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MII Introduction

The Evolving Newsmedia Market

The Co-Creation Business Model

The Action Plan

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

The Evolving Newsmedia Market

Identifying the Opportunities

Time

• Increasing urbanization, mobility, and globalization of society

• Wages and literacy on the rise

• Introduction of TV

• Advent of world wide web

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

• Digitization of media channels

• Advertising dollars shifting to other channels

• Growing number of social networking and special interest websites

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

Tomorrow

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

Customer Selection &

Value Proposition

• Exploit synergy between online and offline channels

• Consider sharing non-specific content with other companies

Value Capture

• Develop way to quickly recognize new opportunities

Organizational Systems Time

Readers’ Engagement

Yesterday

Today

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

Challenges Opportunities

• 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

Threats

PricewaterhouseCoopers. Moving into Multiple Business Models: Outlook for Newspaper Publishing in the Digital Age.

The Co-Creation Business Model

Translating Innovative Ideas into Economic Value

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

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

“If your company does not capture this intelligence to create more fulfilling experiences for consumers, your competitors will.”

Traditional

Co-Creation

(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

(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

Prahalad, C.K. & Venkatram Ramaswamy (2004??). The Co-Creation Connection. Strategy + Business, Issue 27.

D A R T

Dialogue Access Risk

Assessment Transparency

Ability to use information and tools to inform decisions or for your benefit (consumers don’t 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)


Dialogue Access Risk

Assessment Transparency

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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 individual’s objective function

Give readers a “stake” in what is created/sense of ownership

Model 1: Newsmedia

Organization to Reader

Model 2: Among Readers

Model 3: Value Chain &

Advertiser to Readers

Co-Creation Models

• 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)

• 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.

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)


• News organization creates interactive web pages designed to:

oCreate communities of interest (e.g. dog-lovers, gardeners, tech geeks)

oEngender reader engagement

oEncourage reader sharing

oProvide information or feedback

• Web pages are monitored and managed by news organization

• Subscription based services for information and recommendations such as:

oReferrals for babysitters, plumbers, electrician, lawn care with automatic links to Better Business Bureau and background checks

oProduct 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

• Q&A to ask for technical assistance with a problem (e.g. how to prepare lawn mower for winter storage)


• 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

The Action Plan

Building a Co-Creation Newsmedia Platform

Design • Generate new or revitalized ideas to innovate

around

Validate • Verify the commercial viability of new

innovations

Apply • Implement innovations resulting from co-

creation techniques

Manage • Monitor and track new innovations, including

a feedback loop for improvements

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

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

Identify high priority target segments

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

Prioritize the best options for early adoption

Clarify and assess potential hurdles to implementation

Determine measures of success (early and longer-term)

• 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

Design

Validate

Apply

Manage

Emerging Trends

Ideation Qualitative

Research Competitive

Research

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http://www.surveyfour.com http://www.surveyfive.com

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3 1 7 9 4

0 8 5 1 2

7 1 3 8 2

Data Transfer Channels

Cost to Serve data

(6) Decision Optimization (5) Predictive Simulator

(1) Model Specification & Hypotheses

(2) Research Design

Predictive Scorecard™

Priorities for Lab Testing with Customers

Innovation Lab Survey Data

(3) Behavior Model

(4) Economic Model

Virtual Test

Simulated Buying Behaviors

Preferred features, prices, providers

Live Market Feeds

Ordering Activations

Usage Support

Web-based Competitive Buying Simulator

~1K Simulated Competing

Packages and

Participant Responses

Dynamic Behavioral Market Model

Dynamic Economic Market Model

Web Samples • Customers • Prospects

Web-based Dashboard

Scenario + Optimization Control Interactive Reports Business Case Creation

Scenario Optimization Engine Scenario Execution Engine Predictive Scorecard™

Engine

Customized

Behavior Sampling

and

Data Repositories

Dashboard Applications

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Technology

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