huge and digital strategy

HUGEAnd Digital Services

Group 7Gabriella Kawilarang

Minjae ParkKripa Shroff

Leanne Tremblay

What We Do• Digital Business

– Creating products and services that transform organizations for the digital economy

• Integrated marketing– Building brands and driving sales with a cross-channel, digitally-led

approach to communications• Strong focus on UX

– Simple, elegant, and easy-to-use platforms

“The value of our brand is synonymous with the quality of our work: Remaining excellent”

Brand Mission

What Does it Take to Win?

Incorporate both full digital services and traditional services

What Does it Take to Win?

To reach revenue levels in the hundreds of millions that will put

them in the top 25 digital agencies in the US by revenue level

Strategic Goal

How could HUGE best grow without compromising the

firm’s reputation for excellence?

Core Question

• Steady as She Goes• Retainer Relationships• Geographic Expansion• Healthcare• Expanded Traditional Services

Possible Solutions

Steady as She Goes

Possible Solution #1

Continue with their current strategy

Steady as She Goes

“HUGE had reached the point where the growth

for which (Shapiro) was hoping- to revenue levels in the hundreds of millions- would require

a shift in strategy”

Challenge to Steady as She Goes

Retainer Relationships


• Expand the proportion of clients with which HUGE had a long-term retainer relationship with

• Positioning itself as a recurring component of companies marketing budgets


“CMO tenure gradually decreased from 24 months in 2004 to 22 months in 2010-

compared to about six years for CEOs and four years for CFOs.”

Challenges to Retainer Relationships

“HUGE shied away from engagements primarily focused on campaign-based marketing, such as display advertising or PPC search marketing…

this stance was not without significant opportunity cost…”


“[If HUGE] was trying to expand the proportion of clients with which HUGE had a long-term

retainer relationships… HUGE could find itself doing digital marketing projects - such as display

advertising and search marketing.”


“HUGE did not pursue [digital offerings forcing clients to come back for any revisions or

enhancements] because senior management viewed it as unethical and ineffective to create digital products that client could not support or

maintain themselves”.


Geographic Expansion


Exporting what had worked so well in New York to other cities and

even other countries

Geographic Expansion

“... difficult to scale due to scarce talent in the marketplace and

conflicting client needs.”

Challenges to Geographic Expansion

Only 5 countries of the countries in the “World eCommerce Statics 2009” have a higher

ecommerce rate than USA

20% eCommerce rates indicate 80% retail commerce rates


Average proportion of the population that are technologically savvy in US is 6%


Health Care


Targeting a new market segment that spent

approximately $1 billion online

Healthcare

Heath Care growth rate is almost half the growth rate of search marketing and display advertising

Healthcare

Health Care is a $1.5 billion market compared to display and search that are a

$47.3 billion market.

Healthcare

Digitas and Razorfish have established independent healthcare practices and

already offer full-service digital services.

Healthcare

Weak demand in the common consumers who say they would use social media, Chat/IM, and online forum channels with their doctors

Healthcare

What people say is different from what people actually do

Healthcare

Expanded Traditional Services


Expansion of offerings into more conventional marketing services, including

heavier emphasis on display advertising and search marketing, as well as expanding

IT offering to offer robust technical support, with possible efforts in PR, print,

and TV advertising

Expanded Traditional Services

“As networks, platforms, and programming became more central to modern marketing,

digital evangelists emphasized that marketers ‘need to think like software companies’ and

cultivate hybrid marketer/developer specialists ‘who understand tech from a marketing and

brand perspective, and who have a consumer mindset’”

The Optimal Solution

“Established marketing agencies like Ogilvy and Leo Burnett rapidly developed digital practices that often benefited from strong brand affiliation and well-established client

relationships in the industry… IT providers such as Sapient and IBM, began to expand their practices to fuller digital strategy as firms began to move from internal systems to web-based platforms. Like traditional marketing, IT firms leveraged brand name and client relationships to become

some of the largest digital consultants in the U.S. Their main challenge was mastering the creative and UX design

side of digital marketing.”


“HUGE took great effort in positioning itself as a one-stop shop for clients seeking to navigate the digital convergence. Consistent with its founding emphasis on integrated digital

marketing services, HUGE’s leadership felt that the future of the firm lay in being a digital ‘uber-firm’ that handled general

marketing strategy as well as the design of digital products and campaigns, along with technical implementation. This

one -stop shop approach shop approach was viewed as being critical to long-term success because Shapiro and his staff

believed that within the next decade ‘there will be no specific digital industry because everything will be digital.’”


Search and display digital advertising, which HUGE has not offered in the past, accounts for

about 70% of the overall digital budgetFORECAST FOR 2016


Social Media Email Mobile DISPLAY SEARCH Total

4,995 2,468 8,237 27,600 33,319 76,619

Even though Internet is growing at 15.7%, the combined growth rate of other media excluding

Magazines and Newspapers is larger than the internet growth rate.


Source: Exhibit 9 Huge and Digital Services Case

Search and Display are growing at about 20% each year, which is higher than the yearly

growth of the health market and also the other digital strategies they currently incorporate.


Competitors and Complements – “HUGE found itself constantly working to evolve its capabilities just as other industry players, change for us is the

norm” –CEO Shapiro


HUGE will be able to expand their capabilities and maintain their flat organizational and

entrepreneurial structure with their ability to move to a larger office space and have the

creative talent to tap into as they currently have less than a half a percent hiring rate

Feasibility

• We have understood the context for the decision and the overall strategic goals of the organization and thought in alignment with these goals

• We have framed the problem correctly and asked the right question(s) and we can show that our framing is the best

• We have identified the widest feasible range of options for the decision and established a fair and rational process for evaluating these options

• We have made a decision and can demonstrate that our decision is the best from the available options

• We have a realistic and achievable decision

Evaluation

By implementing the expansion of traditional services, HUGE will be able to

increase their revenues into the hundreds of millions of dollars while maintaining

their commitment to excellence

Conclusion

Thank You

We are happy to take any questions at this

time.