South African Digital Marketing 2008 Updated

How Digital Is Forcing A Change In The Marketing Landscape South Africa 05 11 08

• 4 Points On Ogilvy/Me • 4 Marketplace Observations • 4 Ways Customer’s Are Changing • 4 Marketing Responses • 4 Coping Strategies Ogilvy –08 09 08– 2

Ogilvy –08 09 08– 3

Interactive @ Ogilvy - The largest digital network in the world Ogilvy –08 09 08– 4

Digital Is A Specialism Within All Disciplines PR ADVERTISING DIRECT RETAIL ACTIVATION DIGITAL KNOWLEDGE Ogilvy –08 09 08– 5

Update Digital Thought Leadership & Innovation Ogilvy –08 09 08– 6

Web 2.0 7/3/8

http://uk.youtube.com/watch?v=lBLZkdK1SDw Ogilvy –08 09 08– 8

WEB 1.0 WEB 1.0 WEB 2.0 WEB 2.0 READ READ WRITE WRITE Ogilvy –08 09 08– 9

1. 4 Marketplace Observations a. Traditional methods no longer working a. What marketers are saying & doing, c. Key reasons why, d. Your audience is online

Ogilvy –08 09 08– 11

1a. Traditional Methods Will Not Work “The ad industry is passing through one of the most disorienting periods in its history. This is due to a combination of long-term changes, such as the growing diversity of media, and new technologies, most notably the internet. Consumers have become better informed than ever before, with the result that some of the traditional methods of advertising and marketing simply no longer work.” Ogilvy –08 09 08– 12

1a. Traditional Methods Will Not Work Ogilvy –08 09 08– 13

1b. What are Marketers Saying? Digital Is Fundamental • “Consumers are less willing to believe traditional advertising… marketers need to use the channels consumers use” – Nestlé • “Using new media has reminded us that we can play a bigger role in consumers lives” – Unilever • “ What we have to ask is what's right for the customer and put them at the centre” – Technology Sector • “There is no mass media anymore” – P&G How Companies Are Marketing Online McKinsey 2007 Ogilvy –08 09 08– 14

1b. What are Advertisers Doing? Digital Investment Growing €29,0 bill. Worldwide Online Spend growth of c. 200% since 2001 €25,3 bill. €18,4 bill. €13,1 bill. €10,6 bill. €10,3 bill. €9,4 bill. 2001 2002 2003 2004 2005 2006 2007 GroupM Interaction Report 2008 Online Spends Ogilvy –08 09 08– 15

1b. What are Advertisers Doing? Digital Growth Outpacing Traditional Global market: % growth in each medium for 2008 (vs. 2007) $46.0 Internet* Billion 24.1% 9.5% 6.1% 7.2% 3.5% Outdoor 3.2% Television 1.0% Total Newspapers Media* Radio Mags Source: ZenithOptimedia, March, 2008; *eMarketer, 2008 (Internet and total media) Ogilvy –08 09 08– 16

1b. What are Advertisers Doing? Digital Overtaking Traditional Ad Spend Google’s Ad & Search revenue in the UK Digital Ad Revenue will exceed UK ($803 million Q1) will exceed ITV in print in 2008 2008! The value of South African online marketing will more than double from US$91 million in 2007 to more than US$186 million in 2009 GroupM Interaction 2008 Ogilvy –08 09 08– 17

1b. What are Advertisers Doing? South African Marketplace Is Also Growing GroupM Interaction Report 2008 Ogilvy –08 09 08– 18

Ogilvy –08 09 08– 21

1c. Why: Broadband & Mobility Are Changing The Game 43.15m Mobile Users @ A penetration rate of 98.5% South Africa is expected to become one of the cheapest places for internet connectivity in the future, with broadband speed hopefully in place by 2010, “so don't bet against the internet, make it a part of your campaigns”, Google country manager in South Africa, Stafford Masie Ogilvy –08 09 08– 22

1c. Why: Online Advertising Drives Measurable Action Cancer Research UK Banner Campaign Viewed Impressions Ad 37 million CPM – £1.8 CTR - 0.08% Arrived 29,949 CPC – £2.26 CTC - 3. 51% Action 914 CPA – £74.20 (vs. £90 Target) ARPU - £60.32 Cash/£58.3bD £ Year 1 £17,953 Cash ROI – 0.71 – Year 1 £42’630 DD £ Over 5 Years Donated £231, 103 ROI – 2.90 – Year 5 CRUK/Ogilvy Post Campaign Data 2007 Ogilvy –08 09 08– 23

