This article appears in

the February 2010 issue of

The journal of
high-performance business

Industry Report | Media & Entertainment

 ow to energize
H
your digital revenues
By Marco Vernocchi and Matt Symons

 hile the digital era presents significant opportunities, it also poses

W
serious threats for companies that remain mired in an analog mindset.
The winners will be those that leverage what is unique about the
digital experience: the ability to develop relationships with customers
from the earliest points in the buying cycle.
 NBC Universal CEO Jeff Zucker
once famously dismissed the digiti-
zation of media and entertainment
as having traded “analog dollars for
digital pennies.” Although Zucker
has recently upgraded his assess-
ment (he thinks revenue generation
has now achieved at least the level
of “digital dimes”), companies still
have a long way to go to generate
the kind of revenues one should
expect from digital channels.
To be sure, companies in the media
and entertainment industries have
been among the hardest hit by the
digital revolution. But almost every
company is struggling in some way
with how to leverage digital com-
munications technologies and trans-
late digital capabilities into cash.
Part of the problem is the usual lag
between when new technologies
and offerings are created and when
they are embraced by customers.
But the biggest sticking point by
far is the lukewarm embrace by
many companies of the essential
and distinguishing characteristics
of the digital world.
Too many companies still hold onto
their analog mindsets, which pre-
vents them from leveraging what is
unique about the digital experience:
the ability to develop interactive
relationships with customers, from
the earliest points in the buying
cycle. Without a sustained relation-
ship, companies are left trying to
monetize single website visits, ban-
ner ads and one-off downloads of
mobile applications. But if you can
develop an ongoing dialogue with
customers, then you’re on the path
toward the digital Promised Land.
The digital difference
Unfortunately, most companies have
a long way to go before they will be
able to monetize these relationships.
To this day, many corporate websites
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Outlook 2010
are little more than online versions of
Number 1 analog sales brochures hosted on plat-
forms that are incapable of delivering
a customized, engaging experience.
If companies are to effectively
monetize the digital relationship
with consumers, they must get three
things right.
Engage consumers through relevance
and dialogue. Companies need to
improve their ability to engage and
influence consumers through rel-
evant and timely experiences based
on their interests—engendering
loyalty and profitable behaviors.
This means adopting a truly digital
mindset. The age of push marketing
is behind us. What counts now are
dialogue, engagement and relevance.
Use technology to deliver a custom-
ized digital experience with a more
predictable cost structure. Companies
must adopt more flexible and scalable
technology platforms capable of
creating a tailored experience for
consumers over both online and
mobile channels, and they must do
it with a more predictable cost struc-
ture over time.
Establish revenue models based on
the success of relationship building.
The ability to engage consumers
with relevant and customized expe-
riences becomes, then, the basis for
monetization. Instead of focusing on
inputs such as numbers of banner
ads or page views, companies—
especially media and entertainment
companies—will be able to focus on
relationship-based outcomes: a known
quantity of consumers whose interests
are well understood. Digital chan-
nels that can deliver consumers with
established interests can charge hand-
somely for that capability.
In short, engagement, relevance and
customization lead to longer-term
relationships. And those relationships
are the key to digital monetization.
At the heart of digital technologies
is the potential for delivering unique
 experiences to consumers, as well
as unique capabilities to companies
leveraging digital channels for sales
and marketing purposes. Digital
gives businesses deeper insights into
consumers—their interests, needs
and behaviors—which can then be
translated into compelling, tailored
offerings that create longer-term
relationships.
Try this experiment: Spend a few
minutes on your favorite social
networking site, or on the website of
a digital veteran like Amazon.com.
What do you experience? A site that
knows you by name, and remembers
what kinds of activities you like and
purchases you have made. That makes
recommendations—products you
If you can’t craft a might be interested in, or relationships
and groups that might be a good fit.
relevant and compelling That gives you a slightly different and
experience, people tailored experience every time you go
online, depending on what kinds of
won’t come back. activities you’ve engaged in recently.
Now go to the website of a typical
traditional business. Do you feel
engaged? Are you receiving a
unique experience tailored to your
profile and interests? Does the
