www.astech-intermedia.com

The Newspaper as “Infomediary” Kim Leserman, Media Insight Group

Tom Ratkovich, ASTECH InterMedia

FORCES DRIVING CHANGE IN

OPERATING LANDSCAPE FOR VENDORS

More savvy consumers - easy access to information

- shop price/compare products

The New Operating Landscape

Determining what they will pay

Proliferation of products

Brand loyalty disappearing

Market share fragmentation

Consumers tuning out

Vendors spending more to

achieve lower sales

Fight for „mind share‟

More advertising clutter

Diminished effectiveness

LESS!

Strong negative impact on

vendors‟ bottom line

Cutting cost everywhere

Increased Focus On Cost-Effectiveness

Advt.

$$$

Profit Bleed

Lower Ad Effectiveness

Experimentation with technology

Examples Are Everywhere

Pressure to improve targeting capabilities

Growing popularity of e-marketing

Explosion in direct mail

- auto dialers/automated messaging

- Geographic and demographic

- Success of Belo Interactive’s e-marketing database

- E-Bay success (not just an auction site!)

“There is renewed focus on ROI and a tremendous pressure for competitive advantage.” “In our environment, we have to find ways for our advertising to work harder.”

David Rooney, Director of Media Operations

DaimlerChrysler

Addressing TV Bureau of Advertising

THE ROLE OF THE “INFOMEDIARY”

The Concept Explained

Required reading:

Net Worth” (John Hagel and Marc Singer)

- revolutionary new business model connect buyer/seller - permission marketing to bypass traditional advertising - root of privacy backlash: confidentiality concerns vs.

pragmatic concerns over who benefits - consumers very willing to share personal data - key is receiving sufficient value in exchange

Infomediary Role

Information Intermediary: - trusted (third party ) personal „agent‟ for consumer

- help capture/manage (not sell) consumer data

- entrusted with complete view of customer

- use it to strike best bargains on their behalf

- complete protection of their privacy

- shift focus from serving advertiser to serving consumer

- act only in the best interest of the client

- optimize relationship between buyer and seller for benefit of both parties

Infomediary Role

Interact primarily via Internet:

- infomediary provides a „technology toolkit”

- customer communicates/controls permission via

ongoing manipulations of dynamic preferences

menu

- client can specify which types of goods/services

and

which vendors at any point in time

- marketing messages/offers delivered by e-mail

via

infomediary to protect client‟s privacy

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The Traditional Advertising Model

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The Merchant Community

• Fragmentation/Targeting/Bypass

• Migration to ROI as key metric in ad expenditures

• Seeking mechanism to optimize communications through channel integration and consumer intelligence

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The Evolving Business Model

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The Newspaper as Infomediary

• Opportunity to become the matchmaker between:

• Consumers with specific consumption intentions, and

• Merchants desiring to satisfy them

• Why?

• Trust

• Consumer and merchant relationships

• Channel integration

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The Newspaper and “Trust”

• Generally among highest of media concerns

• Must be impeccable

• Does brand strength = trust?

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The Newspaper and “Relationships”

• Consumer “touch points”

• Wide range

• Under-leveraged

• Merchant relationships transformed

• Control of data, channels lead to partnership

• Sales organization must also evolve

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The Newspaper and “Channel Integration”

• Only entity capable of integrating newspaper distribution with direct mail, email, etc.

• Potency of this advantage related to customer knowledge

• Greater in markets where subscriber knowledge, penetration high

• In other markets, data acquisition is key

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Getting Paid: The Right Revenue Model

• The “Communication” model

• Paid for message delivery via all appropriate channels

• Consumer intelligence adds value beyond traditional model

• The “Customer Development” model

• Paid for delivery (and fulfillment?) of customer

• Risk/reward creates high profit opportunity

• Relevant for some markets, not all

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The Daily Telegraph (UK)

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The Road Map

• Build the information infrastructure

• Enhance interactivity

• Ensure privacy

• Diversify communication channels

• Transform the account team

• Invest in the brand to build TRUST

Thank You

www.astech-intermedia.com

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Group A: The Competitive Environment

• What other entities might usurp the Infomediary opportunity?

• What are the advantages and disadvantages of each relative to you?

• How should the newspaper industry position itself against these competitors?

• What happens to the industry if we are not successful?

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Group B: Consumer Interactivity & Data Acquisition

• Create a “Data x Channel” matrix

• Identify data elements that have economic value; to whom?

• Propose relevant data acquisition mode

• Outline data use policy

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Group C: Getting Paid

• How should the revenue model evolve?

• Are there categories for which the “Customer Delivery” model is particularly relevant?

• Will the newspaper culture ever accept such a model?

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Group D: The Organization

• What are the major roles of the organization?

• How do the traditional roles of advertising, circulation and marketing evolve? Do the typical manager positions remain?

• Outline an org chart

• What skill sets are required of each and how should they be developed?

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Group E: TRUST

• How trusted is the typical newspaper relative to other media?

• Are there entities with whom consumers are more likely to share personal data?

• What steps can the newspaper company take to enhance the perception of trust, credibility and integrity in the market?

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Group F: Instituting Change

• Who must champion this evolution?

• List the major transitory steps that must occur for it to take place?

• In what order? Over what time frame?