Old Media

UGC – Open Source for Content Like what? http://www.youtube.com/watch?v=jjXyqcx-mYY – yes we can! Politics of 2008 An introduction to Facebook: http://www.youtube.com/watch?v=2b-fJxzpK7s Where is Matt? http://www.youtube.com/watch?v=bNF_P281Uu4 Inspiration for my 10 year old’s science project: http://www.youtube.com/watch?v=hKoB0MHVBvM Red vs. Blue that started it all http://www.machinima.com/film/view&id=275 Free Hugs – top YouTube 2006 http://www.youtube.com/watch?v=vr3x_RRJdd4

http://www.youtube.com/watch?v=jjXyqcx-mYY – yes we can! Politics of 2008

An introduction to Facebook: http://www.youtube.com/watch?v=2b-fJxzpK7s

Where is Matt? http://www.youtube.com/watch?v=bNF_P281Uu4

Inspiration for my 10 year old’s science project: http://www.youtube.com/watch?v=hKoB0MHVBvM

Red vs. Blue that started it all http://www.machinima.com/film/view&id=275

Free Hugs – top YouTube 2006 http://www.youtube.com/watch?v=vr3x_RRJdd4

Blogs, RSS, Podcasting -- “Journalism”? 8% of American’s Blog? 2% in 2004. 28% of teens have blogs (Pew) Revenue models? Always-on News? Business Model Impacts?

8% of American’s Blog? 2% in 2004. 28% of teens have blogs

(Pew)

Revenue models?

Always-on News?

Business Model Impacts?

Web 3.0 – Presence and Connecting as Content Social Networking as content Twitter – what are you doing? Del.icio.us – what are you looking at? Last.fm and Pandora –what are you listening to? NowThen – recording your life on your phone

Social Networking as content

Twitter – what are you doing?

Del.icio.us – what are you looking at?

Last.fm and Pandora –what are you listening to?

NowThen – recording your life on your phone

Connections as Content Presence, Lifecasting, and Crowd Sourcing Power of Social Networks as recommenders/influencers 25% of Metacafe’s visitors via home page Twittering KPCC? Barak Obama? Self-Actualization and Marginalized Connectivity Creativity unleashed – 10%? Gathering of the marginalized – pro-ani, pro-mia, gang recruiting

Presence, Lifecasting, and Crowd Sourcing

Power of Social Networks as recommenders/influencers

25% of Metacafe’s visitors via home page

Twittering KPCC? Barak Obama?

Self-Actualization and Marginalized Connectivity

Creativity unleashed – 10%?

Gathering of the marginalized – pro-ani, pro-mia, gang recruiting

Universal McCann 4/08 Findings 73% of global Internet users have read a blog 184 million bloggers world-wide #1 Topic: personal life and family China has 42 million bloggers, more than the US and Western Europe combined Source of this and next pages: Universal McCann Next Thing Now Study, 4/08

73% of global Internet users have read a blog

184 million bloggers world-wide

#1 Topic: personal life and family

China has 42 million bloggers, more than the US and Western Europe combined

Global Blogging Readership

Global Blogging Writers

Social Network Environment 4/07 U.S. Maremel Ventures

Global Connectors

Global Differences in Influence

UGC Video differences

Yet We Aren’t All in the Pool Source: Pew Internet Study May 2007

Video: March ‘08 ComScore Snapshot 73.7% of US Internet audience viewed online video, 235 minutes, 2.8 min avg/video 84.8 million viewers watched 4.3 billion videos on YouTube.com (50.4 videos per viewer) 47.7 million viewers watched 400 million videos on MySpace.com (8.4 videos per viewer)

73.7% of US Internet audience viewed online video, 235 minutes, 2.8 min avg/video

84.8 million viewers watched 4.3 billion videos on YouTube.com (50.4 videos per viewer)

47.7 million viewers watched 400 million videos on MySpace.com (8.4 videos per viewer)

