Presentation given to the Club of Amsterdam on 29 October 2009 in Pakhuis De Zwijger in Amsterdam.

1. THE FOLLOWING PRESENTATION HAS BEEN APPROVED FOR
RESTRICTED AUDIENCES ONLY
BY THE CLUB OF AMSTERDAM
THE FEATURED PRESENTATION HAS BEEN RATED
PG6+ AD PEOPLE STRONGLY CAUTIONED
Some Material May Be Found Offensive For Traditional Ad People
CONTAINS HALF-TRUTHS, HUMOR, HARSH LANGUAGE
AND A SUBJECTIVE VISIONARY PERSPECTIVE
www.brandedchannels.com www.clubofamsterdam.com

2. FROM
TRADITIONAL MEDIA
TO
NETWORKED MEDIA

3. THE FUTURE OF ADVERTISING
“Half the money I spend on
advertising is wasted …

4. THE FUTURE OF ADVERTISING
“Half the money I spend on
advertising is wasted … … the trouble is I don't know
which half.”

5. JOHN WANAMAKER
US DEPARTMENT STORE MERCHANT
(1838 - 1922)
• Retail innovator
– “Fixed price and goods returnable”

6. JOHN WANAMAKER
US DEPARTMENT STORE MERCHANT
(1838 - 1922)
• Retail innovator
– “Fixed price and goods returnable”
– First department store in Philadelphia

7. JOHN WANAMAKER
US DEPARTMENT STORE MERCHANT
(1838 - 1922)
• Retail innovator
– “Fixed price and goods returnable”
– First department store in Philadelphia
– Contributor to campaign for
Mother’s Day

8. JOHN WANAMAKER
US DEPARTMENT STORE MERCHANT
(1838 - 1922)
• Retail innovator
– “Fixed price and goods returnable”
– First department store in Philadelphia
– Contributor to campaign for
Mother’s Day
• Father of modern advertising

9. TV ADVERTISING TODAY
EUR 855 million ad spend
on Television in 2008 ...

10. TV ADVERTISING TODAY
EUR 855 million ad spend
on Television in 2008 ... … so EUR 427.5 million is
wasted!?

11. TV ADVERTISING TODAY
Q: (How) do we know?

12. TV ADVERTISING TODAY
Q: (How) do we know? A: We don’t

13. A RATINGS TALE

14. A RATINGS TALE
14-16.4 2-10
• Dutch population growth 1980-2008 • Growth of national TV channels
• From 5 to 7.2 million Dutch households between 1989-2006
• Single households now 34%
260
240
220
200
180 Population
160 Households
140
Single Households
120
100 • + special interest + international
+ digital channels: 60-90 channels

15. RATINGS = BASIS FOR AD SPEND
1280/2900
• Households/participants determine
what ALL of us watch
• 0,017% of Dutch Households/Population
• Every participant represents 5,655
others

16. RATINGS = BASIS FOR AD SPEND
1280/2900 855
• Households/participants determine • Million Euro is spent on TV
what ALL of us watch Advertising in the Netherlands
• 0,017% of Dutch Households/Population
• Every participant represents 5,655 • That’s Eur 294.827 per participant
others (and they get paid Eur 22,50 pp per year)

17. TV ADVERTISING TODAY
I don’t buy it …

18. TV ADVERTISING TODAY
I don’t buy it … (Why) do you?

19. TV ADVERTISING TODAY
I don’t buy it … (Why) do you?
Do we really want better
measurement?

20. TV ADVERTISING TODAY
I don’t buy it … (Why) do you?
Do we really want better Or are we too afraid of the
measurement? real results?