website entice you to return to it
several times a day or week?
Probably not.
This is a serious problem for most
companies—especially for those in
media and entertainment or social
networking, whose business models
depend on generating revenues from
consistent online and mobile traf-
fic. The ability of many traditional
companies to engage consumers and
engender customer loyalty lags far
behind more creative and nimbler
websites and marketers. That gap
widens every day as Web and mobile
traffic heads inexorably toward the
sites that know how to do digital well.
So the failure to engage becomes
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Outlook 2010
a self-perpetuating problem when
Number 1 it comes to improving the revenue-
generating potential of digital.
If you can’t craft a relevant and
compelling experience, people
won’t come back. If they don’t come
back, you can’t learn enough about
them to effectively monetize the
relationship. You are then forced to
remain in the world of digital small
change—trying to make money on
sessions, site visits and page views.
The problem is exacerbated by the
fact that most companies are running
their websites and marketing initia-
tives on older systems with inflexible
architectures and incompatible tech-
nologies. These legacy systems make
it difficult if not impossible for brand
managers to execute agile digital
marketing programs that deliver rich
and compelling experiences in a cost-
effective, robust and secure manner.
Engage and influence
The traditional mindset that is
proving to be particularly difficult
for companies to shake during the
transition to digital is push market-
ing—reducing product messages to
a few simple statements and then
getting those messages in front of
as many eyes as possible.
That traditional marketing funnel—
one that moves people through
awareness, to consideration and
purchase of a product, then to the
development of loyalty—severely
limits the opportunities companies
have for dialogue with their custom-
ers (see chart, page 4). Ads simply
push messages out indiscriminately in
a one-size-fits-all model—the source
of the famous line from Philadelphia
department store pioneer John Wa-
namaker: “Half the money I spend on
advertising is wasted; the trouble is,
I don’t know which half.”
Later in the sales process, a sales-
person has a chance to interact with
the consumer during the consider-
ation and purchase phases, but that
dialogue tends to be focused on a few
products, not on the greater brand
Missed opportunities
In the traditional model of push marketing, there is an inverse relationship between the number of consumers moving from
awareness to loyalty (left) and the number of consumers who can be engaged in dialogue (right). Dialogue occurs mostly at
the end of the funnel, where numbers are relatively low. This means traditional approaches, in general, have not been able
to leverage opportunities to engage with consumers and influence choice earlier in the marketing and sales process.
High Low
Awareness
Consideration
Ability to
Number of engage
consumers Purchase consumers
in dialogue
Use
Low Loyalty High
Source: Accenture analysis
value of the company. Ironically, the
biggest opportunity for post-purchase
dialogue arises when a consumer
phones a service center to complain.
The digital world is reshaping that
traditional funnel (see chart, page 5),
broadening it and enabling significant
opportunities—earlier in the mar-
keting and sales process and also
throughout the entire funnel—to inter-
act with consumers, engage them in
dialogue and influence their percep-
tions of products and brands. Every
interaction—even those at the very
earliest stages of awareness—offers
an opportunity to influence choice.
Consider Blendtec, an American
manufacturer of commercial blenders
that supported its entry into the
retail market with a humorous video
campaign called “Will It Blend?” In
the series of videos (more than 84
have now been produced), Blendtec
CEO Tom Dickson adds a variety of
odd things to the blender and turns it
4
Outlook 2010
on. One video from last year featured
Number 1 Dickson adding a number of objects
Awareness
Consideration
Purchase
Use
Loyalty
representing ingredients in the US
federal bank bailout package—paper
money, the entire bailout plan on a
portable memory disk—to the blender
and then turning it on.
The “Will It Blend?” videos became
a viral hit on social networking
sites, and drew more than 60 million
viewers during the campaign’s first
year. But people weren’t just viewing
the videos—they were providing
feedback, sharing the video link
with others and spreading the word
through their social networks.
Blendtec retail sales rose 500 per-
cent in the first year following the
start of the campaign in 2006.
In 2009, YouTube used wide popular
interest in the Super Bowl—and Super
Bowl television commercials—to drive
traffic to its site. To leverage the large
viewing audience and the high level
of engaged interest in both the game
and the ads, YouTube created a popu-
lar offering called “Ad Blitz.” Users
could view the ads online, share and
discuss them with others, and vote
Engagement and dialogue
