How Steve Jobs Got ATT To Share Revenue

FORBE'S

Peter Cohan, Contributor
Published: August 21, 2013
 

FRANKFURT AM MAIN, GERMANY - OCTOBER 06: A picture reading 'Danke, Steve' (Thank you, Steve) was placed outside of the Apple Store in remembrance of Steve Jobs, founder and former CEO of Apple Inc, on October 6, 2011 in Frankfurt am Main, Germany.  (Image credit: Getty Images via @daylife)

 When he worked at telecommunications consulting firm, Adventis, Raj Aggarwal met with Apple’s Steve Jobs twice a week for several months. In an August 15 interview, Aggarwal explained how Steve Jobs persuaded AT&T’s Cingular Wireless to provide service for the iPhone with an unprecedented revenue sharing agreement.

 

In 2006, CSMG acquired Adventis and Bain & Co. hired Aggarwal as a consultant before he left in August 2008 to found Localytics, a 50-employee, Boston-based “analytics and marketing platform for mobile apps on a billion devices running 20,000 apps. Microsoft and The New York Times are among the companies that use Localytics to guide the allocation of their mobile marketing budgets with the aim of boosting the lifetime value of their customers,” according to Aggarwal.
 

As most everyone knows, when Jobs first launched the iPhone in June 2007, he cut a deal with AT&T in which Apple would get a portion of AT&T’s revenue. According to the Harvard Business School case, Apple Inc. in 2010, “AT&T, the exclusive U.S. operator for the iPhone, agreed to an unprecedented revenue sharing agreement — Apple got about $10 a month from each iPhone customer’s bill – which gave Apple control over distribution, pricing, and branding.”
 

Aggarwal, whose Adventis consulting stint with Jobs occurred in “early 2005,” said that Jobs was able to pull off the AT&T deal because of his personal involvement in the details of the iPhone, his efforts to build relationships with carriers, his willingness to make demands that others perceived as outrageous, and his nerve to bet major resources on that vision.
 

Aggarwal pointed out that Jobs was different than other CEOs who delegate strategy implementation. “Jobs met with the CEOs of each carrier. I was struck by the hands-on nature and his desire to make his mark on everything the company was doing. He got deeply involved in the details he cared about. He made it happen,” said Aggarwal.
 

Aggarwal was impressed by the way Jobs was willing to take a risk to realize his vision. “In one meeting in the conference room with Jobs, he was annoyed that AT&T was spending too much time worrying about the risks of the deal. So he said, ‘You know what we should do to stop them from complaining? We should write AT&T a check for $1 billion and if the deal doesn’t work out, they can keep the money. Let’s give them the $1 billion [Apple had $5 billion in cash at the time] and shut them the hell up,’” Aggarwal recounted.
 

Although Jobs did not actually offer AT&T the cash, his willingness to do so made an impression on Aggarwal. Aggarwal also found Jobs unique in his outrageous demands. As he explained, “Jobs said, ‘$50 a month unlimited voice, data, and SMS plan — that’s our mission. We should ask for and go after something unreasonable that no one has been willing to accept.’ He would come up with these outrageous demands and fight for them — getting much more than he otherwise would have.”
 

From the iPhone, AT&T ended up getting nearly twice the average revenue per user of its peers. According to Apple Inc. in 2010, AT&T’s iPhone ARPU was $95 compared to $50 for the top three carriers. AT&T was proud of the deal it cut with Jobs and clearly wanted what Apple was then offering. According to my February 2012 interview with Glen Lurie, then President of Emerging Enterprises and Partnerships for AT&T, AT&T’s exclusive relationship with Apple resulted, in part, from Lurie’s ability to develop a reputation with Jobs and Tim Cook for trustworthiness, flexibility, and speedy decision-making.
 

As a way to build that trust, Jobs needed to be certain that Apple’s iPhone plans would not be leaked to the public. And Lurie’s small team evidently satisfied Jobs that it could be trusted with sacrosanct business details about the iPhone. The result was AT&T’s 2007 to 2010 exclusive deal to support the iPhone.

Interpublic Strikes Deals Automating Buys With 5 Media Giants: Covers TV, Radio, Outdoor, Display, Video, Mobile

The way your company's consumer ratings metrics are in the process of being changed. Philip Jay LeNoble, Ph.D.