21. NETWORKED MEDIA

22. ARE WE STILL WATCHING TV?
PROLIFERATION OF MEDIA BETTER MEASUREMENT
1. (New) technology 1. WTSIWYG
2. Changing consumer behaviour 2. Online/mobile vs mass media

23. ONLINE VERSUS MASS MEDIA
2001
• Internet boom  Internet bust
• Unrealistic expectations
• Too much money around

24. ONLINE VERSUS MASS MEDIA
2001
• Internet boom  Internet bust
• Unrealistic expectations
• Too much money around
2003-2008
• Reinventing the web: user-centric
• Web 2.0, social networking

25. ONLINE VERSUS MASS MEDIA
2001
• Internet boom  Internet bust
• Unrealistic expectations
• Too much money around
2003-2008 2003-2008
• Reinventing the web: user-centric • Business-as-usual
• Web 2.0, social networking • No better measurement methods

26. ONLINE VERSUS MASS MEDIA
2001 2009
• Internet boom  Internet bust • Screaming need for accountability
• Unrealistic expectations • Advertisers are shifting budget
• Too much money around towards online & mobile
2003-2008 2003-2008
• Reinventing the web: user-centric • Business-as-usual
• Web 2.0, social networking • No better measurement methods

27. GENERATION NEXT IS HERE
ON DEMAND MEDIA
• Why wait when you can see it now?
Coen & Maud

28. A BRAVE NEW WORLD
Analogue Digital
Interruption Permission
Few channels Many channels
Limited choice Unlimited choice
Linear content Content on demand
Broadcaster in control User in control

29. NETWORKED MEDIA MODEL
FUSION OF DIALOGUE & BROADCASTING
+
Transmitter
Receiver
Dialogue (1-to-1)

30. NETWORKED MEDIA MODEL
FUSION OF DIALOGUE & BROADCASTING
+ =
Transmitter Transmitter
Receiver Rec. 1 Rec. 2 Rec. 3 Rec. n…
Dialogue (1-to-1) Broadcasting

31. NETWORKED MEDIA MODEL
FUSION OF DIALOGUE & BROADCASTING
+ =
Content & context
Transmitter Transmitter
organiser
Receiver Rec. 1 Rec. 2 Rec. 3 Rec. n… User 1 User 2
Dialogue (1-to-1) Broadcasting Networked media model

32. TRADITIONAL AD AGENCIES

33. WHY DO ADVERTISERS HIRE AD AGENCIES?
• Creativity?
• Strategic insight?
• Account Management Skills?

34. Account manager
Grey guy/board member (Eur 140 an hour) Traffic/project mgr
(Comes in to say hello) (Eur 120 an hour)
Strange guy
(Fixes the door)
Account director
Jr. account executive (Eur 180 an hour) Sr. Art director
(Eur 100 an hour) (Eur 180 an hour)
Sr. copywriter
(Eur 180 an hour)
The client
(gets charged Eur 900 an hour) Scene from “Mad Men”

35. ANSWER = RISK REDUCTION!
Because we don’t know (for sure), we hire someone who is
• Ad business = Risky business!
• Possible outcomes

36. ANSWER = RISK REDUCTION!
Because we don’t know (for sure), we hire someone who is
• Ad business = Risky business!
• Possible outcomes
It sucks Client has been ill-advised Change of agency

37. ANSWER = RISK REDUCTION!
Because we don’t know (for sure), we hire someone who is
• Ad business = Risky business!
• Possible outcomes
It sucks Client has been ill-advised Change of agency
It rulez Client takes all the credit
Review/Pitch
Client is promoted New client
Agency stays

38. ANSWER = RISK REDUCTION!
Because we don’t know (for sure), we hire someone who is
• Ad business = Risky business!
• Possible outcomes
It sucks Client has been ill-advised Change of agency
It rulez Client takes all the credit
Review/Pitch
Client is promoted New client
Client stays Totally happy Agency stays

39. ANSWER = RISK REDUCTION!
Because we don’t know (for sure), we hire someone who is
• Ad business = Risky business!
• Possible outcomes
It sucks Client has been ill-advised Change of agency
It rulez Client takes all the credit
Review/Pitch
Client is promoted New client
Client stays Totally happy Agency stays
Gets nervous

