Aggregating Audiences to deliver precision marketing opportunities
I’ve been trying to form a picture in my mind – a mental model if you will – what it means for media companies to move from product-based selling to audience-based selling. This theme has come up in several conferences and research materials I’ve encountered lately, and a blogged early this weekend about John Hagel’s take on the topic.
This is a bit of a meandering post, but I wanted to aggregate some key concepts in one place.
Nielsen’s Integrated Media Monitoring Vision
I think the following video from Nielsen captures an important element of this picture:
David Calhoun, Chairman and CEO of Nielsen, puts it pretty well:
The future is … a marriage between precise consumer marketing opportunities with precise audience opportunity. You want to collect audience, and you want to develop product that goes after that audience. But now you’ve got to do it across all three screens, and you want to get paid for all three screens.
Susan Whiting, the Vice-chair and EVP at Nielsen frames the challenge:
The ultimate thing will be connecting all three screens [i.e. TV, PC, and mobile device]. And really understanding if a program starts on television, or even online, and moves to one of the other screens, what’s the size of the audience, what’s the reach, is it incremental, is the behavior different, how does the creative matter, how engaged are you in those different screens?
What interests me here, I think, is the notion of having deep insight into a media audience, so that you can deliver both targeted content, as well as potentially sell targeted advertising or commercial products.
Deep Insight into Media Audiences
The key is “deep insight into audiences”. And not just deep, as David Calhoun says, but also precise. And this is where the transition may be a challenging one for many traditional media companies. As John Hagel puts its:
I think there’s definitely opportunity for the large companies to still make a go of it. They’ve got extraordinary assets to deploy in terms of relationships, brands – relationships both with audience and with creative talent.
I think the challenge is just understanding the changes that are going on. And part of the issue, from my experience, is that the changes are just so fundamental that it’s no longer about skills, it’s not even about economies, it’s really about basic assumptions about what is required for success. And when you get to that level it becomes very challenging to make the transition.
I’d say one of the key transitions for large media companies is to move from a “product business mindset” to a “customer business mindset”. And I think most big companies when I talk to them would say “Of course we’re a customer business; that’s our franchise.”
On the other hand, there are some basic questions you can ask that quickly put that into question. One is, if customers are your focus, who has the power within your organization? Is it the product people? Or the customer people – the executives that own customer relationships vs. the executives that own product development?
[By Customer People, I mean] people that are really focused on building relationships with customers – ongoing relationships focused on getting to know these audiences not just as segments, but as individual audience members. Who has the power? When there’s a conflict that emerges in the organization, who wins?
Second question is “How do you measure profitability?” If audience is so important to you, do you measure profitability based on product profitability or audience profitability? Most media companies still are very focused on product profitability. A fundamental mindset shift required.
Finally, brand promise. What’s your brand promise? Is your brand promise “Come to us because we have extraordinary product?” Or is your brand promise “Come to us, because we know you as an individual audience member – again not as a segment, but as an individual audience member – better than anybody else, and you can trust us to bring together the right media content resources for your needs.
And I think that’s kind of the shift really necessary to make this transition. And I think that’s where the large media companies are still struggling.
Demand-driven Business Models
This focus on understanding audiences and audience profitability is what David Calhoun calls Demand-driven Business Models. In fact, Calhoun co-authored a book with Rick Kash of The Cambridge Group called How Companies Win: Profiting from Demand-Driven Business Models No Matter What Business You’re In. The authors have a YouTube channel containing short video clips where they elaborate on the core concepts in their book.
In the video below, the authors discuss the concept of a demand-driven company:
Quoting David Calhoun from the video:
The difference today, what the Internet has brought everyone [is these] demand aggregation models, – some take the form of Google or Search, some take the form of Facebook or Social media. [And] they’re beginning to develop at a fairly profound pace.
And what does that mean? It simply means that the old school forms of demands that came in small increments called neighborhoods, who were served through points of convenience, retail shops. All that’s changed now. These neighborhoods now are big. They’re virtual. They’re based on real, essential, and emotional needs. They form in minutes. And they can effect demand profiles in amazing ways.
Precision marketing is another important concept in the book. Calhoun and Kash elaborate on the concept here:
Calhoun and Kash provide their view of innovation as identifying unsatisfied demand, and fulfilling it, in the video segment below:
Finally, the book introduces the concepts of Need States and Demand Pools. These concepts are only touched upon lightly in these introductory videos, but it’s basically about identifying targeted buyer needs that give you pricing power. A quick clip:
So definitely one of my more meandering posts. So to summarize, two key takeaways:
- Media companies will need to transition from product-focused companies to audience-focused companies
- Deep audience insight and precision marketing needs to be a core competency for media companies
And that’s my thoughts on that.