MediaDailyNews

by Joe Mandese, Yesterday, 8:14 AM (August 20, 2013)

On the heels of last week’s deal naming Adap.tv its primary automation platform for targeting and buying TV and video inventory, Interpublic this morning unveiled a spate of similar deals to automate its transactions with five big media suppliers traversing TV, radio, out-of-home, mobile and online video and display.

 

Details about how the deals would be structured and how they would work were not disclosed, but Interpublic said it now has agreements with TV programmer A&E Networks, cable operator Cablevision, out-of-home and radio operator Clear Channel, local broadcaster Tribune and online portal AOL, which is in the process of acquiring Adap.tv, to supply assets “not previously available through automated buying systems.”

 

The initiative, which was developed by Interpublic’s Mediabrands unit, is dubbed the Magna Consortium, and is part of the agency holding company’s mission to automate 50% of its media-buying by 2016.

 

Interpublic has said it is making the push for several reasons, including both greater operating efficiency for its agencies and its clients as media-buying becomes hyper-fragmented and hyper-complex, as well as greater precision in targeting audiences it says will result by shifting from conventional audience-buying data (ie. Nielsen ratings, GRPs, etc.) to estimates that co-mingle so-called first- and second-party sources of data in a manner similar to the way agency trading desks utilize DMPs -- or data management platforms -- to trade online audience buys.

 

“The good news is that our charter members were quick to sign on to develop a plan forward,” Magna Global Worldwide CEO Tim Spengler stated, adding: “Our goal is to ignite real change in the way media is transacted for the industry.”

 

While programmatic trading systems are growing fast in the online display marketplace (Magna estimates this is currently about 25% of all online display advertising), the growth has come largely from the emergence of an over-supply of online inventory and auction-based media-buying models like “RTB,” or real-time bidding, that many “premium” suppliers are loath to embrace for fear it will “commoditize” the value of their inventory.

 

However, some of the most premium online publishers now participate in programmatic exchanges, and many of those deals are not necessarily auction-based, but function more like private exchanges where sellers can set pricing “floors” and buyers can set “ceilings" to ensure that both sides are in control of the process -- even if it’s being processed by machines faster than humans can manage such deal-making.

 

According to Frank Addante, CEO of Rubicon Project, one of the biggest suppliers of media-buying automation technology, the speed of such transactions is accelerating and is now down to 30 milliseconds of processing time for the average online buy. That’s an improvement from 300 milliseconds a year ago, and three seconds three years ago, all thanks to improvements in data-processing technologies.

 

The advances of such technologies, and the shift among advertisers and agencies to use them to improve their efficiency, as well as the data-driven effectiveness of reaching their audiences, has sparked a gold rush among media and advertising technology suppliers, many of whom are now going public. One of the fastest-growing and most sophisticated of those developers -- Rocket Fuel, which utilizes artificial intelligence and robots that can assess and bid for media value faster than any human can -- is the latest to file for an initial public offering.

 

In its filing late last week, Rocket Fuel noted that advertisers are flocking to its technology, and that its revenues more than doubled last year -- and more than tripled during the first half of this one, thanks to a surge in the number of advertisers using its platform. The filings said Rocket Fuel currently has 784 advertisers (up from 341 last year), and that many of its existing advertisers continue to increase the volume they trade via its systems.

 

The greatest impediment to Interpublic’s goal of automating 50% of all its media buys by 2016 is convincing the most premium suppliers of media inventory -- especially the major television networks -- that they won’t lose control, or value, by doing so, which is why A&E Networks' direct involvement is so significant.

 

That said, at least a portion of all of the most premium TV suppliers inventory already is being sold through programmatic exchanges. While it’s not being sold directly by the national TV networks themselves, the trading desks of at least two agency holding companies have already begun utilizingAudienceXpress, a programmatic audience-buying exchange spun off from target TV-ad serving developer Visible World. The portion being traded by AudienceXpress comes from the two minutes per hour that networks give to local cable TV operators as part of their carriage agreements. While the cable operators are supposed to sell that commercial time to local or regional advertisers, AudienceXpress effectively pools their national reach into unwired network buys.

