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)
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
Dialogue Access Risk
Assessment Transparency
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• 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
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)
How it works Value Capture Examples
• 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)
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
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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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