Post on 30-Oct-2014
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Turning COGS
Anthony Rhind
Thursday, 9th June 2011
Business environment is challenging ... heightened by economic crisis
Ultra Competition In a world of cheap interaction, entry
barriers are few & firms must compete
with a larger set of global rivals
Uncertainty Difficult to predict market change;
where tomorrow’s consumer,
competitor or category innovation will
come from
Complexity When interaction with everyone in
real-time is possible, decision-making
becomes significantly more complex
Fragility Interaction shifts the balance of power
away from firms, to consumers,
governments & other stakeholders
Crisis has created a challenging
advertising environment
... but a digital opportunity
Certainly consumer „connection‟is extending very rapidly
2 billion internet users worldwide
(Internet World Stats)
4.6 billion active mobile „phones
worldwide(UN Telecommunications Agency)
Smartphones WW
Symbian 36.6 (44.6)
Android 25.5 (3.5)
iPhone 16.7 (17.1)
Blackberry 14.8 (20.7)(Gartner Q3 2010)
500+ million active Facebook users worldwide
(Facebook)
517 million digital TV households
(Informa Telecoms & Media)
1 million Kinect units sold first 10 days. 5 million expected by
Christmas(Microsoft)
7.5 million iPads sold in 6 months
(Apple)
72% of teens have become a brand "fan" or "friend“ on a social
network
4 million Foursquare registered users
(Twitter)
190 million Twitter registered users
(Twitter)
62% of European shoppers consult
online forums before buying
... & capital stakeholders are confident
6/16/2011 :: 7
$8.5 billion10.5x revenue
$575 million2.6x revenue
$9 billion capTrading $95 vs. $45 IPO price
€750 million reported acquisition fund
6/16/2011 :: 8
So digital inherits the (advertising) earth ... ?
Something isn‟t working ...
Supply & demand market disconnect
Source: Cisco Visual Networking Index: 2009–2014
Audience is over supplied& growth areas under valued
...
Fixed cost entertainment
Growth in low cost advertising markets
Driven by social
Impactful, innovative, mobile ... hard to measure ROI
Familiar trading paradigm?
„Price‟ & „value‟ not the same ... but price is an optimisation lever
Auditing is a fact of life ... it‟s scope will increase
6/16/2011 :: 14
Source: Cisco Visual Networking Index: 2009–2014
Digital content value destruction ... „publisher‟ &
„media agency‟business model
stress
Cluttered consumer experience
Advertising poor, generic, annoying
Digital „tonnage‟ ... advertising commoditisation
Cluttered consumer experience
Advertising poor, generic, annoying
Low publisher sell-through / yield
Stressed content business model
Agency margin stressed by commission
model, complexity & operational scale
Digital „tonnage‟ ... advertising commoditisation
Cluttered consumer experience
Advertising poor, generic, annoying
Low publisher sell-through / yield
Stressed content business model
Agency margin stressed by commission model,
complexity & operational scale
Advertisers perceive digital as low
value
Digital „tonnage‟ ... advertising commoditisation
6/16/2011 :: 18
...must ad(d) value
Less inventory is a requirement ...
scarcity & certainty drive value
6/16/2011 :: 19
Better consumer experience ...
Better advertiser experience …
Better publisher margin
6/16/2011 :: 20
“The next phase of media will be after the page & after the site. Media can‟t expect us to go to it all the time. Media must
insinuate itself into our steams.” Jeff Jarvis
“1 billion impressions, 0.5% CTR”
... mustn‟t forget they are PEOPLE !!!
1963
6/16/2011 :: 21
The consumer isn't a moron; she is your wife. You insult her intelligence if you assume that a mere slogan & a few vapid adjectives will persuade her to buy anything. She wants all the information you can give her.
Reflect person‟s many selves ... reflect person‟s inter-related devices
PERSON
PARTICIPANT
CONSUMER
COMMUNITY
CUSTOMER
PRODUCER
USER
Content & advertising ... authorised, user generated ...
peer to peer conversations
thebrand.com
I talk WE talk THEY talk
What the
company says
What the consumer
experiences (interactions &
conversations)
What others
say about the
company
Touchpoints paid, owned, earned
& outcomes talk, think, trust
23
TALK THINK TRUST
6/16/2011 :: 24
Executionmust better exploit:
technology, data,
automation,
programmatic - segmentation, trading,
& „experience‟
Hype,hype, hype, hype, hype, hype
6/16/2011 :: 25
Believe it!
Today is only the dawn ...
6/16/2011 :: 26
Adoption inevitable,
opportunity significant
... move first!
6/16/2011 :: 27
* Crunchie Awards: January 2010
User level real-time data must enrichdigital planning & buying & creative
Privacy no longer a “social norm”*
Live „listening‟ to design
contact strategies is critical
New planning tools to balance
all touchpoints locally ... globally
6/16/2011 :: 29
User-based Optimization
• Cross-channel digital reach & frequency
• Display influence on search activity
• Keyword attribution and learning model
Planning Guidance
• Pricing benchmarks
• Reach & frequency estimates
• Daypart synergy with offline
Display Campaign Benchmarks by Client Industry, CTR (Left) and CPC (Right)
Timeframe: January-December 2007
Tailored Data Management
• Integration of sales & engagement activity
• Tailored KPIs
• Customized dashboard
reporting
Real-time execution based on
integrated consumer data-sets
6/16/2011 :: 31
Impression level „audience‟ & „domain‟
optimised programmatic buying
Clashing cultures: Creativity & intuition vs. technology & mathematics
6/16/2011 :: 32
“Dangerous primacy of mathematics over
psychology ... in business thinking &
decision making”
“Philosophy is dead. Philosophers have not kept up with modern
developments in science.”
... whilst also enforcing RESPONSIBLY
Digital marketing must balance
„art‟ & „science‟
6/16/2011 :: 33
“Re-tooling talent”
6/16/2011 :: 34
All levels & disciplines, especially management
Radical reinvention doesn‟t happen overnight
6/16/2011 :: 35 130 years ... unfinished
6/16/2011 :: 36
Thank you!
Obrigado!
Gracias!
Merci!
Grazie!
Arigatô!
Vielen Dank!
Terima Kasih!
谢谢您!