Category Archives: Business

Why Yahoo Bought Tumblr?

“F*ck yeah”

Ended David Karp (founder of Tumblr) his announcement about upcoming Yahoo-acquisition. He is not the only one amped up about the deal. Internet has been buzzing about the Yahoo´s recent acquisition of Tumblr. On theory marriage of Tumblr & Yahoo looks rational. Will it be that on practice?

What will Yahoo get from Tumblr?

1. Reach (especially to the young target audience)
Currently Yahoo has over 700 million unique visitors/month and Tumblr with its 300 million unique visitors and over 100 million blogs might help it bypass the 1 billion-visitor threshold. Yahoo is buying growth.
Tumblr user base is also the youngest among the different social media channels. It is stronger than any other social network within 13-18 and 19-25 demographic. As the buying power of teens and tweens increases even more, this target audience becomes more and more lucrative for marketers. It is therefore important to reach them young and maintain that relationship.
2. Gateway to Social Media & Mobile
Like many of its peers, Yahoo has been struggling with social media & mobile. It actually has a more impressive track record with screwing up potential social media opportunities (Flickr-which has been rewamped today as well, Geocities, Del.icio.us) than utilizing them. By buying Tumblr, Yahoo will get healthy social media which has been designed to be mobile-first from the beginning.
3. Street Credibility
Yahoo has not been a flavor of the month in recent years. Tumblr acquisition is exactly the kind of bold move that shareholders love. It is also the most prolific action Marissa Mayer has yet announced after taking the helm of the struggling company last year. Will it be the right move? That remains to be seen.

What will Tumblr get out of the deal?

Coherence & Monetization
Being the most user-friendly blog platform has its benefits, but also certain challenges. Tumblr is also the world´s most NSFW blog platform filled with porn, politically incorrect gifs and one-off-jokes (not even saving the founder David Karp). How Tumblr will maintain its characteristic quirkiness, but become “brand safe”? Currently adult sites are the leading category of referrals for Tumblr. Yahoo, as a household name, will give more legitimacy for Tumblr and probably help to clean up its act.
Tumblr has also been struggling with monetization and its business model throughout its whole existence. Whatever you say about Yahoo, you cannot dispute their skills and strengths on traditional ad sales. With Yahoo sales teams with interactive advertising (Tumblr) on their toolkit, it will be quite interesting selling point. The challenge is to find ad solutions which are seamless and enhance user experience.

What next?

Based on the statement from Marissa Mayer, it is quite improbable to see radical changes with Tumblr in the immediate future. The model for the Yahoo/Tumblr-coexistence will probably follow Instagram/Facebook –route where Instagram has remained relatively independent from Facebook. Many are likely to draw parallels between this acquisition and the quite ill-fated Geocities-acquisition from 14 years ago, but I am not that pessimistic. Tumblr definitely fills certain problematic gaps within Yahoo´s current strategy.

The crucial questions are whether the synergies that look obvious on paper come to fruition in action and was the price right?

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How Hollywood Studios Predict Themselves to Fail

Due to the combined effect of the cheap movie prices and quite limited indie movie selection in Singapore, I have watched way more Hollywood movies during last year than I should. Based on that empirical research, I have to say that the overall quality of Hollywood films is currently really horrible.

The main reason for that is that studios have never played so safe as now. They have not necessarily been pushing the envelope before, but the shift even from “Spec-script”-era to current “Script Doctors” has been radical and unfortunately radically to worse. Still we see almost the same rate of failures as ever before, even though we are bombarded with lame-ass attempts of creating franchises. At the same time, HBO has proved that you can have compelling and challenging quality content and great revenues at the same time.

Why movie studios are missing the beat?

1. Past success does not necessarily predict future success
We tend to believe that our success is about our own achievement and failures are just a bad luck. In reality, it is mostly about luck. Many people claim to find formula for success, but actually they just extracted the similarities in successful projects and draw correlation from individual instances. That is easy. What is difficult is to find the actual combination and correlation of those extracted elements. This is especially true for surprise successes. The sequel for Blair Witch Project scored way worse in the box office than the original (although still profitable). Things tend to regress towards mean, so after abnormal success you are more likely to have normal success. In relation to abnormal success, anything closer to the average is regarded as failure.

