Digital Reality

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The disparity between consumer media consumption and advertiser media spend demonstrates the gap between the digital reality and - to quote Jim Stengel, GMO P&G – the “antiquated thinking to a new world of possibilities.”

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Digital Reality

  1. The Digital Reality Search MDAS Singapore Chris Schaumann, Country Sales Manager
  2. Slide 2 | © Microsoft Corporation 2007
  3. Future Shape of Advertising Slide 5 | © Microsoft Corporation 2007
  4. The Consumer is in Control Slide 6 | © Microsoft Corporation 2007
  5. The Consumer is in (Remote) Control Slide 7 | © Microsoft Corporation 2007
  6. The new TV Reality Before DVRs, (TV Viewing) After DVRs • 70% of television viewing • Up to 60% of viewing is time happens during primetime shifted hours • Virtually all television • Reality, news and sports are watched quot;livequot; the only genres that retain much live audience • 70% of commercials are • Life fits into the network's skipped schedule • Two-thirds of television occurs outside of primetime hours Slide 9 | © Microsoft Corporation 2007
  7. DVR – the next VCR (with a catch) In recorded programming, what percentage of ads do you actually watch? Source: Forrester’s consumer technographics 2004 DVR online study Slide 10 | © Microsoft Corporation 2007
  8. Digital Generation Source: Nielsen//NetRatings consumer Survey 06/06 Slide 14 | © Microsoft Corporation 2007
  9. No more Mass Media? Slide 15 | © Microsoft Corporation 2007
  10. TV Channel Proliferation The End of Mass Media 7109 Number of TV Channels 1686 416 246 93 UK Japan US France Germany Source: Europe: Screen Digest 2005, Japan: Wikipedia May 2006, US: US Federal Comms Commission, 2004
  11. The End of Mass Media 34% 24% 13% 9% Source: NAB (1965 – 1986); Nielsen (2000) Slide 17 | © Microsoft Corporation 2007
  12. Multi-tasking Source: MindShare, November 2005 Slide 18 | © Microsoft Corporation 2007
  13. Always connected and informed Access home & work Connected Self expression Informed Slide 20 | © Microsoft Corporation 2007
  14. The Internet beats the TV in the Battle for Attention Slide 22 | © Microsoft Corporation 2007
  15. Print Global Trends 1995 USD billions constant prices 140 135 130 125 120 115 110 105 100 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Slide 23 | © Microsoft Corporation 2007
  16. Slide 24 | © Microsoft Corporation 2007
  17. Print Humor Slide 26 | © Microsoft Corporation 2007 26
  18. The Rise of Windows Live Spaces 120 m 40 m 2m Source: Microsoft Internal Data (audited by PWC) Slide 27 | © Microsoft Corporation 2007
  19. The Internet has reached Critical Mass Slide 28 | © Microsoft Corporation 2007
  20. Exploding Online Users in APAC Source: www.internetworldstats.com, February 2007 Slide 29 | © Microsoft Corporation 2007
  21. Exploding Online Users in APAC Source: www.internetworldstats.com, February 2007 Slide 30 | © Microsoft Corporation 2007
  22. Exploding Online Penetration in Asia Source: www.internetworldstats.com, February 2007 Slide 31 | © Microsoft Corporation 2007
  23. Who’s Online? Source: PAX Q3,05-Q2,06 (10 markets ex Tokyo; among top Management Sample) Slide 32 | © Microsoft Corporation 2007
  24. Average Hours of Media Exposure per Day Source: Synovate Young Asians Nov 2005 Slide 35 | © Microsoft Corporation 2007
  25. What is the Global Youth spending more Time on? Slide 40 | © Microsoft Corporation 2007
  26. But Consumers are still way ahead…. Slide 41 | © Microsoft Corporation 2007
  27. The World is changing (fast!) Growth rate: years to reach a quarter of the US population Slide 43 | © Microsoft Corporation 2007
  28. The World is changing (fast!) Growth rate: years to reach a quarter of the US population