In the digital world, the traditional marketing funnel is opening up, transforming its shape. More opportunities exist
for dialogue, interaction and engagement throughout the marketing and sales process, even at the awareness and
consideration stages. Embracing this new model for consumer engagement can lead to significant competitive advantage
by establishing long-term consumer relationships that can influence choice and drive more valuable business outcomes.
Awareness
Consideration
Purchase
Use
Loyalty
Source: Accenture analysis
on their favorites. Ad Blitz generated
more than 21 million commercial
views, and more than 2.6 million
votes were cast, giving YouTube a
huge boost in viewership.
The advertisers themselves got an
unexpected bump as well. For a com-
pany like online brokerage E*TRADE
Financial Corp., whose “talking baby”
ads were among the fans’ favorites, the
impact was immediate and signifi-
cant—a 19 percent increase in applica-
tions to open E*TRADE accounts in the
week after the game. Because of the
viral nature of the Web, the E*TRADE
spots achieved such notoriety that on
the Monday following the game, morn-
ing TV shows aired them—as content,
not paid advertising. At no additional
cost, E*TRADE was able to dramatical-
ly increase the value from its (consider-
able) investment in the ads.
It’s a good lesson in the distinctive
value of engagement, influence and
dialogue. The online experience is
a richer, more interactive and more
engaging experience than simply
5
Outlook 2010
watching the football game from
Number 1 an easy chair. For YouTube, the ad
became content that engaged people
online, enabling the portal company
to observe the interactions of people
and then use that knowledge to
build relationships.
The next step would be to make
recommendations about other sport-
ing events, related products and other
television shows that people might
like to see based on their past be-
havior and activity on the website or
social network. Some of those people
will follow those recommendations—
which will make them stay on the site
longer, giving the portal even more
opportunities to understand them and
build relationships. When this starts
to happen, the monetization potential
of the digital world grows.
Customize the experience
Most companies try creative ap-
proaches in an effort to provide a
more engaging online experience for
their customers. In fact, they spend
millions of dollars every couple
of years or so to refresh their Web
presence. Yet they are not able to
reach the required level of dialogue,
interaction and engagement.
 What often happens is that compa-
nies, and the agencies that create a
Web presence on their behalf, focus
on enhancing the look and feel of
the site, instead of on its ability to
engage consumers and customize
a digital experience for them in a
way that will result in repeat visits.
A common constraint here is that
most companies do not have a
technology platform capable of
delivering customized, relevant
and dynamic experiences for their
customer base, especially given
the tremendous pace of change of
Web technologies. What’s needed
Every interaction— is a flexible, reusable platform that
gives a company the ability to run
even those at the analytics on the data generated as
very earliest stages customers interact with the site, and
to easily integrate third-party, syn-
of awareness—offers dicated content as well as content
an opportunity to generated by users themselves.
influence choice. For most companies, such a platform
is only a dream. Many organizations
run branded websites on relatively
inflexible Web 1.0 digital marketing
infrastructures and delivery systems.
More often than not these legacy
systems make it difficult if not
impossible to deliver the kinds of
personalized experiences that then
lead to repeat visits and long-term
relationships. As we’ve seen, those
relationships are the key to monetiz-
ing digital channels and products.
One company looking to move be-
yond these technical restrictions to
deliver more engaging and relevant
digital experiences to its customers
is consumer products giant Procter &
Gamble. By leveraging what Accenture
calls an “intelligent digital platform,”
P&G will now be able to move from a
one-size-fits-all website to a platform
that delivers customized experiences to
consumers, as well as activity reports
and business impact assessments to
company executives.
6
Outlook 2010
In effect, the intelligent digital plat-
Number 1 form will give P&G a website where,
unlike today’s sites, every customer
will see and experience something
slightly different. However, the site
will be managed through a common
and standardized infrastructure, and
a common metadata schema that
manages all content. What consumers
see on one page will depend on what
they did on the previous one and
on their profile—which is based on
knowledge of their behaviors and
preferences gleaned over time.
The website experience will be
highly customized, increasing the
likelihood of delivering relevant
and compelling experiences. And
that in turn presents P&G with the
opportunity to engage in a dialogue
through time with that visitor.
Another way the intelligent digital
