2010 Razorfish Outlook Report

evolve outlook report

This report contains opinions, estimates, and forward-looking statements by Razorfish and industry leaders; these statements may turn out to be wrong, so keep that in mind when reading this report. Razorfish undertakes no responsibility to update this report and makes no warranty as to the accuracy of statements in this report. Statements in this report are the personal opinions of the individuals quoted and should not be attributed to any other entity or individual. © Razorfish, LLC. All rights reserved.

cover photography RICARDO SANTOS BERLIN back cover photography PAUL MITCHELL PORTLAND CARSTEN LINDSTEDT FRANKFURT GREG CARLEY AUSTIN 1

photography GABE JOYNT SAN FRANCISCO

01 The Razorfish Outlook Report ............................. 4 02 New Lenses .......................................................... 8 03 Publishers to Watch in 2010 .............................. 24 04 Looking Ahead to 2010 ...................................... 28 05 How to Become a Social Brand ........................ 40 06 The New Brand................................................... 46 Your SIM Score Health Metric: 07 One-to-One Marketing to the Masses .............. 52 08 How the Ad Exchange Ecosystem Works ........ 58 09 Measuring What Matters ................................... 62 10 The Power of Small Thinking............................. 68 Becoming More Agile: 11 Iterating for Innovation....................................... 74 All imagery in this year’s report was 12 It’s Time for Everyday Innovation ...................... 78 created by Razorfish employees from around the globe. Photographs 13 Retail Therapy .................................................... 84 were shot on Kodak 120 VC or Tri-X film with a Holga 120 camera. To all who helped produce this beautiful 14 The Fragmented Consumer............................... 88 body of work, Thank You. 15 Search Everywhere ............................................ 92 3

photography LAUREN EDWARDS LONDON The Razorfish Digital Outlook Report

The Digital Outlook Report is now the Razorfish Outlook Report. When we started Razorfish in 1995, our founding our mantra became true: Everything has become mantra was: “Anything that can be digital, will be.” digital. Digital is not on the fringe — it’s on center We were building the first online stock trading plat- stage. In fact, it’s now so mainstream that it no forms, the first ecommerce sites — we were even longer needs to be included in the title. So say experimenting with things like a soda machine that goodbye to Razorfish’s Digital Outlook Report could be operated with a cell phone, and a kitchen and hello to, simply, the Razorfish Outlook Report. Internet device called “Audrey.” Meanwhile, Avenue The “digital” is understood. A, long before it became part of Razorfish, was Even as digital has taken center stage, however, proving that online media could be as effective as it isn’t sitting still. It’s the catalyst for a perpetual mass media, and created an ad serving platform to revolution in business and culture, a digital domino efficiently service clients’ needs. At the time, most effect that encompasses everything from the death- of America was still watching an awful lot of prime- by-DVR of appointment TV to the role that Twitter time television — and accessing the Web with a played last year in Iran’s attempt at revolution. Con- dial-up modem. And many who knew us consid- sumers and technology are driving the change. ered us crazy — and interesting at the same time. But are marketers keeping up? We were definitely operating at the fringe of the marketing world, too small and obscure for most When we ask CEOs, CMOs or CTOs about their conventional ad agencies to even notice. businesses today, we generally hear more questions. That’s because most companies, brands Things look pretty different today. We’re still building and marketers are attempting to navigate a con- trading platforms and ecommerce sites, implement- sumer and technology landscape that continues ing sophisticated targeting technologies within all to shift — and at a faster and faster pace. Who digital media, launching brands solely using digital has the luxury of long-term strategic planning technologies and working deeply with mobile when technology is leapfrogging, conventional devices (though we’ve moved beyond soda ma- marketing tactics are tanking and the only thing chines). We are driving sales and moving clients’ consumers seem to be confident about is Twitter, businesses forward, but we’re not considered Foursquare and Facebook? crazy anymore. That’s because, as it turns out, 5

The fact is that even if we’ve been talking about No matter how you look at it, if you wait another the need for marketers to change for years, it is year to see how all this shakes out before ramping now, simply, do-or-die — because of both the up your digital strategy, your company won’t just scale and the pace of technological revolution. stand still — it will fall even further behind. Consider that it took Apple only one month to sell Therefore, as we publish the Razorfish Outlook a million iPads, that Facebook has grown from 150 Report, we are urging marketers to embrace million users to almost 500 million in 15 months or change — now — and hone the skills necessary to that Hulu now streams over one billion videos per harness it. If Moore’s Law is taken seriously, then month. Yes, there are dozens of other statistics the pace of cultural evolution — and the prevalence we could cite about this tectonic shift in consumer of digital innovation — are going to continue doub- behavior, but the epicenter is mobile: In the U.S. ling every two years. Marketers must evolve.Quickly. alone, there are more than 280 million mobile subscribers. By the end of 2011, more than half We could go on and on about how essential this will be smartphones. The mobile transformation is but, frankly, that’s become obvious. What may alone has extraordinary implications for every not be so obvious is what to do about it. This Out- brand, as consumers will expect a brand’s social look Report should help, by providing a roadmap universe to be accessible and delightful and for navigating the hills and valleys ahead. We hope on-the-go. And, when combined with emerging it will help you move your business forward — and technologies such as multi-touch, augmented real- that you’ll even enjoy the journey. ity and cloud computing, an ocean of opportunity opens up. Consumers aren’t just craving new experiences — they’re demanding them, and aren’t shy about shar- Bob Lord, Global CEO ing from their social media soapboxes. Successful brands will be those that adapt and derive from customer insights, both positive and negative.

photography clockwise TIM PETHEL ATLANTA, PAUL KARLIK CHICAGO, JASON DRAKEFORD NEW YORK, LAUREN EDWARDS LONDON 7

photography BRYCE GIBSON PHILADELPHIA New Lenses A Fresh Look at How Razorfish Clients Invest in Media Joe Mele, Managing Director, Marketing & Media with assistance from Thomas Sudassy, Media Research Manager

As one of the biggest buyers of digital media, each year in the Outlook Report, Razorfish aggregates spending information on all of our clients, providing insight into where clients spend their money, where they’re experimenting and why. But for several reasons, 2009 called for us to in 2009? Did our clients change the way they look at this data differently; to, if you will, come bought media? How did behaviors for consumers to it with a new set of lenses. Therefore, the data and corporations potentially change permanently you’ll find here is a more detailed picture of what because of the economic crisis? was going on in the online media ecosystem in But what made 2009 different wasn’t just the the past year. economy. We also decided it was time to set So how is this data different from years past? new benchmarks because media consumption First, the Great Recession of 2009 presented has changed so much since when we started all of us, agencies and clients alike, with new publishing these reports back in 2004. Although realities. In light of that, we thought it particularly we are only five years removed, a great deal has important to see if we could uncover some clues changed in digital media. Consider the following in the data we collect about how the recession statics from U.S. media usage: see figure 02.01 may be affecting spending. Did we see a recovery NEW LENSES 9