  29. Digital Dominance Games Digital radio Mobile Outdoor Digital TV Cinema Analogue radio Analogue TV Internet Print Growth rate: years to reach a quarter of the US population Source: ISOBAR Slide 45 | © Microsoft Corporation 2007
  30. Internet is the most helpful Medium for Product/Service Information Source: Synovate Young Asians Nov 2006 Slide 47 | © Microsoft Corporation 2007
  31. Internet for B-2-B? Slide 48 | © Microsoft Corporation 2007
  32. Internet is the most helpful Medium for Consumer Electronics Source: Consumer Electronics Association, Oct 2006 Slide 49 | © Microsoft Corporation 2007
  33. Consumers research & buy Online Source: EIAA Mediascope 2005
  34. Share of Advertising Expenditure – U.S. 2005 Source: Media expenditures by medium from TNS Media Intelligence & Coen’s Slide 52 | © Microsoft Corporation 2007
  35. Share of Advertising Expenditure – U.S. 2005 COEN’S U.S. ADVERTISING EXPENDITURES MEDIUM AS % OF TOTAL TOTALS* MEDIA 2005 2004 % CHG 2005 2004 2005 2004 % CHG Direct mail NA NA NA NA NA 55,218 52,191 5.8 Yellow Pages NA NA NA NA NA 14,229 14,002 1.6 Cable local spot NA NA NA NA NA 5,358 5,103 5 Network TV 26,706 26,218 1.9 9.9 9.9 16,128 16,713 -3.5 Local newspaper 25,537 25,164 1.5 9.4 9.5 39,870 38,985 2.3 Magazine 23,218 21,628 7.3 8.6 8.2 12,847 12,247 4.9 Spot TV 17,115 18,794 -8.9 6.3 7.1 24,300 25,877 -6.1 Cable TV network 16,453 14,818 11 6.1 5.6 18,296 16,424 11.4 Internet 8,323 7,343 13.3 3.1 2.8 7,764 6,853 13.3 Local radio 7,431 7,453 -0.3 2.7 2.8 15,357 15,205 1 Business publication 5,038 5,234 -3.7 1.9 2 4,170 4,072 2.4 Syndicated TV 4,222 3,931 7.4 1.6 1.5 3,865 3,674 5.2 Outdoor 3,529 3,213 9.8 1.3 1.2 6,232 5,770 8 National newspaper 3,467 3,303 4.9 1.3 1.3 7,465 7,629 -2.1 National spot radio 2,604 2,617 -0.5 1 1 3,469 3,540 -2 Sunday magazine 1,739 1,529 13.7 0.6 0.6 NA NA NA FSI 1,442 1,392 3.6 0.5 0.5 NA NA NA Network radio 1,010 1,028 -1.7 0.4 0.4 814 836 -2.6 Local magazine 451 360 25.2 0.2 0.1 NA NA NA Total US 271,074 263,766 2.8 100 100 271,074 263,766 2.8 Source: Media expenditures by medium from TNS Media Intelligence & Coen’s Slide 53 | © Microsoft Corporation 2007
  36. Slide 54 | © Microsoft Corporation 2007
  37. Regional Reach (vs. TV) Source: Synovate Young Asians 2005, Hong Kong, Singapore, Korea & Taiwan Slide 59 | © Microsoft Corporation 2007
  38. Regional Reach (vs. Print) Source: Synovate PAX 2005/06 (Q2 ’05-Q1 ’06) % Av. Issue Readership, Slide 60 | © Microsoft Corporation 2007
  39. Reaching Consumers throughout their Media Day 7.00am Journey Morning Paper Breakfast News Breakfast Show To Work Check News/ Mail 9.00am 11.00am Search 1.00pm Paper/Mags Out for News, Sport, Drive Time Lunch Finance 3.00pm 5.00pm Search 7.00pm Leisure Mags Drive Time Web Cast Journey Home 9.00pm News, Ent, Sport 11.00pm Slide 63 | © Microsoft Corporation 2007
  40. Digital Convergence + WiFi Slide 66 | © Microsoft Corporation 2007
  41. The Captains of the Industry get it... Digital is becoming the core marketing tool. ... it is, and we should have no doubt about this, a fundamental and irreversible evolution. Publicis Groupe CEO Maurice Levy Source: AdAge May 2007 Slide 68 | © Microsoft Corporation 2007
  42. The Captains of Industry get it... I believe today’s marketing model is broken. We’re applying antiquated thinking to a new world of possibilities… Jim Stengel, GMO: P&G Slide 69 | © Microsoft Corporation 2007
  43. The Captains of the Industry get it… Source: Forrester December 2004 (What’s Next For TV Advertising) Slide 70 | © Microsoft Corporation 2007
  44. …and the Consumers? - Internet tops TV as most popular pastime - Surfing the Internet is now more popular than watching television, according to new figures. On average, adults in Britain spend more time online at their computers - 41.5 days a year - than in front of the TV. Government figures from the Office of National Statistics show that we spend just 37.5 days a year watching television. Source: Daily Mail, 8th March 2006 Slide 72 | © Microsoft Corporation 2007
