Doing More With LessBy CIOinsight
Trends: Digital Asset Management
It was Friday afternoon, March 21, roughly 48 hours before the curtain was to rise on ABC's live broadcast of this year's 75th annual Academy Awards ceremony, and Ted Sann had a problem. It was 3 p.m. in Manhattan and Sann, the chief creative officer and chairman of the New York flagship of BBDO Worldwide, the world's third-largest ad agency, had a creative team out on the West Coast still haggling over the final cut of a 30-second Oscars spot for client AOL Broadband. Would the ad pass muster back at headquarters? Time was running out.
Ad deadlines are always pushed to the limit for highly coveted spots during special programs such as the Academy Awards and the Super Bowl, when ratings peak and viewers are almost as interested in the commercials as they are in the show itself. But this time, the final cut was running critically late. It still had to be finished, then reviewed by Sann back in New York along with a half-dozen other BBDO executives and AOL. And that was just for starters. After that, the commercial would still have to be finalized and get network clearance from ABCa process that, under normal circumstances, could take days to complete.
In the past, the task would have seemed insurmountable, says Melinda Graham, the supervisor for the AOL Broadband account. "We would have been scrambling at the last minute over the weekend, frazzled nerves and a deadline breathing down our necks," Graham says.
But not this time. Thanks to BBDO's use of a new digital asset management system that lets the agency gather, organize, track and digitize its contentfrom moving images and radio spots to still photographsit took Graham only ten minutes to encode a final cut of the reel and send it from Hollywood via the Web to the AV department in New York, which then transferred the electronic file to Sann's set-top box for viewing in seconds. Meanwhile, copies of the ad were sent via the Web to AOL Broadband and viewed by the BBDO creative team, and from there, a quick copy of the tape was created and sent via courier across town in Manhattan to ABC. By 5 p.m. ET, close to quitting time on a normal Friday, Graham's team, and Sann, were already on their way home for the weekend.
The payoff? A review process that would normally take up to several days or more was completed in just hours, and at roughly two-thirds the cost to BBDO. Says BBDO North America CIO Dennis Pannuto, who helped to create the digital asset management program for the agency, "BBDO is known for the creativity of its ads, but in this economy and marketplace, we're finding that clients are looking for a little bit more."
Indeed, DAM helps the agency "bring costs inside, cut out the middleman, and keep margins competitive," Pannuto says.
BBDO is not alone in its push to do more with less. Driven by the sour economy, as well as falling information storage costs, faster computer processing speeds and fatter network bandwidth capabilities, companies from retail leader Target Corp. to pharmaceuticals giant AstraZeneca PLC are turning to digital asset management strategies to help them catalog, make sense of and leverage their fast-growing warehouses of informationwhether audio, video, text or all three combined. Companies just starting to experiment with DAM say it can help them not only cut costs, but also create new profit opportunities: Media giant Martha Stewart Living Omnimedia Inc. (MSO) for example, is looking to DAM to help it sell specialized content to its customers.
How does the technology work? Digital asset management systems help firms create a digital warehouse that stores all company media and information, tagged by common names, or metadatainformation, say, about when a photo was shot, who shot it, where it was used and so forthaccessible at the click of a mouse and in a form that can be sent anywhere, anytime, and in seconds. That might not sound like much, but when used as part of a business strategy to cut costs and find ways to use in-house data to spawn new revenue opportunities, DAM can be worth millions.
But DAM isn't for everyone. Systems, whether created in-house or bought off the shelf, can be expensive. Paul Ritter, an analyst with The Yankee Group, a Boston-based technology research firm, says the software alone can run as high as $250,000, and companies may end up spending thousands more to install it, not to mention thousands more, still, to learn how to use it and fold it into an overall business strategy. "Some companies are charging three, four or even five times more on the professional services end than what the software costs," Ritter says, "because it's a complex installation and integration effort"especially if the information assets that a company needs to digitize are old, or could, in paper form, fill dozens of warehouses around the globe.
