The Media The commercial media consist of enterprises that: 1. Create or acquire content. 2. Distribution of content (news, information, entertainment,

The Media

The commercial media consist of enterprises that:

1. Create or acquire content.2. Distribution of content (news, information,

entertainment, or data) to an audience. Content ----- Medium ----- Audience (Method of distribution)

Packaging or Retail

Media Industry Structure *

ContentPackaging Retail

Segment

KeyFunction

Examples

* Creative data production

* Aggregation* Marketing and promotion* Wholesale distribution

* Delivery to final customer

* Artist/production house* Author/imprint* Journalist/title

* Cable channel* Book publisher* Newspaper/ magazine publisher* TV/radio network

* Cable systems* Book retailer* Newsstands/postal services* Newspaper delivery* Local TV/radio stations* Billboards* The Curse of the Mogul, Knee, Greenwald, and Seave, Portfolio, 2009.

Distribution: Distribution:

Mapping to Assess Competitive Advantage

*The Curse of the Mogul, Knee, Greenwald, and Seave, Portfolio, 2009.

Content Packaging

Retail

Continuous (on-going relationship)

Physical (sales force)

Local *

Increasing Competitive Advantage * (# of competitors go down)

Mixed

Discrete (one time, no scale)

Hybrid

Electronic

Mixed

National/Global

Decreasing

Advantage

* Barriers to entry

Media Business ModelsAdvertising Advertising OnlyOnly((Single Rev. Single Rev. Stream)Stream)

Advertising/Subscription Hybrid(Dual Rev. Stream)

SubscriptionOnly(Single Rev. Stream)

Transaction(Single Rev. Stream)

TV

Radio

Google

Outdoor

Cable

Newspapers

Magazines

HBO

Newsletters

Mobile

Movies

Content access is free

Content access cost is low

Content access cost is higher

DVDs

Music

Content ownership cost is highest

Content creation, distribution, and advertising-delivery business

Content creation, distribution, access, and advertising-delivery business

Content creation, distribution, and access business

Content creation, distribution, and retail business

Supply and Demand

Demand for advertising opportunities is up– Global ad spending increases every year 2-4%– Especially demand for video advertising online

and in mobile (online growth +15%, mobile +25%)

Supply of advertising inventory has gone from scarcity to abundance– All TV, radio pricing used to be based on

scarcity, now just big, live events are– Newspaper and magazine pricing used to be

based on size and placement, now it’s a mess

The Internet Changed Everything

Advertising opportunities – inventory – is abundant, in fact it’s virtually infinite

Search (Google) garners about half of all online advertising revenue– Performance-based (CPC) pricing– Relevance of results– A million customers

TV CPMs have gone up slightly, but ratings have plummeted, thus revenue is down.

The Internet Changed Everything

Selling media– Ad Words– Negotiating more– DSPs (demand-side platforms)

Buying media– Networks, exchanges, and trading desks (SSPs,

supply-side platforms)– Targeting platforms (Blue Kai)

Consumers/Customers

A consumer uses a product: TV, radio, websites = audience or readers

A customer buys a product: newsletters, music,, DVDs– Advertisers are customers for radio, TV, magazines,

websites—they buy access to audience/readers/users– Subscription revenue is relatively minor except for

cable companies– Who is P&G’s customer?

In some businesses the consumer and the customer are the same person– Detergent, razors

Purpose of a Corporation

To create and keep customers– Can’t make a profit unless you have customers

To serve stakeholders– Consumers/audience– Customers/advertisers– Society– Employees– Stockholders (owners, investors, lenders)

To survive– Need profits– Need to innovate and adapt (innovator’s dilemma—

disruptive technologies)

Create a Customer

Must satisfy unmet consumer/audience needs and wants—benefits sought (might be unrecognized)– Stories– Search– Social media

Create a differential, sustainable, promotable competitive advantage that will get customers/audience and keep them– Best way – high barrier to entry (TV stations, cable)– Next best – great products

Create a business model that monitizes content/audience/traffic

Media Selling

What Is Selling?

Selling is about getting customers and keeping them

It involves a process of helping customers/buyers get what they want

It is not a manipulative process in which salespeople get customers/buyers to do things they don’t want to do

Selling is about building trusting relationships, and guided by three basic relationship rules

Basic Relationship Rules (For Sellers and Buyers)

1. Do unto others as they would have others do unto them.

– Treat them the way they want to be treated.

2. People like and trust people exactly like themselves– Find similarities and areas of mutual interest.

3. People don’t care how much you know until they know how much you care

Purpose What is the Purpose of ad-supported

media?– “To bring our audience and advertisers

together” - KOMC/KRZK, Branson, MO– “To help people sell more Fords,’ Lowry Mays,

former of CEO Clear Channel Communications– To “create a customer” - Peter Drucker– Ad-supported media are in the advertising

delivery business Thus, agencies and the media are co-dependent

Objectives What are salespeople’s objectives?

1. To get results for customers Should be – not universal Buyers need to teach salespeople this objective

2. To develop new business3. To retain and increase current business4. Increase customer loyalty with insight

selling

Insight Selling

The Challenger Sale– Teaching– Tailoring– Taking control of the conversation

Strategies What are salespeople’s sales strategies?

1. Sell solutions to marketing/advertising problems

2. Reinforce the value of advertising and of their medium

3. Create value for their product Before negotiating or discussing price

4. Become the preferred supplier5. Innovate

Big Ideas Packages and sponsorships

Functions Salespeople’s functions (key skills)

1. Create a differential competitive advantage in a buyer’s mind

2. Provide insights Including how to buy the medium (Google)

3. Manage relationships4. Solve problems

– Big Ideas– Insights– Easy to buy

Related Functions

1. To represent the customer to sales management (inside selling)

– Reinforce and help salespeople with this function

Give them justifying arguments

2. To provide customer service3. To monitor the marketplace for sales

management– Help salespeople, don’t lie to them

Biggest Problem In Sales Organizations

People do what they are paid to do Wrong incentives lead to wrong, counter-

productive behavior– E.g.. Wall Street and bankers and the sub-

prime mortgage debacle led to the Great Recession

Buyers

Ask all salespeople how they are paid (their incentives)– If primarily on commission, they are out for

themselves, not the company and they will lower rates to get an order, to maintain relationships, and keep their list intact.

– If primarily on making budget, virtually the same as being on commission, but will drop rates more near the end of the month or quarter. They are in a dilemma, but their short-term interests come first.

Learn to trade favors, if you trust the salesperson

Learn negotiating skills– Talk price early– Open low, come up slowly– Have an effective concession pattern (get smaller)– You never get anything you don’t ask for– Competitors vs. cooperators– See Advanced Negotiating Seminar at

http://www.charleswarner.us/AdvancedNegotiating.ppt

If a salesperson’s company/product is important to you, get to know the salesperson’s top management (highest level possible) and negotiate with him/her

Manage these relationships with important vendor management assiduously and objectively in your self-interest (your organization’s and your own).– Network , cable TV– Top six websites (70%)

Carefully design your career– Media becoming ever more important– Focus on planning

Exchanges and trading desks taking over buying– Specialize

TV Online Mobile