  45. …and the Clients? – Jim Stengel, CMO P&G – “What we really need is a mind-set shift, a mind-set shift that will make us relevant to today‟s consumers, a mind-set shift from „telling and selling‟ to building relationships.” Source: Times UK Online, October 21, 2005 Slide 73 | © Microsoft Corporation 2007
  46. …and the Clients? – Heineken Halts All TV Advertising in UK – Heineken has pulled its television ad budget after 30 years of broadcast advertising campaigns. It will redirect its marketing dollars towards point-of- sale promotions and event sponsorship. Rob Marijnen, managing director of Heineken UK, said that a number of factors had prompted it to put its money elsewhere... “The enormously cluttered environment in TV ads makes it difficult to make standout ads... It’s also very expensive and it’s questionable as to its effectiveness.” Source: Times UK Online, October 21, 2005 Slide 74 | © Microsoft Corporation 2007
  47. …and the Clients? -– McDonald’s doubles online spend after global restructure –- McDonald’s has restructured its global marketing team and doubled its online advertising budget as it turns to interactive media to forge a more meaningful relationship with consumers. Consumer-generated content and social networks such as Windows Live Spaces are believed to be important areas of focus for the company. Detailed research conducted through Microsoft demonstrated that online was 44 per cent more cost-efficient than other media when it came to driving purchase intent. TV’s share of the marketing pot has reduced from 85% to 70%. Source: Industry News, January 2007 Slide 75 | © Microsoft Corporation 2007
  48. …and the Clients? -- NESTLE favors Digital by an additional 8% -- NESTLE dropped a digital bombshell this week. The Swiss food giant is reducing its TV advertising budget from 68 to 60 per cent of marketing expenditure globally in recognition of the importance of digital media. quot;The advent of the digital age continues,quot; announced Nestle Australia's Ian Alwill. quot;Nestle has legislated that we will spend more in the digital space.quot; Source: Fairfax, November 2006 Slide 76 | © Microsoft Corporation 2007
  49. …and the Clients? Suzuki to 3x Online Ad Spend In a move to become a bigger player on the auto landscape, American Suzuki Motor has more than tripled its online ad spend this year and already has made its Internet media buy for 2007, well ahead of the competition. Up to 85% of Internet ad buys are now made upfront. Source: Brandweek 6/9/06 Slide 77 | © Microsoft Corporation 2007
  50. …and the Clients? -- HP spends 30% Online -- HP has shifted its online media spend from 10% to 30%. They have also merged content and media in various fresh and compelling ways. Source: ANA Annual Conference October 20`06 Slide 78 | © Microsoft Corporation 2007
  51. …and the Clients? Source: ANA Annual Conference October 20`06 Slide 79 | © Microsoft Corporation 2007
  52. …what about Microsoft? Of the $500 million Microsoft allocated to the introduction of its Vista operating system, 30% went online. Source: Times UK Online, October 21, 2005 Slide 80 | © Microsoft Corporation 2007
  53. …and the Industry? “78% of advertisers feel that over the last two years television advertising has lost effectiveness, and — as a direct result — marketers are exploring emerging technologies to help bolster their television advertising spend.” Source: Survey from the Association of National Advertisers (ANA) and Forrester Research, 30th March 2006 Slide 81 | © Microsoft Corporation 2007
  54. …and the clients? “The ANA predicts that 80% of advertisers will spend more of their advertising budget on Web advertising and 68% of advertisers will look to search engine marketing.” Source: Survey from the Association of National Advertisers (ANA) and Forrester Research, 30th March 2006 Slide 82 | © Microsoft Corporation 2007