Since it became operational in late January, AudienceXpress Founder and CEO Walt Horstman estimates the two agency trading desks that have been beta testing it have bought 2 billion TV advertising impressions through it.

 

The reason why AudienceXpress has been successful where others, including Google and Microsoft, have failed, says Horstman, is that its platform is designed to give suppliers 100% control over the floors they set for selling their inventory, while giving buyers the ability to analyze more data that will enhance the value of buying those audiences from their perspective.

 

As with online publishing, the supply of unsold TV inventory also continues to expand due to the emergence of so-called “long-tail” networks that are not yet rated by Nielsen, as well as a torrent of free video-on-demand audience impressions.

Wakshlag Supports Nielsen-Arbitron Merger Thinking Cross-Platform

TV Blog

by David Goetzl, 13 minutes ago (3:23pm MDT August 21, 2013)

Jack Wakshlag was told he's on the Mt. Rushmore of media researchers. He laughed heartily. Then, he got down to business.

The Chief Research Officer at Turner Broadcasting offered a spirited endorsement Wednesday of Nielsen’s proposed $1.26 billion deal to acquire Arbitron. From his perspective, the media industry needs reliable cross-platform measurement that can serve as a currency -- yesterday. And, he believes a marriage will move that along.

 

“A combination at this time accelerates the process,” Wakshlag said in an interview, though he acknowledged the process will still have a long way to go even with a merger. 

 

“My tweet says what I feel … I am happy to see progress with these companies working together,” he added in reference to a recent Twitter drop. “And, yes if this merger will accelerate the measurement of any content, anytime on any device, anywhere – it’s good for my business.”

 

Wakshlag is hardly an active tweeter – his feed includes 14 missives since July 2009 – but he recently took to the social networking site to tout a cross-platform initiative Turner has engineered, which uses Arbitron and Nielsen data. He implied the project, CNN All-Screen, might have been easier had the two companies already been together.

 

“This is a positive sign of what is possible when Nielsen and Arbitron combine efforts,” he tweeted, linking to a Broadcasting & Cable article about the CNN product.

 

The effective green light for the Nielsen/Arbitron merger – which would combine the dominant currency providers in radio and TV measurement -- is presumably tied up somewhere in the halls of the Federal Trade Commission (FTC). Or, maybe not. The FTC may have indicated to Nielsen that it’s not in favor unless the company enters into a consent decree -- maybe agreeing to a divestiture or promising licensing opportunities.

 

Certainly, the FTC has taken a look at whether the deal will give Nielsen too much of an advantage in that cross-platform space that is so important to Wakshlag and others.  Will it prove anti-competitive with so much data under one roof?

 

It might stand to reason that having the companies continue to chase solutions separately might be beneficial. Could a merger stifle innovation? Wakshlag said, yes, competition is good for the most part. But, there are enough players out there toiling in multi-platform measurement that taking one off the market isn't a concern.

 

“There’s plenty of room for competition and there are other companies that are coming up with new and interesting ideas that will be part of the process, including ours,” he said. "Ours" was a reference to CNN All-Screen, which uses Arbitron’s out-of-home TV measurement data, Nielsen’s TV ratings and ways to capture PC and mobile usage to show CNN’s reach beyond TV. The Arbitron data comes via its portable people meter (PPM) technology.

 

B&C reported that Turner is set to begin using CNN At-Home, which also measures HLN consumption, as a currency this fall. That begs the question if Turner can orchestrate a multi-platform product with Arbitron and Nielsen as separate entities, can’t a currency be developed without a merger?

“It could, but at this point in time with the products that we see available and/or on the horizon, we think that the probability of having (one) ... sooner rather later is helped by (a merger),” Wakshlag said.

In a separate realm, Wakshlag declined to address whether Nielsen and Arbitron together would lead to some sort of bundling and higher pricing. That, however, is probably more a matter of concern to the likes of CBS, ESPN and Univision that have TV and radio products.

CBS’s top researcher David Poltrack – another Mt. Rushmore candidate – has come out in favor of the deal. ESPN and Univision have declined comment.

Also declining comment was Wakshlag regarding what he might want the FTC to seek in a consent decree with Nielsen.

