Trends in Digital Marketing and e-Commerce

Slide 1: Trends in Digital Marketing and E-commerce Linus Gregoriadis, Head of Research E-consultancy.com Email: linus@e-consultancy.com Website: www.e-consultancy.com

Slide 2: Presentation overview 1. Online advertising 2. Search engine marketing 3. Vertical search 4. E-commerce and affiliate marketing 5. Social media and social commerce 6. ‘Atomisation’ 7. User experience and Customer Engagement 2

Slide 3: Online advertising landscape

Slide 4: Three big deals in 2007 • Google’s proposed acquisition of DoubleClick for $3.1 billion. • Microsoft buys aQuantive (owner of Atlas) for $6 billion. • Microsoft pays $240 million for a 1.6% stake in Facebook. 4

Slide 5: Online marketing landscape • Online now accounts for 15% of the total UK advertising market and is likely to hit £2.75 billion this year (IAB). 5

Slide 6: Trends in display advertising …  Increased importance of behavioural targeting for boosting conversion rates and providing a better online experience.  Yahoo! bought online ad network BlueLithium for $300 million; AOL acquired Tacoda; Microsoft now owns DRIVEpm.  Leading publishers including The Guardian, News International, FT and Emap agree alliance to share information on reader behaviour.  Talks with Revenue Science. 6

Slide 7: Rise and rise of search Source: E-consultancy Search Engine Marketing Buyer’s Guide 2007 7

Slide 8: Search Engine Marketing - trends • Search has become more strategic, and part of integrated marketing plans. • SEO gains ground - PPC less cost effective than before. • Introduction of Universal Search creates new challenges and opportunities. • PPC is becoming more like SEO. 8

Slide 9: Google dominates … • Google is used for 70-80% of UK searches. • 60% of companies surveyed by E- consultancy believe that Google’s dominance represents some sort of risk … though the vast majority (80%) rate it as the best search engine for ROI. 9

Slide 10: Vertical Search • Could vertical search erode Google’s dominance? – More than half of E-consultancy users (54%) said they would be ‘very likely’ to use a search engine that focused specifically on serving their specific business / work needs.* • A further 40% said they would be ‘quite likely’. * E-consultancy / Convera Vertical Search Survey 2007 (Preliminary results) 10

Slide 11: Vertical Search – Benefits • Keep users on-site 62%* • Improve brand (by becoming authority website) 62% • Potential to monetise through advertising 52% • Reclaims online community from Google 42% * Percentage of publishers citing as ‘major benefit’ 11

Slide 12: Vertical Search – Disadvantages • Point users to competitors 37%* • Hassle (support/maintenance) 29% • Resource issues 21% • No clear business opportunity 15% * Percentage of publishers citing as ‘major downside’ Survey closes tomorrow night: http://tinyurl.com/25fqct 12

Slide 13: E-commerce and affiliate marketing

Slide 14: E-commerce landscape • Online sales in the UK will amount to an estimated £42bn in 2007, up from £30.2bn last year, according to the IMRG. – The average UK online shopper will spend £1,600 in 2007. – Online sales will reach an estimated £78bn a year by 2010. 14

Slide 15: Online buying behaviour is changing ... % of internet sales by source of referral (Channel Advisor) 15

Slide 16: Affiliate Marketing … • Affiliate Marketing is seen as ‘most cost effective channel’. • It will drive in the region of £3 billion worth of sales in 2007. • Move to ‘Affiliate 2.0’ * E-consultancy / buy.at Affiliate Marketing Merchants Survey 16

Slide 17: Social Media and Social Commerce

Slide 18: Blogs User- generated Content Wikis Social Networks Peer- Ratings and Reviews 2-peer Facebook Tagging 18

Slide 19: Social Networks = “sticky”, high page views / session, high repeat visits, youth audiences, reach Blogs = PR, niches, search rankings “UGC” = cheap content, increased conversion rates, user loyalty / trust Tags = improved navigation, categorisation, conversion rate optimisation, SEO 19

Slide 20: Social Media  The profile of social media has risen dramatically in recent months because of sites such as Facebook and Twitter which are used by millions of people.  The challenge for companies is to find a natural way to start conversations about their products and services online. 20

Slide 21: What is Social Commerce? • Put simply, social commerce is about customers having the means to interact with one another in order to make better buying decisions. 21

Slide 22: Importance of ratings and reviews, and user-generated content • Customer ratings & reviews are being used by 28% of online sellers, with more than half (52%) saying that they were considering the use of this feature.*  More than half of all online sellers (51%) consider UGC as either ‘extremely important’ or ‘very important’ to company strategy over the next year. *E-consultancy / Bazaarvoice Social Commerce Report 2007 22

Slide 23: Benefits of ratings and reviews Benefits of Ratings and Reviews 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Higher conversion Improved retention SEO benefit Ideas for Differentiation from Lower costs to Reduced returns rates and loyalty product/services competitors serve customer rate development Percentage of respondents rating as ‘major benefit’ (Social Commerce Report 2007) 23

Slide 24: ‘Atomisation’

Slide 25: “Web as Mash-ups platform” Widgets Feeds Open Syndication APIs Aggregation 25

Slide 26: iRobot 26

Slide 27: Fragmentation of content • Publishers should no longer think about their content just as something which appears on their destination website.  Growth in personalised home pages.  Widgets, feeds and open APIs are an opportunity. 27

Slide 28: User experience and customer engagement

Slide 29: User Experience is key • More grasp of commercial benefits of user experience investment. • Tiny increase in conversions = £££. • Specialist agencies (user-centred design services, eye-tracking etc). 29

Slide 30: What is Customer Engagement? • ‘Repeated interactions that strengthen the emotional, psychological or physical investment a customer has in a brand.’*  Recency of visits, frequency of visits; propensity to give feedback, recommend and create user-generated content.  Digital environment offers unprecedented scope for interaction and measurement of that interaction. * Richard Sedley of cScape, adapted from Ron Shevlin. 30

Slide 31: Top strategies for online engagement E-consultancy / cScape Customer Engagement Report 2008 31

Slide 32: Top tactics for online engagement E-consultancy / cScape Customer Engagement Report 2008 32

Slide 33: Conclusions • Important to think of online publication as more than just a destination website. – In a world of ‘atomisation’, what is the most effective and appropriate way of getting the brand out there? • Engagement with audience is vital. – How is that engagement being defined and measured, and how is it being deepened? 33

Slide 34: Questions? Linus Gregoriadis, Head of Research E-consultancy.com Email: linus@e-consultancy.com Website: www.e-consultancy.com