Transformation Through Big Data
By Charles W. Stryker
VDC Connect was an event organized by Venture Development Center at the Time, Inc. headquarters in lower Manhattan. This event was an opportunity to bring together top information industry leaders who are embracing the development of Big Data initiatives in their companies. The first panel discussion focused on the transformational experiences of three leading media companies. Each company was represented by the C-level executive with the responsibility to grow their company through the use of Big Data strategies.
Three themes emerged from the first panel. The first was “Transformation”. Each panel participant is intimately involved in a transformational change in their company. Secondly, each panelist recognized that he was witnessing a culture change surrounding the company’s transformation. Finally, the presenters agreed that the use of Big Data analytics was central to the success of the transformation.
The first presenter was Joe Ripp, Executive Chairman of Time, Inc. We asked Joe to talk about his experiences bringing a transformational change to Time, Inc., one of the largest and comprised of many of the most recognizable print medium brands in the world (People, Time, InStyle, Sports Illustrated, etc.).
Joe explained the background behind Time’s decision to embark on a Big Data strategy. He said that the Company needed to find a way to answer advertisers who were demanding more and more information about the effectiveness of their ads. Joe explained that traditional magazine publishers can’t measure advertising effectiveness accurately. “The advertisers were demanding answers: ‘How effective was my ad? Did it change the perception of my brand? Am I getting reasonable return for my investment?’
“Those questions are radically transforming the whole media landscape. Billions of dollars are being diverted into new types of media, not because they’re better, but because they can measure better.” Joe was convinced that Time Inc had to adapt, to transform itself into a modern, relevant, digital media company that could compete and succeed in the 21st Century.
“Transformation is very hard!” said Joe Ripp. “You must ask yourself, ‘Do you have a culture of transformation and do you have a culture of change?’ If you don’t, you’re going to fail!”
Joe’s conviction about embracing change is compelling. As he put it, “Culture trumps strategy every day of the week. You must make sure that if you’re in the organization, accepting change is imperative. If someone cautions, ‘We don’t do it that way’, you have a problem. If you look around the corner and say, ‘That’s not going to affect us’, then you have a problem. If you have an organization that’s telling you why it won’t work, then you have a problem. You need to have an organization that’s embracing all the things that are different and move forward.
“You used to look forward and see competitors coming at you five years out, seven years out. Now you look out thirty days and can’t see them coming at you. So you have to be prepared and understand that disruption is going to be an everyday event. And you must build the kind of culture-based organization that’s not fearful of that but embraces it and understands it. It’s an exciting time to embrace change. If you get that right, then transformation can happen.”
“For Time Inc., the next big thing is the whole distributed content world. We will produce 40,000 videos this year. But for us and all major media companies, the challenge is customer attention. The average attention span of a human being right now is 7 seconds. The average attention span of a goldfish is 8. So the problem that media companies have is, how do you break through that clutter? The thing that makes it even more challenging is people are being distracted by devices all the time. Digital distraction is a real problem for media companies. How do you break through that clutter? And, as we’re trying to engage our consumers, how do we know my ad is getting through? There’s more clutter in advertising going on now than ever before in the history of man. So advertisers are asking questions like how much engagement was there? Was the ad actually viewable? Was it viewed by a bot or not?”
Following Joe Ripp was Mark Roszkowski. Mark is Senior Vice President and Head of Corporate Development, Strategy & Strategic Partnerships at AOL. Mark has been at the center of Verizon’s acquisition of AOL and he has been actively managing that merger. Mark is now in the center of completing AOL’s acquisition of Yahoo. The combined companies will have over 1 billion active users and a global digital delivery network and financial capacity of Verizon.
Mark described the transformational nature of the thinking that was essential to getting the acquisitions right. “We had a strong belief that content was a key attractor and builder of audiences and communities but, over time, we felt that it was important to supplement and / or support that content delivery with platforms that enabled distribution, personalization, engagement and monetization. Ultimately that’s all underpinned by insights that are driven from data.