 

The proposed Nielsen-Arbitron deal was announced late last year. It may be a testament to the thoroughness of the FTC. Or, how complicated the future of media measurement is. Or, a wariness about a bigger Nielsen. Or, tangling  about what a consent decree might look like. Or, something else, that the review process has taken this long.

 

But back to the cross-platform measurement pursuit. Wakshlag is optimistic.

“Sooner or later, the process will settle on one because at the end of the day,” he said. “Nobody wants multiple currencies. I don’t want to trade in pounds, euros, dollars and drachmas.”

One currency. All screens. Oh, if only so simple.

5 Steps to Fixing Problems with Problem Solving Techniques

 

 

 Making budgets is always a task for leaders. Herein are some salient points that may help you solve daily problems. Philip Jay LeNoble, Ph.D.

by Mike Figliuolo at thoughtLEADERS, LLC

 

               Published: August 21, 2013

Everyone thinks they’re a great problem solver.  I mean – who isn’t?  Give me a problem.  I solve it.

The problem is you might be working on the wrong problem.  Or you’ve missed the entire root cause.  Or the solutions you pursue aren’t the highest impact ideas to chase down.

Problem solving is actually pretty simple though.  All you have to do is follow five simple steps.  I promise if you’re rigorous about the problem solving method you use, you’ll improve your chances of solving the right problem, generate solutions that address the true root cause, and select the ideas to pursue that will have the greatest impact.

How do I know this method works?  I’ve personally used it for almost 15 years and we’ve been teaching our clients our Structured Problem Solving course for a long time.  And every time we teach it, participants in the program walk out with great new tools they immediately apply to solve the biggest problems they face.

So how can you become a better problem solver too?  Easy.

Step 1: Pin the Problem

You’ve got to clearly define the issue at hand.  Look at the problem not just from your perspective but from multiple perspectives.  What would your CEO say the problem is?  Your customers?  Your front line associates?  Your finance team?  You get the picture.  Problems look different to different people.

Also look at causality.  All of us have solved a symptom before rather than curing the real disease.  When you fix a symptom, the root problem doesn’t go away – it simply manifests as new symptoms.  Be sure to understand causality.  Once you’ve looked through different lenses and found root causes, you should have a clearly-defined problem.

Step 2: Identify the Issues

Building on causality, start breaking the problem down into sub-components.  For example – if you have a profit problem, that breaks down into revenue issues and cost issues.  On the revenue side, that breaks down further into price issues and volume issues.  Costs break down into fixed cost issues, variable cost issues, and semi-variable cost issues.  As you break the problem down and identify all the possible issues and problems you face, your chances of finding the true root cause go up.  This will also give structure to your problem solving so you can be deliberate in your investigation and analysis.

Step 3: Generate Hypotheses and Prioritize Proving Them

Once you’ve laid out all the issues, start thinking about ways you could solve each issue.  Note I did not say to actually solve the issues – just to identify possible solutions for each issue.  Those possible solutions become your hypotheses you’re going to prioritize, analyze, and evaluate.  This is the work of classic brainstorming.  For example, if you have a volume issue on the revenue side of things, you might generate ideas like enter new markets, launch a new product, increase sales efforts at key customers, and expand distribution channels.  All four of those ideas focus primarily on driving volume.  Those are your four initial hypotheses for that particular issue (volume).

Once you’ve constructed a full list of hypotheses that could solve all the issues you identified in Step 2, you need to prioritize your efforts.  There’s so much waste in our current problem solving methods because we go out and try to prove or disprove every hypothesis instead of focusing on the ones that could be the biggest.  Use the 80/20 method.  Do some rough calculations to see which idea might be the biggest.  The bottom line is don’t set out to prove or disprove everyhypothesis.  Focus your efforts on the ones that could be the most meaningful.

Step 4: Conduct Your Analysis

You can stop twitching now – we finally get to open Excel.  But again, our analysis is a focused effort designed to prove or disprove our primary hypothesis (the one from Step 3 that we thought could have the biggest impact).  Center your analysis on proving or disproving that idea.  If you prove it’s a valuable solution, you’ll have some impact, pay your own salary to stick around to do some more problem solving, and then move on to the next most likely idea.  Ring the cash register, folks.  You may not find the biggest idea on the first shot but at least you’re making a contribution (unlike those folks who analyze everything but implementnothing).