platform creates more relevant and
compelling digital experiences is by
giving local and regional managers
the ability to customize and optimize
the website on their own, rather than
being forced through a central, delay-
ing bureaucracy. Regional managers
can add timely information and local
color, increasing the relevance of the
experience for users from that area.
Charge for relationships
How does a new mindset based
on relevance, dialogue and influ-
ence—and a technology platform
capable of delivering customized
experiences—translate into better
monetization strategies? First, if
relevance to users is high, they
are more likely to be willing to
pay for digital experiences through
subscriptions, pay-per-use or
other models.
Second, if consumers are enjoying
a predictable and reliably relevant
experience, then marketers can
make bolder promises, which can
push digital marketing toward a
more mature development phase.
Part of the analog thinking that still
pervades sales and marketing has to
 do with pricing models. It’s been more
than 15 years since the appearance
of the first online display ad, and of
pricing models based on the number
of people viewing those ads. But that’s
really the same pricing model as pay-
ing for a newspaper ad insertion; it
simply substitutes the cost of showing
a Web page for the cost of showing
a newspaper page (independent of
whether or not the user/reader actu-
ally pays attention to the ad).
In a world where organizations are
focused on creating relationships,
however, the pricing models can
change dramatically.
In a world where
To understand the potential of digital
organizations are to dramatically change the nature
focused on creating of the game, consider the following
scenario enabled by digital technolo-
relationships, the gies. A major media outlet establishes
pricing models can the capability to engage in dialogue
with visitors to the “Lifestyle Im-
change dramatically. provement” section of its newspaper
or magazine site. The company uses
the automated analytics capabilities
of its intelligent digital platform to
observe the content a visitor engages
with during a visit, and also where
that visitor goes next.
The site begins to make recommenda-
tions to the person based on those be-
haviors—a blog or video, for example,
or other related content and channels.
It enables the person to connect with
other users with similar interests
through a social networking capabil-
ity. Over time, as that person returns
to the site—because it is relevant to his
or her needs and interests—a relation-
ship develops between the channel
and the consumer.
When the person begins to show
increased interest in articles and
other content related to, say, kitchen
remodeling, things really get interest-
ing. At this point, what kind of price
can the media channel charge for an
ad for kitchen remodeling for that
7
Outlook 2010
consumer? A lot more than for
Number 1 a banner ad being pushed out indis-
criminately to thousands of consum-
ers whose interests are not known.
This kind of capability ushers in an age
of what we call “performance mar-
keting.” A channel with that type of
capability can then begin pricing
its advertising based on certain perfor-
mance outcomes promised to clients on
a campaign-by-campaign basis.
This trend, which initially developed
in the direct-response community, is
now finding its way into the media
planning budgets of some of the larg-
est brand marketers on the planet.
The Coca-Cola Co., for example, has
announced it will no longer pay its
advertising agencies by the hour or
based on fixed fees but instead only
for achieved results.
Such results or outcomes—topline
sales numbers, share of wallet, cus-
tomer retention and so forth—would
vary based on the company’s inten-
tions, market and needs, and that is
precisely the point. Marketers can
work with media and entertainment
channels to define the outcomes they
desire, and then establish pricing
models based on whether those out-
comes are achieved.
Certainly this raises the bar consider-
ably for the media and entertainment
companies over whose channels these
marketing campaigns are conducted.
It will require far more sophisticated
analytics capabilities, for example,
than most media companies currently
possess.
On the other hand, it will be a distinc-
tive competitive advantage to a media
company to be able to tell a marketer,
“Let’s work together to precisely
define the outcomes you are looking
for; then you will pay only if we help
you achieve that desired outcome.”
This approach can also improve the
effectiveness of marketers because
it forces them to think more clearly
about business objectives that drive
desired results.
Endangered species
Consumer experiences and marketing that are not relevant to the user will face accelerated extinction. Product/
service success stories represent a more compelling model. The most effective form of digital monetization,
however will come from the ability to create long-term relationships through highly relevant offerings and
experiences, which then enable a company to guarantee outcomes to marketers trying to reach those consumers.