U.S. media usage: 2004 /2009 end 1 iPhone did not exist 9.8 million Because the media landscape and our own behaviors have changed so dramatically in that sold time frame, we felt there was an opportunity to 2 Hulu expand our focus beyond the types of media that did not exist 18.9 million have ruled the industry for many years: the big portals, the big search engines, ad networks and monthly visitors vertical networks. In looking at the data this year, 3 YouTube we found these old definitions were becoming did not exist 107.4 million harder and harder to use as media types increasingly overlapped. Is Facebook a vertical monthly visitors in the “communities” category, or, because it is a 4 starting point for many users, is it a portal? How Facebook 111.9 do you define Google? Is it search, or is it a closed network network or is it a portal? to college students million monthly visitors Because these old definitions don’t adequately 5 Broadband penetration describe how we plan and buy media, and how we think about investing our client’s precious 54% of Internet HH 96% of Internet HH investment dollars, this year we looked more closely at the myriad ways our clients buy media and determined how this uncovers trends in the 6 Internet HH marketplace, particularly when it comes to emerging 57% of Internet HH 66% of Internet HH media. These are the trends that our clients are most interested in, as we help them determine the best ways to divide up their media dollars to make 7 % of media to online the most impact. Sources eMarketer 2.60% 14.50% ComScore figure 02.01

New Realities: The Great Recession and Its Effect on Media Did we see any recovery Did clients switch tactics or in 2009 over 2008? approaches to become more Yes. Although small, we saw an overall percent- direct response oriented? age increase in average media spend per client. In general, our clients did not change their On average, the increase was 4 percent in 2009 tactics. Seventy percent of them kept their mix after an average drop of 13 percent in 2008. the same. Interestingly, of those that did shift see figure 02.02 tactics, 40 percent moved to a heavier focus in direct response, while 60 percent actually shifted to more brand-focused marketing. see figure 02.03 Increase / decrease in average spend per client 2007 2008 2009 Switching tactics 40% No Change 30% 20% 10% 0% -10% Brand Source DR Razorfish -20% Media Department 12 % 70 % 18 % Sources Survey Razorfish media data; Razorfish Media Department Survey figure 02.03 figure 02.02 Looking forward: Looking forward: We also expect to see a greater mix of strategies We expect to see continued increases in digital as brands see the value in both branding and investments, particularly as broadcast budgets doing direct response in digital. continue their shift to digital. NEW LENSES 11

What adjustments did clients make in 2009? We asked our media teams to give us some idea of the kinds of things clients did in 2009 to adjust to the Great Recession. Our clients’ responses were varied, and in some cases, enlightening. Here are six ways they adjusted their plans: 1 More discounting in messaging 2 Decreases in overall budgets, but with more budget shifting to digital 3 Scaling back in ad spends for the year or not running certain campaigns 4 Shifts to search and out-of-home display 5 Increases in overall ad budgets to grab more share 6 Shift in goals — more focus on return on ad spend Source Razorfish Media Department Survey Looking forward: We expect brands to be less focused on promotions as the year progresses. Clients are anxious to retreat from heavy discounts and promotions as soon as possible. photography PAUL KARLIK CHICAGO

New Benchmarks: Taking Stock of Media Investments What percentage of media was spent on performance-based buys? What did prices look like in 2009? Although all of our media is judged on the return it Putting context around average prices paid for provides our clients, almost 60 percent of our media certain types of media is tricky because there is spending was focused on impression-based buys. so much variation in client goals and strategies. see figure 02.04 On a per-unit basis, ad networks and homepage take-overs on major portals and sites may both have very low CPMs, but the approaches and Buy type % media spend goals of each are very different. We thought, CPM 48% however, it would be interesting, starting with this year’s Outlook Report, to offer some pricing CPC 36% data, and then compare with current pricing data in subsequent years. Time Based 10% One important comparison point — in the CPA/CPL 06% 2008 Digital Outlook Report (looking back on 2007), average cost-per-click prices on the Sources major search engines ranged from $.56 to $.88. Razorfish media data; Razorfish Media Department Survey. As the landscape has become more competi- Data includes paid search. tive, and brands have become more targeted in figure 02.04 their keyword buying, we are seeing significant increases in prices. see figure 02.05 Looking forward: We expect consistency here. Major swings are not expected. NEW LENSES 13

Where are clients investing their dollars, and how was that Average CPM and CPC’s different in 2009? 2009 2009 For all of the talk of “emerging media,” the average median $25.00 breakdown of media spend in digital is focused mainly on traditional online media choices: $20.00 verticals, search, ad networks and portals. $15.00 Because of the recession, a great percentage of $10.00 client spending was in highly-efficient vehicles: $5.00 search, ad networks, data brokers and ad $0.00 exchanges accounted for just over 50 percent CPM Video CPM CPC of the total. Note, however, that classifications Sources can be hard to make, and that things like social Razorfish media data; Razorfish Media Department Survey. figure 02.05 and verticals can be contained within networks and portals. see figure 02.06 Looking forward: Still, despite the demand for efficiency, clients We expect to see publishers try to create more were willing to experiment in 2009. When we and more premium inventory as well as pull back asked our media teams about client spending in non-guaranteed inventory from ad networks as channels that were new to them, we found some they build their own exchanges. With more dollars robust statistics. One hundred percent of Razorfish going into digital, publishers will try to take more clients that spent in digital out-of-home did so for control over their inventory, and in a revived the first time this year. More than 80 percent of economy, we expect prices to rise this year. clients investing in ad exchanges in 2009 were doing so for the first time. All told, the channels which clients experimented with the most in 2009 were ad exchanges, data brokers, digital out-of-home and social media. see figure 02.07

% ad spend 35% 30% 25% 20% 15% 10% 5% 0% ites ries ork s ve) pla y ers ges bile pla y ail e e al s cto etw abo dis rok han mo dis em gam f-h om idu dire ies dia ta b exc on- in- t-o div adn r me da an ou / in rch & ego ial ad edi ital als sea cat soc lm dig rtic des cia ve clu so figure 02.06 (ex als p ort Sources Razorfish media data; Razorfish Media Department Survey. % of clients investing in specific media that were new to that channel Source Razorfish 100% Media Department Survey 80% 60% 40% 20% 0% es rks ers om e ail gam e bile ies lay pla y ites ve) ang wo rok f-h em in- mo tor isp dis al s abo exch net ta b t-o irec dia d on- idu ing ad ad da ital ou &d me an /ind iv clu d rch ial edi (ex dig sea soc lm als cia rtic tals so ve por figure 02.07 NEW LENSES 15