Building a DAM system also can create cultural challenges, depending on how many different names the company uses, across its various business units for a particular piece of information, or how many old and new technology formatsfrom 8-track tape to floppy disksthat information assets are stored on. Often, some companies find, some of the most valuable information can literally walk out the door every night. At Martha Stewart Living, for example, CIO Sheila Beauchesne says that at one time, the only clues about where some of the company's 93,000 assets could be found lay in the heads of a couple of veteran staffers.
It's no wonder, then, that a growing number of companies, pressed by ever-more urgent needs to cut costs and create new revenue opportunities, are starting to experiment with DAM. In a March 2003 CIO Insight survey of 501 CIOs, 36 percent said DAM wasn't yet on their radar screens, but some 18 percent said they've already deployed DAM, and another 15.8 percent said they're testing various DAM applications in pilot projects. Another 30 percent said they're tracking development. (See "Doing More with Less.") "The economy is forcing many companies, even those with strong products, to realize they can't sell their way out of the downturn and that, instead, they need to economize," says Michael Moon, CEO of GISTICS Inc., an Emeryville, Calif.-based tech research firm, "and economizing must become a permanent part of the business strategy." Adds AMR Research Inc. senior analyst Jim Murphy: "The industry jargon is 'We need to leverage our existing resources.' And from an IT perspective, DAM is about leveraging existing resources."
Consider MSO. In recent months, as efficiencies have been ordered internally across the company's various divisions, the company is using its two-year-old DAM project to help it weather the economic fallout from CEO Martha Stewart's December 2001 sale of her stake in ImClone Systems Inc. Even now, says Morningstar Inc. analyst T.K. MacKay, who tracks MSO for investors: "Advertisers are not committing to buying ad space in the company's flagship Martha Stewart Living magazine, and management is having difficulties negotiating with retailers to take over the lucrative merchandising business." Indeed, on April 30, MSO announced a loss of $4.51 million for the first quarter of 2003, its second consecutive quarterly loss since going public three years ago. The company's 2002 annual report quotes Stewart as saying the company won't be back in the black until 2004, or later. With the economic downturn, cost-cutting is now the recipe of the day at MSO, and CIO Beauchesne is already using DAM to cook up savings. Conceived in early 2001, not long before Stewart's ImClone woes, the DAM system aims to completely digitize the company's nearly 100,000 assetseverything from photographs of Martha's rose garden to her recipe for osso bucco and her advice for removing port wine from beige silk toile. The idea: Give the media giant the ability to more quickly, and cheaply, repurpose its vast storehouse of information for reuse, repackaging and resale. The strategy has not only cut dramatically the number of photo images the company needs to shoot and re-shoot, Beauchesne says, but can cut the cost of doing business throughout the company. "We have editors, researchers and photo archivers who have all seen productivity gains from this so far," says Beauchesne. In addition, the average story research time has been cut from six hours to 20 minutes. "We had people who were literally going back and flipping through old magazines to try to find some particular topic," says Beauchesne, "so everybody saw the DAM program as a big benefit right away." Considering the recent cutbacks in the company's Internet division alone40 of its 90 staff members were eliminated in a recent round of layoffsanalysts say the DAM program isn't only a "good thing," it's critical.
And now, spurred by the need for more cost-cutting and innovation, Beauchesne has served up an even bigger idea: This year, she's using DAM to help MSO execs plot a new business strategy that would use DAM to enable the bundling of various types of content into single packages that could be sold to individual customers, as customized content, for a feea project scheduled to get off the ground sometime this summer. Beauchesne says MSO is looking over customer data to get a sense of what types of premium content might sell best.
