Ad:Tech 2004

1
University of London Study An average workers
functioning IQ falls 10 points when distracted by
ringing cell phones or incoming e-mails.
The amount of change in marketing over the past
3 5 years probably equals the amount of change
over the past 30 years. --Robert Liodice, ANA
CEO
more than double the 4-point drop from smoking
marijuana.
eMarketer Presentation Getting Web 2.0
Video,Social Networks, etc
2
Top Marketer Issues in 07 1. Integrated mkg
communications 2. Accountability/ROI
Less than 24 of marketers consider their firms
to be digitally savvy.
Source Booz Allen Hamilton and Association of
National Advertisers, 2007 survey
conductedamong 184 ANA-member marketers
3
Accountability Mandate
69 of US marketers say ROI is too difficult to
measure
DoubleClick (Jan, 07) 18 of consumers say
they dislike all forms of advertising.
1 challenge facing marketing chiefs in 2007 is
Quantifying and measuring the value of marketing
programs CMO Council
4
The TRUST factor
Lets take a stepback and look atthe big
picture
Only 17 of consumers say they have any
confidence in advertisers or the advertising
industry
Only 6 of consumers today say that they believe
marketers ad claims
5
Media fragmentation is leadingto total
disintermediation
Any one
Remember Sisyphus???
Any time
Any where
6
F.O.G.
Fear Of Google
The long-term fantasy is we walk up to you and
you give us, say, 10 million and well
completely allocate it for you (across all media
types).
7
Where to next???
PEC
We want to have a highly personalized
relationship with every one on the planet.
Google Body Search
Bidding for barrels
8
GMOOT Get Me One Of Those.
Beware the dreaded GMOOT syndrome. --Scott
Donaton, Advertising Age
Hype
Reality
VirtualWorlds?
9
Second Life and other virtual worlds
ComScore only 207,000 in US

• 51 of Web users have taken virtual tours of a
  location online (Pew)
• Virtual world sites have attracted 20 million
  users (Gartner Group, 2007)
• 7.1 million global residents on Second Life,
  but only 1 million are active in a given month
  (Linden Labs)
• New forms of brand ENGAGEMENT?!?

Most corporate locations on Second Life attract
fewer than 500 weekly visitors
10
Gartner Group 80 of Fortune 500 firms will have
a virtual world presence by 2011?!

• NIKE sells virtual shoes (to make your avatar run
  faster)
• Xerox, Sun, etc are hosting events, meetings and
  training
• Forrester 7 of marketers are doing virtual
  world efforts

Your Store Here?

• Komjuniti Survey of Second Lifers
• 72 expressed disappointment withvirtual
  marketing
• Only 7 said it had a positiveeffect on brand
  image

WARNING You are going to fail if you treatit
like somewhere you make amedia buy. --Reuben
Steiger, CEO, Millions of Us
11
Advice for Marketers Its a great place for
marketers to 1) learn about communities, and 2)
test new marketing concepts without spending
much money.
Advice for Second Life Members
Get a (real) life!
12
Schonfeld Assoc. 8.6
Schonfeld Assoc. 8.6???
Growth rate for total USmedia spending in 07
Outsell 5.8
Kagan 5.3
Piper 5.3
Carat 5.2
PWC 4.7
Veronis 4.3
Morgan 4.0
Citigroup 3.9
Zenith 3.3
McCann 3.1
eMarketer 2.6
Merrill 2.7
GroupM 2.4
TNS 1.7
13
US direct mail spending, in billions
4 growth
So, wheres the growth?
Source Direct Marketing Association, 2007
14
US online advertising spending, in billions of
dollars
Internet passes DM catalogs!!!
28.6 overall growth in 2007
Source eMarketer, August, 2007
15
US online ad spending growth in 2007
Ads placed in front of searchers arent
interruptions theyre exactly what the
searchers are after. Danny Sullivan, Search
Guru at Large
Google who???
Search is by all indications the fastest-growing
segment of the Internet world. --Jon Swallen,
TNS

• Does NOT include
• TNS. 16.4
• GroupM.. 14.0
• McCann... 17.0

Source eMarketer, February, 2007
16
Relevancy/reach trade-off
Contextual, BehavioralTargeting
Search