We also asked our media teams whether clients Only 4 percent spent on were increasing or decreasing their investments in social media? OMG!!! WTF?!? particular channels. Spends increased significantly in ad exchanges and networks, data brokers, Social is an interesting case. Despite the fact that mobile and social. see figure 02.08 everyone talks about it constantly, it does not garner a huge share of media dollars. There are three Looking forward: reasons why: These trends look like signs of things to come. We expect to see greater investments in social, 1 Social ads can be bought very inexpensively. mobile, in-game, and digital out-of-home this Top social sites such as Facebook and You- year, and ad networks to drop in total investment Tube have more inventory than they can sell, as publishers try and find more lucrative options and without a clear homepage for Facebook for their inventories; more money will also go to and with most of YouTube’s traffic bypassing ad exchanges. the homepage and linking directly to content, there is little premium inventory to sell at high prices. We can often buy this inventory through exchanges and networks as well. How did your client’s spend change in this channel in 2009 compared to 2008? Source Razorfish Media Department 100% Survey 80% 60% 40% 20% 0% ges ork s ers om e ail e bile ries pla y pla y ites ve) han etw rok f-h em gam mo cto dis dis al s abo exc ta b t-o in- dire dia on- idu ing dn da ou me an v ad a ital rch & ial edi ndi lud dig ls/i exc sea soc cia lm ica ls ( so vert po rta figure 02.08 % that said % that said % that increased decreased stayed flat

2 Much of the media spend on social doesn’t express itself in the form of buying media, but New ways to think about in the labor it takes to build a page, manage media investments a community, respond to Twitter comments The media department’s job has changed. In and so forth. To really do social means having the past, media was a job focused, in part, the right people committed to the community on the purchase of media. While that is still and conversation, not on buying a bunch of true today, the growth of social media in ad space. particular has altered the role of media’s 3 Media dollars are spent toward social efforts relationship with content providers and to drive users to communities, content and creators. And it also requires advertisers to apps but these are not captured under “social” rethink their definitions of what “media ad spending because the buys don’t occur on dollars” really means. Increasing one’s social sites. investments in “earned” and “owned” media means radically shifting how those dollars Looking forward: are spent. Rather than going directly to More dollars will go into social, but it will be hard media companies, dollars need to flow to to measure as most of those dollars will not go content creators, social media strategists, toward ad impressions or clicks. Brands will community moderators, etc. We can still have to come to terms with two types of social view the connection between marketing investment; first, they’ll have to invest in people investment and customers similarly — a more than media. Second, even the best social communication connection with consumers strategies need support, so media dollars will that results in an interaction, whether that is need to be spent on other types of media to build a sale or a more positive impression of the stronger communities and programs. brand — but passive spending on media is quickly becoming a thing of the past. So, while the studies show that companies intend to put more dollars toward social, the truth is that those dollars are largely not going to be spent on buying ad space, but instead on investing in the people, resources, technologies and relationships that having an ongoing conversation with consumers requires. — Alyson Hyder, VP, Digital Marketing NEW LENSES 17

I thought 2009 was going to be the year of mobile! The prognosticators have been saying this every A lot of mobile isn’t paid media. Some of the most year since 2004. In fact, here is a quote from our effective marketing on mobile phones is found in first Outlook Report in 2005: “While moving in fits texting programs, which are still the largest and starts over the years — leaving advertisers opportunity, and in apps. In general, these require wondering if ‘the next big thing’ will in fact be a time in terms of labor and development; as with ‘never was’ — the wireless advertising industry social this investment doesn’t go toward media buys. continues to make progress.” While we are Change may be in the air, however. With Google seeing more clients involved with mobile, the and Apple moving forcefully into mobile advertising challenges with shifting a lot of money into mobile with their purchase of mobile ad networks, and are as follows: Apple’s announcements around iAd, the mobile • Mobile is hard to measure. Because most landscape could quickly change. Both companies transactions occur off of the device, it is hard to have the ability to change both the ad experience, justify spending money on mobile, particularly in and start to connect together the user information a down economy, when there is almost no way so that it can be tied to meaningful activities. to optimize it. Looking forward: • Advertising formats from the Internet We expect more money to go to mobile, particularly don’t translate well to mobile. In general, in local search. We are watching Google and banner ads don’t display well in mobile surfing Apple closely in the mobile space, and intend to and in apps, which makes moving significant test new ad platforms and measurement systems dollars hard to justify. The growth of smart- as they come online. 2010 will likely turn out to phones and the introduction of mobile rich be the year of testing before mobile really takes media should help to improve the experience. off in 2011.

Flexibility trumps pricing Our approach to planning and buying media Looking forward: has always been to think and look broadly for Our strategy will not change, but consolidation will opportunities. As such, we find that flexibility in have an effect on where inventory is purchased. our planning more often than not trumps pricing, We expect to see continued consolidation in both which is why we tend to buy on many more the ad network and ad exchange space, as well properties than other agencies. as consolidation among sales organizations. This could very likely lead to a reduction in the number This was as true in 2009 as it has been in previous of entities that sell media, but not in the number of years. In total, we bought media with over 900 sites that exist. different entities (note that ad networks are made up of several thousand more sites, but we do not count those separately). And, yes, the top 25 sites garner a huge percentage of our clients’ media dollars, but the long-tail of sites is healthy. see figure 02.09 Spend concentration by site 600 • 500 spend in thousands 400 300 200 • 100 1 26 51 76 101 151 176 201 226 251 276 301 326 351 401 426 451 476 501 526 551 576 601 626 651 676 701 751 776 801 826 sites Source Razorfish Media Data figure 02.09 NEW LENSES 19

How big was video? We are seeing more and more of our clients Looking forward: invest in video advertising as well as other forms We expect more and more dollars and impressions of rich media — though different companies have to move into video in 2010, particularly as analog different definitions for rich media. For instance, dollars move to digital, and broadcast “make-goods” at Razorfish, we consider all Flash-based creative are fulfilled in the digital space. It will be crucial to be standard. These ads, because they are for brands to understand the true value of video standard and efficient, are still the workhorse of ads — valuations which may be very different the industry; they provide the backbone of nearly from what ad buys cost on TV. For instance, the any communication plan to drive traffic and currency of offline video — the GRP and TRP conversion. For sake of clarity, we define video — are much less relevant in the digital space as “advertising messaging that can be placed where actual rather than estimated exposures in or around video content across all digital and views can be counted and subsequent media channels.” actions can be measured. Until analog becomes see figure 02.10 more precise and/or a more common language is found, evaluating online and offine video will continue to be a challenge. In addition, when % display spend digital video becomes more interactive, and less like a 30-second TV spot, we expect to see Standard Ads 77% more focus on it. Rich Media 15% Video 08% Sources Razorfish media data; Razorfish Media Department Survey. figure 02.10

