>>Terence Kawaja: Hi. My name is Terry Kawaja
and I run LUMA Partners. It's a strategic
advisory firm at the intersection of media
and technology.
Now, I'm going to use Don Draper to help me
describe something I call the sciencification
of media. Now, what exactly do I mean by this?
Well, if you're confused, you're probably
not alone. There's -- it's a confusing title,
and besides, that's over 15 seconds, so there
you go. You just get to keep talking about
the title slide.
So the sciencification of media is really
 -- what I'm talking about is --
There we go!
I -- actually what I did was, I Googled it,
right? And the only thing that came up was
my own tweet about it.
So clearly that's not that relevant.
But what I'm really referring to is data-driven
targeting and optimization of digital media.
And while that may seem like a narrow subject,
I submit that it's much broader.
Imagine -- think about the early days of a
media channel. It takes a while for it to
get into its own, and I believe digital just
coming on. Remember the early days of TV?
They basically televised a radio broadcaster.
I think we're at a critical inflection point,
and apparently I am not alone. Google recently
launched a campaign to emphasize their efforts
in the display space, so Eric, Nikesh, Neil,
you let me know when I screw up here.
This is a really big thing, and data makes
it all possible.
Ubiquitous data about consumers' preferences,
likes, dislikes, proclivities, you name it,
and all this data is being utilized by a vast
ecosystem of companies that are looking to
target advertising.
And a vast ecosystem it is. It is a complete
mess.
I attempted to chart 200 companies in 26 categories
to try and understand how this works, and
it's terrible.
And when you consider this is only an $8 billion
market, you really start to get worried.
But don't worry. There's hope!
It's a much bigger market.
Think of online media as a Petri dish where
they take the learnings of targeting and optimization
and bring them to the much larger markets
in television, radio, print.
And if you ask me, people are after television
because that's where all the money is.
And it's not just advertising. The same targeting
technologies can be utilized to help with
content creation, content discovery, the whole
consumer experience from CRM to product design
and e-commerce.
So this is much broader.
In many ways, media is becoming personalized.
Every single one of us in this room could
have -- go to the same websites and have an
entirely different experience.
This is the future of digital, and I think
this is the -- what I'm talking about in terms
of sciencified media.
In that is going to become such a rich consumer
experience that going back, doing it, not
having a personalized media experience, will
feel old and static. There's no way you can
go back to the old options once you've gotten
to the nirvana of sciencified media.
That has not stopped folks in Washington from
trying to intervene. They believe that there's
severe privacy concerns, and there's been
legislation suggested that would significantly
hamper this.
And the media has gotten in on it. Heck, the
Wall Street Journal came out with a whole
series on -- called "What They Know" that
talks about all these tracking technologies.
I will tell you that the tone was very alarmist,
but I'm sure it sold newspapers.
And I think like Don does. I need a drink
when I read those.
And, you know, it's understandable why it's
a newsworthy topic, because all of these issues
 -- real-time, social, mobile, and local -- are
all elements of sciencified media, and they
have massive implications beyond just media.
What are those implications? Well, let's take
a look at the purchase funnel.
When you change the top layer, the entry layer
of the purchase funnel, from an art to a science,
it has massive implications. All the other
layers are all the science of conversion,
and the first implication may, in fact, be
a collapse of the purchase funnel where you've
got media companies moving down the funnel
towards search, towards e-commerce, and e-commerce
companies coming up towards media, because
it is now a language that they understand.
This is going to have a significant implication
and will likely lead -- thankfully -- it to
a lot of M&A activity, a lot of consolidation,
because a lot of different companies are going
to be getting in on the game to take advantage
of rectifying the fragmented marketplace and
taking advantage of this huge opportunity.
And I'm not just talking about the usual players.
I mean, sure, you've got the big media and
marketing companies, old and new, but you
now have companies in data and communications
and networking and software and hardware that
are getting in on the game.
Don't believe me?
Well, it's already happening.
Many of these companies in the last two years
have made significant investments in terms
of acquisitions in this space because sciencified
media matters.
If you think about all the cash positions
of these companies, it really starts to get
interesting. They're all at all-time highs.
So I believe that sciencified media is a winning
strategy where -- and there's a reason why
there's so much interest. It is because of
the huge opportunity set.
In fact, the future of the whole consumer
experience is at stake.
And so in conclusion, the digital channel
is showing its true value. Thanks, Don.
Consumer data is fueling media innovation,
which has big implications on both the industry
and the consumer experience, and privacy concerns
will probably -- we'll get over those and
there's no going back. Thank you very much.
