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Accenture Outlook: How to Energize Your Digital Revenues

Accenture Outlook: How to Energize Your Digital Revenues

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Published by Accenture
While the digital era presents significant opportunities, it also poses 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.
While the digital era presents significant opportunities, it also poses 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.

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Published by: Accenture on Sep 17, 2010
Copyright:Attribution Non-commercial


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Industry Report | Media & Entertainment
How to energize your digital revenues
By Marco Vernocchi and Matt Symons
While the digital era presents signiicant opportunities, it also posesserious threats or companies that remain mired in an analog mindset.The winners will be those that leverage what is unique about thedigital experience: the ability to develop relationships with customersrom the earliest points in the buying cycle.
The journal o high-perormance business
This article appears inthe February 2010 issue of 
Outlook 2010
Number 1
NBC Universal CEO Je Zucker once amously dismissed the digiti-zation o media and entertainmentas having traded “analog dollars or digital pennies.” Although Zucker has recently upgraded his assess-ment (he thinks revenue generationhas now achieved at least the levelo “digital dimes”), companies stillhave a long way to go to generatethe kind o revenues one shouldexpect rom digital channels.To be sure, companies in the mediaand entertainment industries havebeen among the hardest hit by thedigital revolution. But almost everycompany is struggling in some waywith how to leverage digital com-munications technologies and trans-late digital capabilities into cash.Part o the problem is the usual lagbetween when new technologiesand oerings are created and whenthey are embraced by customers.But the biggest sticking point byar is the lukewarm embrace bymany companies o the essentialand distinguishing characteristicso the digital world.Too many companies still hold ontotheir analog mindsets, which pre- vents them rom leveraging what isunique about the digital experience:the ability to develop interactiverelationships with customers, romthe earliest points in the buyingcycle. Without a sustained relation-ship, companies are let trying tomonetize single website visits, ban-ner ads and one-o downloads o mobile applications. But i you candevelop an ongoing dialogue withcustomers, then you’re on the pathtoward the digital Promised Land.
The digital difference
Unortunately, most companies havea long way to go beore they will beable to monetize these relationships.To this day, many corporate websitesare little more than online versions o analog sales brochures hosted on plat-orms that are incapable o deliveringa customized, engaging experience.I companies are to eectivelymonetize the digital relationshipwith consumers, they must get threethings right.
Engage consumers through relevanceand dialogue.
Companies need toimprove their ability to engage andinuence consumers through rel-evant and timely experiences basedon their interests—engenderingloyalty and proftable behaviors.This means adopting a truly digitalmindset. The age o push marketingis behind us. What counts now aredialogue, engagement and relevance.
 Use technology to deliver a custom-ized digital experience with a morepredictable cost structure.
Companiesmust adopt more exible and scalabletechnology platorms capable o creating a tailored experience or consumers over both online andmobile channels, and they must doit with a more predictable cost struc-ture over time.
Establish revenue models based onthe success o relationship building.
 The ability to engage consumerswith relevant and customized expe-riences becomes, then, the basis or monetization. Instead o ocusing oninputs such as numbers o banner ads or page views, companies—especially media and entertainmentcompanies—will be able to ocus onrelationship-based outcomes: a knownquantity o consumers whose interestsare well understood. Digital chan-nels that can deliver consumers withestablished interests can charge hand-somely or that capability.In short, engagement, relevance andcustomization lead to longer-termrelationships. And those relationshipsare the key to digital monetization. At the heart o digital technologiesis the potential or delivering unique
Outlook 2010
Number 1
generating potential o digital.I you can’t crat a relevant andcompelling experience, peoplewon’t come back. I they don’t comeback, you can’t learn enough aboutthem to eectively monetize therelationship. You are then orced toremain in the world o digital smallchange—trying to make money onsessions, site visits and page views.The problem is exacerbated by theact that most companies are runningtheir websites and marketing initia-tives on older systems with inexiblearchitectures and incompatible tech-nologies. These legacy systems makeit difcult i not impossible or brandmanagers to execute agile digitalmarketing programs that deliver richand compelling experiences in a cost-eective, robust and secure manner.
Engage and infuence
The traditional mindset that isproving to be particularly difcultor companies to shake during thetransition to digital is push market-ing—reducing product messages toa ew simple statements and thengetting those messages in ront o as many eyes as possible.That traditional marketing unnel—one that moves people throughawareness, to consideration andpurchase o a product, then to thedevelopment o loyalty—severelylimits the opportunities companieshave or dialogue with their custom-ers (see chart, page 4). Ads simplypush messages out indiscriminately ina one-size-fts-all model—the sourceo the amous line rom Philadelphiadepartment store pioneer John Wa-namaker: “Hal the money I spend onadvertising is wasted; the trouble is,I don’t know which hal.”Later in the sales process, a sales-person has a chance to interact withthe consumer during the consider-ation and purchase phases, but thatdialogue tends to be ocused on a ewproducts, not on the greater brandexperiences to consumers, as wellas unique capabilities to companiesleveraging digital channels or salesand marketing purposes. Digitalgives businesses deeper insights intoconsumers—their interests, needsand behaviors—which can then betranslated into compelling, tailoredoerings that create longer-termrelationships.Try this experiment: Spend a ewminutes on your avorite socialnetworking site, or on the website o a digital veteran like Amazon.com. What do you experience? A site thatknows you by name, and rememberswhat kinds o activities you like andpurchases you have made. That makesrecommendations—products youmight be interested in, or relationshipsand groups that might be a good ft.That gives you a slightly dierent andtailored experience every time you goonline, depending on what kinds o activities you’ve engaged in recently.Now go to the website o a typicaltraditional business. Do you eelengaged? Are you receiving aunique experience tailored to your profle and interests? Does thewebsite entice you to return to itseveral times a day or week?Probably not.This is a serious problem or mostcompanies—especially or those inmedia and entertainment or socialnetworking, whose business modelsdepend on generating revenues romconsistent online and mobile tra-fc. The ability o many traditionalcompanies to engage consumers andengender customer loyalty lags ar behind more creative and nimbler websites and marketers. That gapwidens every day as Web and mobiletrafc heads inexorably toward thesites that know how to do digital well.So the ailure to engage becomesa sel-perpetuating problem whenit comes to improving the revenue-
I you can’t crat arelevant and compellingexperience, peoplewon’t come back.

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