For an increasing number of established companies, creating new businesses and programs within the company is an imperative for success. Maturing technologies and aging product portfolios are requiring established companies to create, develop, and sustain innovative new initiatives. In this course, learners will develop knowledge on how to navigate the barriers to creating, developing, and sustain innovative new businesses and programs within established companies or organizations with an emphasis on: • Introducing the skills for identifying and analyzing entrepreneurial ideas within a corporate environment; • Examining entrepreneurial thinking within yourself and your colleagues with an awareness of entrepreneurial mindset, entrepreneurial motivations, and entrepreneurial behaviors; • Cultivating seeing entrepreneurially within yourself and your colleagues with attention to industry conditions, industry status, macroeconomic change, and competition; and • Championing acting entrepreneurially within the corporate environment with an understanding of value innovation and opportunity identification. Try this course for FREE at https://www.coursera.org/learn/corporate-entrepreneurs-opportunity
Is the industry advertising intensive?
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Del curso dictado por University of Maryland, College Park
Developing the Opportunity for Corporate Entrepreneurs
43 calificaciones
University of Maryland, College Park
43 calificaciones
Curso 1 de 5 en SpecializationCorporate Entrepreneurship: Innovating within Corporations
De la lección
Seeing Entrepreneurially
Cultivate seeing entrepreneurially within yourself and your colleagues with attention to industry conditions, industry status, macroeconomic change, and competition
Conoce a los instructores
Dr. James V. GreenDirector of Entrepreneurship Education
Maryland Technology Enterprise Institute
Advertising intensity in the industry is an element that we'll explore.
Its influence by industry status as well as its impact on the entrepreneur.
This fits within industry structure
as we continue our discussion on industry status.
So when we look at defining advertising intensity, we're looking at the importance
of advertising and branding to the success of competitors in a specific industry.
And so this is the second leg of what we're going to be analyzing within this
broader segment.
High advertising industries are characterized
by customers that prefer to buy and
transact based on their histories.
They prefer to buy based on past successful transactions or
they prefer to buy brands they know or products they've heard of.
Established companies that have a reputation for success are going to
have a unique advantage in these high advertising intensity industries.
And new ventures have a much harder time with competing.
There may also be perks in play, things like loyalty programs,
that are offered by the credit card companies.
By the airlines, by the hotels, by retailers,
that make it more difficult for new entrants to compete.
Now for many of us we may not be starting a credit card company, or a hotel, or
an airline, but we want to recognize that increasingly there are other
technology based firms and, or small firms that are doing similar things.
They're building and populating profiles, they're integrating networks,
they're building out preference engines.
They are developing one click transactions online.
And doing other things that essentially add more stickiness or
adherence to their customers on those selected platforms and sites.
So we want to think broadly about the variety of things that can take place and
that can influence advertising and
influence the resistance of a customer to trying something new.
When we look at low advertising intensity industries customers
here are more willing to trying new products and to try new brands.
There might be other influences in play.
There might not be established product leaders.
There may not be established brands in that space.
There might be low switching costs, so it's easy for them to experiment and
try a variety of different things, before committing to one thing.
There might be differentiation, and/or other value that the new products deliver.
This is certainly the preferred scenario for new ventures,
to be able to operate in the lower advertising intensity industries.
We can go to IBIS, continue our exploration of online tutoring,
and think about the advertising outlet.
And when we look at the Barriers to Entry section,
there's one paragraph that really addresses this.
While instruction techniques may vary tutor to tutor,
the same general purpose of educating students remains.
And as a result new firms, prospective firms,
must be willing to spend large sums of money on advertising.
Now that's not good news if you're a new entrant
considering the online tutoring space.
What is large?
How do you quantify large?
Well IBIS quantifies it as a percent of revenue.
In the left-hand column, you can see the average cost as a percentage
of their revenue that companies spend on wages and purchases,
on depreciation, marketing, and rents.
And we see that the average company will spend 1.6% of their revenues on marketing.
We see that for online tutoring it's more than twice that,
3.8% of revenues are spent on marketing.
And if you're a young firm, if you're an unknown firm with an unfirm,
unknown brand, a new entrant,
you're likely going to have to spend a lot more than that.
Maybe 10%.
Maybe 20%.
That essentially would make your 8.4% profit go to zero.
And perhaps be zero for a year or
two to build that brand and to build that market awareness.
We also want to think about who’s our customer, and
IBIS helps with this as well, starting online tutoring
perhaps our costumer are public schools or private schools.
Perhaps they are public universities or private universities or for
profit universities.
Or perhaps it's the end consumer, it's the students themselves or
the parents themselves, that we're going to try and sell our product to and
market to, or maybe some combination.
But what we want to recognize is that there are options for
who we want to target.
And the relative expense of targeting them is something we want to consider as well.
The relative influence of advertising on their decision of what to buy and what
not to buy should be part of our decision as well on who we want to market to.
Once we've identified them we can do some fairly simple things.
We can look at mailing lists that are out there.
If we want to target the schools or the universities, we could spend all day and
all night looking at websites trying to collect contact information for
people at universities that we think would be interested.
Or we could buy lists, we could buy contact lists of names and
phone numbers or emails of influencers at these different institutions,
at these different schools, at these different universities, and
that might be a more effective way of spending our time and money.
Or if we're trying to sell directly to consumers, and
we're trying to find households of a certain income level and
a certain geography that have school-aged children.
Whatever our profile is, both our demographic and behavioral profiles,
we might be able to find those on some of the lists and
let that be our entry in the targeting.
Now for many of us we think that well social media is the way we´re going to do
it, and online is the way we going to do it, and it’s going to be viral.
Well, good luck with that, easier said than done,
certainly more complicated than you may think.
