The new frontier of information cocreation

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The new frontier of information co-creation
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Agenda

• MII Introduction
• The Evolving Newsmedia Market
• The Co-Creation Business Model
• The Action Plan

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Who is Market Innovations (MII)?

• A strategic advisory firm that works with
  companies to improve their revenue-earning/profit
  potential with a special focus on innovation

• Help organizations evolve their current business
  thinking into an economic advantage
• Apply our proprietary Innovation Lab process to
  generate the highest potential options and
  minimize risk associated with large-stakes
  decisions
• Assess propositions, reduce testing costs,
  accelerate idea to implementation time
• Incorporate linked information customer,
  competitive market, operations, economics
• Simulate scenarios through our Predictive
  Scorecard

• Principals have deep expertise within industries,
  across functional areas, and in solving
  customer-centric business issues

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The Evolving Newsmedia Market
Identifying the Opportunities
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Major Influencers of the Newsmedia Industry

• Increasing number of special interest news
  sources or innovative delivery (e.g. CNN, USA
  Today)

• Advanced technology enables rapid, real-time,
  mobile access to news

• Advertising dollars shifting to other channels

• Wages and literacy on the rise

Time

• Increasing urbanization, mobility, and
  globalization of society

• Introduction of TV
• Advent of world wide web

• Digitization of media channels

• Growing number of social networking and special
  interest websites

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Business Model Evolution
Readers Engagement
Tomorrow
Customer Selection Value Proposition

• Innovate with a Total Customer focus (i.e., low
  and high returns, young and old, online, offline,
  mobile)

Tomorrow

• Objectives
• Engage readers
• Leverage the brand
• Provide a platform for merchants and advertisers
  to build competitive advantage
• Become a more relevant player in Web 2.0

Today
Value Capture

• Exploit synergy between online and offline
  channels
• Consider sharing non-specific content with other
  companies

Yesterday
Organizational Systems

• Develop way to quickly recognize new opportunities

Time
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Opportunities Emerge Despite Market Pressures
Challenges
Opportunities
Threats

• Current economic downturn causes even loyal
  readers to unsubscribe
• Erosion of the reader base in favor of electronic
  news
• Migration of advertisers to online channels and
  new formats (e.g. Google, YouTube, Facebook)

• Industry mergers put some news organizations at
  an economic disadvantage
• Growing number of news and information sources
  online
• Many news sources allow user input and
  interaction (e.g. Wikipedia)
• Social networking sites are used to discuss and
  disseminate current news and issues

• Too much information creates room for a
  value-added news consolidator
• Increasing need for platforms where communities
  can talk to each other (e.g. share experiences)
• A market exists for high value online content in
  specific topics

PricewaterhouseCoopers. Moving into Multiple
Business Models Outlook for Newspaper Publishing
in the Digital Age.
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The Co-Creation Business Model
Translating Innovative Ideas into Economic Value
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The Co-Creation Approach

• According to C.K. Prahalad and Venkatram
  Ramaswamy, consumers are challenging the
  corporate logic behind value creation
• Due in large part to the Internet, consumers are
  able to influence value creation across all parts
  of the value chain
• They suggest that companies must embrace this by
  shifting the focus and basis of value creation
  from products to experiences through the
  application of co-creation

If your company does not capture this
intelligence to create more fulfilling
experiences for consumers, your competitors will.
Prahalad, C.K. Venkatram Ramaswamy (2004??).
The Co-Creation Connection. Strategy Business,
Issue 27. Prahalad, C.K. Venkatram Ramaswamy
(2004). Co-Creating Unique Value with Customers.
Strategy Leadership, Volume 32 No. 3
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Traditional vs. Co-Creation Shift
(1) Consumer is outside the domain of the value
chain (2) Enterprise controls where, when, how
value is added in the value chain (3) Value is
created in a series of activities controlled by
the enterprise before the point of purchase (4)
There is a single point of exchange where value
is extracted from the customer for the enterprise
Traditional
(1) Consumer is an integral part of the
system (2) Consumer influences where, when, how
value is generated (3) Consumer need not respect
industry boundaries in search for value (4)
Consumer can compete with companies for value
extraction (5) There are multiple points of
exchange where the consumer and company can
co-create value
Co-Creation
Prahalad, C.K. Venkatram Ramaswamy (2004??).
The Co-Creation Connection. Strategy Business,
Issue 27.
11
Building Blocks of Co-Creation

