Driving Insights & Relevance in the World of the Connected Consumer

Unless you’re only focused on traditional marketing techniques to acquire new customers, you know all too well that disruptive forces are necessitating changes to Media & Entertainment revenue and industry models and driving the need for data and analytics.

We see these forces across 6 key areas in M&E:

• Impact of Technology: the adoption of connected devices has reached the tipping point for most categories and we’re now faced with learning to play on the mobile field or be crushed by the competition.
• Increased Consumer Power: patterns of behavior are changing and expectations for new services, products, offerings and unique content are evolving rapidly as consumers expect to be given what they want, exactly when and where they want it
• Time & Place Shifting: mobility changes the “when and where” factor for consumer engagement in ways we’ve never seen before – and it’s seemingly just getting started.
• Revenue Model Uncertainty: traditional advertising revenue sources are declining as consumers continue to mass-migrate to online and mobile sources.
• Amount of Data Exploding: demographic and channel segmentation is simply no longer sufficient as real time consumer insights are essential to deliver compelling digital experiences.
• Emerging Markets Growing: it’s time for everyone to think globally. China, for example, is leading the digital charge as they have become a world leader in wired, dial and mobile subscriptions.

Now, let’s consider that Anne Sweeney, President, Disney/ABC Television, said “our global audience will grow by 40 million by the end of this year, to 3.7 billion people – or roughly half of the world’s current population…Digital technology didn’t ‘disrupt’ our business – it transformed it. Digital didn’t weaken the power of television – it unleashed it.”

That’s a powerful and bold statement coming from an industry that is traditionally viewed as being “behind the times.” It seems that’s simply not the case these days… or at least, it shouldn’t be (especially not if you’re a media company that wants to succeed and capture the attention of a consumer audience that is fragmented across so many different channels, devices and choices.)

Given these disruptive forces, M&E executives are focused on enabling better decision-making through customer insights. We’re seeing over 80% of M&E CMOs make significant investments in social media and customer analytics.¹ We’re seeing 4 out 5 M&E CIOs say business intelligence and analytics are an important element for a visionary plan. Finally, we’re seeing 72% of these same CIOs target customer analytics as a “high priority” activity to turn data into intelligence.²

Anne Sweeney went on to state that “you have to understand your content, your organization and your goals, and know how to evaluate the opportunity quickly. At the end of the day, it’s not about us; it’s about what we do for the consumer. Listen and pay attention.”

In 2012, we spoke to dozens of M&E companies who have consistently articulated their customer analytics imperatives. Time and time again, we (as in IBM’s M&E Segment Teams) heard that they have 3 key imperatives:

1. Need to be more analytical in our decision making
2. Need to be more customer-centric
3. Need to understand how to ride the “big data wave”

But, still, customer adoption remains relatively low with only 28% actually piloting or implementing big data activities. A much larger set of 47% are still in the planning stages while a further 24% have not even begun any activities whatsoever.

This is where the era of big data introduces several opportunities for M&E companies to introduce new offerings and improve operational efficiencies. However, the trick is to make sure that you do not try to “boil the ocean” and instead work to identify a key starting point that will show early success. At that point, you can start to invest ahead of scale as the data sets we’re all dealing with today are most certainly not going to shrink tomorrow.

Consider this (easier-said-than-done) equation:

Big Data Sources (STB, 2nd Screen, & Mobile Video Events, Browser Mobile App Activity Logs, Free Text, e.g. Social, Geo-Spatial GPS or IP, 3rd Party Data Feeds, Content Repository Metadata, Video, Images, & Audio, etc.)

+ Big Data Platform Capabilities (Natural Language Processing for Text and Semantic Analytics, Data Fusion & Sensemaking, Entity Integration  for People, Relationships, Events, Content, etc., Massive Scale Predictive Analytics, Massive Scale Machine Learning, Stream Computing, Video Analytics, etc.)

= Big Data Opportunities (Understand Audience Sentiment e.g. movies/TV shows, franchises, or media services, In-Depth, 360 Audience Profiling  for Cross-Channel, Behavioral Segmentation, etc., Predict Audience Behavior e.g. Churn, Purchases, Views, etc., More Precise Audience Targeting for Marketing, Advertising, etc., Enable Multi-Channel Content Personalization, Improve News Discovery, Improve Editorial Scale e.g. dynamic, rules based publishing, etc.)

Across different industry segments, there are different patterns and subsequently different analytics opportunities are emerging. In short: one size does not fit all.

For example, there are pay TV networks that are slower to react with a primary focus on efforts to improving content offerings. Now, they are seeing emerging initiatives on driving 2^nd screen experience and much higher levels of engagement and personalization. Or consider the cable companies that need to improve CRM operational efficiency and churn reduction and therefore they see a strategic opportunity for higher ad sales and monetizing customer interactions (ad sales, up-sell) in order to become more than a pipe provider. I like to call this a transition from “utility” to “lifestyle” (or from “cable” to “cool” depending on how you want to describe it) which suggests a much needed evolution-in-process. And let’s not forget the content publishers that have a need to build direct to consumer models using personalization and need to use audience insight to improve pull marketing efforts.

In my next post, we will explore where most organizations sit in the customer analytics journey and start looking at realistic solution strategies and ways to get started.  You can also join me on April 8th, 10:30 – 11 am, at NAB in Las Vegas, where I will be deep diving into this very subject.

Either way, please stay tuned!

UPDATE: You can read Part 2 of this series – Positioning Up in the Journey to Enhanced Customer Analytics – on IBM’s Big Data Hub. Thanks!

1. 2010 CEO Study Q13: “Which of the following dimensions will you focus on more to realize your strategy in the new economic environment over the next 5 years?”

2. 2011 CIO Study, Q13: “Where will you focus IT to help your organization’s strategy over the next 3 to 5 years?”