Recently I was keynote speaker annual event GLS University, Ahmadabad, on the topic of Media Convergence and Management. I shared the following thoughts at the event. My speech text:
The setting tone of the day is never easy, but I guess this is what life throws to us. We always need to learn, adapt, unlearn, relearn, and adapt. And this makes our life simpler, for betterment. Please don’t think that I am here to preach to you all on life lessons. I am here to talk on the topic of Media Convergence and Management, and I see a precisely similar thing happening on this topic too.
Fast-changing technology and its adaptation in our everyday life are impacting and forcing us to do, what we do in a new way every day.
Media convergence, as a word often misunderstood. And it is used about – using or optimizing different medias such as YouTube, other Social Media platforms, Print, and TV, etc. to promote or advertise products or services. Or how a brand engages with their customers using social media.
But, that’s not right. Convergence means coming together of two or more things. Similarly, when four things Interconnection of information, communications technologies, computer networks, and media content comes along, it is referred to as Media Convergence. Media Convergence is a new thing, and it all started with the digitization of content and popularity of internet connectivity.
But before we talk more on Media Convergence, I will take you all a little bit backward. The first significant shift in media took place in the late 1960s when telephone switching technology was invented, and self dialing telephone exchanges came in existence. People could speak to each other as per their wish and when they wanted to connect with other people.
According to me, this was the first media convergence instant, and information started traveling faster than ever. Telephone Switching technology not only eliminated the distance between people but also became one of the critical factors in the invention of the World Wide Web, which now we call the Internet. And with the Internet getting popularity, how content is served, changed fast.
Before the internet became popular all mediums like TV, print, radio were bombarding information of their choice on to us. All this while we as consumers never had any choice on what information we wanted to consume through media. It was like, Mom has prepared “Karele ki Sabbji” and we have to consume it whether we like it or not. We only had two options – eat it or leave it.
But then came the Internet and smartphones, which changed everything. Today with smartphones in our hands, each one of us is a journalist and a media owner. Today, now we can create websites, video channels, and populate content created by us using social media. And with in few minutes, information travels to millions of people.
You and I are the new media distribution channels. You and I are as powerful as a TV channel.
No wonder the popularity of TV and newspapers is fast diminishing. So much so, that in the next 2 to 3 years we expect newspapers will disappear in developed countries though in developing countries like India they survive till 2034.
So, in such a case, what are the media we are left with? We now have four types of media:
- Paid Media: When we pay to promote. This means when we advertise. TV, print, OOH, or digital.
- Earned Media: When public and media relations efforts start gaining coverage in both on and offline.
- Owned Media: Media assets which brands control such as website blog and newsletters etc.
- Shared Media: Brand’s social web participation and interaction with consumers on social media.
Internet and Social media are now essential drivers of the convergent media. This single change has not only changed the media landscape but also empowered consumers. Consumers no longer can be taken granted for.
Therefore; Media convergence is a phenomenon that concerns numerous areas such as media technologies, industries, business models, consumer behaviors, and content management. With media convergence, new technologies, new thinking, and new business models are emerging.
Who would have thought of Uber as a taxi company, which owns no cars?
A hotel company, which owns no hotels but we have Airbnb.
MakeMyTrip like travel company, with no offices.
A music company that doesn’t produce any Music – Apple Music Store.
Or a market place, which has zero inventory, but we have Alibaba and Amazon.
These businesses are the resultant of Media Convergence, where technology and interconnection of content have created a new business model using digital media. These business models are forcing older companies to re-look their business and reinvent the way they do business.
New business models are consumer-focused and are based on value creation. Our unique business model not only needs to create value for its customers but also for suppliers and partners.
So how we need to manage Media Convergence? Or what methods companies should adapt in the age of media convergence to remain in the game?
There are four distinct ways that companies can follow to create value using Media Convergence.
(1) Efficiency: Efficiency means, cost of transaction decreases. Efficiency also means product search cost, selection range, systematic information, simplicity, speed, and economies of scale. Take an example of Amazon – we now need not spend fuel on travel, visit multiple shops to search the right product or best deal for us. And most important, time wasted in this whole process.
(2) Complementarities: Complementarities means bundle goods or services to deliver additional value to consumers. Like Smart TV with the internet where we can watch a movie of our choice on Netflix or Tablet PCs.
(3) Lock-in: Lock-in means to attract customers to repeat transactions. Loyalty programs, use of dominant design, trust, and customization. Apple is a perfect example of a dominant design, confidence, and loyalty.
(4) Novelty: Novelty comes from innovative methods of transactions or by creating innovative business models. Like Uber business or PayTM payment wallet.
In the age of media convergence, the Customer is king. Whether it’s a B2B business or B2C business, customers must be the priority. With the development of technology, the cost of products and services got lowered, and the satisfaction of customers has increased.
From the consumer’s point, the increased convenience of information provided by converged stories makes usage of the media a better experience. So companies now need to focus more on how their brand interacts with consumers on various paid, earned, owned, and shared media.
Let me tell you all how we handled media convergence in our business.
In 2009, we were making TV ads practically for all FMCG & OTC companies with a presence in 32 countries, and our big challenge at that point was trying to work – how digital change will impact the FMCG industry? How will FMCG players adopt new technologies in their marketing function and apart from advertising on digital mediums? How we, as a vendor to FMCG companies, be useful in the new digital age?
We were anticipating that there may not be a significant shift in the way companies promote their brands. Still, we knew that a direct threat was coming to our TV business due to converging media technologies.
In 2011, our company founded HoemTesterClub.com. Goes without saying that the first five years were painful for us, and we kept burning money in keeping the website breathing in South Africa and India. There were hardly any takers for our services.
If you visit our website, you will find it’s as a Grocery Product rating and review website. But that’s not the complete truth. That’s the way we engage us with consumers.
In reality, we have reinvented product testing and research methodology. We have challenged old ways of city-centric product testing and research methods. We have tested how one or a few cities can be representative of consumer preferences for a state or a country?
Today, using club members spread across 500 plus towns of the country, we courier them products. Consumers try products at home; they come back on our website and participate in a product research survey. We share a live research finding dashboard with our clients.
Best is that no consumer is paid a single penny, their opinions are not moderated, and there is no bias.
So what is the benefit to us as business or to our clients?
Old product testing and research methodology costed around Rs. 1.8m to Rs. 3.5m or even more, depending upon the numbers of towns and sample size. And the time taken for research was 4 to 8 months.
We can now do a product testing research spread across hundreds of towns using the sample size of thousands of consumers at one third or even one-fourth of the old cost. And the time taken is around a month.
Using Media convergence, we brought new product testing research practices globally.
That’s not all. With this website, we also help our clients generate testimonial content. We help them with sampling and in creating positive word of mouth and brand advocacy campaigns.
Our clients are happy as their research data is robust, cost, and time consumed is less. We are pleased as we could build a new revenue stream using media convergence in our business after 28 years of existence. Media Convergence has shown us the way in not only adding new services that we now offer to our clients but also in expanding the business’s geographical boundaries.