• D A R T

Ability to use information and tools to inform
decisions or for your benefit (consumers dont
need to own it to experience its value)
Interactivity, engagement, and a propensity to
act on both sides
Inform consumers of the probability of harm to
them
Make vital business-process information
available (e.g. pricing, costs, profit margins,
availability of product)
Prahalad, C.K. Venkatram Ramaswamy (2004??).
The Co-Creation Connection. Strategy Business,
Issue 27. Prahalad, C.K. Venkatram Ramaswamy
(2004). Co-Creating Unique Value with Customers.
Strategy Leadership, Volume 32 No. 3
12
Examples of Co-Creation

• Pay-as-you-drive Mobility CarSharing in
  Switzerland
• IBM promotes use of Linux through free software
  tools

• New Line Cinema develops Lord of the Rings The
  Fellowship of the Ring promotion through feedback
  from fan websites
• Cisco Connections Online customers can engage in
  dialogue and solve one anothers technical
  problems

• US Food Drug Admin reintroduces Lotronex with
  stricter controls after patients protested

• Federal Express continuous tracking along the
  delivery chain and package rerouting
• Instinet Group customers real-time monitor how
  much the fund managers trading is costing them

• Sumerset Houseboats let customers co-design the
  layout of their boat, negotiate specs and prices,
  connect with the factory during construction, and
  monitor progress in real time. Customers can
  also review drawings, access architectural and
  aesthetic expertise, consult representatives,
  read bios of people crafting the boat, have
  dialogues with other customers and a wider
  community of avid sailors

Prahalad, C.K. Venkatram Ramaswamy (2004??).
The Co-Creation Connection. Strategy Business,
Issue 27. Prahalad, C.K. Venkatram Ramaswamy
(2004). Co-Creating Unique Value with Customers.
Strategy Leadership, Volume 32 No. 3
13
Co-Creation Innovation Can

• Enable the newsmedia
• Identify what products and services customers
  want/need
• Determine readers sensitivity to price levels
• Leverage synergies between online and offline
  channels
• Inform decisions about where to make investments
• Engage readers and strengthen the brand

• Assist businesses and advertisers
• Determine what advertisements are the most
  effective
• Identify optimal offline-online advertising
  packages to attract advertisers
• Provide a means of connecting with the customer
  either more directly or through another channel

• Offer unique value to readers
• Provide information, summaries and ratings,
  self-help tools, etc.
• Provide a community platform to share
  experiences, obtain referrals, get assistance
  with problems, and optimize buying decisions
  based on individuals objective function
• Give readers a stake in what is created/sense
  of ownership

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Applying Co-Creation

• Co-Creation Models

Model 1 Newsmedia Organization to Reader
Model 2 Among Readers
Model 3 Value Chain Advertiser to Readers

• Direct exchange among individual readers and
  reader groups (e.g. people like you would like
  )
• Provide platform for readers to interact and
  solicit information or help from each other

• Direct exchange between business advertisers and
  readers (consumer and business)
• Gauge effectiveness of advertising, develop new
  products, monitor reader boards for issues, etc.