• Marketers using BT cite 3 benefits
• Increased click-throughs, 35
• More conversions, 26
• Improved ROI, 21 --Forrester, March, 2006

Behavioral
Contextual and Behavioral allow you to capture
interested prospects who may or may not choose to
use a search engine
Run of site
Contextual
17
Behavior targeted online ad spending (US)
gt 10 of online ad spending
40
2.1 billion
30
1.5 billion
43
1.2 billion
When the RELEVANCY of behavioral targetingis
combined with the IMPACT of video, watch out!
925 million
2005
2007
2006
2008
Source eMarketer, 2006
18
For every 1.00 spent online, the average search
user spends 2.56 offline. --ROI Research, 2006
85 of Web users, or 160 millionAmericans, use
search engines

• Over ½ of Internet users regularly use search
  engines as a tool for shopping
• Cowen Co, 2006 (55)
• Avenue A/ Razorfish survey, Oct, 2007 (50)
• 25 of all online searches for products result in
  a sale (online or offline) --comScore, 2006
• Plus, searching online influences 20 30 of
  purchases made offline ROI Research

But search isnt everything
19
If marketers only do search, theyre missing 80
of their market opportunity!
By 2011, 47 of all retailpurchases will be
either made or influenced by consumers
research online --JupiterResearch
Awareness/Branding
Customer Relationship Management
INTERNET
Attitudes, Interest
Marketing opportunityhere to influence online
shoppers whether or not they use a search engine
Post-sales support
Pre-purchase Information Gathering
Fulfillment
Sale/Purchase
20
55 of global marketers agree thatbrand
advertising will drive the nextphase of online
marketing growth.
26 Search only
21
Over 80 of US online households will be on
high-speed broadband connections by year-end
Magna Global.. 67.5 eMarketer
65.0 Forrester Research.. 64.6 Parks Associates.
60.0 Kagan Research... 60.5 PwC.
59.8 CEA. 57.8
65 millionhouseholds
Source eMarketer, 2005 OECD (baseline years of
2001-2003) Leichtman figure reflects 1Q 2006,
not end-of-year
22
Meanwhile
The basis for contenton the Web is shiftingfrom
text to video
The TV and PC arecrashing into each other
So folks are moving from theBoob Tube
23
To
The basis for contenton the Web is shiftingfrom
text to video
The TV and PC arecrashing into each other
24
To
The basis for contenton the Web is shiftingfrom
text to video
The TV and PC arecrashing into each other
25
Warning!
What Google did forsearch ads
theyll do the samefor graphical and videoads
as well.
26

• Over 55 million, or 40 of online US adults watch
  videos on YouTube
• 40 per comScore
• 42 per Harris Interactive
• 43 per Piper Jaffray

27
What of Internet Users Watch Video Online?
28
What of Internet Users Watch Video Online?
Nielsen//NetRatings 27
Pew (active) 74
Ipsos... 34
Frank Magid 64
Frank Magid 52
eMarketer 72
comScore 75
Parks Assoc. 29
Deloitte 36
CTAM/Nielsen 63
AP/AOL.. 40
29
What of Internet Users Watch Video Online?
Monthly
Weekly
comScore 75
Frank Magid 52
BridgeRatings Teens spendmore time online than
with TV.
Pew (active) 74
AP/AOL.. 40
eMarketer 72
Deloitte 36
Forrester 18 26 year olds spend more time
online (12.3 hrs weekly) than on TV (10.7 hrs)
Frank Magid 64
Ipsos... 34
Jupiter Under 35-year olds spend more time
online than watching TV
Outliers CTAM/Nielsen ever watched
63 Nielsen//NetRatings monthly 27
Parks Assoc. 29
72 of Internet users 135 million monthly
online video viewers
30
Online video is a great way to ENGAGE with your
customers
81 of online shoppers say that detailed product
descriptions are very important to their
making purchases on Web sites --Sterling
Commerce and Deloitte, Aug., 2007

• Place video footage of your products on your Web
  site (e.g., create a video demo!)
• Place video ads on other content video sites,
  e.g., on YouTube and product category-related
  sites
• Create your own Webisodes content so
  entertaining that people will come to watch it
  (and share it with others)

With online, you need to compensate for the
lack of physical presence. Chris Anderson,
author of The Long Tail
31
What can we learn from physical stores???
MAGIC FORMULAAll the convenience and choice
that comes with a typical Web experience today,
but with the human reassurance provided by a
salesperson and the contextual appeal and
serendipity factor associated with a real store.

