Evolution of the Communications Model

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Class Slides: Changing Media Landscape

Over the years companies have used various media to target their audiences with their marketing messages. The following table outlines the key attributes of each medium, and compares each of them to the web.

This helps explain why the web, and mobile, can be a more efficient marketing medium for businesses. This provides two core advantages, which will represent key themes for the remainder of the course:

Comparing the Web, and Mobile, with traditional media
Media Cont. Int. Comm. model Linear Obtrusive Control Presentation Reach Flex. Scalable Geo-Specific Transactional Community / Social Analytics Business Apps. Publishability Spam
Billboard N 1 to many L Y N P S N Local N N N A Marketer (Rent) N
Newspaper N 1 to many L Y Y P Q N Regional N N N A Media, Marketer (Rent) N
Magazines N 1 to many L Y Y P Q N Regional N N N A Media, Marketer (Rent) N
Direct Mail N 1 to many L Y Y P Q N Regional N N N A Marketer Y
Radio N 1 to many L Y N A S N Regional N N N A Media, Marketer (Rent) N
T.V. N 1 to many L Y N AV Q N Regional N N N A Media, Marketer (Rent) N
WWW Y 1 to 1, many to many N N Y MM F Y (owned) 1-1 Fixed Y Y Y A, CS, PR, TR Media, Marketer (Own, Rent), Consumer (Earn) Y
Mobile Y 1 to 1, many to many N N Y MM G Y 1-1 mobile Y Y Y A, CS, PR, TR Media, Marketer (Own, Rent), Consumer (Earn) Y
Table key:
Cont. Int.: N (no interactivity) Y (interactivity)
Refers to the interactivity of the content delivered by the medium, not interactivity between medium and user.
Comm. Model: 1 to many (mass marketing), 1 to 1 (mass customization)
Comm. Model refers to the communications model.
Linear: L (Linear), N (Non Linear)
This refers to the method/flow in which the user can process the information.
Obtrusive: N (unobtrusive) Y (obtrusive)
Refers to whether the medium pushes (obtrusive) the message to the consumer, or the consumer pulls (unobtrusive) the information.
Control: N (no consumer control) Y (consumer control)
Presentation: P (Print), A (Audio), V (Video), MM (Multi-media---includes A, V and P and is interactive)
This refers to the media available to represent the information.
Reach Flex.: S (no flexiblilty) Q (moderate flexibility) F (determined by customer) G (customer's location is flexible)
This refers to the ability to use the medium to cover breadths of marketplaces (i.e., local, regional, national and/or international, simultaneously).
Scalable: Y (yes), N (no)
Scalable refers to the marginal cost and ability of increasing the audience size that is exposed to the message.
Transactional: Y (yes), N (no)
This refers to the ability to use the media to execute transactions directly.
Community: Y (yes), N (no)
This refers to the ability of the medium to foster community.
Analytics: Y (yes), N (no)
This refers to the medium providing direct data from its consumers
Business Apps. A (Advertising), CS (Customer Service), PR (Public Relations), TR (Transactions)
This refers to the ability of the media to perform business goals.
Publishability Media, Marketer, Consumer
This refers to who is able to publish information via each type of medium. Consumer publishing is increasing on WWW via social media. The web is the only medium that allows marketers to own their own space.
Spam: Y (yes), N (no)
This refers to the medium's exposure to spam. Note, spam is a distinct problem with e-mail at this time, this can be overcome by the use of RSS feeds (organizations distributing dynamic content directly to subscribers via their aggregated news program).

Traditional Communications Model
The following illustrates the basic communications model of traditional media. Note the indirect feedback loop, and an assumption of reaching the right audience.

------------------------->Communication flow

Marketer--------Medium----------Target Audience
   ^                                  |
   |                                  |
   |                                  |
   |          Feedback                |

<-------------------------Communication flow

WWW Communications Model
The following is the communications model that is emerging with the web. Note consumers each have direct interactivity with the company and the web, and EACH other.

                       ---->---<----Customer C-->
                      /             |           |
                     /              |           |
Marketer-->---<-----WWW---->---<----Customer A  | 
                     \              |           |
                      \             |           | 
                       ---->---<----Customer B-->

Communication flow is from:
  • Marketer to WWW
  • Customer to WWW
  • WWW is now personalized, as a result of algorithms
  • Customer to Marketer (via Email)
  • Marketer to Customer
  • Customer to Customer
  • Impact on Communications

    1. Telegraph
    2. Telephone
    3. Internet

    Telcos, businesses threatened by VOIP, messaging services over the web, which are now beginning to include voice.

