As delegates and attendees gather in Las Vegas this week for the CES trade show they will be looking forward to hearing from the major media companies on how they plan to address leading edge issues such as how to adopt a multi platform business model to maximise the monetisation opportunities for their content. Those objectives are becoming increasingly relevant for all brand owners who have had to grasp both the opportunities and threats to their businesses posed by the growth of digital channels. In particular CES attendees will be keen to see the latest developments in the Smart TV sector with Philips, Google, Apple, amongst others, scheduled to showcase their new products.
In 2010, when I wrote my Masters thesis I suggested that those brands that failed to ensure a cross platform presence were doomed to lose market share to competitors who recognised the opportunity to engage with their consumers in a relevant and direct manner. The growth of social media platforms such as You Tube, Facebook and Twitter means that brands no longer control the dialogue about their brands. The traditional top down linear communication between brand and consumer has been replaced by a looping ‘digilogue’ as part of the user journey where consumers consult with peers and friends before making the purchasing decision – what Google terms the ‘Zero Moment of Truth’.
The consumer is in control and brands need to become part of that digilogue and also to understand user behaviour on digital platforms so as to intercede between what the consumer is saying about their brands to their friends and peers. Tracking what users are saying about brands and campaigns are now an integral part of online marketing which has helped to position the efficient use of web analytics and the insights gleaned from their application as a key requirement of business strategy. Positioning the brand within those social media channels, such as FaceBook, to influence this digilogue is now becoming commonplace, with brands having their own channels on platforms such as YouTube in order to extend their brand reach and capture the interest and attention of consumers.
If Richard Dawkins was not such an eminent evolutionary biologist he may have considered a career as a web analyst as I am sure he would appreciate how the science of web analytics in digital media science has replaced superstition. The speed at which this transition from what has been termed ‘Faith-based marketing’ – see http://www.kaushik.net/avinash/online-marketing-faith-based-initiative-fix) – that is a reliance on traditional media measurement tools to assess campaign effectiveness
( e.g. BARB for TV ) – to real time application of insights gained from web analytics to adjust in flight campaigns has been remarkable but represents an early phase in the development of digital business intelligence. As Eric Schmidt, CEO of Google, said in January 2010, it is the exponential increase in computing power – doubling every 18 months – that is enabling the development of technology to provide an ever expanding number of enhancements, platforms, options and services to digital consumers of content.
The real impact of the growth in computing power has been to create a ‘pull’ in demand from consumers who want content and services at a time and location of their choosing, not that of the service provider. This demand has seen huge growth in the provision of video on demand, smart phones, tablets and connected television services all designed to allow the consumer to access content via any touch point throughout their daily lifestyles. Consumer goods manufacturers have anticipated, or have belatedly recognised, this disruptive shift in content consumption behaviour – from the linear to the non linear – by ensuring their platforms and devices allow for the accessing of content in a form and at a speed that meets with this new demand. The coming of the Connected TV set in the living room, allowing users to watch a channel and engage with their peers via social media and to buy – all from the same screen – has huge implications for advertisers and media owners used to traditional means of media trading.
Interestingly, some of these Consumer Goods Manufacturers (CGM) are failing to recognise the opportunity to own the relationship with their consumer by not tracking in application usage or to follow their users journeys as they access the web via the Connected TV. This would allow the CGM, not the content owner, to collect user data relating to purchases, preferences, viewing habits, etc. Sony is looking at application usage through their Bravia TV set but other manufacturers appear unready to do develop this capability. Could the application of a Web Analytics capability within the Smart TV give the CMG the ability to improve their product features based on real consumer insights? If this is an option and it is not followed by CMG’s then this pass through approach is a strategic error that they will come to regret.
If it is agreed that brands need to adopt a multi platform business model, including the use of Social Media to market themselves, this raises the question as to whether brands should become media owners rather than merely media users. There have been a number of attempts by brands to move into the digital television sector – Audi, Renault, Sainsbury (Carlton Food anyone?), etc. have all launched digital TV channels on the BSkyB platform here in the UK. Sports brands such as Real Madrid, Manchester United, Liverpool, Chelsea and Arsenal have launch TV channels using the subscription model (although Liverpool FC TV has now reverted to an advertising – centric model ). Tesco had an ill-fated in-store TV channel, Tesco TV.
As a former consultant to many digital media ventures, I have long advised clients to adopt a multi- platform and revenue stream business model in order to maximise the number of opportunities for users to access and engage with their content and to monetise each contact. At Siemens, where I was Head of Convergent Media, I developed the concept of Siemens TV which proposed the use of digital satellite television along with Video on Demand, Mobile and Intranet platforms for Siemens to sell their products direct to consumers, to provide an effective communications vehicle to convey corporate policy and to train and educate their global sales and marketing teams on new product launches. This concept represented an advance on the model that as a consultant I had developed for clients such as Ocean Finance who subsequently Ocean Finance TV launched on the Sky platform.
The fact that entry costs for brands to launch their own media platforms have dramatically reduced e.g. for IPTV, means that brands have the opportunity to enter these sectors on an experimental basis, to trial channel and content concepts and to adapt and revise these in the light of consumer reaction. Crucially, brands can assess which business model will provide the best ROI opportunity – subscription, micropayments, e-commerce, advertising, etc. Previously, many new TV channel launches involved significant investment, based on poor market research, which inevitably failed. Now, lower production and distribution costs plus the ability to offer any form of payment method on any device means brands can maximise revenues and minimise risk by adopting a multi-platform and revenue stream model. This option was not available some years earlier for those brands brave enough to enter the digital domain. Web analytics can also play a crucial role in helping brands understand how their consumers are interacting with the brand’s digital channels and content and can adjust marketing strategies accordingly.
The plethora of current digital platforms and the absolute certainty of new ones emerging over the near future means that brands have to ensure that they adopt a mind set of permanent revolution in order to understand and conform with the impact of digital technology on their businesses. Today’s digital media leaders such as Facebook may face challenges from as yet unheard of quarters. My view is that markets such as China and India will throw up new technologies to challenge these incumbents and brands need to be ready to adopt and make use of these disruptive technologies to survive.