Remember – you don’t need all the analysis.  You need the right analysis.  If you can focus your efforts on proving or disproving your primary hypothesis, you’ll be more efficient and get to answers quickly versus getting stuck in the muck of analysis paralysis.

Step 5: Advance Your Answer

Now that you’ve proven a hypothesized solution, you need to start selling that recommendation so it actually gets implemented.  Be sure you turn that hypothesis into a clearly worded recommendation.  Have the core analyses required to prove your case and not one bit more.  People aren’t impressed by your one million spreadsheets.  They’re impressed when you can pull out two or three core analyses that prove your case.

Once you know what that recommendation is, you should put it into a logical, clear storyline.  Help your audience understand what the problem is, why we need to solve it, and how your recommendation saves the day.

There you go!

Five easy steps for solving even the most complex problems.  Note that the method is about clarity, focus, simplicity, and elegance.  It’s not an Excel competition.  It’s about who can crack the biggest problems the fastest and also who can crack the most problems in the shortest period of time.  I know it seems simple but the discipline takes a long time to acquire (and by the way – call us if you’d like help with improving your problem solving skills – we’d be delighted to teach you more about the method).

So what are the biggest challenges you face in your problem solving?

3 ways to retain and engage your valuable employees

Smart Blog on Leadership

General Management, Inspiring Others

By Joel Garfinkle on August 19th, 2013 | Comments(4)

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Valuable in-demand leaders are what turn a company from good to great. An organization’s most important asset is its talented, high-performing employees. Companies that prioritize retaining valued employees understand retention’s direct impact on their success.

To maintain the company’s greatness, it must commit and invest resources in the vast pool of quality talent across the company. The most effective way to maintain a competitive advantage in today’s marketplace is to fully utilize your top performers. This will directly differentiate your company from its competition.

But how do you do this? Begin to implement these three strategies today:

1. Think outside the job. Motivated employees want a challenge. They are anxious to contribute to projects outside of their specific job descriptions. Look around you. How many people do you see who are underutilized? Who could contribute something more than they currently do? Take steps to evaluate your peoples’ skills, talent and experience. Ask them what they want and tap into this valuable talent bank.

Case study: Brenda, a mid-level marketing manager, was assigned the job of coming up with a new ad campaign utilizing social media. Steve, a company sales rep with extensive social media interest and experience, continually volunteered to help. But that wasn’t his job, and Brenda hired a team of outside consultants to create the campaign. Steve was so disheartened by the company’s lack of interest in utilizing his talents that he put his resume out on the street and within a few weeks he accepted an offer from one of the company’s competitors.

What did it cost the company? Probably close to 100% of Steve’s compensation package in hard costs. Intangible costs are harder to figure, but could include a costly candidate search; the expense of training Steve’s replacement; loss of his knowledge and skills; and of course the mourning time and insecurity of his coworkers.

2. Practice total transparency. When you wonder why people are leaving your company, look up. People leave their managers far more often than they leave the company. It’s critically important that managers give their team members clear expectations and consistently open communications. When the manager fails to show employees a clear pathway to growth and success, it makes employees feel uncertain and undervalued.

Case study: Jill loved her job as an IT manager but David, the company VP and her boss, was a puzzle. He was nice enough, but Jill was totally stressed out by his lack of communication. She had no idea where she stood or where she was headed. Eventually she left the company in frustration — and for a lower paying job. At her exit interview, she told HR what she wasn’t getting: clarity about David’s expectations, specifics about her earning potential and future with the company and frequent feedback about her performance.

In the absence of free and open communication, people will assume the worst — that the company doesn’t value them and has no plans for their future success.

3. Hand out the Oscars. Your people want to feel rewarded, recognized and appreciated. Frequent “thank yous” go a long way. Even better — acknowledge people publicly for specific accomplishments. Brag about them to your boss, or even to your boss’ boss. Of course people appreciate monetary rewards, bonuses and raises. However, these have more impact when they are tied to specific milestones and accomplishments. In a tough economy with high unemployment in many sectors, it’s easy to get complacent about compensation and figure your people will hang around because they need a job. Don’t do it! Keep up with the compensation statistics in your industry and make sure you’re paying competitive salaries, maybe just a bit better than the industry average.