    Internet provided by telcos, and cable companies

    History of Advertising, and its relationship with Media

    Media Reaction to the Internet and Mobile Disruption

    Should we welcome the 'Buzzfeed-ification' of journalism?
    NYT Innovation Report, 3/14
    Guardian's Known Strategy

    The changing media landscape, as a result of the internet and mobile adotpion, is similar to the changing retail landscape. The internet and mobile has disrupted traditional media much like it has disrupted traditional retail.

    Phase 1: add web-site while bleeding traffic and advertising dollars
    Phase 2: more considered "omnichannel" strategy (media and retail) includes a mobile strategy:

    A pure focus on Journalism to a three-pronged focus:


    1. Traditionally mature monopolistic business; cultural inertia resists change, significant legacy systems
    2. Advertising dollars heavily subsidize media
    3. Advertising dollars are finite, and account for a fixed proportion of GDP (3-5%)
    4. A new channel (digital) has emerged, advertising dollars will shift from traditional media to the new medium.

    5. PR on the Internet, especially Social Media will require investment (marketers have more control with direct channel)
    6. PR on Social Media may reduce overall advertising investment needs

    7. By the end of 2012 digital became the second medium, behind only TV, in terms of advertising dollars: Why Digital Is Grabbing a Bigger Share of Consumer Product Budgets
    8. Print media struggles to survive (Washington Post, Boston Globe, Newsweek etc.) Fashion Mags Buoy Print's Uneven 2013
    9. Mobile is now becoming an increasing part of digital

    10. Media companies will also shift, to account for some of those advertising dollars; new media companies (pure plays) emerge to take a portion of those dollars (Google: earnings $36 bn in 2011, $50bn 2012.), Buzzfeed, Facebook
      fashion and youth magazines are leading the publishing industry to a brighter future
    11. Traditional Print (Time) and TV (CNN / BBC) will go head to head for audience in digital, along with "Digital First" pure plays (Google News): Competition convergence
    12. Cost structure: Fixed costs versus variable costs, competition pushes prices to zero
    13. Integration across media is important for marketers and media organizations

    14. Hyper personalization (algorithms) versus serendipity (The Filter Bubble: Algorithm vs. Curator & the Value of Serendipity)
      Itís time to engineer some filter failure (echo chamber effect)
    15. Data versus editors

    Print: Advertising dollars continue to shift online: Changing business model

    1. Classified ads have shifted online (Craigslist for example)
    2. Subscriptions reduce as readers move online
    3. $1 gained online, $7 lost in print advertising revenue
    4. Print revenue is x11 greater than online revenue
    5. Industry revenue dropped 50% in a decade
    6. Consumers have access to an abundance of free content (zero marginal cost), online (costs are fixed, not variable)
    7. Convergence of traditional media to Internet (your TV, your newspaper, your magazine)
    8. Impact on small, local papers, not as significant as large
    9. Will change accelerate demise, disenfranchise core customers, JCP?

    10. Change business model:
      • Add internet as a channel, include a mobile strategy
      • Paywalls (different models to generate subscriptions $s online), all access; metered (Rising Paywalls Are Already Paying Off for Publishers)
        Google hack: copy the title of the piece in Google (works for WSJ, Adage)
      • Guardian's Open Strategy, seeking membership
      • Better monetize data
      • Use data to drive content strategy
      • Redesign offline content, change editorial model
      • Editorial focus on key strengths
      • Change print schedule of offline materials
      • Shift to Smart advertising
      • Add new revenue streams (Guardian)

    11. Buzzfeed, reddit, digg
    12. The Plan Behind Newsweek's Return to Print: Charge Readers More Than Before
      Time Mag Rolls Out Web Redesign as Newsweek Returns to Print
    Broadcast: Advertising dollars still strong with TV, but the future is less certain
    1. Add internet channel, include a mobile strategy
    2. Continued fragmentation (cable, satellite etc., growth slowing, internet TV)
    3. User Shift to devices

    4. Linear TV to Internet TV (House of Cards example)
    5. Netflix, YouTube, Hulu, Amazon Prime, and other pure play offerings, with original programming
    6. Net neutrality issues: Comcast and Netflix agreement
    7. Use data to drive content strategy
    8. Internet TV was the big loser on Oscar night
    9. Netflix and YouTube Dominate Downstream Bandwidth, Fixed and Mobile
    10. Netflix Is Hot. The Competition Is Not. Yet
    11. With its original shows so far, Amazon is no alpha
    12. Dish Disney, Internet TV deal
    13. Pay-TV Subscriber Growth Slows at Dish
    14. Massive cable deal would make Comcast too powerful for some (Comcast Time Warner Cable)
    15. Internet streaming to TV: