Speaker: Tim Sanders, evangelist, Broadcast Services, Yahoo!
Conference notes prepared by: Gretchen Kirby, editor-in-chief, Publishing & Production Executive magazine
Dressed to the nines in Armani's new black, Yahoo!'s Tim Sanders came to Spectrum with one goal in mind: to spread the word that only the strongest, experience-based companies will survive in the tug-of-war between print and the Web. "What is going to be the net impact on print?" Sanders asks his attentive audience. First, he suggests looking at the plethora of digital myths. Myth no.1: Computers will create paperless offices. Myth no. 2: Digital catalogs will replace paper. Myth no.3: All direct marketing will become Web based. So, according to Sanders, the outlook for print remains good.
Sanders' own organization, Yahoo!, is growing larger each day. He sites 156 million unique monthly visitors to Yahoo!, to be exact. Yahoo! also has relationships with more than 11,300 merchants and 2,000 content providers. Short-term corporate goals include an initiative to be device/platform independent. Yahoo! wants to be accessible to consumers in any form they choose: PCs, Internet appliances, cell phones, PDAs, mobile handsets and pagers.
"We're a platform business," Sanders explains. "We take communications, content and also commerce and we create a platform-which has terrabytes of daily data-that we hyper personalize. We're going to start serving you the ads that you need. For example, if you buy a camera, you won't get another camera-related ad from Yahoo!. . And the more you use Yahoo!, the better it will be customized for you."
But if companies like Yahoo! are increasing marketshare on a daily basis, certainly there will be a negative impact to print? That, Sanders says, will be completely dependent upon how the print producer enters the new "experience economy."
"Welcome to the experience economy," Sanders asserts. "An experience occurs when a company uses services as a stage and goods as props for engaging individuals in a way that creates a memorable event. . The new generation is all about experience. Consumers today don't say, 'What can I own that I don't already own?' They ask, 'What can I experience that I've never experienced before?' "
Charting a timeline of business model progression, Sanders notes that Schmitt's Progression of Economic Value provides us with a valuable tool for mapping where we've come from and where we're going. "In the beginning, we had a commodities model," Sanders explains. "They extracted things from the Earth. . By 1930-the second wave, the industrial revolution in North America-companies became goods driven. They made things. By the mid-70s, we entered a new phase, the third wave. This was called the service economy, and companies began to develop core competencies in delivering benefits. Now, we enter the experience phase, because of companies like Starbucks, Saturn and Intel. And a lot of companies are replicating what they've done, which was to create an experience."
To demonstrate this change of business model, Sanders offers a familiar example: "It used to be for Mom's birthday, we could make her a cake that cost $1.00. Then, you could go to the store and pick up a mass-manufactured cake that cost $2.00. Next, you have the outsourcing option, for which you'd go to a bakery and-as a service company-they would make a cake for you, and you'd pay even more for that service. . Now, as I plan a birthday party for my 14-year-old, I find myself having to stage an experience-at Chuck E. Cheese or the Discovery Zone-that could cost me as much as $100."
From 2000 to 2009, Sanders predicts that the most successful companies will be those that adopt an experience-based model. "It will all be about the ride," he proclaims. And he suggests that we will soon follow the new metrics, analyzing CPE (costs per experience) and ROA (return on attention). "With 3,000 marketing messages in your face everyday, the competition will not be about cash; it will be about your attention."
For the publication industry, Sanders offers these strategic suggestions: First, leverage editorial content to enable high-value Web content. Next, use print publications to promote Web events. Plan events and seminars around your customer's passions. Develop new ad programs for the Web, which could be as simple as helping existing print clients get traffic via branded links.
"Publications and brick-and-mortar companies can put dot-com companies out of business if they leverage their strengths," Sanders stresses. "I would put Hearst Publications against Salon.com any day of the week."
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