For now, though, the big win for many companies experimenting with the technology is speed and productivity gains from enhanced collaboration. At the WorldWide Retail Exchange, a 63-member consortium including Target, Campbell Soup Co., J.C. Penney Co. Inc., Royal Ahold N.V., Kmart Corp., Wegmans Food Markets Inc. and a variety of other food, textile and manufacturing companies can, for a fee, store their digital assets on the WWRE's secure DAM system. Using its program, members are cutting their marketing costs on advertising circulars and reaping a variety of other benefits. Members can use the one-year-old system not only to collaborate on joint marketing campaigns, but also to store and share its most commonly used digital assets, such as photographs of fabric, buttons, people and products. "A lot of textile and electronics companies have suppliers in the Far East, and DAM gives them the ability to share designs in real time across the globe," says product director Maureen Phillips-Houser, who runs the DAM program for WWRE.
In the textile business, for example, clothing manufacturers who supply Target and J.C. Penney and other WWRE members send people around the globe, from Paris to Australia, looking for new trends in color, fabric and style. Information is collected and sent back to the design team, which then begins the design process for, say, a new shirt. Today, that process is manualtrend managers have to physically send fabric samples and other data by mail. "You don't have any control over who gets these assets and what they do with them," says Phillips-Houser. Using WWRE's asset manager software, member retailers will still send out trend managers, but now those managers can go back to their hotel rooms at night, upload their images, check them into WWRE's central repository and share them with their design teams, in real time, anywhere in the world. WWRE also gives members access to more than 400 Adobe Illustrator files that show line drawings of a point of measure for, say, a clothing pattern, or how to measure a shoulder or cuff. "It makes data-sharing inside a company much easier, and data-sharing across retailers much easier, too," Phillips-Houser says. And the savings are undeniable. "The average cost to produce a single beauty shot is about $300, so if you capture 5,000 beauty shots over the course of a year and you're able to share that one image across the organization, you can save over a half-million dollars just in providing a single repository for all of your operating companies," she says.
Even the highly competitive, high-cost pharmaceutical industry is starting to sit up and take noticefor cost-cutting benefits and in response to pressure from regulators to meet marketing guidelines. London-based AstraZeneca, for example, the maker of the $2 billion heartburn drug Nexium, is using DAM to help ensure it meets its internal standards for accuracy and consistency across its 170 public Web sites and 1,300 intranet sites. The company, among a dozen being investigated by U.S. Attorney's offices in Boston and Philadelphia over allegations of inducements used to persuade doctors and health plans to prescribe its drugs, wants to better control how its content is written and distributed to customers. According to Stephen Taylor, the company's business engagement manager, the firm is thinking of ways to use DAM to communicate directly with doctors, via the Web, about the merits of a new drug. The goal, says Taylor: To reach those doctors who don't have time for a physical visit from one of AZ's sales agents. "There's always a certain core of doctors who haven't the time nor the desire to see a sales representative," Taylor says, "and the average time you get with a representative, especially in the U.S., is usually about 30 seconds." DAM, he says, might help AstraZeneca sell more drugs, but it also "gives doctors a way to view an infomercial about a new drug on their own time."
Down the road, says Gistic's Moon, DAM could hold even more promise. For example, he says, managers could use DAM to track which assets sales agents use most, and help identify which sales people are the best. "The chief marketing officer could use this to look for differences among A-team members, to find out, for example, why the A-team member in the northeast territory is doing something that the A-team member in the southwest isn't doingand then tie that to figuring out why the northeast territory is 11 percent over quota while the southwest is 5 percent under," says Moon. "That's a piece of data that closes the loop for the CMO to come back and say, 'Something's going on here' and then be able to fix it."
How to get started? BBDO CIO Pannuto advises other CIOs mulling DAM to look at it as a business strategy, "not a technology implementation" or failure is a sure thing. (See "Viewpoint," page 54.) Gartner Inc. analyst Toby Bell suggests companies might want, as a first step, to name a content strategist whose job it would be to create an inventory of corporate media assets, start cataloging them and then convene executives to consider their potential for strategic business use. "A lot of IT shops are looking for cost recovery, doing some ROI calculations, trying to eliminate a large number of moving parts," says Bell. "At the same time, though, they should review what the prospects are for using their existing information assets."
