The Newspaper as Infomediary

1

• The Newspaper as Infomediary
• Kim Leserman, Media Insight Group
• Tom Ratkovich, ASTECH InterMedia

2
FORCES DRIVING CHANGE IN OPERATING LANDSCAPE FOR
VENDORS
3
The New Operating Landscape

• More savvy consumers- easy access to
  information- shop price/compare products

Determining what they will pay

• LESS!

Proliferation of productsBrand loyalty
disappearing
Market share fragmentation
More advertising clutter Diminished effectiveness
Fight for mind share
Vendors spending more to achieve lower sales
Consumers tuning out
Strong negative impact on vendors bottom line
Cutting cost everywhere
4
Increased Focus On Cost-Effectiveness
Profit Bleed
Lower Ad Effectiveness
Advt.
5
Examples Are Everywhere

• Experimentation with technology

• auto dialers/automated messaging

• Explosion in direct mail

• Pressure to improve targeting capabilities

• Geographic and demographic

• Growing popularity of e-marketing

• Success of Belo Interactives e-marketing
  database
• E-Bay success (not just an auction site!)

6
Addressing TV Bureau of Advertising

• 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

7
THE ROLE OF THE INFOMEDIARY
8
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

9
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

10
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 clients privacy

11
The Traditional Advertising Model
12
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

13
The Evolving Business Model
14
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

15
The Newspaper and Trust

• Generally among highest of media concerns
• Must be impeccable
• Does brand strength trust?

16
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

17
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

18
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

19
The Daily Telegraph (UK)
20
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

21
Thank You
www.astech-intermedia.com
22
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?

23
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

24
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?

25
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?

26
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?

27
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?