“The transition we’re on is content oriented. Content has become commoditized to some extent and we believe we can enable not only ourselves to build great brands and promote those brands globally, but leveraging our platform to then help other brands build their businesses globally on our platform of great tools, technology and data that we can bring to the table. There’s a massive opportunity bringing together great content, massive distribution and great data that personalizes, engages, and hopefully monetizes consumers. But first and foremost you have to figure out what data do you actually have. Is it useful? Where does it sit? Is it silent?
“We’re investing in the Internet of Things, the combination of mobile connectivity and sensors that essentially pulls data from anything that you can imagine. You can think about the connected house, all the data that’s being developed through consumer interactions with dishwashers or refrigerators or stereo systems or media devices within the household. Ultimately, as you leverage all that data, we see the intersection of what we call conversational user experiences leveraging the device in your pocket. We look at your device such that the combination of all the data and artificial intelligence we provide will be able to drive what we would call notification. The machine that’s going to think for you and predict for you and notify you of where you need to be, why you need to be there. It will tell you you’re out of paper towels. Then the paper towels are just going to show up on your front doorstep. You get a text and click to accept the purchase.
“We’re still spending too much time in front of the TV. Driving towards addressability is huge. It dictates efficacy, whether you call it contribution or ‘controversion’. The point is that addressability allows you to measure impact.
“It’s going to be a really interesting time for the next 25 years.”
The final panellist for the session was Matt Marolda, Chief Analytics Officer of Legendary Entertainment. Legendary is known for the movies it produces, such as Jurassic World, Straight Outta Compton, Godzilla or The Dark Knight trilogy, to name a few.
When the CEO of Legendary made a commitment to transform the way film is developed, created and marketed using Data and Analytics, he called on Matt. Matt previously was the founder of StratBridge where he created an analytics platform for sports teams to make better decisions about player acquisition, game preparation, and in-game strategies and tactics.
As Matt explained it, “If we can use data analytics to reduce media spend by being more efficient and more targeted, then that’s a material impact for our business. It goes right to our bottom line. It begs the question of what other benefits can come from analytics. What films should we produce? How should we cast them? What are the optimum release dates? Previously, all these questions used a very intuition based approach. Using analytics, then, we’ve provided answers to all those key business questions and others as well.
“We’re trying to take the data that we have and drive towards informed action, whether it’s a decision or a marketing intervention. And the crux of it all is being able to understand people on a fundamental level which means on an individual level. That approach impacts everything we do.
“When it comes to the marketing side of things, data for us is all about trying to understand people at a microscopic level to deliver the right message at the right time. We strive to do it with precision so we can tailor creative to impact what messages we serve to what segments of people really down to groups of hundreds.
“We don’t want to treat customers as a monolithic audience. We look at them as a collection of many segmented groups. That way, we can tweak the creative to be much more targeted.
“So data is the currency for us in all those actions and without that data, we wouldn’t be able to get that precision.
“My challenge was that as soon as I walked into Legendary, more or less the first day, I had to deal with people who are very creative. Their jobs were to make movies and tell stories. While I was about to enable them with the ability to have data infused into everything, natural and understandable trepidation existed.
“My analogy was with sports. I explained there was never a point in which analytics created a player. But analytics always tried to put the player in the best position to succeed. And so that attitude enabled the data to actually become a viable part of our strategy at Legendary. I think that without that attitude, there would have been rejection from the beginning. The challenge is always to treat the data with respect. The key is once you have corporate cognisance about the power of data, then you are able to fold it into the rest of the business in a way that’s not intimidating and not threatening. That way everyone in the organization can actually realize its potential.”
All three executives who framed their individual experiences transforming culture within challenging corporate environments represent the disruptive kind of thinking that is propelling Big Data Analytics into the center of corporate growth strategies for the future.