The future of media business is digital and the future of digital will be automated

Arndt C. GrothIS Directors Conference 201418. SeptemberInterlaken

A shift in media consumption A shift in media

consumption

47 BC 1450’s 1700’s

Newspapers

Early industrialrevolution

newspapershave published

ads

GutenbergGutenberginvents the

printingpress and print the Gutenberg

Bible

First advertising

Advertisingin Pompeii

for agladiator

1890’s

First large scale

advertisingFirst large

scaleadvertising

1950’s

Major globalagenciesMajor global

agenciesfounded

1990’s

Internetadvertising

IAB firstmeasuresinternet

advertising

1

Advertising evolution: the beginning

2000 2002 2005 2007 2009 2014

2

Internet of things

Deviceconvergence

ProgrammaticTV

DSP

Sharing data/Social tools

Verification

DMP’s & dataaggregators

Ad exchanges

Targeted ad networks/

AMP’s

Data suppliers

Vertical adoperators

Mobile

Ad servers

Ad networkshorizontal

Creative optimization

Trading desks

Retargeting

Video

Advertising evolution in 2000’s

3

A shift in media consumption

NewspapersRadio (analog)Radio (digital)CinemaOutdoorTV (analog)TV (digital)InternetMobileVideo Games 60

70

80

50

40

20

10

30

90

100

1900 1920 1940 1960 1980 2000 2013

80 hours mediaconsumption a

week

Hours perweek

4

More and more media consumed

Yesterday Today

Home-bound

Dedicatedservices

Dedicateddevices

Separatenetworks

Mobile (mostly)

One device,all services

Integrate IPnetwork

Large #devices/

user

21%Mobilevideos

84%2nd Screen

Users

201650%IP-TV in D

430 Mio.

Whatsappusers

+500 Mio.

IP-Geräte inUS-HH

SocialMedia

TV

News

Radio

OTT

Changing pattern in media consumption

5

20

22

24

18

16

12

10

14

26

28

1950 1960 1970 1980 1990 2000 2010

30

In millions

Sum of newspapers sales in Germany

-42.5%

198330,1 Mio.

201317,3 Mio.

6

-50% in print circulation in Germany

7

More information than ever60 seconds on the web

in

60seconds

320+NEW Twitter

Accounts

100+NEW

LinkedInAccounts

370’000+MINUTESvoice calls on

Skype

12’000+NEW ADS

posted onCraigslist

20’000+NEW

posts onTumblr

13’000+IPHONE

Applications downloaded

600+NEWvideos

70+DOMAINS

registered

60+NEWblogs

695’000+FACEBOOKstatus updates

694’445SEARCH

queries

168 MILLIONEMAILSare sent

510’040COMMENTS

on Facebook

6’600+NEW

pictures uploaded on

Flickr

79’364WALLposts on

Facebook

8

Harder to reachconsumers

Yesterday Today

Target audience

Contextadvertisement

Channel budgets

2017 global$32,5 Mrd.

ProgrammaticBuying

9

Challenge for advertisement today: reaching across channels and devices

Content & Communication

Advertisement

Personalprofiles

Targeting

Real-TimeAdvertising

Advertisement

10

Targeting yesterday vs today

VSInventory buyingBroad targeting

NZZ.CH$ 5.00 CPM

TAGES ANZEIGER.CH

$ 3.50 CPM

RTL.DE$ 3.00 CPM

DRS.CH$ 2.00 CPM

BILD.DE$ 3.50 CPM

Inventory strategy

Audience buyingNarrow targeting

Audience strategy

$ 3.00 CPM

NZZ.CH

TAGES ANZEIGER.CH

RTL.DE

DRS.CHBILD.DE

$ 3.50 CPM

$ 12.00 CPM

$ 6.00 CPM

An increasingly complex ecosystem

11

A large number of specialized actors along the value chain

Advertiser Media Buyers & Ad

OperationsTeams

TradingDesk

Web PageDevice App

PublisherAd

Server

PublisherDMP

DSP / DMP Exchanges SSP

Ad Networks

Publisher Programmatic Direct Vendor

Publisher Sales Force& Ad Operations Teams

Buy-SlideProgrammaticDirect Vendor

Buy-slide Ad-Server

End user

DataManagement

Platform

Applicationof Data

Segmentation

Audience modelling

Analytics

Huge Varietyof Data Sources

Social

Mobile

Display

Search

Online/Offlinesubscriptions

Campaign DataClicks, impressions,

interactions, conversations,..

Audience DataDemographics,

Web and SearchBehaviour,..

CRM DatabaseTransactions,

segments, products,..

Audience DataOffline

segmentation, Digital ad Impact,..

Big data playing important role today

12

13

Change of business model of PubliGroupe

Key strategic premises

14

• Market is becoming a multi-channel and multi-device

• Users are now content producers, putting advertising under pressure

• Data based targeting and advertising automation, the new rule of the game

• Traditional media will continue to lose audience and advertising revenue

New business model of PubliGroupe

15

16

Start-up

Young compagny

Establishedcompany

Maximization ofads use

Marketingoptimisation

Maximization ofonline sales

Advertising Mediaproviders

E-commercefor

for

through

Media providers

PubliGroupe

Advertising providers

Optimal use of digital ad space

Optimal use of digital advertising over providers networks, technology,

and data use

A I D A

Leading provider of online ad services in Europe

PubliGroupe value proposition today

17

Swisscom & PubliGroupe – a possible future scenario

Low HighTelecom Infrastructure

ContentValue Chain

Advertising

Access

• Created Google fiber with USD ⁓3bn investment

• 34 cities are working with Google to implement

Google Fiber• April 2014 Google brings in business to

it’s network

Sweet SpotAdvertising-

Infrastructure

• Created a new USD 500m fund to invest in Advertising and

subscriber video OTT companies

• Offers a USD 70 a month plan if users agreed to let AT&T monitor their online

browsing and sell ads targeted to that customer

based on his or her behavior

• SingTel bought 2 Online Advertisement Companies for USD 359m in June 2014

• Running singtel digital - marketing agengy

• Owns Amobee which offers comprehensive

mobile advertising solutions SingTel Digital

The best way topredict the futureis to create it. Alan Kay(Born May 17, 1940) is anamerican computer scientist

18

Thank you! A shift in media consumption

A shift in media consumption