  55. Some things never change Slide 83 | © Microsoft Corporation 2007
  56. Planning & Creativity Slide 84 | © Microsoft Corporation 2007
  57. The Future of Marketing - From Monologue to Dialogue “Media execution & media buying is becoming the new creative in advertising” Source: The Economist Intelligence Unit, September 2006 Slide 85 | © Microsoft Corporation 2007
  58. The Future of Marketing - From Monologue to Dialogue “Every major advertiser today is re-evaluating their entire marketing investment” Ed Erhardt, President of Marketing and Sales Source: The Economist Intelligence Unit, September 2006 Slide 86 | © Microsoft Corporation 2007
  59. Bring the Love back! Join the conversation at www.bringtheloveback.com Slide 87 | © Microsoft Corporation 2007
  60. Customer-2-Customer Generation ‘C’ (for Content) • Research shows that 86% of consumers no longer believe what brands say about themselves • Whereas 78% of consumers believe what other consumers say about brands Slide 88 | © Microsoft Cooperation 2006
  61. Slide 89 | © Microsoft Corporation 2007
  62. Make your communication genuine Slide 90 | © Microsoft Corporation 2007
  63. Make your communication relevant Slide 91 | © Microsoft Corporation 2007
  64. Target the right message At the right time To the right person Slide 92 | © Microsoft Corporation 2007
  65. Break up the silos of creative + planning Slide 93 | © Microsoft Corporation 2007
  66. Engage your audience with interactivity Slide 94 | © Microsoft Corporation 2007
  67. Slide 103 | © Microsoft Corporation 2007
  68. What does this mean for Microsoft - a new era Slide 104 | © Microsoft Corporation 2007
  69. Software & Ad Market 2007 Online Ad Market = $34B 6% of total Ad Market 2009 Online Ad Market = $52B 8% of total Ad Market Sources: -Market Sizes: Microsoft & Universal McCann - Online Market Sizes: Oppenheimer & Co. Inc., June 2007 (sources include Universal McCann, Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers ) Slide 105 | © Microsoft Corporation 2007
  70. “Going back about 20 years I used to tell our people Microsoft was about one thing: Windows, Windows, Windows… but not any more baby, it’s Advertisers, Advertisers, Advertisers” Steve Ballmer Slide 107 | © Microsoft Corporation 2007 107
  71. Slide 109 | © Microsoft Corporation 2007
  72. Slide 113 | © Microsoft Corporation 2007
  73. Slide 116 | © Microsoft Corporation 2007
  74. Online for the Consumer in Control Move from links to answers Biz Network Previous Relevant Access all areas Searches Info Met Book on-line EntertainmentAnswer my Question Club Family Friends Designed to My social Network Com- puter News Files mework together Friends Family Everything on Anything Met Play Anywhere access on-line Group Family Friends Friends Safety and security Trip Local Photos Search Last Other job pals Family Local shops Slide 117 | © Microsoft Corporation 2007
  75. Volume of Users Content providers (major to self select) Slide 120 | © Microsoft Corporation 2007
  76. Vision • Windows Live, a new set of personal Internet services and software, is designed to bring together in one place all the – Relationships – Information – Interests • People care about most, with enhanced safety and security features across their PC, devices and the Web. • MSN and Windows Live will be offered alongside each other as complementary services. Slide 121 | © Microsoft Corporation 2007
  77. Slide 126 | © Microsoft Corporation 2007
  78. Slide 128 | © Microsoft Corporation 2007
