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Day2 1715 turning_cogs_havas_digital

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  • 1. Turning COGSThursday, 9th June 2011Anthony Rhind
  • 2. Business environment ischallenging ... 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
  • 3. Crisis has created a challenging advertising environment
  • 4. ... but a digital opportunity
  • 5. Certainly consumer „connection‟ is extending very rapidly Smartphones WW2 billion internet 4.6 billion active Symbian 36.6 (44.6) 500+ millionusers worldwide mobile „phones Android 25.5 (3.5) active Facebook (Internet World Stats) worldwide iPhone 16.7 (17.1) users worldwide (UN Telecommunications Agency) (Facebook) Blackberry 14.8 (20.7) (Gartner Q3 2010) 1 million Kinect units517 million digital sold first 10 days. 5 7.5 million iPads TV households (Informa Telecoms & Media) million expected by sold in 6 months Christmas (Apple) (Microsoft) 4 million Foursquare 190 million Twitter registered users registered users (Twitter) (Twitter) 72% of teens have 62% of Europeanbecome a brand "fan" shoppers consultor "friend“ on a social online forums before network buying
  • 6. ... & capital stakeholders are confident $9 billion cap $8.5 billion Trading $95 vs. 10.5x revenue $45 IPO price $575 million €750 million reported 2.6x revenue acquisition fund6/16/2011 :: 7
  • 7. So digital inherits the (advertising) earth ... ?6/16/2011 :: 8
  • 8. Something isn‟t working ...
  • 9. Supply & demand market disconnect Source: Cisco Visual Networking Index: 2009– 2014
  • 10. Audience is over supplied & growth areas under valued ...Fixed cost entertainment Driven by social Growth in low costadvertising markets Impactful, innovative, mobile ... hard to measure ROI
  • 11. Familiar trading paradigm?
  • 12. „Price‟ & „value‟ not the same ... but price is an optimisation leverAuditing is a fact of life ... it‟s scope will increase
  • 13. Digital content value destruction ... „publisher‟ & „media agency‟ business modelSource: Cisco Visual Networking Index: 2009–2014 stress 6/16/2011 :: 14
  • 14. Digital „tonnage‟ ... advertising commoditisation Cluttered consumer experienceAdvertising poor, generic, annoying
  • 15. Digital „tonnage‟ ... advertising commoditisation Cluttered consumer experience Advertising poor, generic, annoying Low publisher sell-through / yield Stressed content business modelAgency margin stressed by commissionmodel, complexity & operational scale
  • 16. Digital „tonnage‟ ... advertising commoditisation Cluttered consumer experience Advertising poor, generic, annoying Low publisher sell-through / yield Stressed content business modelAgency margin stressed by commission model, complexity & operational scale Advertisers perceive digital as low value
  • 17. ...must ad(d) value6/16/2011 :: 18
  • 18. Less inventory is a requirement ... scarcity & certainty drive value Better consumer experience ... Better advertiser experience …6/16/2011 :: 19 Better publisher margin
  • 19. “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 Jarvis6/16/2011 :: 20
  • 20. “1 billion impressions, 0.5% CTR” ... mustn‟t forget they are PEOPLE !!! 1963 The consumer isnt 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.6/16/2011 :: 21
  • 21. Reflect person‟s many selves ... reflect person‟s inter-related devices CUSTOMER USER CONSUMERPRODUCER PERSON PARTICIPANT COMMUNITYContent & advertising ... authorised, user generated ... peer to peer conversations
  • 22. Touchpoints paid, owned, earned & outcomes talk, think, trust I talk WE talk THEY talk TALK THINK TRUST What the consumer What others What the experiences say about thecompany says (interactions & conversations) company thebrand.com 23
  • 23. Execution must better exploit: technology, data, automation, programmatic - segmentation, trading, & „experience‟6/16/2011 :: 24
  • 24. Hype, hype, hype, hype, hype, hype Believe it!6/16/2011 :: 25
  • 25. Today is only the dawn ... Adoption inevitable, opportunity significant ... move first!6/16/2011 :: 26
  • 26. Privacy no longer a “social norm”* User level real-time data must enrich digital planning & buying & creative 6/16/2011 :: 27* Crunchie Awards: January 2010
  • 27. Live „listening‟ to design contact strategies is critical
  • 28. New planning tools to balance all touchpoints locally ... globally6/16/2011 :: 29
  • 29. Real-time execution based on integrated consumer data-sets Planning User-based Tailored Data Guidance Optimization ManagementDisplay Campaign Benchmarks by Client Industry, CTR (Left) and CPC (Right)Timeframe: January-December 2007• Pricing benchmarks • Cross-channel digital • Integration of sales &• Reach & frequency reach & frequency engagement activity estimates • Display influence on • Tailored KPIs• Daypart synergy with search activity • Customized dashboard offline • Keyword attribution reporting and learning model
  • 30. Impression level „audience‟ & „domain‟ optimised programmatic buying6/16/2011 :: 31
  • 31. Clashing cultures: Creativity & intuition vs. technology & mathematics “Philosophy is dead. “Dangerous primacy of Philosophers have not mathematics over kept up with modern psychology ... developments in in business thinking & science.” decision making”6/16/2011 :: 32
  • 32. Digital marketing must balance „art‟ & „science‟ ... whilst also enforcing RESPONSIBLY6/16/2011 :: 33
  • 33. “Re-tooling talent”All levels & disciplines, especially management6/16/2011 :: 34
  • 34. Radical reinvention doesn‟t happen overnight6/16/2011 :: 35 130 years ... unfinished
  • 35. Thank you! Obrigado! Gracias! Merci! Grazie! Arigatô! Vielen Dank! Terima Kasih! 谢谢您!6/16/2011 :: 36