Measuring "Digital Escape Velocity:" When Digital Revenues Offset Traditional Media Losses

amp160In an exclusive interview with JackMyers Media Business Report Girard uses this concept to explore why transformation is difficult to recognize much less embrace Clickability has been a frontrow passenger to the explosion of online publishing and the emergence of Software As A Solution SaaS As such this perspective has challenged Girard and his team to consider the broader implications of how technology has reshaped us and how our best practices must evolveThis February the company closed a second round of investment funds raising 8M from Shasta Ventures and Convergence Partners which led its initial round To date Clickability has raised 156M and reports that with over 140 blue chip clients including CNN the Wall Street Journal Smithsonian TIME and full disclosure Myers Publishing it39s currently in the blackGirard offers online video as a notsotextbook example of an innovation that upends this sense of quotThe Presentquot quotIt39s hard to remember this far backquot says Girard quotbut YouTube was actually founded three years ago this past February Within eighteen months they were purchased by Google Prior to YouTube video was kind of an afterthought for most Web publishers now it39s essentialquotIt is Girard39s contention that we are overtaken by change because we don39t ask the right questions Girard cites the recording industry No one still asks quotDid you get the new Rolling Stones albumquot Buying a physical object distinguishing between an album and a single have all become largely obsolete Leapfrogging over to television Girard mentions a test he gave his staff name the network channel and time slot of Lost No one was able to get all three answers rightThese examples encouraged Girard to mine a concept that has relevance to his core competency Web Content Management Girard explains quotDigital Escape Velocity describes the point in the future when digital media revenues offset losses in traditional offline mediaquot Girard argues that we have to be willing to look at a long enough time scale quotLook at what happens if the average offline losses are five to seven percent a year and the average online gains are fifteen to twenty percent a year Now depending on what the numbers are how fast online is growing and how fast offline is dropping that point may be significantly lower from a total revenue stand point from where those businesses are today It may not be a pretty picture but there is a point on horizon where this escape velocity actually happens and losses turn aroundquotquotWhile the recording industry has not responded well to replacing traditional revenue with digital revenue streams that39s not actually not the case with traditional mediaquot offers Girard quotNewspapers have actually been developing pretty sophisticated and robust digital strategies What people overlook is that for most organizations the contribution to digital is still pretty small but the other thing that gets missed is that the operating margins are so much higher on digital that the contribution to operating income can actually be much more dramatic many many times higher largely because the operating margins on the print side have always been very very slimquotAs Google continues to rollout its cloud computing applications Amazon offers its storage solution S3 and even Microsoft is toeing the water with Mesh Clickability looks visionary for having married its focus on Web Content Management with Software As A Service quotFrom a philosophical standpointquot agrees Girard quotSaaS utility computing and cloud computing are kind of cut from the same cloth Our business is essentially infrastructureintensive and we serve on behalf of our customers around 280 million and 300 million page views a monthquotOne of the prevailing myths around SaaS is a loss of control Argues Girard quotThe reality is that the customers tend to have more control when they move into this kind of environment If you look at what people experience when they have installed content management software on premise their uptimes are typically around ninetyfive percent while ours is typically around ninetynine percentquotJust as online video galvanized the Web Girard envisions that quotSaaS is going to replace the traditional enterprise installed applications We are seeing just the beginning of what will be a feature change in the industry Nobody will buy and install enterprise software in a decade and five years out will be the tipping pointquotFor those considering a WCM solution Girard asks quotWhat is your core business If it generates strategic value from innovating technologically on your own you have a case for making it or building it inhouse But if you believe that your core business is creating exceptional content and connecting an audience with advertisers then outsourcing the technology component deserves some real thoughtquotGirard adds quoteven in a time of slowdown there is a pressure to make the right choices over which of those technologies to embrace how to embrace them and how to monetize them It39s essentially an opportunity to invest and grab market sharequotClickability employs a proprietary methodology for product development one that enables them to release a feature a day and four substantive releases a year During his presentation Clickability CTO Jeff Freund offered quotfive years from now I truly believe that we won39t be remembered as a content management solution but as a redefinition of what it means to be an agile enterprisequot

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Measuring "Digital Escape Velocity:" When Digital Revenues Offset Traditional Media Losses

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