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September 27, 1999

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Web Is Big News At Media Companies

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The goal is to provide all subsidiaries and divisions with opportunities to leverage the efficiencies of the Web by automating procedures such as procurement of supplies or access to human-resources benefits.

Publishers are not the only segment of the media industry affected by the need to repackage their work via technology. For ad agencies, the general industrywide shift from mass market toward more narrowly segmented audiences engenders a need for much more targeted content. Advertisers are willing to pay top dollar to make sure their messages reach the most receptive audience.

Ogilvy & Mather has begun a project to make all of its creative output, such as photographs, artwork, and video, available in a categorized digital archive. Building on a DB/2 database, the company is implementing IBM's Digital Library software to combine different media into one searchable resource. CIO MacBlane says the goal isn't to resell work, but to clarify what precisely makes its creative work stand out and recreate those qualities in new ways.

Ogilvy & Mather also plans to incorporate advertising work from its clients' competitors into the archive, making it possible to compare its own work with what competitors are doing in the same market. Understanding its clients' competitive challenges will make the companies better advertisers, MacBlane says.

Having this kind of anticipatory outlook on customer needs is a key to success for many of the media and entertainment companies. Shrinking target audiences and the need to build communities of interest also fuel the desire to know the customer better. Managing customer relations is an emerging strategic priority for companies.

ADVO Inc., the largest U.S. direct-marketing company, depends heavily on its ability to determine the most likely buyers of a direct-mail campaign. By using a Sybase Inc. database containing detailed demographic and socioeconomic details on 117 million U.S. households, and a mapping tool built by Tactician Corp., a geographic information systems software developer, ADVO salespeople can define very narrow customer segments in planning a client's direct-marketing campaign.

To expand its knowledge of customers, ADVO plans to implement a customer-relationship management system. But, as CIO Kabe Woods says, "the really cool stuff happens when we link up the enterprise resource planning, customer-relationship management, and the order-fulfillment pieces." By pulling up relevant data on customers and the status of jobs via an intranet application, the people within ADVO responsible for particular clients will have a more complete picture of their relationship with those clients, Woods says.

Research firm Dataquest estimates that customer-relationship management software will be the top spending priority for many media companies during the next few years. "Media companies will spend the next few years getting their arms around what customers want, investing in systems to create better touch points and better ways of meeting the wants and needs of advertisers," says Kristen Engelhardt, media and entertainment analyst at Dataquest.

But having the technology to see what customers are doing is only one part of the equation. For Robert Isherwood, director of technology for the Chicago office of DDB Needham, an international advertising firm, a major challenge is getting people to see how technology can be relevant to the creative process.

By using the latest re-lease of Lotus Notes, DDB provides tools that employees can easily access and use in their daily routines, such as creating a "statement of relationship," which the company applies to each of its clients. This report shows what work has been done, its costs, and its impact on the client, and it gets the advertising teams talking about client needs. Isherwood also sponsors "idea lunches" to get everyone thinking about the creative uses of technology, as well as to help IT understand the future challenges of the advertising business.

Media and entertainment companies also deal with the continuing shortage of skilled IT workers.

At Harrah's Entertainment Inc. in Memphis, Tenn., Tracy Austin, VP of customer-focused IT products, says the casino operator has become more aware of the dearth of necessary IT skills. Harrah's has revamped its human-resources and benefits policies to attract IT workers from different types of businesses.

By fostering more dialogue about management and person- nel performance, providing more flexible work and lifestyle options, and increasing training time, turnover rates have dropped to 6% from 30% annually, Austin says. "Ultimately, it's the people who give you the edge. The technologies come and go."

Business-savvy IT leaders in the industry understand this sentiment well. The technology isn't as important as the ability to make it relevant to a rapidly changing business environment. Innovative media companies are turning to the Web as a huge source of new business, building applications that turn information from existing systems into insight and analysis that supports key business prerogatives.

The news that IT leaders in the media business are playing a key role in developing products and building customer relationships may not make the front page, but it's a major story at these companies.

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