Just ask Martha Stewart. Last spring, the company, pressed by Kmart's financial woes as well as its own, sought to expand its line of Everyday products into the Canadian market. Sears Canada Inc. was interested, but needed a rundown of the company's productsand fast. Before the DAM system was in place, putting this sort of presentation together would have taken months, as the needed images and product information would have been in multiple locations, and "there would have been no way to pull all of that together and create it fast enough," Beauchesne says. What's more, the presentation would have been delivered in an enormous, clunky, paper-stuffed binder that would have taken "multiple people multiple weeks" to assemble. Thanks to DAM, Beauchesne says, the company was able to create a package, all on CD-ROM, within minutes. The payoff? By summer, Martha Stewart products will be available in all 162 Sears Canada stores, as well as in the Sears Canada print catalog and Web site.
Was DAM the only reason MSO won that new partnership? Beauchesne says no. But there's no doubt that it helped seal the deal in the time requiredand that, agrees Beauchesne, was a really good thing.
Debra D'Agostino is a reporter at CIO Insight magazine. Staff researcher Bijal Saraiya contributed to this report. Please send comments about this story to firstname.lastname@example.org.
Managing Intellectual Assets in the Digital Age
By Jeffrey H. Matsuura
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"Digital Asset Management In the Enterprise: Making Content Actionable"
By The Yankee Group
"Artesia Technologies: Mainstreaming Digital Asset Management"
By IDC, October 2001
"Refreshing Media Management"
Doing More With Less
Doing More With Less
How early adopters are using digital asset management software to help boost the bottom line
|BBDO North America|
|Getting multiple approvals for rough cuts of TV commercials or print ads could take several dayslonger if couriers lost or delayed materials in transit to clients and execs around the globe.||A DAM workflow program called "The Screening Room" lets BBDO creative personnel and executives share and distribute rich media, including sound, video and photographs, in minutes.||The Manhattan office reduces courier costs by more than $500,000 and cuts to hours from several days the review process for 25 clients.|
|Worldwide Retail Exchange|
|The Exchange's 63 member companies spend months of staff time and millions of dollars sending physical copies of photographs, story boards, concept designs or packaging samples between headquarters and different internal divisions or outside business partners.||Retailers and suppliers store product photos and corporate logos on a secure WWRE DAM site, with access privileges granted to business partners, such as grocery stores, textile manufacturers and retail outlets, to improve collaboration.||DAM cuts the work required to days from months, and speeds the impact of promotional campaigns in targeted markets. It also saved client companies $600,000 last year by creating a centralized repository for creative assets.|
|Redundant and outdated information on the U.K.-based pharmaceutical company's 170 public Web sites and 1,300 intranet sites confused client physicians and staff members.||DAM helps the company standardize its marketing message across sites, better manage its online content and digitize millions of offline documents to help bring new drugs to market faster.||DAM cuts in half the time it takes to manage and prepare digital content, for annual savings of $50,000 per Web site, and enables AZ to stream infomercials to doctors over the Web.|
|Sales brochures for various travel destinations and packages sometimes contained outdated price and availability information.||A DAM system organizes the travel company's 65,000 images, arming travel agents with up-to-date travel-package information to help them sell more to clients.||TUI UK now produces all publications internally, saving thousands of dollars in production costs and helping the company's 1,000 agencies serve clients better.|
|Martha Stewart Living Omnimedia Inc.|
|A need to track the company's 93,000 assets, followed by a companywide cost-cutting initiative, required business units to become more efficient and productive.||A DAM program lets editors reuse contentfrom recipes for bundt cake to photos of rosesand will soon help the company sell customized, packaged bundles of content to individuals on demand.||Estimated savings so far of $1.5 million, with annual savings of up to $7 million predicted by analysts, plus potentially millions in revenues once its customized-content subscription strategy is under way.|