And from Networks, Traffic

And Selling (To) Different Users

#6: Data = $$ Behavioral Targeting, SEO, Search Data as power, competitive advantage, and salable asset Advertising shift toward Direct Response Search as ad driver

Data as power, competitive advantage, and salable asset

Advertising shift toward Direct Response

Search as ad driver

One-way Media – Broadcast

One-way Media – Cable 1980s-1990s Satellite Headend TV(s) & analog cable box Viewer(s) Project Canoe

Amazon – Knowing You 2000 -- subject of a lawsuit and an inquiry by the Federal Trade Commission over the use of personal data collected by its Alexa Internet unit Hello, G. Johnson. We have recommendations for you. (If you're not G. Johnson, click here .)

2000 -- subject of a lawsuit and an inquiry by the Federal Trade Commission over the use of personal data collected by its Alexa Internet unit

Portals – Knowing You Even Better Customize screen for your needs Keep track of your searches and activities -- cookies Targets ads to your demographic/psychographic

Customize screen for your needs

Keep track of your searches and activities -- cookies

Targets ads to your demographic/psychographic

Buying Your Interests 24/7 Real Media, Inc. Adteractive, Inc. (intellisrv.net) Advertising.com, Inc. Alena/PMG Atlas DMT (atdmt.com, avenuea.com) Autotrader LLC BidClix, Inc. Bluestreak, Inc. Centrport Cossette Media/Fjord Interactive (adcentriconline.com, fjordinteractive.com) Claria Corporation Commission Junction, Inc. DoubleClick, Inc. Dynamic Logic (questionmarket.com) eBoz, Inc. (linkbuddies.com) EyeBlaster, Inc. (serving-sys.com) eyeReturn EyeWonder, Inc. (xlontech.net) FastClick.com, Inc. (adserver.com) FactorTG, Inc. (factortg.com, suitesmart.com) Interpolls Network, Inc. Insight Express Klipmart Corporation (kliptracker.com) Mediaplex, Inc. NexTag, Inc. Pennyweb, Inc./Ad Dynamix Performance Marketing Group (partner2profit.com) Planning Group International (bridgetrack.com) Poindexter Systems (ru4.com) PointRoll, Inc. QuickFlicks, Inc. (streamexchange.com, rn11.com) Right Media (ad.yieldmanager.com, adserving.cpxinteractive.com) TruEffect, LLC (adlegend.com) UniCast Communications (dmpi.net) United Virtualities ValueClick, Inc. Video Banner Zedo, Inc. Currently, Yahoo! has relationships with the following ad networks (click to visit their site):

24/7 Real Media, Inc.

Adteractive, Inc. (intellisrv.net)

Advertising.com, Inc.

Alena/PMG

Atlas DMT (atdmt.com, avenuea.com)

Autotrader LLC

BidClix, Inc.

Bluestreak, Inc.

Centrport

Cossette Media/Fjord Interactive (adcentriconline.com, fjordinteractive.com)

Claria Corporation

Commission Junction, Inc.

DoubleClick, Inc.

Dynamic Logic (questionmarket.com)

eBoz, Inc. (linkbuddies.com)

EyeBlaster, Inc. (serving-sys.com)

eyeReturn

EyeWonder, Inc. (xlontech.net)

FastClick.com, Inc. (adserver.com)

FactorTG, Inc. (factortg.com, suitesmart.com)

Interpolls Network, Inc.

Insight Express

Klipmart Corporation (kliptracker.com)

Mediaplex, Inc.

NexTag, Inc.

Pennyweb, Inc./Ad Dynamix

Performance Marketing Group (partner2profit.com)

Planning Group International (bridgetrack.com)

Poindexter Systems (ru4.com)

PointRoll, Inc.

QuickFlicks, Inc. (streamexchange.com, rn11.com)

Right Media (ad.yieldmanager.com, adserving.cpxinteractive.com)

TruEffect, LLC (adlegend.com)

UniCast Communications (dmpi.net)

United Virtualities

ValueClick, Inc.