What do we see as the differences among the “big four” portals? The “big four” — MSN, Google, AOL and Yahoo!, Yahoo! dominate premium impression buys. despite not being as sexy anymore, are still an Below is a graphic showing, on a relative basis, extremely important part of our media planning how we invested our clients’ dollars in the “big and strategy. In fact, the search/portal category four.” (The stars demonstrate how much money still garners about 45 percent of our clients’ was spent in relation to the other properties as media dollars. well as being an indication of total investments.) see figure 02.11 But our huge investments in them don’t mean that we think they are all built the same. Some have Looking forward: more robust product offerings and/or inventory in Google will continue to try and move more into certain areas than others. Google still dominates the display space, but until it improves its offering, search, although the combination of Microsoft’s there is no reason to invest. We expect more Bing and Yahoo!, which have partnered on search, gaming and search dollars to be spent with is certainly poised to take share from it. AOL and Microsoft over the next year, but Google will MSN dominate performance buys, and MSN and remain the leader in search. lowest highest Portal comparisons 1 2 3 4 Performance/ Display/ Email In-game Mobile Search & Social media Social media Video media ad-network impression directories display non-display media AOL 3 2 1 1 1 GOOGLE 1 1 1 4 1 1 MSFT 3 3 1 1 1 1 1 1 YAHOO! 2 3 1 1 2 1 1 Sources Razorfish media data; Razorfish Media Department Survey figure 02.11 NEW LENSES 21

A final word Now that the Great Recession is behind us (we think, we hope), we expect 2010 not only to be a year of experimentation, as 2009 was, but also a year of tremendous growth, as budgets increase and more money moves to digital channels. To be sure, just like last year, the experimentation will be carefully considered and measured, but we expect our clients to be hungry to stretch into new places and spaces, to explore new opportunities, and to reach into new types of media. Will 2010 be the year of mobile? The year of the iPad? The year of the iPhone killer? Only time will tell, but where the ad money goes will be an important part of the story.

photography LAUREN EDWARDS LONDON 23

photography RICARDO SANTOS BERLIN Publishers to Watch In 2010: 03 Facebook, Greystripe, Hulu, Pandora and MySpace (yes, MySpace) By Tricia Lasky, VP, Media, Discipline Lead

When looking back at online publishers in 2009, which did the most to drive change and push the advertising boundaries, it’s incredibly hard to land on just one standout. So, even though, traditionally, we have named a Publisher of the Year in our Outlook Report, we’ve taken a different route this time around. Last year drove change in many areas of digital marketing: smarter targeting, location-based social technology, even mobile creative that actually engaged users. Therefore, in lieu of picking one shining star, below are a handful of publishers that pushed the limits; In 2010, these are ones to watch as they continue to be at the forefront of digital media and advertising. 1 Facebook 2 Greystripe With its explosive subscriber growth and Although officially a mobile advertising apparent social dominance, it’s not a huge network, Greystripe proved an advertising surprise that we are keeping our eyes on engine that fired up many mobile publishers; Facebook in 2010. In the last year, Facebook it was among those taking the lead in bringing has added an eye-popping 200 million users richer advertising experiences to mobile users, — doubling its user base. It has staked its making it possible for advertisers to create claim as the leader in social networking and dynamic full-screen rich media in mobile everyone is waiting for its next trick. The games and applications across the iPhone, growth was not only focused on their user Java and Android platforms. With smartphones base but also on the product. Feeling the accounting for 15.4 percent of all mobile pressure to focus on the product and its phones shipped in 2009, it was about time. marketing offerings, Facebook grew its Others, such as Google-owned AdMob and engineering staff by 50 percent and started Millennial Media, soon followed in bringing 3 to focus on simple marketing solutions like richer advertising to mobile. With more and learned targeting and geo-based status more consumers digesting media through updates. We’ve seen the fan base of one their handhelds, mobile advertising will need of our clients grow 150 percent in one to continue to surprise us; Greystripe showed day based on placing a non-offer based it has what it takes to do so. ad on its homepage. Now that’s reach. And reward. PUBLISHERS TO WATCH IN 2010 25

3 Hulu 5 MySpace While social platforms took off in 2009, many If one thing was clear in 2009, it was that failed to recognize the treasure-trove of choice is king — and as on-demand media information at their fingertips. One that did consumption increased, the marketplace is MySpace; yes, MySpace. The News took notice by adapting advertising to user Corp.-owned social network has continued preference. Hulu reinvented the video ad to innovate and be ahead of the curve in platform by allowing users to choose not only utilizing its users’ profile information to help whose advertising they would see, but also put together relevant messaging and smart how often and when they wanted to see it. advertising opportunities. While MySpace As Hulu’s tagline says: TV on your terms. As may have taken a backseat to other rising reported in Vivaki’s marketing report The Pool, stars in the social category, it took its loss of the ad-selector model on Hulu produced the driver’s seat as an opportunity to realize a 33 percent lift in purchase intent over standard what it really was: a niche site which caters pre-roll executions. to a young, music-hungry audience. Further, 4 Pandora it has learned to become comfortable with that position. As it goes through this transition, Video wasn’t the only place where online MySpace has learned how to leverage the publishers adapted to consumers’ passions strengths of its community, encouraging a for on-demand media — and advertising high level of user interaction within high-quality consumption — on their own terms. Pandora original entertainment content. is one of a number of services that acts as a predictor for the music that speaks to each We’ve seen how well this works for marketers, individual listener, making like-minded first-hand — for one of our key retail clients, suggestions based on their love for one song MySpace built a program for young couples, or artist. Pandora extended that intelligence leveraging age, demo and relationship status to tight behavioral — and one might say targeting to recruit for a reality TV-like contest, emotional — targeting capabilities based on allowing one lucky couple to win their wedding the music and artists each listener consumes, registry at the partnering retailer. In addition, making the advertising part of the user their entire wedding was planned by the experience and less of an interruption. MySpace audience and MySpace hosted and documented the entire journey, producing video of the couple shopping at the retailer to pick out items from their registry. It’s that deep understanding of its audience that will attract advertisers, and, we hope, secure the social net’s future.

photography RICARDO SANTOS BERLIN As these examples show, the definition of online publishing is continually expanding, from its start as static text and pictures to video to music to social networking and mobile. As such, it is fertile ground for innovation, both in terms of the content it serves up, and the advertising experiences that are being built around it. PUBLISHERS TO WATCH IN 2010 27

photography LAUREN EDWARDS LONDON 04 Looking Ahead to 2010 Things That Might Not Be on Your Radar Screen, But Should Be Joe Mele, Managing Director, Marketing & Media with assistance from Thomas Sudassy, Media Research Manager