2. Finding correlations where there is none
We correlate high education level with high productivity. According to many experts (such as Alison Wolf), this correlation is not true. It goes other way around: countries with high productivity tend to gain high education levels during time. According to the “script doctor” in the article you should not have bowling scenes in your script as on average they do not score that well. I have only one thing to say for the script doctor: Big Lebowski.

3. Everything unfamiliar scores bad in the tests
Would you have predicted the success of Indonesian Raid:The Redemption or Beasts of The Southern Wild? Fight Club scored really badly in opinion surveys but was highly successful in the box office. People tend to resist everything unfamiliar until they start to like it (case in point: Outkast-Hey Ya). I am not huge fan of tests, surveys and research, because at best they are just a poor reflection of reality. You can predict and test your movie as much as you want, but at the end-of-the-day the box-office is all that matters. Tests do not reduce risk, they just reduce your awareness of risk.

4. When playing safe, you will have only negative surprises.
Every major movie could not be prepared better: they are script-tested, based on existing franchise, have massive social media campaigns and start on more theatres simultaneously than ever before. Still many of the estimated blockbusters fail. They are predicted to be too big to fail, so they can only provide negative surprises.
The abovementioned small budget movies (Raid & The Beasts) have better ROI% than the biggest movie last year (The Avengers). And in the terms of pure cash, they got almost the same profit as the epic John Carter. That movie was considered as the biggest flop last year, although it was eventually profitable (globalization plays in favor of big movies, at least for the moment).
The main catch is that with the budget of John Carter, you could have produced over 200 Beasts of Southern Wild -movies. There are opportunities for 200 positive surprises.

The last point is really important in modern day marketing. We spend too much time predicting on the outcomes instead of actually doing things. As the potential outcomes are unknown in reality, the goal to succeed is the following:

1) Increase the amount of tries: There are no clutch players, just those who keep on shooting.
2) Limit the potential loss: Think like venture capitalist: the probability of success is relatively low, so you do not want to put your eggs in one basket.
3) Make it flexible: When you struck the goldmine, invest more. When it fails, kill it quick.

This is the “Anti John Carter” –approach. You will try more, fail more but win more on the long run.

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Calculate the Success Rate of Your Next Marketing Campaign

Based on years of empirical research in real working environments, I have finally cracked the formula for estimating the success rate of your marketing campaign.

It is the following:

SR=C-(10%*X)

SR= Overall succes rate of the campaign

C= Estimated Concept Succes Rate. Below are the average success rates for different type of concepts:

Great Concept (GRC):100%
Good Concept (GOC): 70%
OK Concept (OKC): 50%

If you even your worst day will do something which is below “OK Concept”, you should probably change profession.

x= Amount of every very adjustment, addition, alternation, modificiation and other mutilation given in the revision routes.

So what we can learn from this formula?

1) If you want to maximize your success, aim always for the great work.
2) Even the greatest of concept can be killed with too many modifications. Five revision routes reduce the success rate of your campaign to the same as flipping the coin.
3) Most often, less is more. When you have simple and effective concept in your hands, cherish it. Those are usually the ones, which will succeed.

Wearable Tech: The End of The Mobile as We Know It?

When observing people playing with their smartphones, tablets and phablets*, it is quite hard to believe that handheld mobile phone is only 40 year old invention and has been in mainstream use only for the last twenty years depending on the country. The influence of mobile phone to human behavior has been profound. When comparing current smartphones to the first bulky ones, they are quite far away from its original purpose of speaking to each other. New devices are definitely mobile, not necessarily that much of phones anymore.

So enter the wearable tech. It will be the next step for the mobile revolution.

Phone has been just a transition period with mobile. Mobile consists of three important elements: freedom, access & connection. You can achieve those with multiple devices. When assessing the future of mobile, there are two major shifts happening. Firstly, we are moving to the age of different screens. Secondly, we are totally defining mobile in a new way. It easy to dismiss wearable tech as a fad, but Sergey Brin raises really important point in this comment from Ted Conference few weeks back:

“Is this the way you’re meant to interact with other people? Is the future of connection just people walking around hunched up, looking down, rubbing a featureless piece of glass? It’s kind of emasculating. Is this what you’re meant to do with your body? You want something that will free your eyes.”