• The experience is highly visual you can see
  dozens of items all at once
• Its easy to compare and contrast items
• Theres a serendipity factor you end up
  buying items you didnt come for
• Sales people are there to help at any time

Can I help u?
32
4.3 billion in 2011
DynamicLogic 38 of marketers expect to heavily
invest in online video this year (March 2007)
AAF Survey 43 of US marketers expect to shift
20 or more of ther TV budgets into online video
by 2010
Melrcum 63 of global media professionals
already use or plan to use online video this year
(April 2007)
Broadband video ads allow forgreater
measurability,target-ability and share-ability!
1.3 B
Jupiter only 1.3 billion by 2011?!?
Source eMarketer, July 2007
33


18 of online videoviewers have made apurchase
in responseto an online video ad --TNS, Sept 07
18 per TNS survey, 9/07 (commissioned by
Google AOL)
Plus, video click-through rates in the US are 3X
5X that of standard JPG or GIF ads


11 forward ad videos to others, per Kelsey Group
34
Challenge how do you monetize video???
These YouTube ads could bring in between 12
million and 360 million. --Henry Blodget
(former Merrill Lynch analyst)
35
Over 11 millionconsumers haveinteracted with
thecampaign
This isProcter Gamble?
To succeed, we need to stop standing between
consumers and their content, and actually be
the content they want to see. --Greg Verdino,
VP Digitas
You can imagine what it was like to take this to
management. Tom OBrien, Assoc. Marketing
Director, PG
36
McKinsey (January, 2007) 32 of global
companies are using or planning to use blogs this
year
But, many bloggers areincredibly influential
eMarketer17 of Internet users are
activereaders 31 million
34 of marketers say theyre using or testing
blogs this year
34 of large companies already have a blog this
year
33 of global senior execs say their company has
a blog
To blog, or not to blog, that is the question.
37
Fear of Google
38
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Advertisers should explore creative ways to
leverage the power of blogs

• Monitor the Blogosphere
• only 38 of firms do so, according to
  Reveries.com
• Work with existing relevant bloggers, in ways
  that will encourage them to link to your site
• Place advertising on popular blogs
• Create your own blogs -- to create a community of
  interest around your product

When you talk about engagement, people talking
about your brand is the ultimate
engagement. --Ed Keller, Keller Fay Group
Watch for what people are saying about you Its
a two-way medium, a way to have a real
conversation. --Robert Scoble
SHIFT from deliveringmessages, to
influencingconversations
40
Are you doingword-of-mouth marketing?
RoperStarch
Consumers rate WOM as 2X as important as
advertising or editorial content
gt 90 of consumers regularly or
occasionallygive or seek advice fromothers
about productsor services --BIGresearch, 2006
82of consumers are driven tovisit Web sites
based onthe recommendations ofothers (vs. 65
for TV)
Consumers considerword-of-mouth as 2X
asvaluable as traditionalmedia when
choosingbrands
NEWSFLASH Consumers trust each othermore than
they trust you(the marketer).
41
Consumer TRUST level in media formats
--Nielsen Company global survey, Oct., 2007 --
The American Journal of
Opt-in email 49
Radio 54
Dysfunction Why 22 ofAmericans Dont
TrustOthers
TV Mags 56
Ads before movies 38
Brand Web sites 60
Search ads 34
Newspapers 63
Banner ads 26
Recos from consumers 78
Trust-O-Meter
Mobile phone text ads 18
0
100
Source Nielsen, 2007 n 26,486 Internet users
in 47 countries
42
Q Whats the 1 secret sauce for creating
word-of-mouth for your brand???
Saving the universeone PC at a time.
A Make your product orservice great.
43