• Direct exchange between newsmedia organization
  and reader (consumer and business)
• Identify services the reader wants/needs and
  results in incremental value to the newsmedia
  organization (e.g. revenue, brand building)

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Model 1 Co-Creation Between News Organization
Reader
How it works
Value Capture
Examples

• News organization creates a landing page on
  website to engage readers in experiments
• Experiments are designed to gauge readers
  interest in new products/services
• Behavioral results are statistically modeled and
  integrated with a financial simulator
• Scenarios are simulated to determine the
  financial impact

• By identifying the most valued products and
  services as well as their relative preference for
  features and prices, the newsmedia organization
  can predict financial outcomes based on
  implementing any offer configuration to the
  broader reader base
• Can assess the investment required to execute
  prior to actual cash outlay

• Free vs. paid subscription for premium content
• Paid access to consumer guide-like product
  rating reports
• Instant mobile alerts for news (e.g. stock market
  changes)

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Model 2 Co-Creation Among Readers
How it works
Value Capture
Examples

• News organization creates interactive web pages
  designed to
• Create communities of interest (e.g. dog-lovers,
  gardeners, tech geeks)
• Engender reader engagement
• Encourage reader sharing
• Provide information or feedback
• Web pages are monitored and managed by news
  organization

• Subscription based services for information and
  recommendations such as
• Referrals for babysitters, plumbers, electrician,
  lawn care with automatic links to Better Business
  Bureau and background checks
• Product and service ratings
• Revenue from banner advertising
• Revenue from businesses wanting to mine the
  forums for product issues or needs

• Blog for people to report their reactions to
  current news
• Online op-ed section for controversial news or
  political debates
• Forums to compare shopping experiences and rate
  products/companies
• Self-help tools to compare mortgage offers
• QA to ask for technical assistance with a
  problem (e.g. how to prepare lawn mower for
  winter storage)

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Model 3 Co-Creation Between Business/Advertiser
Reader
How it works
Value Capture
Examples

• News organization works with business/advertiser
  to create a landing page to engage readers in
  experiments (e.g. features, pricing, billing
  fulfillment, customer service)
• Experiments are designed to gauge readers
  interest in new products/services , measure
  receptivity to advertising, or assess aspects of
  value chain
• Behavioral results are statistically modeled and
  integrated with a financials
• Scenarios are simulated to determine the
  financial impact

• For businesses testing products/services/value
  chain, experiments can reveal the most valued
  product or service offer configurations
• Advertisers can evaluate the most effective
  messages, promotional offers, etc.
• Both types of experiments can be linked with the
  businesses financials to prioritize options and
  assess expected investments

• Product/service offer configurations
• Rate reliability, importance, brand awareness of
  value chain components
• New vs. old advertising messages
• New vs. old promotional offers

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The Action Plan
Building a Co-Creation Newsmedia Platform
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The Innovation Roadmap
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Requirements For Getting Started on Co-Creation

• Management engagement and alignment with
  priorities
• Business case and strategic fit analysis

Management Support
Platform Plan

• Platform definition and requirements
• Platform road maps

Organizational Readiness

• Critical resources (people, dollars, technology)
• Partner engagement

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What Can We Accomplish During this Conference?

• Discuss the emerging revenue growth opportunities
  that could be enabled by the co-creation
  business model

• Identify high priority target segments

• Prioritize the best options for early adoption

• Clarify and assess potential hurdles to
  implementation

• List expected resources requirements, technology
  partnerships, etc. to support successful
  implementation

• Determine measures of success (early and
  longer-term)

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Backup
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Innovation Lab in Co-Creation
Emerging Trends
Ideation
Qualitative Research
Competitive Research

• The MII Innovation Lab is a unique strategic
  analysis process and tool for management
  decision-making, enabling management to evaluate
  and compare various strategic options
  side-by-side along with competitive alternatives,
  using demand drivers to more accurately reflect
  the various likely scenarios

Priorities for Lab Testing with Customers
(1) Model Specification Hypotheses
(2) Research Design
Virtual Test
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Data Transfer Channels
(3) Behavior Model
Innovation Lab Survey Data
(4) Economic Model
Cost to Serve data
(6) Decision Optimization
(5) Predictive Simulator
Predictive Scorecard
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MII Predictive Scorecard
Dashboard Applications
Scenario Execution Engine
Predictive Scorecard Engine
Customized Behavior Sampling and Data
Repositories