Berkeley MBA 211 - Advertising in a changing media landscape

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Advertising in a changing media landscape:The role of consumers as players in the game of advertising March 18, 2010Patricio SimpsonCopyright © 2010 Deloitte Development LLC. All rights reserved. You may view, copy, print, and distribute this document only for educational purposes and informational use (and not for commercial purposes); provided that any copy of this document or portion thereof must include this copyright notice in its entirety.1Copyright © 2010 Deloitte Consulting LLP. All rights reserved.Today‟s topics• Changing customer needs are driving interactivity– Trends toward increased customer empowerment– Demands for ease of use, personalization and choice• Traditional media is finally catching on– Repositioning and growing new media propositions– Growth of alternative approaches and mediums• New world of media and advertising– New business models– Class Discussion2Copyright © 2010 Deloitte Consulting LLP. All rights reserved.Customers are taking controlPower shift: Consumers are seeing more and remembering less – and they have taken control of when, where, and how they interact, via Web channels, interactive media and on-demand devicesWhat They Want• Ninety-four percent of shoppers conduct research online before purchasing a product1• More than half of consumers’ buying decisions are more influenced by consumer reviews and ratings than any other type of online advertising2• A Web search for “Product Review” generates roughly 500 million pages of results• Almost all consumers want to block unwanted ads, online and offline3When They Want It• Sixty-six million U.S. digital cable subscribers will have video on demand by the end of 20154• Forty-two percent access the internet via their phone, an increase of 36% in the past year5• The mobile web isn’t just about phones - the Apple iPad is predicted to exceed all-time sales of the popular Amazon Kindle during its first 3 months on the market61 Compete Online Shopper Intelligence study – 20102 “State of the Media Democracy” 4thEdition. Deloitte (2010)3 Forrester study with Intelliseek (May 2004).4 Magna Global (January 2010)5 “State of the Media Democracy” 4thEdition. Deloitte (January 2010)6 FBR Capital (March 2010)3Copyright © 2010 Deloitte Consulting LLP. All rights reserved.Talk about vying for attention!Westin St Francis – San Francisco’s Union Square becomes Zen garden with 25 tons of rocksStarbucks – coffee cup hitches a cab ride and fools Boston motoristsNike – ball squashes BMW!!Thailand4Copyright © 2010 Deloitte Consulting LLP. All rights reserved.Consumers value personalization and convenience and are driving new commercial opportunities and more content choices More choice, more opportunities to exploit content on more platforms, and ultimately more consumer powerSupply of content proliferates, consumer choice and commercial opportunities expand, and the powerful customer sits at the centre of all thisUbiquitous IP networks will allow for hub centric content delivery, and content access cross-platformRadioWirelessTVInternetPlatform specificdeliveryPlatform owners as “gate–keepers”CrossplatformdeliveryUbiquitous IP networksHub centric deliveryEvolution over time19962010TransactionSettlementProcessorsContent ProvidersService Providers (Infrastructure)AggregatorsRetail ProvidersTerminal Device SuppliersSubscription ServicesApplication ProvidersMiddleware & NetworkingSolution ProvidersThe personalisation dimension adds complexity to the traditional content versus distribution competitive strugglePersonalisationDistributionAggregationAggregationAggregationTraditional StruggleThree dimensions ofcompetition inthe digital ageFragmentation of the value chainEase of AccessPersonalisationProliferation of Supply2014Content5Copyright © 2010 Deloitte Consulting LLP. All rights reserved.Media companiesMedia companiesMedia companies…and shifts towards enriched and interactive consumer experiencesEnriched consumer experience and greater interactivityLow interactivity High interactivityEvolution over timeCustomersPushCustomers CustomersPush+Pull+ Provide1996 2005 2014Push+Pull6Copyright © 2010 Deloitte Consulting LLP. All rights reserved.These shifts are driving towards a media environment where the consumer is a powerful decision-makerSource: Deloitte analysisPlatform owners as “gate-keepers”Ubiquitous IP networkSources of competitive advantage:• Trusted brand• Access to exclusive premium content• Archive/searching functionality Ability to partner effectively• Knowledge of target consumer needsSources of competitive advantage:• Ownership/access to platform• Access to exclusive premium contentSources of competitive advantage:• Access to general and premium content providers• Archive/searching functionality• Responsiveness to changing consumer demand and consumer insightLow interactivity High interactivity„VANILLA‟ Aggregation Consumer PowerPlatform Power Service ProvisionSources of competitive advantage:• Consumer relationship management (fulfilment, assurance and billing)• Ownership/access to platform• Responsiveness to changing consumer demand• Ability to attract communitiesTimeTimeTimeEvolution of the market – conceptual journey7Copyright © 2010 Deloitte Development LLC. All rights reserved.Consumers also increasingly create and „broadcast‟ content…• People (especially Millennials and Xers) are increasingly creating their own entertainment • Not only are they creating entertainment for themselves, but nearly one-in-three consider themselves to be “broadcasters” of their own media– Nearly half of Millennials feel this way tooSummary of Agree Strongly/Somewhat1stEdition %2ndEdition %Millennials%Xers %Boomers %Matures %I am increasingly making my own entertainment through editing my own photos, videos and/or music.4054 6962 45 30With all the technology available to me today, I actually consider myself to be a "broadcaster" of my own media.--324638 23 10Q. Please indicate how much you agree or disagree with the following statementsGenerational Comparison by Survey Edition (Summary of Agree Strongly/Somewhat)Millennials 1stEdition%Millennials2ndEdition %Xers 1stEdition %Xers 2ndEdition %Boomers 1stEdition %Boomers 2ndEdition %I am increasingly making my own entertainment through editing my own photos, videos and/or music.566946623145Source : State of the Media Democracy, 2ndEdition.


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