1c. Why: Online Advertising Builds Brands 100 Control 5.9% Exposed 80.3 75.8 80 9.0% 5.9% 58.1 Percent 60 33.7% 53.3 47.5 50.3 107% 44.4 40 33.2 33.2 16 20 0 Brand Awareness Ad Recall Message Brand Purchase Intent Association Favourability Source: Dynamic Logic MarketNorms-EU-FMCG, data through June 30, 2004; N=33 campaigns, n=25,273 respondents Ogilvy –08 09 08– 24

1c. Why: Digital Fits In All Areas of The Purchase Cycle Ogilvy –08 09 08– 25

1c. Why: “The Internet is the Viagra of big business.” Jack Welch American Express Q2 Financial Presentation Ogilvy –08 09 08– 26

1d. Why: Your Audience Is Online GroupM Interaction Report 2008 Ogilvy –08 09 08– 27

Ogilvy –08 09 08– 28

Ogilvy –08 09 08– 29

1d. Why: Your Audience Behaving In The Same Way Online GroupM Interaction Report 2008 Ogilvy –08 09 08– 30

SA Online • 16-24 year olds – Dating, gaming, chatting online, and downloading music – About 50% of all online gaming, dating, chatting and music downloading is done by the 16 - 24-year-olds. – Higher than average rate of online radio listening, well above any other age group. – Youngsters also have well below-average usage of email - only half go online to send email. – Slightly lower than average scores for reading a magazine or newspaper online.” – More serious activities AMPS 2007B Ogilvy –08 09 08– 31

SA Online • 35 - 49-year-olds – The great online bankers and shoppers. Just over 42% of online banking is done by this group, while 48% of online shoppers fall into this age bracket. – The 35 - 49 bracket likes working online with money, with online share-trading and gambling featuring alongside its banking activities. – Over 46% of online share trading and 34% of gambling is done by this group. – In terms of communication, over one-third of all emailers are in this age group, and instant messaging is also big - 36% of all IM is done by this group. – There is below-average interest in gaming, dating (although 25% of online dating is done by this group), chatting and music downloads. AMPS 2007B Ogilvy –08 09 08– 32

SA Online • 50+ age group. – Only 6% of those aged over 50 access the Internet, compared to one in 10 of those younger than 50. – “We have found with new mobile and digital technology, that people over 50 who are using it are doing so because their grandchildren are forcing them to. The younger generation is pushing the technology up the generations, which is a worldwide trend. It's one step on from the children teaching the parents how to set up the VCR.” – This group uses the Internet predominantly for online banking, but unlike the 35 - 49s, online shopping is a less important activity. Only 13.2% of online shopping is being done by this group, similar to the low 14.8% of the 16 - 24s. – The 50+ age bracket has very little interest in the more social side of the net, with only tiny amounts of gaming, dating, chatting, downloading music, and listening to the radio being picked up. AMPS 2007B Ogilvy –08 09 08– 33

2. 4 Ways The Audience Is Changing

Consumer 1.0 Consumer 1.0 Consumer 2.0 Consumer 2.0 SURF SURF CREATE CREATE BROWE BROWE COMMUNITY COMMUNITY CONSUME CONSUME CHALLENGE CHALLENGE RECEIVE RECEIVE CONTROL CONTROL I PASSIVELY CONSUME WE ACTIVELY PARTICIPATE Ogilvy –08 09 08– 35

2a. Create: The Rise of the ProAm Food Big Business South African Youtube Postings Micro Business Marketing Advertising Ogilvy –08 09 08– 36

2b. Community The Power Connections In the top 5 developed counties, 55% of members of social networking sites say their online communities are as important as their office ones South African Business Social Network South African Companies’ Facebook Groups Ogilvy –08 09 08– 37

2c. Community: People Trust Each Other African Crowdsourced Mobile Technology South African Based Ideas Marketplace South African digg Advertising Marketplace 26% of Europeans share their thoughts on forums EIAA 07 Ogilvy –08 09 08– 38

2c. Collaborate: People Trust Each Other Blogpulse Trends Facebook Lexicon - BOE Google Trends - visy Ogilvy –08 09 08– 39

2d. Challenge: Enough Is Enough Ogilvy –08 09 08– 40

2e. Control: “My Media & Me-Messaging” 39% of consumers claim they avoid advertising as much as possible Adweek survey, 2007 18% of consumers say they dislike all forms of advertising. DoubleClick 2007 Ogilvy –08 09 08– 41

African Web 2.0 Companies Ogilvy –08 09 08– 42

Vodacom’s The Grid POCit Mobile Payment Ogilvy –08 09 08– 43

State Of Web 2.0 In South Africa Ogilvy –08 09 08– 44

3. 4 Shifts In Marketing Required a) BE SOCIAL b) BE USEFUL c) BE RELEVANT d) BE INTEGRATED