Using of smartphone has created new behavior patterns for us (aptly documented in the excellent Curious Rituals). Wearable tech is ideologically step backwards from smartphones. It is technology adapting to existing human behavior instead of actively changing it. In a way, wearable tech is more natural than using smartphone.

When thinking about possibilities of wearable tech, I would closely benchmark sports companies. Quantified self –movement naturally started from sporting and has evolved lately to other areas. Nike FuelBand is one of the first crossover wearable tech products, which has its roots in sports but expands to other areas as well. The really big potential is with the normal people. Being a sports fanatic myself it is often hard to forget that the target audience of us is lucrative but still quite small. The wearable tech company who is able to tap the mainstream audience will win. And win big: the wearable tech industry is estimated to be worth of $6 billion by the end of the year 2016.

When creating wearable technology, we have to think quite deeply about the issue of what people would wear and what they are wearing now? Looking from that angle, the wearable tech products most likely to hit mainstream should be quite familiar product types. My hunch is that they will be either watches, glasses or clothing (or combination of all of these):

The Revenge of the Watch
Watch has been relevant for hundred of years. You do not necessarily use it to its original purpose of timekeeping, but it has still maintained its role as a status symbol for many people. If you check time from your mobile phones, why would you not send your WeChat-messages from your watch? It will be interesting to see will certain existing watch manufacturers with strong brand equity challenge the technology companies in this field?
Watch out for: Kickstarter all-star Pebble, The rumoured iWatch, traditional existing watch manufacturers, sports watch brands (such as Polar or Suunto)

Using Glasses to Look Be Smarter
What can I say about Google glasses that is not said in this video (NSFW)?

Nevertheless, I want to acquire one pair, despite all the privacy concerns.Google Glass has already competitors as well, but all the eyes will be on the Google on this one.
Important players: Google Glass, Luxottica (world´s largest eyewear company)

Maxwell Smart was Right
With clothing technology this rubber boot phone is definitely the most interesting one:
Rubber Boot Phone
(Designer Sean Miles project for O2)

Jokes aside, the smart clothing has more supporting function with wearable technology accessories (maybe excluding bracelets). Different sensors can track things in clothing, but it is unlikely that we use our underwear as the main starting point for our mobile communication or access. That being said, combination of smartphone and smart clothing will probably be quite crucial in the transition period when moving to the new era of mobile. Especially if quantified self- phenomenon continues expanding to even more mainstream audiences.

Will wearable tech be the future of mobile?
I truly think so. The question is when that future is evenly distributed to the whole world?

* Contender for the most annoying word invented in last couple of years.

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Brutal Truth: Doing Good Work is Easy

Doing good work in advertising is easy.
You just have to make sure that you have the following things in the order:

1. Good product & Brand
Sometimes it is obvious that you are working with superior product (Apple comes to mind). Other times you have to really dig for the relevant difference, but it is there if you are willing to do the work (something like Orabrush). The sad truth is that sometimes you are dealing with mediocre or even lackluster product. Then you have three choices:
– Decline the work and suffer financially.
– Do mediocre work and hope that adequate media push will ensure enough tick in sales to keep you afloat.
– Do great advertising for it. That is the fastest way to kill inferior product.
Advertising does not create new needs for people. It just amplifies existing ones. If there is no need (existing or latent) for the product, you are pretty much screwed.

2. Good team
You need sound strategic and creative thinking and also the ability to sell that thinking. Sometimes you might have all those capabilities in one person, sometimes even 10-member global team is not enough. When having more than one person in that team, the best results come with right mixture of competition and collaboration. Great team is full of different strong-minded individuals who strive together towards same goal, but not necessarily without fight.

3. Good client
Idea is worthless until it is bought. That is why it is crucial to work with demanding and bright clients who do not settle for the mediocre solutions. Good client knows how to brief and to buy creative product and also treats you like a human being.

