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THE 5TH CONFERENCE ON MARTECHThe journey of Deutsche Telekom's hybrid media modelGerhard Louw, head of international media management, Deutsche Telekom AG

Your competitors aren’t Your competition; your competition is the future. jeFF BEZOS, AMAZON

Gerhard Louw, Deutsche Telekom 2

THE DIGITISATION OF MEDIA IS SPEEDING AHEAD


MEDIA TODAY: A COMPLEXITY TSUNAMI!

Gerhard Louw, Deutsche Telekom

Fragmentation of audiences

Analytics, Modeling, A/B testing

Standing out

Shu

tting

out

Dig

itisa

tion

So

cia

l M

ed

ia

Engagement

Mobile internet & apps

BIG dataPro

gram

mat

ic

Pai

d O

wne

d E

arne

d M

edia

Budget reductions

Effectiveness of advertising

Content

4

Ad blocking

5

The world’s most valuable resource is no longer oil, but dataMay 2017


ADVERTISERS: TAKE CHARGE & DRIVE CHANGE

Redefine our partner models Restructure ourselvesTake back more control


Take back more control Redefine our partner models Restructure ourselves

NO CONTROL BEFORE KNOWING THE FACTS


Consumer attention and time spend is shifting to mobile and away from traditional ads

Partner ecosystem is changing

Data & technology enable a new way of targeting, reaching, measure, analyzing and optimizing every piece of advertising

Technology providers

Agencies

Advertisers

Technology platforms

Publishers/Media owners

Time

Single user targeting

Mass media targeting

8

WHAT KIND OF CONTROL DO YOU WANT?


Start with thinking about:

▪ Core business? Are advertising & media part of it?

▪ Company goals? Link to media, data & technology?

▪ Company set up: Centralised? Decentralised?

▪ Who is currently doing the work?

▪ What kind of resources do you have internally?

▪ How are you working currently with partners?

▪ How happy are you with your current media & martech performance/output?

9

TAKING BACK CONTROL: A NEW PARADIGM FOR ADVERTISERS


“Our future is definitely going to be about more thoughtfully using our data thanby outsourcing”

- David Wheldon, RBS

“If 2017 was the year of the wake-up call, then 2018 is the year we take back control”

- Marc Pritchard, P&G

“When you have people take ownership and control, you can have better quality ads plus savings.“

- Lucas Herscovici, AB InBev

“Now, it’s much more about self-sourcing and learning as well as calling on external experts or agencies”

- Tatiana Jouanneau, Duracell

10



PARTNER MODELS: 3 OPTIONS FOR ADVERTISERS

Insourcing

▪ Hot!

▪ But very, very few advertisers can in-source the entire value chain!

▪ Start with “why:” why do you think you can do it better than a partner?

▪ Then: “what to in-source?”

▪ Then: “how:” detailed planning, business case and consequences: staffing, technology, operations, etc.

Outsourcing

▪ “Old” model

▪ Used by most advertisers today

▪ Bundles services into one agency per discipline

▪ Agency is in control, advertiser largely on the outside

▪ Limits channel neutrality, commercial transparency and flexibility

Hybrid Model

▪ Probably the most relevant model

▪ Advertiser decides on an operating model

▪ Advertiser takes control of certain aspects of the value chain

▪ Outsourcing some aspects to one or more partner (agencies, consultants, etc.)

12Gerhard Louw, Deutsche Telekom

THE MARKET IS ON THE EDGE OF A MASSIVE DISRUPTION


2018

Outsouced Hybrid In-house

13

THE LANDSCAPE WILL CHANGE ENTIRELY OVER THE NEXT FIVE YEARS


2021-2023

Outsourced Hybrid In-house

14


1 2 3 4 5

CommittedOutsourcers

Natural Collaborators

ElectiveCollaborators

Adaptive Insourcers

Natural Insourcers



RESTRUCTURE OURSELVES


WHO DO YOU WE HAVE IN OUR MEDIA & ADVERTISING DEPARTMENTS?

▪ Start with current set-up: generalists vs experts

▪ Define the future skills you need, e.g. digitization experts, analytics experts, data analysts, etc.

▪ Current skills assessment, gap definition. Most probable solution:

▪ Basic digital training for everyone, e.g. e-learning (Circus Street)

▪ New experts required!

HOW DO YOU WORK TOGETHER INTERNALLY?

▪ Consider all stakeholders: commercial management, product, pricing, distribution, procurement, Data Warehousing / BI, CRM, sales: retail & e-business

▪ Start small & simple: cross-functional project teams, define common goals and projects

▪ Once that works, think of reducing the silos: merging departments

▪ Need even better internal collaboration: think of new organizational structures, e.g. agile working (Spotify model)

18

CASE STUDY:THE DEUTSCHE TELEKOM MEDIA OPERATING MODEL (MOM)

EUROPE’S LARGEST TELECOMS COMPANY


EUR75,7billion REVENUE

12 EUROPEAN MARKETS (‘NatCos’)

Formed in 1996, following the privatization of a state-owned company

MOST valuable TELCOBRAND IN EUROPE

20

WE HAVE A CLEAR VISION FOR DEFENDING OUR LEADERSHIP POSITION IN EUROPE


Tim Höttges, Deutsche Telekom CEO

The raw material of this revolutionis the data…and we are makingthe data usable

We need to be more in control

21

WHAT KIND OF CONTROL DID WE WANT?