3. Old School Advertising… BRAND MESSAGE AUDIENCE Ogilvy –08 09 08– 46

3 Along Came The Internet… BRAND CONVERSATION CONSUMER Ogilvy –08 09 08– 47

3 Then Came Web 2.0 MEMBER MEMBER COMPANY BRAND MEMBER MEMBER MEMBER Ogilvy –08 09 08– 48

3 Turning The Model Upside Down Ogilvy –08 09 08– 49

3 Marketing 2.0 Advertising 1.0 Advertising 2.0 PASSIVE BE SOCIAL INTERRUPTION BE USEFUL SIGNPOSTS BE RELEVANT INDIVIDUAL CHANNELS BE INTEGRATED BEING IN CONTROL LETTING GO Ogilvy –08 09 08– 50

3a. Be Social

3a. Be Social - Listen – People Are Talking About You Online Ogilvy –08 09 08– 52

3a. Be Social Listen – People Are Talking About You Online BT Tradespace Influencer Audit 2008 Lipton White Team Influencer Stategy 2008 BrandEye Online Reputation Tool Ogilvy –08 09 08– 53

3a. Be Social Converse - Choose When To Talk Back Dell Idea Storm Starwood – Lurker Customer Service Outreach Nedbank Heroes Facebook Group Ogilvy –08 09 08– 54

3a. Be Social Connect – Allow Customers To Talk With Each Other Cisco C-Level Mastercard Community Priceless Community Stormhoek Geek Dinners OgilvyBrainz Staff Community Ogilvy –08 09 08– 55

3a. Be Social Involve Them – Co-create Suave In The Motherhood 51% lift in unaided brand awareness Comfort and 27% lift in purchase intent. Do Da Moves Addidas – The Rook 5 Million views 240,000 players Each player interacted 20 minutes Ogilvy –08 09 08– 56

3a. Be Social Involve Them – Co-create Doritos – Crash The Superbowl 1.3 Billion page impressions ($35M) 1M member online community 12% sales Spike in Jan 07 20 National print stories & 88 broadcast mentions #4 most liked Superbowl ad Golden Lion in Cannes Breadline Africa Ogilvy –08 09 08– 57

3b. Be Useful

3b. Be Useful Inform – Don’t Just Tell, Show Guinness - Mobile 7s Guide 2,000 visitors to the site 1,000 downloads of the application Ogilvy –08 09 08– 59

3b. Be Useful Inform – Don’t Just Tell, Show IBM & The Times MBA Podcasts 94,791 downloads of the MBA podcasts 6,494 downloads of IBM whitepapers 4,314 respondents for IBM brand study Top 10 download for promotion Top business download for 4 months Ogilvy –08 09 08– 60

3b. Be Useful Entertain Hellman's & Yahoo In Search Of Real Food +7.6% YTD sales growth Lift in perceptions of “healthy” ROI of 1:2 “Real Food” Yahoo group 5,000+ members South Africa Tourism Google Earth Ogilvy –08 09 08– 61

3b. Be Useful Content Creation The Grid American Express Travelcast Mobile Documentary Series Creation of Travel Guides http://uk.youtube.com/watch?v=ud0Xh_MhLJA Europe IBM & CNBC Business of Innovation IBM Films beat TV ad rolling averages, by more than 63% Interest in IBM Products +100% in US Meetings with reps +400% in Europe Ogilvy –08 09 08– 62

3c. Be Relevant

3c. Target It is NOT Always About the Pretty Pictures Personalize d Content Who you speak to is 50% more important than what, how and when combined Targeting/Lists Offer 60% 20% Dynamic Creative Content Timing 15% 5% Ogilvy –08 09 08– 64

3c. Target Behavioural-Based Targeting Month 0 1 2 3 4 5 6 Purchase Re -Purchase Welcome New User Advanced Tips and Trick Upgrade Ogilvy –08 09 08– 65

3c. Target Consider The Subject Line Paradox – BT Case Enjoy 4 for 1 with BT Fusion Introducing the new WiFi mobiles mobiles from BT Fusion Emails Delivered: 10,000 Emails Delivered: 10,000 Open Rate: 25% Open Rate: 20% Click Through Rate: 5% Click Through Rate: 7% Clicks: 500 Clicks: 700 Clicks per View 20% Clicks per View 35% Openers were 75% more likely to click Ogilvy –08 09 08– 66

3c. Be Relevant Distribute - Go To Your Audience Johnny Walker Concierge Kraft Mobile recipes 132K unique visitors interacted with the program with average user returning twice 10K unique users signed-up for alerts / 8% of unique visitors BMW SA Facebook Page Ogilvy –08 09 08– 67