4 What does 2010 hold in store for us? There are, of course, the usual suspects: particularly mobile and social, which we explore in other sections of the Outlook Report. However, for the purposes of this article, we wanted to spend time exploring some not-so-discussed topics that we nonetheless think will have significant impact on online media in 2010. Below, Razorfish’s media leaders offer insights and predictions, both domestically and internationally, for some often below-the-radar areas that will attract interest in the next year. Ad verification systems Dynamic ad delivery systems Ad verification systems allow advertisers to confirm As digital advertising becomes more and more ads are running where they are supposed to on personalized, the challenge for advertisers what have traditionally been opaque network buys. is delivering personalized ads at scale. Building tens of thousands of ads is not a viable solution, What we’re seeing: so some companies have started to offer dynamic Mostly new to the market in 2009, display ad ad delivery systems to solve this problem. These verification systems started hitting our radar systems offer advertisers the ability to run large toward the end of the year, but their impact was numbers of ads without putting stress on the slight — only one of our clients actively used creative teams. They are effective for creative test- one. However, about 20 percent of our clients ing as well since many different variables within a are looking to learn more or test ad verification creative can be controlled and swapped out. in 2010, leading us to expect the use of these systems to explode in 2010. Because most ad- What we’re seeing: vertisers are sensitive about the kinds of content Last year, about 15 percent of our clients started their ads appear next to, ad verification will be using systems like Tumri and Teracent to deliver increasingly important. dynamic ads. In a survey of clients, about 40 percent of our clients have shown interest in — Joe Mele using these vendors; the majority of those inter- Managing Director, Media & Marketing ested are focused on direct response strategies. LOOKING AHEAD TO 2010 29

In the coming quarters, we are looking at apply- lower prices than search, rather than a preference ing combinations of technologies like these in for one or the other. We expect to see this change delivering brand experiences, or for activating in the next year as newspapers continue to decline social interactions. These technologies will in circulation, the iPad and other devices like it bring become essential in managing the increasingly newspapers back to life but in digital formats, and sophisticated matrices of placement, audience smartphone usage increases local search. and message created by ever more refined — Joe Mele audience segmentation. Managing Director, Marketing & Media — Alyson Hyder, VP, Digital Marketing Interactive TV Local online advertising Like local online, interactive TV has been part of Though local online advertising has been around the media dialogue for some time; however, while for some time, its nature is changing, as GPS- historically most of the focus has been on interac- enabled mobile devices, mobile apps such as tive advertising coming to cable, the definition of it, FourSquare and geo-location targeting make for too, is expanding as PC and TV applications be- enhanced targeting. come intermingled and players beyond the MSOs come on to the scene. What we’re seeing: With the “death” of newspapers, and a rise in What we’re seeing: location-based technologies, many are curious to The amount of ad inventory available within see if advertisers will move more of their budgets interactive TV continues to be incredibly small. to local online. Approximately one-third of our The biggest barrier here is the lock the cable com- clients ask us to run local ads. For most clients panies have on the headend and the data that these are small percentages of their outlays — flows from it. Much as advertisers might like inter- they still use digital as a targeted mass media. active TV, the cable companies just don’t have the Local mobile spending is still very small, and was incentive to change the current model because tested by only a few of our clients. Interestingly, their ad market remains strong; traditional cable although the number of clients participating in advertising brought in $19 billion last year to net- local display and local search activities was about work TV’s $20.5 billion, increasing its share of the equal, local display spending was twice as large as TV advertising pie, according to Kantar Media. local search spending. This may be due to there be- Yes, there are privacy issues with opening up set- ing more inventory available in local display, and at top box data, but at the heart, it’s still about

cable’s lack of incentive. Google TV found this out Twitter advertising the hard way; it made headway in interactive TV through its partnership with satellite TV’s Dish Net- A work in progress. While third-party providers work, but got relatively little traction outside of that have created their own Twitter advertising models, footprint. Even Canoe, the cable industry-funded at this writing, the industry is waiting for Twitter to consortium, has had little success in implementing announce its own ad platform, which the company addressable or interactive TV testing. That said, says it will do soon. there are small tests going on that will allow cable What we’re seeing: subscribers to request information from advertisers; Even without a confirmed ad model, brands are Cablevision seems to have taken this further than using this social tool in a variety of ways. Twitter any other MSO. Other interactive TV initiatives to is an excellent tool for brands to use if they want watch include the partnership between TiVo and to have conversations with their customers, as it Quantcast, which looks like a promising attempt provides opportunities for customer service and is to tie together both online and offline panel data, a great platform for announcing sales and promo- making the connection between how TV viewing tions. Furthermore, it enables brands to have and Internet behavior affect each other. Addition- personal “voices,” which can be reinforced in ways ally, Yahoo! Connected TV, which uses widgets that resonate with their loyal consumer bases. For to put Yahoo! content on TV, as well as Google’s brands that have acquired enough Twitter power partnership with Sony and Intel to bring interactivity to obtain large followings, creating trending topics to the TV, are two models that will try to bypass the around hashtag keywords can corral users into cable operators in getting direct-to-set interactive participating in a controlled conversation around a capabilities launched. Additionally, as the tele- certain event, promotion or campaign. phony IPTV footprint continues to scale, through products like Verizon’s FiOS and AT&T’s U-verse, Therefore, we expect brands to continue to use they will bring increased interactive TV possibilities Twitter to support their digital marketing efforts as well. no matter whether its ad model takes off or not — especially now that the company provides verifica- — Julie Weitzner, VP, Media tion certificates for major companies and advanced analytic measurements. We also expect many more companies from multiple verticals to create pres- ences for themselves on Twitter. The smart brands will be the ones that keep their users interested, involved and a central part of the conversation. — Debrianna Obara, VP, Media LOOKING AHEAD TO 2010 31

Influencer outreach In-game advertising This can take a variety of forms, but the massive In-game advertising is more than just putting growth in blogs has led many publishing compa- sponsored billboards within console video games. nies to develop sophisticated methods of bringing In-game advertising includes branded mobile bloggers into conversations about products and gaming applications, branded online games, or services. Blogger outreach networks, such as more broadly, any use of a video game to deliver BlogHer, serve as third parties for brands to have advertising. Even applications like Farmville or relationships with these individuals, through, for FourSquare, which reward user for usage, can be example, a centralized area for the brand’s spon- considered in-game advertising as the advertiser sorship; network bloggers are then invited to add integrates within the actual game itself. It should to the conversation around a certain topic, usually not be confused with advertising around games or spawned by the advertiser. To amplify conversa- the sponsorship of a game in which the brand is tions, the host will ask the more influential bloggers not integrated. to chime in, thus creating a halo effect of influence What we’re seeing: with their loyal followers. Gaming continues to grow in popularity and What we’re seeing: usage, and for a long time now, research has Consumers no doubt consider bloggers to be shown that in-game advertising reaches almost influential since they offer educated opinions all demographics. Web-connected multiplayer on products and services; however, they aren’t games are becoming more and more common, always clued into the relationships that may exist and the line between application and game is between bloggers and marketers. In October becoming increasingly blurred as social activities 2009, the Federal Trade Commission ruled that become integrated in gaming. In-game advertising bloggers who receive products or paid endorse- stalled when the opportunity was mostly limited to ments from brands must disclose these relation- billboards in games because although they were in ships to their readers. While blogger outreach the right environment, the lack of interactivity made programs are influential, we may possibly see their them hard to value in the digital space. However, effectiveness diminish if the increased need for as gaming and social intertwine with location- transparency hampers the degree to which read- based services, the opportunity for brands to be ers trust that their favorite bloggers’ opinions and relevant and meaningful parts of the interaction are recommendations are truly authentic. growing. We expect to see growth in this category not only from brands focused on entertainment, — Debrianna Obara, VP, Media but truly all brands who have a product or service that can be an integral part of a gaming, social, or local experience. — Alyson Hyder, VP, Digital Marketing