40. IS IT ALL BAD?
NO

41. IS IT ALL BAD?
ADVERTISING STILL IS
NO THE MOST FUN BUSINESS
TO BE IN

42. AGENCIES MISSING THE BOAT?

43. GROWTH MARKETS
ONLINE/MOBILE
• Technology skills
• User interaction
• Think & act campaigns,
versus channels & relationships
• Eur 159.6 mln in 2008 in online
advertising
Source: IAB.nl

44. GROWTH MARKETS
ONLINE/MOBILE BRANDED CONTENT
• Technology skills • Media agencies in driver’s seat,
• User interaction together with broadcasters and
• Think & act campaigns, production houses
versus channels & relationships 1200
1000
93 119
800 85
600 Televisie Non-Spot
400 797 851 855 Televisie Spot
200
0
2006 2007 2008
• Eur 159.6 mln in 2008 in online • >Eur 200 mln in 2008
advertising (all media)
Source: IAB.nl Source: SPOT/NUV/estimate 3MO

45. ONLINE + BRANDED CONTENT
ONLINE
• Building brand sites?
• Display/search advertising?
• Social networking?
BRANDED CONTENT
• Integrate ads with programming?

46. ONLINE + BRANDED CONTENT
ONLINE
• Building brand sites?
BRANDED CHANNELS
• Display/search advertising?
• Create your own content
• Social networking?
• Syndicate in external media
BRANDED CONTENT • Link with programming
• Integrate ads with programming?

47. OUTSIDE-THE-SITE THINKING
• Existing model
– Every brand their own site (brand channels)  drive traffic to it
• User has evoked set of favorites
– Youtube, Hyves, Nu.nl, ...
– Google is your best friend
• Challenge: meeting users wherever they are
– Branded channels

48. INTERNAL VS EXTERNAL
Branded
channel
Site extension Branded Branded
channel channel
• Managed Brand
• Up-to-date content
Channel
• Goes beyond campaigns
Branded Branded
channel channel
Branded
channel

49. THINK OUTSIDE THE SITE
Site 1
Site … Site 2
Site 7 Brand Channel Site 3
Site 6 Site 4
Site 5
traffic/lead generation

50. THINK OUTSIDE THE SITE
Site 1 Site 1
Site … Site 2 Site … Site 2
Site 7 Brand Channel Site 3 Site 7 Brand Channel Site 3
Site 6 Site 4 Site 6 Site 4
Site 5 Site 5
traffic/lead generation content syndication

51. JEFF JARVIS ON BRANDED CHANNELS
“I agree on the branded
channel approach and think
that media companies had
better get themselves into a
position of helping marketers in
such a way.”
Jeff Jarvis, e-mail 20-3-2009

52. NETWORKED AGENCIES

53. Italian Economy
80% work in SME businesses

54. Italian Economy
80% work in SME businesses
Hollywood Economy
Depends on Freelancers

55. ITALIAN OR HOLLYWOOD MODEL
NEW REALITY
• Clients have less money to spend
on more media
• More production, less fluff

56. ITALIAN OR HOLLYWOOD MODEL
NEW REALITY
• Clients have less money to spend
on more media
• More production, less fluff
CONSEQUENCES
• 500k shooting trips to South Africa
for a single 30 sec spot are over
• 10 short films for 20-50k each
• 200k for 400 videos

57. ITALIAN OR HOLLYWOOD MODEL
NEW: NETWORKED AGENCY
• Small core
– Focus on brand development &
brand management

58. ITALIAN OR HOLLYWOOD MODEL
NEW: NETWORKED AGENCY
• Small core
– Focus on brand development &
brand management
• Extensive periphery of
independent professionals
(freelancers)
– Project-by-project
– Work anywhere, anytime

59. FUTURE OF ADVERTISING
=
NETWORKED MEDIA
+
NETWORKED AGENCIES

60. THANK YOU
RICHARD VAN DEN BOOGAARD
RICHARD@BRANDEDCHANNELS.COM
+31 6 52 368 276