When you have these things in order, you only have to come up with one simple thing:

Brutal Truth
Some praise the insight, some an idea. I combine them together and call it brutal truth. That truth will separate and distinguish you from your competitors. It connects you with your customers. It will provide the springboard for creative leap.
Many times the separation between insight and creative idea is artificial. If you unearth surprising and unique insight, you might actually have your whole marketing communications in that single insight. If the insight is obvious or well-known, then the need for creative leap is much stronger. It is delicate balance between obvious and obscure.
It is brutal truth because it is not always pretty but always effective. It might be quick and dirty solution. It might require changing your whole marketing plan. You might need to break some taboos. You might need to go against the grain, or do totally same thing as others. Brutal truth might not be easy, but it is equally demanding for all.

Every time I have been a member of a good team working for good client around good product, we have been able to come up with brutal truth. When the marketing has been based on that brutal truth, the end result has always been great work.

It is that easy.

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What is Good Work?

One of the most common terms (besides ideas) in agencies, which is thrown around is “good work”. Probably everyone has different meaning for it, but I have always believed that good work is just two things.

It is effective and entertaining:

1. Effective
Good work has to provide above-the-average business results for the client. Average is not enough, because average results you can achieve with crappy work pumped up with strong media push. Also to go above the average means that the strategy work is not just stating the obvious. To be truly effective, the strategy must provide either great answer to current business problem or find lucrative business opportunity. Great strategy is all about finding the relevant difference.
Advertising is not art, so if the work cannot be measured with commercial criteria it cannot be truly good either.

2. Entertaining
Although advertising is not art, it is not door-to-door-selling either. Spamming your whole client list might be effective done once, but would ruin your hard-earned reputation at the same time. In marketing communications you are maximixing the effectiveness on the long run, not getting quick wins which are cheap.
Entertaining does not mean cheap laughs either. Zero Dark Thirty is entertaining movie, although it is not funny. Great advertising finds the right emotion to suit commercial purposes. Majority of our intentional consumption decisions are done emotionally (rational car buyers?) so if you do not spark any emotion you do not have the chance to be truly effective either.
Entertaining people is harder than ever. Our marketing communications competes head-to-head with the best content in the world. So when you are doing your next brand mobile application, ask yourself is this really on the same level as other good (not marketing) applications? If not, it does not probably take off.

In advertising, we tend to define the work too often with its novelty aspect. We are obsessed of doing something, which has not been done before anywhere. Sometimes it is for good reason. No one has not build the world biggest toilet paper mummy for any toilet paper brand (at least I hope so), but that is for good reason. That is completely stupid idea. In the search of novelty, we tend too often to shift doing gimmicks. More often than creating something completely new, good work is about looking the old things from new perspective.

Good work requires strong strategy with huge creative leap. On the long run, the selection is not either effective or entertaining. If you want to be ahead of your competition, you have to be both.

Also I have only talked about good work. The great work is totally different beast. Great work changes the whole world.

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Psycho Marketing 101

I recently watched Hitchcock, great film about making of Psycho. The movie is notable not just because of great roles by Anthony Hopkins and Helen Mirren. The movie also reminded how great marketer Hitchcock was. Besides his directorial duties, Hitchcock handled also the promotional duties for the film.

Psycho was controversial movie, breaking boundaries in depiction of sex and violence. Because of the risky content, the film was majorly funded by Hitchcock himself. Psycho was filmed and promoted with equally low budget. Without big advertising support from Paramount, Hitch had to rely on word-of-mouth to make Psycho a hit. That required equally cunning and cost-effective marketing methods:

Five Marketing Tips from Master of Suspense:

1. Spot the emerging trends
Hitchcock bought the rights for the novel Psycho (by Robert Bloch) with only 9000 dollars. After that he bought every copy of the book he could find so people would not read it and find out the surprising end.

2. Utilize the “own media”
Because bought media was scarce for the film, Hitch concentrated the marketing efforts to movie theatres. This was also easily done, because Psycho did not open in that many theaters in the beginning.
Psycho had own queues in front of the theaters and in many places theaters had also police staff to underline the shocking nature of the film. All the theater owners got manual on how to screen Psycho.

3. Do not just sell the product, sell the whole experience

Psycho Marketing 101

“Psycho Policy”

Marketing of Psycho went against the grain of typical movie marketing. The main emphasis was not in the plot or leading actors, but in the “Psycho policy”. This policy dictated the way Psycho should be watched to get the full experience.
The center of the policy, that theatres did not allow anyone to the screening late (as can be seen in below trailer as well). This had interesting consequences. The audience was already seated, anticipating and in the right mood when the movie started. Also it resulted in visible queues outside the theatres.