photography JEREMY SOMERS SYDNEY Data providers buying inventory, auction-based pricing to price inventory and the ability to layer in Data providers offer an extra layer of data to third-party data to help advertisers make buyers who want to purchase inventory over ad buying decisions. exchanges and other real-time bidding platforms, by giving advertisers and agencies demographic What we’re seeing: profile points such as gender, age and geography. The Interest of buyers in ad exchanges exploded in 2009, leading to the What we’re seeing: development of a new category of We expect to see many more data providers sell buy-side players such as demand-side their advanced profiling data to brands in the up- platforms and agency trading desks. At coming year. For example, pharmaceutical brands the same time, publishers on the sell-side can target users who are predicted to suffer from seemed caught off guard by the flood of certain medical conditions based on “geo-medical” buy-side interest, and many have taken data. This data includes HIPAA-compliant medical a measured approach to this new sales claim data that is stripped of personally-identifiable channel, perhaps limiting scale and cat- information, and targets selected condition suffer- egory growth. 2010 will be a seminal year ers down to the ZIP code+4 geographic level. This for the ad exchange industry, and will likely data can be applied not only to ad exchanges, but determine whether this will be a primary some networks and portals. channel for marketers in the future, or sim- — Debrianna Obara, VP, Media ply an interesting and efficient side-tactic. Sophisticated advertisers have already taken steps to answer this question for themselves, and those who have not yet Ad exchanges entered the fray will do so this year. Ad exchanges are marketplaces that connect — Matt Greitzer, VP, Search Marketing publishers and advertisers for buying and selling ads. Publishers turn to ad exchanges to liquidate unsold advertising inventory, while advertisers and ad networks use ad exchanges to acquire inventory, often at discounted rates compared to upfront buys. Major ad exchanges include Yahoo!’s Right Media and Google’s DoubleClick, as well as AdBrite, OpenX and AdNexus; there are also publisher yield optimizers such as PubMatic and AdMeld. Ad exchanges are generally consistent in three ways: They use a spot market for 33

photography CARSTEN LINDSTEDT FRANKFURT

Digital out-of-home (DOOH) viewing what you want when you want, it’s also about where you want it. Successful More than just electronic billboards, digital out- content integration takes all this into account, of-home has emerged as a way to deliver highly weaving a brand into the fresh, third-party content customized and targeted messages to a variety that consumers have a strong affinity towards. of locations. While studies have shown DOOH can have positive ROI, there is still a gap in What we’re seeing: measurement; the impact of these initiatives aren’t Smart marketers are recognizing this and enabling yet quantifiable to the level which digital marketers their brands to live a different life, away from their have become accustomed. homes on their Web sites. For example, we have worked with publishers to create custom content What we’re seeing: through blogger relationships or their own editorial As new digital touchpoints continue to infiltrate staff to comment specifically on how brands and consumers’ media consumption habits, the DOOH products enrich consumers’ lives, help them reach environment is becoming a more important part goals or solve problems. Paired with the right of the media mix since it has the ability to change content, integration can show consumers that we creative dynamically, influence customer behavior, understand the brand means different things to build brand identity, activate mobile programs and different people. Putting it in the right place shows speak to customers where they are. Retailers, in consumers we respect their consumption habits particular, are seeing value in reaching shoppers and are comfortable delivering branded messaging while they are on-the-go, using it to guide con- right where they are. Leveraging relevant content sumers to an unplanned stop at their brick-and- in an environment that is natural to the consumer mortar stores. On the flip side, touch screen tech- can be as powerful as leading them to a fully- nology has helped shoppers interact with products branded destination site. More and more, clients without ever having to step foot in their stores. are becoming savvy to these opportunities, and we expect them to grow in 2010 as publishers see —Tricia Lasky, VP, Media them as more powerful ways to partner with brands and offer compelling content to customers, and brands see them as effective ways to communicate Content integration with their consumers. An older definition for this might have been — Tricia Lasky, VP, Media sponsorship, or product placement. Today, content integration is inherently a part of the “on- demand” consumer mentality. It’s not just about LOOKING AHEAD TO 2010 35

Going Global: Some (Zhi Fu Bao), which, like TaoBao, is owned by the Alibaba Group. This unique system guarantees International Digital Trends a fraud-free shopping experience, ensuring it is easier, faster, safer and friendlier, compared to other to Keep an Eye On forms of payment such as by credit card or C.O.D. Here are some insights into what 2010 The experience of TaoBao shows that China may holds in store from a few of our global offices. have an opportunity go beyond just transactions in its ecommerce experiences. TaoBao is also building its own e-Shop, and its own instant messaging View from China: Ecommerce platform, called Ali Wang Wang. There is already goes national, but with a social spin some community built around it, and ecommerce will probably further integrate with social networks. Ecommerce in China is the new retail boom, and it What will TaoBao become in future years? A new is, without a doubt, going to have an important role type of social network/ecommerce experience? It’s in China’s retail market. From consumer packaged not certain, but one thing is for sure: There will be a goods to high-end luxuries, it is still difficult to find lot of opportunities ahead. certain products across this land. And with slim opportunities to travel internationally — or even to first- — Joyce Ling, Account Director, China tier cities within China — ecommerce has opened a window for Chinese citizens to the outside world. The shopping behavior of Chinese consumers isn’t View from the UK and Europe: exactly like what is found in the West; they rely more Digital media takes a bigger on search and ecommerce for product and price piece of the marketing pie comparisons, looking for credible opinions from consumer comments from ecommerce sites. Unsurprisingly, the trends in the United Kingdom during 2009 were hugely similar to those in the U.S. Take the example of TaoBao.com — the site may Clients’ digital media spend remained relatively flat have started as a consumer-to-consumer service or slightly up, whilst other channels were subject very much close to eBay, but it has gradually be- to cuts. The main outcome, though, was a change come much more than that. Today, Chinese in senior clients’ interest in digital. First, the returns consumers go on TaoBao to search, view, com- from digital held up incredibly well whilst other chan- pare, purchase, do business, chat, meet friends, nels floundered, and second, the volume of media join communities, follow trends or even find lifestyle coverage given to iPhone apps and Facebook last and travel tips. For many Chinese youngsters, hav- year was huge, enhancing the attractiveness of ing a virtual shop on TaoBao is similar to having a digital channels. profile page on a social network. Behind it all, there is one important component facilitating its growth “This digital media thing” became amazingly tan- and pushing it forward: the payment system Alipay gible, but it didn’t look like media. This conundrum