  79. A comprehensive Advertising Solution for You • Reach your their target audiences across multiple digital lifestyle touch points • Your message in the right place at the right time • As consumers communicate, research, inform, entertain and work • Dynamically engage your brands with your audience • Context and content for 76 million Asian users on MSN, Windows Live, Microsoft Office • High-impact advertising products and platforms such as Window Live Messenger • Achieve advertising results through world-class partnership services • Access to advertising innovation, knowledge sharing, planning and service excellence • Benefit from case studies, industry research, custom ad accountability and more Slide 129 | © Microsoft Corporation 2007
  80. Advertising when the Audience is … – Game Console (over the Internet) – IPTV – Online Video – Online Maps – Instant Messaging – Online Services – Mobile Phone/PDA Slide 138 | © Microsoft Corporation 2007
  81. While playing Games Slide 139 | © Microsoft Corporation 2007
  82. While watching TV (over the Internet) Slide 142 | © Microsoft Corporation 2007
  83. While watching Video (Online) Branded Experiences: 1. Watching MSN in Concerts (Music/Videos Online) 2. Watching Live Earth Slide 143 | © Microsoft Corporation 2007
  84. http://msninconcert.msn.com/music/archive/en-sg/archive.aspx Slide 144 | © Microsoft Corporation 2007
  85. 07/07/07 – Live Earth Page 145
  86. 07/07/07: The Media Event From the producers of Live 8, a media event to focus global attention on climate crisis… • 7 concerts… at ecologically responsible & politically important venues • 7 continents… each with its own environmental concerns • 150+ artists… performing in support of a global call to action • 60+ films… & PSAs messaging critical environmental issues • Live Earth’s “SOS” online community… engaged by rich content & interactivity • 2 million audience members… inspired by the event experience • 2 billion viewers… mobilized to take action with corporate partners Page 146
  87. Global Concert Locations and Venues Artist for All Venues to be confirmed • US: Giants Stadium Confirmed • UK: Wembley Stadium – London Confirmed • Brazil: Copacabana Beach, Rio de Janeiro • South Africa: The Cradle of Human Kind, Maropeng near Johannesburg • Japan: Tokyo Dome, Tokyo • China: (location TBD), Shanghai • Australia: Aussie Stadium, Moore Park, Sydney
  88. Live Earth Confirmed Artists Giant Stadium–New Jersey • Kanye West • Melissa Etheridge • AFI • Dave Matthews Band • Kelly Clarkson • Rihanna • Akon • Fall Out Boy • KT Tunstall • Roger Waters • Alicia Keys • Smashing Pumpkins • Ludacris • John Mayer • Bon Jovi • The Police • Sheryl Crow Page 148
  89. Live Earth Confirmed Artists Wembley Stadium–London • Beastie Boy • James Blunt • Black Eyed Peas • John Legend • Bloc Party • Keane • Corinne Bailey Rae • Madonna • Damien Rice • Paolo Nutini • Razorlight • David Gray • Duran Duran • Red Hot Chili Peppers • Snow Patrol • Foo Fighters • Genesis Page 149
  90. Global Media Distribution & Reach • A global campaign fueled by 24-hour multimedia reaching 2 billion viewers The Exclusive Online Distributor “One of the things that Microsoft and MSN really believe in is that the Internet is going to change the world, and that we can play a very big role in this.” Joanne Bradford-Corporate Vice President and CMO, MSN Live Earth Press Announcement, Los Angeles, 2/15/2007 U.S. Broadcast Global Broadcast Online Marketing & PR SaveOurSelves.org Guerrilla Marketing User Generated Content PSAs Page 150
  91. http://liveearth.sg.msn.com Slide 151 | © Microsoft Corporation 2007
  92. Watching Live Earth on television, as opposed to online via MSN, is an effect not unlike being a passenger in your grandmother's car: quot;Go faster, turn here, oh hell, forget it, I'll drive…Each concert feed streamed via MSN without buffering or hiccups, meaning that each was as mouse-clickably close as the next...The pageantry that sprung from his devotion was, as seen through MSN's Live Earth webcast, nearly perfect in its execution. 8 million people viewing 15 With a reported million streams for the event breaking the record set two years ago by Live 8, Live Earth is broadband's biggest event to Steve Bryant, Hollywood Reporter date! Slide 152 | © Microsoft Corporation 2007