High

Accelerated Effective digital

extinction monetization

Ability to deliver
desired business
outcomes to marketer

Product/service
No game
success stories

Low High

Perceived relevance to consumer

Source: Accenture analysis

While the digital era presents significant opportunities, it also poses serious
threats, especially to companies that remain mired in analog mindsets. Com-
panies of all types that survive and thrive will be those able to engage cus-
tomers with relevant information and offers, encouraging long-term dialogue
and deeper relationships. New kinds of technology platforms and capabilities
will enable them to build these relationships.

When it comes to the media and entertainment companies providing the digital
channels, the winners will be those that successfully migrate to a performance-
or outcome-centric monetization model. They will be able to identify how to
develop, distribute and sustain digital relationships with their customers. They
will devise ways to forge focused and accountable partnerships with marketers
to present more relevant and compelling advertising propositions founded on a
much deeper, more data-driven understanding of their consumers’ preferences
and interests, learned and developed through time.

Marketers will pay digital dollars, not just digital pennies, to publishers
able to identify specific target audiences at discrete phases of the purchase
consideration process and who have a clear interest in a particular category
and service. More generally, the digital age will have truly arrived when
companies have learned to create engaging, customized and relevant online
and mobile experiences for consumers.
8
Outlook 2010
Successfully building these kinds of consumer relationships will be critical to
Number 1 any company that wants to make money in the digital age.
 For further reading
“Where have all the ads gone?”
Outlook, May 2008
For these and other articles, please
visit accenture.com/Outlook
About the authors
Marco Vernocchi is the global managing
director for Accenture’s Media &
Entertainment group. He has nearly 20
years of experience helping companies
develop business transformation strategy
and execution programs at both the
country and multinational level. Mr.
Vernocchi, who is based in Milan, has
worked with clients in the broadcast,
publishing and portal industries. In his
global role, Mr. Vernocchi helps clients
with the evolving role of the digital
consumer, the challenge of finding
new monetization models, and the
effectiveness of the digital supply chain
in their search for high performance.

marco.vernocchi@accenture.com

Matt Symons is the chief strategy lead

for Accenture Interactive, a business
that helps companies develop world-class
digital marketing capabilities. With
more than 15 years’ experience working
in digital technology development
and Web business commercialization,
Outlook is published by Accenture. Mr. Symons specializes in large-scale
© 2010 Accenture. digital transformation projects spanning
All rights reserved. marketing strategy, campaign manage-
ment and intelligent digital platforms.
The views and opinions in this article He holds a number of patents in the
should not be viewed as professional
advice with respect to your business. area of optimization process and design.
Mr. Symons is based in San Francisco.
Accenture, its logo, and
High Performance Delivered matthew.symons@accenture.com
are trademarks of Accenture.

The use herein of trademarks that may

be owned by others is not an assertion
of ownership of such trademarks by
Accenture nor intended to imply an
association between Accenture and the
lawful owners of such trademarks.

For more information about Accenture,

please visit www.accenture.com

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Outlook 2010
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