4. Tease and hype but do not reveal too much


The main part of Psycho is the whole vibe. Therefore the trailer was completely different, even funny at points. Only the last seconds give glimpse about what kind of terror to expect.

5. Change the rules
The main actors of Psycho did not give interviews about the movie. Psycho was not shown to film critics beforehand. Although this had an effect (and not entirely positive) to the first ratings of the movie, it also ensured that also the critics could get the full Psycho experience. Also the plot would remain secret for longer period.

With his clever marketing schemes Hitchcock ensured the buzz around the film. Psycho was the most successful movie from Hitchcock in box office and remains an influential movie masterpiece still to this day.

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Do You Still Want to Hear About Social Media Trends 2013?

Although everyone and their mother has already given their point of view about current social media trends, here are couple of more predictions.

Good folks at Kurio (Finnish Digital Marketing Think Tank) asked me and 17 other Finnish “social media experts”(stated by the report, I prefer to just be “the planner guy with funny glasses”) about social media trends in 2013 and conducted interesting study about the results. They identified nine emerging trends in social media for the year 2013. The report is in Finnish, but the main trends can be read below. All the finnish-speakers should definitely download the report below.

Big Social Media Themes for 2013  (my comments in italics):

1. 2013 is the year of Mobile (this has been my favourite prediction for at least five years. The main difference is that this year I am actually believing it)
2. Multichannel story-telling is the way to create modern phenomena (Or put it this way: If your marketing activity is not multi-channel/channel-agnostic/holistic/360/add your favourite buzzword by nature, it will be doomed to fail)
3. Lack of human resources is the main constraint in social media (The problem is two-folded, there is definitely lack of people actually working with social media. But there is actually even bigger talent problem: there are lots of “social media experts”, “community managers” but not enough actual strategic thinking about what we should do with and in social media. Social media without strategic thinking behind it is irrelevant at best and purely dangerous at worst.)
4. Big Data (Like the report also points out: we have lots of data & information, but do we have talent, resources and capabilities to turn that information to action?)
5. Content: Interesting, current and value-adding (Which starts the discussion about what is the good content? I still believe that good content is either 1)useful 2)funny 3)on some rare instances both)
6. Picture tells more than 2013 words (Despite the revolt against Instagram, people will rather share more pictures online than less in 2013)
7. Social cannot be just a digital or marketing function, but should be thought holistically (Definitely true, but also the most difficult to achieve. On some instances to make the change requires totally new management, who understands the possibilities of digital and social media. On other instances it requires adequate mix of sticks and carrots to ensure the competitive advantage in digital age)
8. Social media channels are starting to resemble more bought media (The pressure to monetize is already showing with different social networks, especially with Facebook)
9. Users are more and more critical towards marketing activities in social media (You might fool a customer once, but not twice. The opportunity to fool once has already passed)

Download the report (in Finnish).

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Why Google is Struggling with Mobile?

The future of the business is mobile.

Or so they say. Currently it seems more that future business of companies is ruined by mobile. Zynga has lost 85% of its value, because the mobile adoption has been faster than expected. Facebook has been stumbling with mobile advertising, although its recent mobile ad revenues beat the industry estimates.

Even the traditionally steady high-performer Google has been showing signs of slowing down. The problems have their root cause in mobile: Motorola acquisition has not yet paid off and mobile advertising has driven average click prices down.

Here are five other reasons why Google (like many other companies at the moment) is struggling with the mobile:

1. Status Quo Bias
For years the AdWords has been the hen that lays the golden eggs for Google. As humans, we are more likely to believe that things remain the same and are more likely to select to stay in status quo whenever possible. Every company encounters status quo bias at some point. AdWords are still selling like pancakes, the main difference is that the average click price has dropped for four consecutive quarters in row.
Although no one accuses that Google is not doing mobile innovations and investments, there has apparently not been pressing need for them to roll them out faster.
2. Android Ecosystem does not pay off (expect for Samsung)
According to certain estimates, Google makes about $6.50 through ads on Apple devices, compared with under $2 in Android. Google makes roughly the same amount of profit selling Android ads & apps in year that Apple makes selling iPhones a week. Google has regarded Android ecosystem more of an extension of the advertising. Currently it seems that it only benefits Samsung (and maybe to some extend users).
3. Mobile advertising ecosystem is currently broken.
People are not yet ready to make purchases with mobile. That is likely due to change in the future. Meanwhile, the mobile ads generate less revenue than traditional ads on average. Mobile has been thus far more about duplicating the web experience for Google, than regarding it as a center of the advertising innovations.
4. Consumers are even more unpredictable with mobile
Who would have predicted that texting will become popular? Or that tablets will become hits? Consumers are always fickle and surprising, but especially in mobile. Consumers do not really know (or at least articulate) what they want, but they still act quite fast to get it.
5. Google is not (yet) producing phones
Although Google bought Motorola, there has been a strict separation of church and state between Android and Motorola. Apple and Samsung have proven that the money in mobile lies in hardware. Microsoft has returned to hardware game as well. Facebook will probably enter the competition soon. Can Google stay away from the phone game?

I am sure that Google has certain tricks up on their sleeves regarding the mobile. Until those tricks are revealed, there will be more growing mobile pains ahead.

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iPad Mini and The Future of Mobile

Despite the surprise launch of the next generation iPad and the brouhaha that followed it, the most important launch of the yesterday´s Apple event was still the iPad Mini. According to late Steve Jobs that tablet should never been launched:

“This size isn’t sufficient to create great tablet apps in our opinion”

The point is not that Apple is ruining the grand vision of iPad or dancing on the grave of Steve Jobs. The launch of iPad Mini is just a reflection of the current market situation. People do not necessarily want to have great tablet apps, they just want to read e-books with the tablet. Kindle Fire and Nexus 7 have shown that there is a great demand for smaller tablets which are designed mainly for content consumption (such as text, videos, audio and basic casual games). Judging by the strength of Apple´s content ecosystem (iTunes, iBooks), it is likely that iPad Mini will be successful. The biggest concern is the higher price, but that does not really have stopped Apple buyers before either.

The launch of iPad Mini is a good indicator of where we are moving in the mobile sphere. Here are four predictions what will happen in the near future:

1. Apple will release bigger iPhone.
If (when) iPad mini will be a hit, we are quite likely to see bigger iPhone. The success of Samsung Galaxy S III has proven that the traditional heuristic of “it has to fit the pocket” do not really apply. We have the need to communicate and consume content. For those whose urge for the latter is bigger, would want to use bigger smartphones. And they just put it in bag instead of trouser pockets. Or get bigger trousers.

2. The Tablet+Dock hybrid will be the laptop of the future
There has been flood of new device announcements with Windows 8 OS that are not traditional laptops. Instead they are hybrids, merging tablets and laptops. These devices might not be the future yet, but the thinking behind them will be. It is odd and inconvenient to carry around smartphone, laptop and tablet with you. I would presume that the separate bigger tablet would be the one to go. Smartphone would be the urgent communication vehicle; the separated tablet for mobile content consumption and that powered with the dock would be for work.

3. Mobile is the driving force in technology usage of the consumers
Also with the launch of Windows 8 OS, there has been quite a big surge of touchscreen laptops. The way we use mobile is shaping how we use other devices. Mobile is all the times with us, so we expect the same user experience with other devices. That is also reason why companies are struggling with mobile. They view it as an add-on, when it should be the core of what they are doing.

4. Forget the different devices, it is about integration of screens.
In the near future, we will not talk about mobile, tablets or laptops. We will just have different screens, which are integrated together and serve different purpose. The company who will master this integration most fluently will be the winner of the technology race. We will have screens for home, work and mobile (enabling both work&entertainment) and certain devices that enable us to use these screens. What devices those will be, remains to be seen. One certain consequence will be that there will be renewed interest to TV screens, which have and still are the default home screens for the majority of households.

iPad Mini will not be the last interesting technology launch in the near future. There is still plenty of white space to discover while consumer technology usage is changing. The one who understands the consumer experience and “the integration of screens” most thoroughly will be able to find and conquer that white space.

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