3c. Be Relevant Authentic – Be Real & Honest Lenovo Voices Of The Olympics Blogger/Twitter Content Ogilvy –08 09 08– 68

3c. Be Relevant Personalise – Adapt to Your Audience Needs The Times Widgets EasyJet 25,000 Downloads in 3 months Old Mutual – Desktop Widget Ogilvy –08 09 08– 69

3c. Be Relevant “My Product” – Mass Customisation Of Products Kleenex Photo Boxes Nike ID Personal Trainers M&Ms My Flavours Jessica Simpson – Personalized Song Ogilvy –08 09 08– 70

3d. Integrate

3d. Integrate Multichannel Ogilvy –08 09 08– 72

3d. Integrate: On & Offline Virgin – Sarah Connor Chronicles Terminate a Mate UNIC – Mobile Response Ogilvy –08 09 08– 73

3d. Integrate; A Single Unifying Thought Ogilvy –08 09 08– 74

4. 4 Strategies

4a. Solutions – Innovation Marketing Investment Marketing Marketing Objective McKinsey Ogilvy –08 09 08– 76

4b. Solutions - Focus On Customer Journey EXample DHL Awareness Relevant Set Usage Main Provider Sole Provider Purchase Funnel Journey Stages Issue Recognition Scope Requirements Supplier Selection Business Routine Business Improvement What are my requirements? How do I short-list Does order/claim/ report I have a business issue in What are solutions, suppliers? management work well? How can I perform better? regard to shipping or services & prices? What criteria is decisive? Can I rely on a constant Customer Insights outsourcing solutions. Who What are best practices Do I have all the information provider performance? What are logistics trends? What’s new? Am I still up to can help me to solve this within my industry? I need? Are employees and date? problem? Which logistics partners Who should I ask for customers satisfied with the meet my requirements? advice? running logistics solutions? How can DHL support Is DHL able to handle Does DHL fit my Why should I decide in Can I rely on the DHL me to steadily optimize Perception of DHL this issue? needs? favor of DHL? logistics services my logistics working? processes? Proof of capability; Clear USP; Good first experiences; Quality & service standards Orientation & guidance; Case studies; Affirmation from 3rd Quality & service standards are working; High level information; Variety of solutions; parties; are working; Impulses & new ideas; Objective, up-to-date What customers information from experts Request of information and objective support Customer service & expert availability Exchange of information; Exclusivity Innovations; Incentives want Expert Trusted Advisor Preferred Partner Trusted Partner Innovative Driver Moments of Truth Online contract, order, Online Seminars; Expert Hotline/Call back; Price Download Area; Videos & claim and report Forum; Exclusive Calculator; Virtual Brand Online Experience; Pod-Casts; Brochures & management; Forum; Customer Area: Offers, Online Solutions SEO Handbooks, Best Consultant; Request & Chat; Community; Discounts & Services; Comparison of offers; practices; FAQ Literature references; Customer satisfaction E-Mail Marketing Newsletter online panels Site welcome/ Concierge; Examples Brand repositioning video content; Strategic Video case studies; White papers Customer service widget Logistics community: Mobile opp./Tracking widget partnership with google Ogilvy –08 09 08– 77

4c. Permanent Beta £100 £90 Optimisation £80 Optimisation £70 £60 Optimisation £50 £40 £30 £20 Cost-per-Trial £10 £0 Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Ogilvy –08 09 08– 78

4d. Solutions - Working Differently Ogilvy –08 09 08– 79

Summary Web 2.0 Web 2.0 Consumer 2.0 Consumer 2.0 Advertising 2.0 Advertising 2.0 CREATE CREATE SOCIAL SOCIAL COMMUNITY COMMUNITY USEFUL USEFUL CHALLENGE CHALLENGE RELEVANT RELEVANT WRITE WRITE CONTROL CONTROL INTEGRATED INTEGRATED WE ACTIVELY PARTICIPATE LETTING GO Customer Journey Innovation Marketing Permanent Beta Work Process Ogilvy –08 09 08– 80

A Final Thought Over 70% of global marketing executives believe online will determine how major campaigns are planned and executed by 2008 Ogilvy –08 09 08– 81

giles.rhysjones@ogilvy.com http://interactivemarketingtrends.blogspot.com www.twitter.com/gilesrhysjones www.linkedin.com/gilesrhysjones Thank You http://www.mikestopforth.com/ http://www.webaddict.co.za/ http://www.vinnylingham.com/ http://www.gottaquirk.com/ http://blogs.thetimes.co.za/britten/ http://nicharalambous.com/ http://www.matthewbuckland.com/ http://www.collings.co.za/ http://www.justinharrison.com/ http://www.tylerreed.co.za/

South African Digital Marketing 2008 Updated

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