Video Banner

Zedo, Inc.

Buying Your Information Acxiom ’ s InfoBase Offers coverage of 111 million households and 176 million individuals, nationwide Acquired Claritas Europe and Consodata, 2 of the largest European data companies Experian Experian maintains credit information on approximately 215 million U.S. consumers and more than 15 million U.S. businesses. Experian maintains demographic information on approximately 215 million consumers in 110 million living units across the United States. Experian provides address information for more than 20 billion promotional mail pieces to more than 100 million households every year.

Acxiom ’ s InfoBase

Offers coverage of 111 million households and 176 million individuals, nationwide

Acquired Claritas Europe and Consodata, 2 of the largest European data companies

Experian

Experian maintains credit information on approximately 215 million U.S. consumers and more than 15 million U.S. businesses.

Experian maintains demographic information on approximately 215 million consumers in 110 million living units across the United States.

Experian provides address information for more than 20 billion promotional mail pieces to more than 100 million households every year.

#7: Advertising Increasing Audience Segmentation Ability to slice and dice audience need and perceived psychographics Audience and consumer data Advertiser desire for more “direct response” relationship Digital “fingerprints” “ The Long Tail” – low cost of incremental inventory Branding and attachment to audience “fashion”

Ability to slice and dice audience need and perceived psychographics

Audience and consumer data

Advertiser desire for more “direct response” relationship

Digital “fingerprints”

“ The Long Tail” – low cost of incremental inventory

Branding and attachment to audience “fashion”

Search as Major Ad Tool Sponsored Search – only 38% of US Google users know it is paid 17 bn US Searches 8/08 (vs. 10bn 2/08; . 7.2 Billion 1/06; 5.1 billion 12/05; 3.3 Bn 12/04) 8bn Google; 3bn YouTube 63% of core searches at Google, 20% Yahoo 43% of searchers use search box instead of address bars Sources: Pew 12/05; Nielsen Net Ratings, 2/06, 3/07, 4/08; Comscore 8/08

Sponsored Search – only 38% of US Google users know it is paid

17 bn US Searches 8/08 (vs. 10bn 2/08; . 7.2 Billion 1/06; 5.1 billion 12/05; 3.3 Bn 12/04)

8bn Google; 3bn YouTube

63% of core searches at Google, 20% Yahoo

43% of searchers use search box instead of address bars

Video Search – Meta Problem Blinx – search for Google, Yahoo! and MSN Live Search, Ask, AOL, MSN, Lycos and Infospace – metadata creation AOL – Singing Fish/Truveo Alta Vista video search

Blinx – search for Google, Yahoo! and MSN Live Search, Ask, AOL, MSN, Lycos and Infospace – metadata creation

AOL – Singing Fish/Truveo

Alta Vista video search

Re-Aggregating Eyeballs Audience does not equal revenue movement: VOD, mobile video CPMs depend on measurability and targeting – evidence and aggregation Large value created in short period of time by Ad Networks – being swallowed up CPM to CPC to CPA to branded environments Carrying through to ad sales for planned fall season

Audience does not equal revenue movement: VOD, mobile video

CPMs depend on measurability and targeting – evidence and aggregation

Large value created in short period of time by Ad Networks – being swallowed up

CPM to CPC to CPA to branded environments

Carrying through to ad sales for planned fall season

Massive Value Transfers

Platform A/AOL Family Quigo 11/07 Tacoda 7/07 Third Screen Media 5/07 Advertising.com 6/04 Lightningcast 5/06 AdTech 5/07 Relegence 11/06 Userplane 8/06 Truveo 12/05 Weblogs 10/05 Xdrive 8/05 Wildseed, Ltd 8/05

CRM & BT Customer Relationship Management Behavioral Targeting Connecting the data dots between web sites and other media Custom delivered message Custom environment Affecting your decision-making; affecting your environment Conversion Attribution vs. CPC