This is a profile of the various tools and techniques as well as companies and
providers in the online marketing space.
So this does not include anything you may do via print.
It does not include anything that you may do via other radio,
media, etc., platforms.
It does not include conferences or other things you may attend or exhibit at.
This simply is a snapshot of the various online tools that are out there.
Be it email marketing, social media ads, other automation platforms,
business intelligence, and customer experience elements.
It's a complicated landscape that you want to be thoughtful, driven
by the core values you're delivering, the audiences that you're targeting, and
the relative advertising intensity that you're up against.
You may also partner with select providers to try and figure part of that out.
Adaptly is someone in the social media space, this is a bit interesting because
they're going to talk a little bit about advertising and marketing in that context.
They're also going to talk a little bit about the genesis and
launch of their company as well.
So we'll spend a few minutes hearing from their co-founder and
their CEO about their firm and what they do.
>> What is it that let's say Adaptly would do for their company?
How would it help them make more money?
>> Yeah, so essentially we are a media brand technology for social.
And we sit on top of Facebook, Twitter, StumbleUpon, a bunch of their platforms
and help big brands, little brands, big agencies, businesses of all
sizes reach their audiences across the different environments.
>> Okay, but how would you do that?
I mean I understand, rhetorically, how that makes sense.
But let's say a big pizza company comes to you, and
says, Nikhil, we don't know what to do.
There are all these different social media platforms.
We can't be sending tweets and the Facebook likes out all day long.
We make pizza.
What do you do for that?
>> Yeah, so ultimately it becomes an interesting question around which
platforms do you want to be on first?
How do you think about these environments as containing only the audiences of people
that will buy a pizza from you.
And then where it gets really interesting is thinking about how do you amplify your
content, how do you make sure you can apply paid media and real dollars,
marketing dollars, to grow that message against that audience, and
layer on all kinds of really interesting data.
So for example, for pizza companies which we work with a few of,
you can leverage things like TV retargeting.
So when the ad for Domino's goes on television,
you can show them the ad on Twitter and on Facebook at the same time.
>> And you handle all that, so the company writes a check to you-
>> Yes.
>> And you say we’ll take care of all the technical back office stuff, we’ll take
all of that video and we’ll figure out a way to get it to the people that want it.
>> Yeah, we’re fundamentally a technology company.
We provide a layer of services and
tools to our brands and our partners that enable them to do that.
We also do everything ourselves just to make it as easy as possible.
>> So are you in competition with a traditional advertising company?
And at the same time you are complimentary because the ad company will come to you
and say, we're very good with the concept but we want you to do the implementation.
>> Definitely, we're an ad technology company that sits
alongside all the traditional agencies and traditional advertising businesses.
And what is really interesting when you think about it, social is something that
complements the way people use the Internet and live their daily lives.
It's not something that's really designed to replace anything.
It helps achieve the message across many, many different channels.
>> Did you think of this when you were at Northwestern?
Because I know you went from Northwestern and then you started another company.
You've got a background as an entrepreneur.
When did you come up with this thing?
>> Yeah, so it was a really interesting story actually.
I actually had an internship my junior year.
I was in electrical engineering at Northwestern,
at was at HBO here in New York.
And I saw how they were marketing and how they were buying media and
they really knew how to do billboards and TV, and all kinds of different things.
But when it came to the social thing, everybody was like how do we do this?
What's the best way to do it?
Very, it was a lot of confusion, it was very new.
So I went back to school and
met my co-founder in the back of a really boring probability class,
and essentially said hey, let's figure out a way to solve this problem.
Somehow convinced him to drop out of school.
>> You convinced him to drop out of school. >> I did, I did.
>> What's his name?
>> His name is Garrett Ullom.
>> Okay.
>> Yes, his mom wasn't too happy at the time, but, she sends us care packages and
cookies and stuff nowadays.
>> All right, so now that you both are working on this startup,
you gave up I believe a job offer to go work for Microsoft, right?
>> Yeah, that's right, and ultimately my father was a dot com entrepreneur, and
he built a lot of businesses in Silicon Valley.
And just kind of got the bug at an early age and said hey, opportunity costs,
if there's any time I'm going to do anything and
start a business, it's going to be now.
So, I figured I might as well try it right after school.
>> What about raising the money to do this?
You basically put yourself out there, and what happened?
>> So, really right out of school I went into an incubator program in Philadelphia
called DreamIt Ventures.
>> Dream Adventures?
>> DreamIt Ventures.
>> DreamIt Ventures in Philadelphia.
>> That's right, that's right. They give you a little bit of cash, 20,
$25,000, say you have three months, go figure something out.
If you can make it, you made it,
if you can't, go back to doing whatever you were doing.
And we went through the program, met a lot of really great people, and
it's an amazing program that supported us.
And literally after demo day, which is kind of the day that you present your
ideas to the community and investors, First Round Capital, which is a major
institutional venture, capitalist firm in the country, decided to fund us.
>> So we've heard a little bit about Adaptly and
their genesis in getting started, as well as a little bit of what they do and
how they try and help startups navigate this advertising space.
So in summary, when you look at industry structure, there are a number of elements,
and sub-elements, and
sub-elements of the sub-elements that we are going to talk about.
But all of it's geared towards helping you better understand the industry and
how to compete effectively within that.
As we look at advertising intensity, it's something that low advertising intensity
does present a more affordable opportunity for new entrants to enter and
compete effectively on a more level playing ground.
It also suggests that the brand loyalty of incumbents,
the brand loyalty that may exist for
the companies that you're already competing against, may be surmountable.
It may be something that you can conquer, not easily, but with more relative ease,
than if you're competing at a more high intensive industry.
So we encourage you to think about low capital,
as well low advertising industries and how you can enter in success and
realize your success within them.
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