  93. Finding Local Information Slide 154 | © Microsoft Corporation 2007
  94. Finding Local Information Slide 155 | © Microsoft Corporation 2007
  95. While Socializing Slide 157 | © Microsoft Corporation 2007
  96. J&J Acuvue Theme Pack Slide 158 | © Microsoft Corporation 2007
  97. J&J Acuvue Theme Pack Slide 159 | © Microsoft Corporation 2007
  98. While Working Slide 161 | © Microsoft Corporation 2007
  99. While Working Slide 162 | © Microsoft Corporation 2007
  100. On the Road Slide 163 | © Microsoft Corporation 2007
  101. Our Unmatched Audience Reach Digital Lifestyle Slide 165 | © Microsoft Corporation 2007
  102. Slide 173 | © Microsoft Corporation 2007
  103. Case Study: Nokia Slide 227 | © Microsoft Corporation 2007
  104. Nokia New Year’s Eve Live Concerts - a truly Global Entertainment Experience Challenge • Help Nokia own the music category on a global basis MSN Solution • Created a truly global entertainment experience via live concerts in five cities for one giant party during new year’seve in HongKong, Mumbai, Berlin, Rio and New York Result • Nokia New Year’s Eve concerts were the only branded communications to http://nokianewyearseve.msn.com consumers at the time Slide 228 | © Microsoft Corporation 2007
  105. Nokia New Year’s Eve Live Concerts - a truly Global Entertainment Experience Impact • Hundreds of thousands of viewers tuned in during the 24 hour period to watch the live streaming concerts in real time • 1,000+ posted images/videos of their experiences http://nokianewyearseve.msn.com Slide 230 | © Microsoft Corporation 2007
  106. Case Study: Blogging / Volvo Slide 242 | © Microsoft Corporation 2007
  107. Volvo: “What’s Your Story?” Connecting advertisers with digital storytelling • Challenge: Engage adults 25 -54 in a way that connects Volvo with real-life user stories • MSN Solution: Associate Volvo with the blogging experience and MDAS’ platform to bring real-life consumer stories to life • Result: Associates Volvo with the blogging experience, rather than the content itself. As result, Volvo “trustworthiness” showed lift • Impact: – Significant lift in key brand metrics – Visitors are 3.5x more likely to search the web for Volvo keywords http://whatsyourstory.msn.com/ Slide 243 | © Microsoft Corporation 2007
  108. Blogging in Asia • Almost half of the online Asian community have a blog (45%)* • Why do Asians blog?* – Keep in touch - 53 % blog to stay close with friends and family – Self Expression - 50% started their blogs to voice strongly held opinions • 48% of young Asians say reading blogs is their favorite online activity ** *Blogging Asia: A Windows Live Report, 2006. **Synovate Young Asian Survey, 2006. Slide 244 | © Microsoft Corporation 2007
  109. Customized Solutions - Recently launched • Starwood Westin: Renewal http://renewal.msn.com • Philips: Ambilight http://movies.msn.com/movies/movie-trailers/ambilight • Nissan Infiniti: Open for Design http://openfordesign.msn.com • Microsoft: Show Us Your Wow http://showusyourwow.msn.com • Ford: Ideas from the Edge http://fordedge.msn.com • Prilosec OTC: Bunco games http://bunco.msn.com • LeBron James: LeBron on MSN http://lebron.msn.com
  110. Contact Information • Online Services Group - Southeast Asia Microsoft Operations Pte Ltd 1 Marina Boulevard #22-00 Singapore 018989 • Chris Schaumann Country Sales Manager, Singapore +65 (6882) 8532 chris.schaumann@microsoft.com www.msn.com.sg | www.live.com | spaces.live.com | mail.live.com • Find out about the latest information and case studies at http://asia.advertising.msn.com/ • Sign up for the new MSN Newsletter at https://www.msn-advertising.com/msn_ad/ • Get new Windows Live Services: http://ideas.live.com/ Slide 262 | © Microsoft Corporation 2007
  111. Slide 266 | © Microsoft Corporation 2007

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