1. More data-driven decision-making

2. More control of media strategy and analytics

3. Greater transparency & flexibility

22

STEP 1 DEFINING OUR TECH STACK: TELEKOM DIGITAL BLUEPRINT


BLUEPRINT PRINCIPLES:

▪ Full data access

▪ Full data ownership

▪ Strict safety & security rules

▪ Choosing & contracting the partner/supplier directly

One Adserver

One Website tracking & Analytics Programmatic media buying platform (DSP)

Data Management Platform (DMP)

Personalisation of content, campaigns & channels

Dynamic creatives

Private DMP: personal data Public DMP: anonymised data

CR

EA

TIVE

23

STEP 2: A NEW MEDIA OPERATING MODEL

TubeYou

Media buying

Media analytics

Campaign planning and buying

B

Media strategy

Media strategy & steering

A1

Programmatic operations

C

Search and affiliates

D

Media analytics

A2

“BUILD”

A1: Delivered and controlled in-house

• Media Strategy

• Management of the operating model

“BUY”

• A2, B, C & D: Scopes delivered through external specialist partners, selected via competitive pitches


STEP 3, INTERNALLY: EXPANDING ROLES AND APPOINTING NEW SPECIALISTS

CCO Residential

Brand/Marketing Comms / Media

Sales

Media analytics

Media strategy E-business

Media digitization


STEP 4, EXTERNALLY: NEW PARTNERS CONTRACTED

Media buying Media analytics

Campaign planning and buying

B

Media strategy

Media strategy & steering

A1

Programmatic operations

C

Search and affiliatesD

Media analytics

A2

Frame Agreements in place with:

Advertising Technology partner (Digital Blueprint)

Digital media transformation advisors


ROLL-OUT IN DIFFERENT PHASES ACROSS EUROPE

Phase 1

DE NL

PL

Phase 2

GR HU

AT SK CZ

Phase 3

Phase 4RO HR MK

ME

HQ


BENEFITS OF THE NEW MEDIA OPERATING MODEL

In-house capability buildingin media strategy, media analytics and digitization

In-house control over technology and data

Increased transparency over entire media ecosystem

Data-driven results management higher efficiency &

effectiveness


OUR MODEL RECOGNIZED AS ‘PIONEERING’ AND ‘RADICAL’

DEUTSCHE TELEKOM

NOMINATED AS BRAND OF

THE YEAR 2018 FOR ITS

MEDIA MODEL

DEUTSCHE TELEKOM AUF 2017

‘MENSCHEN TOP 100, RUBRIK ‘MEDIA

MANAGER’ LISTE AUSGEZEICHNET

DEUTSCHE TELEKOM RECOGNIZED ON 2017

‘CHANGEMAKERS’ LIST, HONORING THOSE

MODERNIZING MEDIA AND MARKETING


TWO MAJOR MOM IMPLEMENTATION CHALLENGES IDENTIFIED (SO FAR)


Collaboration Building in-house competence

Internal:Media Strategy &

Steering

30

COLLABORATION ATTITUDE & BEHAVIOR ARE BOTH CRUCIAL TO SUCCESS


Managing Communication

Motivation &

Participation

Empathy, Respect and

Understanding

Trust

Efficiency & Delivery

Accountability & Ownership

1COMMON LANGUAGE & BEHAVIOURS

2COMMON MEASUREMENT FRAMEWORK

3DESIGN THE RIGHT PROCESS & SYSTEMS

Aligned all partners behind what ‘collaboration’ means for us

Evaluating performance against levels of collaboration – and made it a significant part of the

overall remuneration

All processes, ways of working & systems in the model are designed to enable effective

collaboration

31

BUILDING IN-HOUSE COMPETENCE TO ORCHESTRATE & STEER MOM


1CENTRAL VERSUS LOCAL

Alignment on roles and responsibilities – through clearly defined job descriptions

2NEW RESOURCES

Hiring new specialist resources, particularly with a focus on media analytics and digitization

3OVERCOMING INTERNAL SILOES

A1 to act as a bridge between internal departments

32

DEFINING & BUILDING YOUR OWN MODEL? 4 KEY LEARNINGS AND RECOMMENDATIONS


1. Do not rush any stage of the process and invest time in proper preparation

3. Developing a business case was vital to support our recommendations and highlight financial benefits.

2. Internal stakeholder management is a non-negotiable success factor to get right

4. Accept that you do not have all the answers at the beginning, remain agile and flexible.

33

THANK YOU

Get linked on LinkedIn:https://www.linkedin.com/in/gerhard-louw-marketing/

https://www.linkedin.com/in/gerhard-louw-marketing/

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