• Lessons Learned
• Take some risks
• Make it fun! Stressentertainment over brand

• Vital Viral Stats
• 36 million visits (vs. 14 m for Subservient
  Chicken)
• 11 million created and emailed around the world
• 2 million Google inquiries
• 20 increase in online traffic during holiday
  period
• 2.5 million in free media Good Morning
  America, USA Today, MSNBC, VH1, Entertainment
  Weekly

It was like jumping off a cliff, but if your
palms arent sweaty, then its probably not that
good of an idea. Anna Bologna, Toy (ad
agency for OfficeMax)
44
So, what about user-generated content???
But is UGC a new idea?
45
UGC through the ages -)
46
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47
Theyre spreading rapidly among kids Its like
catching a runny nose that everyone in the
classroom gets. --Josh Bernoff, Forrester
Research
48
Boomers
49
of all Internet users who visit social network
sites
Teens (12 17) Pew (Jan, 07) 55
Teen Girls (15 17) Pew (Jan, 07)
70
Teen Tweens Grunwald Assoc. (2007)
96
50
350 million 2.2 of online ad spending
Forrester Research, 200720 of US marketers
claim theyre using social networks
Economist Intelligence Unit, 200631 of global
marketers say they support online communities
McKinsey (January, 2007)37 of global marketers
are using or planning social networks
But marketers areschizophrenic
2.1 Billion 8.5 of online ad spending
51
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Why is that?
53
Censored
Censored
Censored
Censored
Social networks cannot guarantee a brand-safe
environment. Advertisers dont want to see their
ads displayed alongside illicit
content. --Karsten Weide, IDC
Unless they can targettheir ads really well!
Censored
Censored
54
Some folks find that kind of creepy.
Our targeting is a balance of what users say,
what they do and what they say they do --Adam
Bain, CTO, MySpace
Your Ad Here.
targeted, based onmembers profile info
55
Social sites sales opportunity???
Only 31 trust product info they find on social
forums --JupiterResearch, 2006
of US online retail traffic driven by social
sites.. 6
So, whats a marketer to do?
of online retail traffic driven bysearch
engines 26
Just 23 per comScore (2006)
JupiterResearch, April 2007 Only 2 of Myspace
users and 4 of Facebook users conduct searches
on these sites to research a product or service
BIGresearch, March 2007 Only 8 of US consumers
are influenced by social networks to start a
search for products online
56
Four basic strategies for marketers looking to
use Social Networking

• Look, Listen, Lounge Learn
• Advertise on the big social networking portals,
  e.g., MySpace, Facebook, etc
• New, with improved targeting!!!
• Advertise on smaller, niche sites reaching your
  target (e.g.,Club Penguin)
• BYO (Build Your Own social network), e.g.,
  Procters Capessa community site for moms

Its going to be one giant living dynamic
learning experience about consumers. --Jim
Stengel, PG
57
Can you create a community around a soda???
DR Viral GOALS Collect data Branding
For many firms, customer reviewsand ratings are
an easy way to to get started with user-generated
content
Short-cut Try Piggy-BackingOffer up SN tools
and apps which will allow brand enthusiaststo
share your brand with others.
Piggy-Backing exampleInvite target consumers
on socialnetworks to embed your brandon their
profile pages.
Sprite Yard wants to become the MySpace of the
cell phone world
Were looking at an opportunity to move from
impressions to consumer connections. --Mark
Greatrex, SVP, Coke
The Yard users literally have their friends in
their pockets.
It takes a lot for a brand to ask that of a
consumer Nobody wants to hang out with
Sprite. --Chad Stoller, Organic
58

• Top products converted at a 49 higher clip
• Average order size increased 40

Transparency Trust

• Read Reviews

59
of online consumers who use customer reviews
when researching products
Avenue A/Razorfish (2007) 55 of online shoppers
say they are the most frequent resource they use
when researching products
Deloitte (2007) 98 of shoppers trust user
reviews
80 who read user reviews say they affect their
buying intentions
Source Forrester Research (76), 2007
JupiterResearch (75), 2007 Deloitte (62), 2007
60
of online consumers who use customer reviews
when researching products
?