Customer Relationship Management

Behavioral Targeting

Connecting the data dots between web sites and other media

Custom delivered message

Custom environment

Affecting your decision-making; affecting your environment

Conversion Attribution vs. CPC

#8: Format and Gear Wars Interoperability vs. Open Source Blu-Ray/HD settled – at what cost? New technologies for production – open source No more powerhouses of exclusive abilities a la Grass Valley Integration of digital workflow Apple iTunes vs. everyone else on music DRM (and now on removing DRM) Format wars on game platforms – major profits to winners; major problems to those who predict wrong

Interoperability vs. Open Source

Blu-Ray/HD settled – at what cost?

New technologies for production – open source

No more powerhouses of exclusive abilities a la Grass Valley

Integration of digital workflow

Apple iTunes vs. everyone else on music DRM (and now on removing DRM)

Format wars on game platforms – major profits to winners; major problems to those who predict wrong

Past Successful Format Adoptions Sources: Rogers (1995), Steinberg (1980) The DVD is the fastest adopted consumer technology in the history of mankind. Faster than TV’s, cell phones, VCR’s, and even the internet! Technology Introduction Take off (20%) Saturation (80%) B&W TV 1928 1950 1959 Color TV 1951 1964 1981 HDTV 1993 2008??? ??? AM Radio 1912 1920 1943 FM Radio 1934 1940 1979 VCR 1964 1980 2000 DVD 1997 1998 2006

With Each Birth, Standards Battles: Control vs Open Source DVD – industry standard DVD – HD – challenges (+ China) Digital Cinema? Sound? Production gear – open standard (largely) Cable Boxes – don’t interconnect iTunes vs. Real/Rhapsody battle Linux-based company networks, educational platforms – rebellion from paying for licenses each year and dependence on creaky platforms

DVD – industry standard

DVD – HD – challenges (+ China)

Digital Cinema?

Sound?

Production gear – open standard (largely)

Cable Boxes – don’t interconnect

iTunes vs. Real/Rhapsody battle

Linux-based company networks, educational platforms – rebellion from paying for licenses each year and dependence on creaky platforms

Digital Momentum from Standards Digital Editing, Transmission, Storage – accelerates or decelerate from standards PVRs, VOD, DVD recording, HDTV, diversity of devices, digital rights management Who is Impacted?

Digital Editing, Transmission, Storage – accelerates or decelerate from standards

PVRs,

VOD,

DVD recording,

HDTV,

diversity of devices,

digital rights management

The Gear Wars – Selling New Gear to Do What?

#8: Growing Internet Family Source: Universal McCann NextThingNow 4/08

Global Shift in Participation Source: Universal McCann NextThingNow 4/08

UK Media: How to Monetize This?

Medium for Social Change Source: NYT, 5/29/07

And China. Period. 1.3 billion people >450 million wireless subs 3G spending: estimates range from $35-37 billion over 5 years Major players: China Mobile China United Telecom Corp. (China Unicom) China Telecommunication (China Telecom) China Netcom Media world all its own – AdAge China, Billboard China, now Rolling Stone China 2008 Beijing Olympics

1.3 billion people

>450 million wireless subs

3G spending: estimates range from $35-37 billion over 5 years

Major players:

China Mobile

China United Telecom Corp. (China Unicom)

China Telecommunication (China Telecom)

China Netcom

Media world all its own – AdAge China, Billboard China, now Rolling Stone China

2008 Beijing Olympics

#10: Battle for the Digital Home Barriers to entry – breaking down “ The Box On Your TV” – Holy Grail Telecom/Wireless/Cable/Satellite/ Broadband Net Neutrality – Comcast/BitTorrent/FCC

Barriers to entry – breaking down

“ The Box On Your TV” – Holy Grail

Telecom/Wireless/Cable/Satellite/

Broadband

Net Neutrality – Comcast/BitTorrent/FCC

Now “Quadruple Play”? Pipes, Gardens? Video Voice Mobile Data/Web

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