Case study: Matt, the president of a small manufacturing company, prided himself on having a casual, friendly, fun work environment. He wanted his workers to feel relaxed and to enjoy coming to work every day. He instituted pizza Fridays and bowling tournaments and felt he had a loyal, productive workforce. But lately he’d been hearing a little undercurrent of grumbling and complaints. So he called everyone together for an informal rap session.

That’s how he learned that several other companies in his industry had just given their employees a 20% across the board salary increase. Matt wanted to be fair, but he also wanted to pay for performance. He asked the employees to create a task force and to come up with a new salary structure that would reward people for reaching specific personal and company goals.

A motivated, productive workforce doesn’t just happen. It takes constant vigilance to remain aware of industry trends as well as the attitudes and needs of your employees. Awareness is the first step toward engaging and retaining your greatest asset — your people.

Know Your Customers -- It's Just Good Business

Last week Cory wrote "Can Paid Media Be Shared?"Pete Austin wrote in response, "You're describing an ecosystem. We are involved in several of these, so, yes -- it's actually quite a usual thing for B2B tech companies."

Wednesday, Aug. 21, 2013  By Cory Treffiletti I want to be where everybody knows my name.  And they’re always glad I came…  Not only is this the paraphrased refrain from one of the greatest television shows of all time, but it’s also the basis for great customer service. Great customer service is many things done really, really well.  In this era of increased programmatic servicing, data-driven insights and automated interactions, it’s even more important -- and potentially a point of competitive differentiation --when you can implement excellent customer service.  Customer service can go a long way towards maintaining the “positive bank account” that Stephen Covey spoke about for so many years.  Personal relationships afford you more leeway and forgiveness when errors are made, and they strengthen the bonds established when things are going well. There are many rules for customer service, but here are a few I find to be at the top of the list: The cardinal rule of great customer service is to be genuine, honest and get to know your customers.  Human beings, especially your clients, can smell a disingenuous relationship a mile away.  They feel fake. When you’re speaking to someone who isn’t interested, that’s one of the worst feelings in the world. We all get distracted, but when you’re with clients, you have to focus your attention on them and invest the energy and effort to make sure that relationship goes well. I used to frequent the Wells Fargo on California Street in San Francisco before we moved to the ‘burbs, and the customer service there was amazing!  They knew my wife and I by name, and they even knew the names of our kids (routinely asking to see pictures of them).  They screwed up our accounts all the time and in some rather dramatic ways, but we were forgiving because they had established an air of acceptable fallibility by being human and interacting with us as people. They would be open and honest, admit the issues, and resolve them.  And then we would move on to the next thing.  When they went out of their way to do something for us that was helpful, we always acknowledged it, said thank you, and kept going. Getting to know your customers is important, and you can do so through personal interactions as well as doing a little research.  LinkedIn is a great place to research your customers’ work history as a start.  You can establish mutual connections to create common ground, which is the basis for any strong relationship.  It’s also not as creepy as checking out their Facebook page, which is usually more focused on family and friends.   Its better to start with people you know in common professionally, and then move on to personal common ground. One of the other important rules of customer service is to know your stuff.  When you’re servicing customers and they’re asking you questions, you should know your product inside and out. It doesn’t mean you have to be perfect -- you can be wrong, or you can need time to determine the answer.  This rule goes back to being open and honest about what you know.  You do need to invest the time though, and learn the product.  If you don’t offer a knowledgeable point of view, then you offer a poor representation of the company and brand you represent. And when all else fails, remembering people’s name and thanking them for coming is a great thing to do.  There’s a coffee shop in San Francisco just off the corner of 2nd and Harrison that is not well-named, but is run by the nicest, sweetest woman you will ever meet.  She calls everyone who walks through the door “sweetheart” or “dear,” and if you visit with any kind of frequency, there’s a strong chance she’ll remember your order of choice.  It’s a small thing, but it’s a differentiator. I stop by most Fridays, walking past Starbucks and Peet’s to give this little coffee shop my business.  It’s the kind of place where they know your name, and they’re really glad you came. Cheers and kudos to that.