Business Analytics Capstone Framework for Strategy WR 05/09/2016

Transcription

1 Business Analytics Capstone Framework for Strategy WR 05/09/2016

2 Problem Statement

3 Problem Statement Ad-blockers Impact on Yahoo Overview Advertising, along with content delivery, is undergoing a fundamental and dramatic transformation, especially in relation to mobile, web, and display Much of the free internet is built on an ad-supported model, where much of content out there is either entirely or partially supported by advertising Television with TV Advertisements Movies with Product Placement Advertising Magazines with Print Advertising Internet with Display Advertising Search engines with Search Advertising Ad-blocking is an important and emerging phenomenon and has the potential to completely upend the content ad-supported model that exists today In terms of adoption, we are past the early adopters phase, and moving into the rapid adoption / mainstream stage Perspectives Consumer Perspective Wants free content ~ Doesn t want to pay ~ Ads are annoying ~ Wants to get rid of Ads Hence, uptick in usage of Ad-Blocking software Company Perspective Wants to reach Consumers ~ Wants to drive Consumer Acquisitions ~ Wants to increase Consumer Retention Hence, wants to advertise successfully to drive the bottom line Analytics Customer Analytics There is a significant impact with Customer Engagement, in that if ads are not displayed to Customers, then the Brand / Company looses ability to reach its Customers. This in turn may reduce acquisition of new customers and reduce repeat traffic by existing customers. Operations Analytics The rate of Customer acquisition and Customer retention impact margins, volume, gross revenue, and subsequently profit Specifically advertising costs will do down, as typically the Company is charged for only Ads Displayed or Ads Viewed or Ads Clicked Accounting Analytics Reduced advertising will reduce gross revenue and subsequently profit May in the near term improve margins, as Advertising costs go into SG&A, while in the long term, will impact Brand Image People Analytics If a Company s Brand is not doing well, then Employees would potentially have incentive to seek a position at a different company Even if Employees did not leave (whether by choice or by force), there may be a morale issue

4 Strategy

5 Strategy Yahoo s Adaptive Strategy to Ad-Blocking General Thoughts Make Ads Relevant and Impactful Stop fighting users and trying to annoy them into paying attention Do more due diligence to ensure your that there are no computer viruses in the AD Distribution network Consider RAVES Relevant & Respectful Actionable Valuable & Value-Generating Exceptional Share-worthy Story Leverage Customer Analytics Consider leveraging Big Data, cognitive computing, and Customer Analytics to better target your Ads. For example Person s Location (If I am near a store, and surfing the web on my phone, I am more likely to go to a store displayed in an Ad with an associated coupon) Past Purchase Behavior (I bought sporting gear from a competitor in the past, and I am near a sporting goods store, so displaying an ad and associated ad on my mobile phone for a sporting goods store will make sense) Demographic information (No need to target Diaper Ads to a 10 year old or an 80 year old, but is relevant to someone of potential parental age, especially if they have purchased other baby products in the past) i.e. should Strategically consider Ad relevance to User Context Make Strategic Partnerships with Cell / Tablet / etc. Manufacturers to get white-listed to Devices Ad-blocking Software Makers to get white-listed for their Users App makers to get white-listed and placement within Apps In short... There should be more Superbowl Ad -quality Ad Campaigns This level of quality, engagement, and relevance should be translated to the online Ad experience i.e. make a Strategic conscientious effort to improve the quality of Ads you deliver Strategic Approach Yahoo is a software company, was a startup, and in this Business Case is considering Advertising efforts The adaptive (experimental) strategy would be an appropriate one to consider in this context.

6 Effects and Measurement

7 Effects and Measurement Yahoo s Adaptive Strategy Definition, Approach, Specifics, Strategic Partnerships, and Example Definition Adaptive Strategy Continuous stream of improved ideas that results from actions If from experiments, actions come before strategy Measure the results of your experimentation Approach Adaptive Strategy Take a disciplined approach to experimentation Build a process for experimentation Build metrics for measuring the effectiveness, speed, and ROI of that experimentation Empower Employees to take risks and experiment locally in the business Specifics In the spirit of experimentation that is at the heart of Adaptive Strategy, Yahoo needs to conduct marketing and ad campaigns to evaluate the effectiveness of the recommended Strategic Partnerships as described in the Strategy Slide Make Strategic Partnerships with Cell / Tablet / etc. Manufacturers to get white-listed to Devices Ad-blocking Software Makers to get white-listed for their Users App makers to get white-listed and placement within Apps For example To test whether or not partnering with a specific Cell / Tablet manufacturer provides appropriate ROI, potentially run a specific ad campaign targeting that Cell / Tablet manufacturer and also a separate ad campaign targeting all Cell / Tablet Manufacturers. You can then assess the impact of the partnership with the Cell / Tablet manufacturer by determining the Click-Through Rate from the two different ad campaigns. The sample size would need to be large enough to determine a statistically significant difference between the two ad campaigns. A similar set of experiments could be done to test the impact of a partnership with an Ad-blocking Software Maker in addition to the impact of a partnership with an App Maker.

8 Effects and Measurement Yahoo s Adaptive Strategy Effects, Measurement, and Outcomes Customers Effects - The primary effects on Customers by developing partnerships with either a Cell / Tablet manufacturer, an Ad-blocking software maker, or an app maker is that not only more ads will be displayed to the Customer but also hopefully an improved ad experience Measurements - This can be measured through determining the incremental Click-Through Rates for ad campaigns targeted at Users of a specific Cell / Tablet manufacturer, Ad-blocking software maker, or App Maker in addition to surveying customers to determine if the strength of the Brand is stronger for Users of a specific Cell / Tablet manufacturer, Ad-blocking software maker. Outcomes - Increased effectiveness of Ad Campaigns and Increased Customer Satisfaction Operations Effects - The effects on Operations by developing partnerships with either a Cell / Tablet manufacturer, an Ad-blocking software maker, or an app maker will be improved margins from improved Customer Acquisitions and Customer Retentions. Measurements - This can be measured through determining if Customers of, for example iphones vs Androids, have higher Customer Retention and Customer Acquisition Rates, if experiments were done where a Strategic Partnership was made with only one of those cell phone makers Outcomes - Increased Customer Acquisition and Improved Customer Retention Accounting Effects - The primary effects on Accounting by developing partnerships with either a Cell / Tablet manufacturer, an Ad-blocking software maker, or an app maker is incremental Revenue improvement based on conducting one of the Ad Campaigns Measurements - This can be measured through determining the incremental Revenue generated for ad campaigns targeted at Users of a specific Cell / Tablet manufacturer, Adblocking software maker, or App Maker. Outcomes - Increased Revenue People Effects - The primary effects on People by being involved with experimentation and the Adaptive Strategy is increased Employee Satisfaction and Engagement Measurements - This can be measured through measuring increased productivity and through Employee Surveys Outcomes Higher Employee Satisfaction and Higher Employee Engagement Summary Through an Adaptive Strategy Yahoo can work to form strategic partnerships with Cell / Tablet Manufacturers, Ad-blocking Software, and App Makers, resulting in positive impacts on its Customers, Operations, Accounting, and People (Employees)