opened the door to more interesting discussions of spend. Companies must to be willing to pay about what digital media means and what it can agencies for what they want them to do, even if be used for. Thus, there will probably be more the cost is up to 100 percent of “media” spend, emphasis on idea-led marketing — such as social, and should be happy to do so as long the return mobile, games, apps and video — and their as- on investment (revenue generated directly or indi- sociated measurement challenges. One hot area rectly) is worthwhile. may be video production companies since video —Rob Watt, Managing Partner, Media, UK can become the unifying asset that seamlessly moves cross-platform from TV advertising to Web advertising, to social platforms such as Facebook, to email, mobile, the iPad and out-of-home, de- View from Southeast Asia: livering the same context and impact across all of A fragmented, mobile-using them. So, while digital marketing is now no longer market poised for growth an afterthought in Europe with 30 - 40 percent of media budgets now spent across digital channels, Although this region is categorized as one, digital many businesses haven’t updated how they consumption varies significantly between countries budget successfully for these digital initiatives. For because of differences in their relative wealth and digital marketing to work, clients will increasingly technology infrastructure. It includes both devel- have to view their agencies as partners and be oped countries such as as Singapore and Hong more willing to compensate them on time rather Kong, and lower-end ones such as Laos and than on a percentage of media. This represents Cambodia. These differences mean that technolo- a dynamic shift in agency/client relationships, gy is not available equally to all, and it also creates and it exists less in the U.S. than it does in the massive differences in what digital platforms are UK and other European countries. When clients available. Connectivity varies widely, too. Indonesia pay for the time agencies spend on an account has broadband penetration of less than 1 percent, rather than on a percentage of media spend (thus while Singapore has more broadband connections incenting agencies to drive growth rather than just than households. Meanwhile, more than 80 efficiency), the nature of the relationship changes. percent of Malaysians use the Internet outside It also focuses attention on strategy, analytics and the home at Internet cafes. Therefore, advertisers optimization rather than just buying. This becomes need to be mindful of these broader differences especially relevant when thinking about owned and understand that overseas digital initiatives do media, such as email and search engine optimiza- not always translate well in this region. tion, and earned media, like social, where there is There are other technological differences as well. no spend to base percentage upon. Even across Individuals in this region rely more on mobile paid media there are certain disciplines, like pay- phones to stay in touch than in many other parts per-click, where the volume of work required to of the world — approximately 17 trillion SMS mes- maximize the returns may bear no meaningful re- sages originated in Asia Pacific in 2008 — over semblance to the fees generated as a percentage LOOKING AHEAD TO 2010 37

three quarters of the world total. Mobile handset are distanced geographically from family, friends ownership is also staggering; Singapore has nearly and cultural capitals. This gap is bridged using as many mobile phones as people, with penetra- technology. Australians are educated and wealthy; tion of 96 percent. The high mobile penetration their smarts and money make the adoption of in this part of the world means the social aspect technology both desirable and possible. Internet is limited to one-on-one conversations. This is a use is high, with 83 percent of Australians using difficult area for marketers to penetrate as mobile it, and time spent online is growing — but there handsets are deemed as personal spaces. is less commercial content (like Hulu, which is not available in Australia). Broadband is very expensive In addition, online commerce entities are scarce (but people are subscribing anyway), uploading is in Asia Pacific, which drives consumers to rely on slow and 3G handset adoption is growing. Almost overseas sites for online purchasing, or not pur- all Australians can claim a tax break by buying chase at all. Amazon is the most visited ecommerce iPhones and laptops as organizers — so there is a site in Singapore. On the other hand, less than 5 financial incentive in investing in digital technology. percent of Indonesian online users purchase items over the Internet, while banking capital Hong Kong, While the desire for digital technology is well not surprisingly, has the highest online banking formed, there are differences in how it is used usage. Online users are very active in user-gen- in Australia. Because of the country’s good erated content. Blogs are viewed as being on an weather, people are not as dependent on digital even plane with established news sites. Although for entertainment; it’s more important as a way to Facebook is the most popular social site in some connect, with social channels such as Facebook countries, competing brands such as Friendster being particularly popular. The active lifestyle also still dominate in a few areas. While this region lends itself to use of mobile. Australia’s switched- represents a smaller part of the global digital pie, on population and geographic isolation makes the it is catching up quickly. This gives unprecedented country a fantastic place to test new products and opportunities for established digital entities to pave digital executions. It is also poised for growth in and structure the digital-scape for this region. digital spending because the population is above average in its use of digital and because Australian —Kai Huang, Account Director, Singapore brands are below world averages in their spending. Government is highly involved in the country’s View from Australia: A highly digital digital growth, too. Universities and the the Commonwealth Scientific and Industrial Research culture continues ramping upward Organisation (CSIRO) continue to lead innovation. The big picture: Australia (and New Zealand’s) Australia’s GOV 2.0 task force is evidence of a colonial past means that they are the world’s most wider trend in Australia in which governments are isolated Western countries. Couple this with two attempting to embrace Web 2.0 technologies. The centuries of sustained immigration from all parts of New South Wales Government sponsored a com- the world, and you’ve got a group of people who petition, Apps4NSW, allowing consumers to