• Sites with customer reviews offer 5 benefits
• Increase trust with the retailer/manufacturer
• stimulate word of mouth
• boost search rankings
• Increase likelihood to purchase
• serves as a form of market research!!!

Plus, the vast majority end up being positive!
If you dont offer reviews, your visitors will
seek them elsewhere. --Larry Freed, CEO,
ForeSee Results
Source Forrester Research (76), 2007
JupiterResearch (75), 2007 Deloitte (62), 2007
Forrester (25), 2007 E-consultancy
Bazaarvoice (28), 2007 Vovici (32), 2007
61
Mobile marketing
Mobile advertising is our single most exciting
opportunity.
62
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63
eMarketers projections for US mobile advertising
marketing spending
Forrester only 11 of US marketers said they
were using it in 2006, and 57 had no plans to
use it all
Jupiter only 22 of online advertisers are using
SMS/MMS marketing campaigns (Oct, 2006)
GfK NOP 50 have no interest in mobile
marketing (June 2006)
Source eMarketer, January 2007
64
A large potential opportunity lies in text
adseven in the US

• A little over one-third of adult mobile users in
  the US send/receive text messages
• MMetrics.. 41
• Forrester... 38
• Pew 35
• But vast majority of young adults are mobile
  texters
• Insight Express (18 24). 86
• Youth Trends (college students) 78
• Forrester (18 24) 76
• Pew (18 29). 65
• Are US marketers getting in on the text action?

text msgfrom mobile marketers
U 1st
65
Consumer trust level for text ads on mobile phones
Survey says!!!
Trust-O-Meter
3
100
0
66
OPA 18 are receptive in exchange for free
mobile content

• Jupiter 46 of mobile phone users say they NEVER
  want to receive ads on their phones
• Forrester over 75 of are turned off by the
  idea of ads on their cell phones
• RBC 43 would pay extra for a phone that
  prohibited mobile ads
• Harris 90 of all adult mobile users are
  disinterested in receiving ads, yet 35 would
  reconsider in order to get free mobile apps

Yankee Group 50 of mobile users aged 18 35
would be interested in mobile ads to subsidize
their use of data/content
Look for cross-media plays where the direct
response capabilities of the handset provide the
punch line to a rich media setup in other
media. --John du Pre Gauntt, eMarketer
67
Classic Integration Example Dove Campaign for
Real Beauty
68
Marketers are now realizing the benefits of
trading off some reach to get a deeper brand
interaction (ENGAGEMENT)
Size of Audience
Marketers must create a connection
environment, in which they meet their customers
in their search for content and
community. --Rishad, Starcom IP
Coca-Cola strongly believes that the Internet
and mobile provide great platforms to connect
with consumers. --Carol Kruse, VP, Coca-Cola
Measurement is really key.

Heavy Engagement
Depth of Brand Interaction
69
Balance being accountable withcontinuous
risk-taking
We need room for experimentation. I dont
think you want to allow measurement to override
creativity and the adventure of this new media.
-- Anthony Ponturo, VP Global Media,
Anheuser-Busch
Iterate. Dont pontificate. --Rishad
Tobaccowala
Its not just O.K. to failits imperative to
fail. --Seth Godin
Do it wrong QUICKLY and then fix it!
--Mike Moran, IBM
Trying is the first step towards failure.
70
4 Great Principles of Marketing Today
Sign-up for our free, Daily Newsletter
atwww.eMarketer.com
Final Stats 70 slides 52,000 charts

• TRUST
• Be authentic in your messages
• Emphasize Listening over Loud-speaking!
• TRANSPARENCY
• Avoid any form, or even hint, of deception or
  subterfuge
• ENGAGEMENT
• Make your content so compelling, people will want
  to share it
• EMBEDDING
• Hijack great content thats already out there and
  find a way to embed your brand
• Provide the tools and platforms to enable easy
  sharing

Thank you!
To get this presentation, please provide me with
your business card, or contact me geoff_at_emarkete
r.com 212-763-6042
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