create applications that would make it easier for brands ignore Classe C at their peril. In the next citizens to access, add to and analyze data about 18 months, almost half of them will buy comput- the state. The federal government is proposing ers and smartphones — and with that they will a nation-wide mandatory Internet firewall to protect jump definitively across the Digital Divide. Brazil is children from undesirable content. This proposal already the world’s leader in usage of email, IM, to censor the Internet has given rise to a creative and time spent with social media, and in 2010, protest movement, which organized through social understanding how to connect online with Classe media using the tag #nocleanfeed. C should be at the top of the marketer’s agenda. —Tim Longhurst, Strategist, Australia —Joseph Crump, Head of Strategy & Planning / Latin America View from Brazil: Digital Baptism for the Emerging Middle Class This decade will be remembered as the era when As these predictions make clear, Brazil — the perennial “Country of the Future” — 2010 will be about much more than became the Country of the Present. On the world political stage, Brazil is emerging as a leader and a few hot platforms. While things like innovator. Consider the global popularity of Presi- mobile and social are expected to dent Luiz Inácio Lula da Silva, and the exemplary make headlines, there are a number progress in infant mortality, HIV, and poverty of other developments that will rates. On the economic front, Brazil was largely untouched by the global economic crisis; the grab the attention of marketers and country is booming, and the Wall Street Journal agencies alike. From infrastructure predicts it’s headed to being the world’s fourth plays like ad verification systems largest economy. And from a popular perspective, there is the World Cup in Brazil in 2014 and to local online advertising, 2010 the Summer Olympics in Rio de Janeiro in 2016. is shaping up as a year in which change in online media will make From a digital perspective, there is an even bigger megatrend afoot: Almost 70 million people, the itself felt both in front of and behind largest socioeconomic block in the nation — are the scenes. becoming upwardly mobile and are about to swell the country’s previously anemic middle class. In the past, Classe C — as they are known in Brazil was believed by digital marketers to be on the wrong side of the Digital Divide. Today, digital LOOKING AHEAD TO 2010 39

05 photography PAUL MITCHEL PORTLAND • GREG CARLEY AUSTIN • LAUREN EDWARDS LONDON • SUZANNE FEE PHILADELPHIA • JADE LAU, SIU FUNG SHANGHAI

How to Become a Social Brand Six Steps to Realign Your Marketing Around Social Media By Andrea Harrison, VP Strategy & Joe Mele, Managing Director, Marketing & Media Quiz time: It’s 2010. What’s the biggest unknown for marketers today? The state of the economy? Not quite. The biggest question mark we at Razorfish see can be summed up in two words: “Social Media.” Not at all coincidentally, social media was also the biggest question mark facing marketers when we published our Outlook Report last year. There’s a reason why social media continues to be a quandary for marketers and their agency partners: They haven’t adapted their organizations to the social behaviors driving social media. Further, many of them don’t even realize that it’s their problem. A recent eMarketer report summed it up nicely; it found that 37 percent of brands indicate their main barrier to adoption of social is simply that they don’t know where to begin. see figure 05.01 HOW TO BECOME A SOCIAL BRAND 41

Barriers to social media adoption Brand according to U.S. brand marketers and ad agencies, June–July 2009 Agency We don’t know enough about social 37 % media to know where to begin 31 % There’s no established way to measure the 37 % effectiveness of social media 28 % There is no funding for social media in 26 % our budget 24 % We just don’t have the time to invest in starting a social media program 25 % right now 17 % Social media is not a 19 % proven/tested strategy 31 % We have legal constraints and/or corporate policies that prevent us from 15 % these types of marketing activities 9% Social media is not seen 7% as a good use of employee time 10 % 9% Other 9% Don’t feel there are any barriers 18 % 21 % Note: n=85 brand marketers; n=85 ad agencies 0 10 20 30 40 Source figure 05.01 eMarketer, “2009 Marketing Industry Trends Report” August 18, 2009

How Social Parallels Aligning your company with the social consumer Older Marketing — For a brand to be successful, it needs to re-engineer and How It Doesn’t its marketing department around cross-functional digital expertise in the six areas outlined below, and However, while social media may seem mystifying, seek agencies that have done the same. it has definite parallels to what marketers have done for decades: understand their consumers and mar- 1 Behaviorally focused account planning. ket to them accordingly. The key, when it comes Having a deep understanding of consumers to social media, is to understand how consumers is vital to creating the right solutions and use technology and adapt it to their social lives. It’s communications. The account planning a cross between behavioral psychology and tech- function must be focused on behaviors — nographics, and definitely rooted in the principles not just attitudes and mindsets — to be of user experience and ethnographic research. able to deliver strong social solutions. It is also based in some of the technological skills 2 Content strategy and creation. There is no that agencies and marketers have developed in the social without content, but the skills needed in digital era. Just as we conduct user research and social content have to go beyond copywriting testing to design our Web applications, we should because they require creating interactive also spend time understanding our users’ social be- and personal conversations. Agencies and havior before we make recommendations on social marketing groups need to staff themselves programs. The strategy and planning required to de- with people who have the time and expertise velop successful social influence marketing programs to respond directly to the target. is very much a part of how we do business today. 3 User experience design driven by customer The biggest difference, and this is where much of insight. User experience design is about the need for realignment comes in, is in implemen- understanding consumer needs, desires and tation. While previous forms of marketing, even actions, and creating design strategies to in the early days of digital, were composed of make those experiences better, deeper and carefully-crafted, one-way messaging, these skills more useful. Marketing departments need to don’t necessarily apply themselves to social. Sure, have experts who understand the principles you can buy ads on Facebook, but how do you behind this and who value them as much as build a fan page that both attracts your consumers “The Big Idea.” and keeps them engaged? How should a marketing department respond when there’s a rising tide 4 Deep technological expertise. Social has of consumer complaints on Twitter? An advertising created new technology platforms like Facebook slogan or banner campaign isn’t the solution. and Twitter. To get the most out of them, marketing departments need to appreciate HOW TO BECOME A SOCIAL BRAND 43

the long-term viability of solutions, and evolve and It’s about people, not platforms adapt the technology along the way. In addition to giving marketing more focus around 5 Interactive media design. Media expertise in social, realigning around social behavior also helps social goes beyond finding the right place to avoid a major pitfall of implementing social programs: put an ad. Media people need to determine becoming obsessed with platforms and vendors. how consumers are behaving on different At its core, marketing in social media is really about platforms, and create the right environments understanding social behavior and acting accord- for them. Marketing departments need to be ingly. The behavior is what makes people want to able to conceive of, and pay for, media planning play a game with a friend or be tagged in a photo. and strategy when buying media isn’t part of the program. Of course, the major growth in social over the last few years has spawned a huge upswing in vendors 6 Real-time data analytics. There are two and platforms rushing to gain market share. Plat- flavors of social data: the chatter itself and the forms like Facebook and Twitter have made social behaviors that occur as a result of social activity. a major buzzword for marketers — convincing many The biggest challenge is not collecting data — that a fan page and a Twitter account are critical it’s having the right people and partners who marketing platforms for brands. But marketers need can uncover the insights that come from the to continue to ask the core question of whether the data and act upon them. social behavior of their target mandates using them. If aligning around the six areas above sounds like Alongside the platforms are the application devel- an impossibly tall order, it doesn’t have to be. We opers, who specialize in creating content for the have had great success with many of our clients, platforms. These niche industries are now core to who have realigned their organizations and their many marketing programs, and continue to gain relationships with us and other partners in order share every day, but, again, if use of them isn’t to take advantage of social. These moves have anchored in consumers’ social behavior, they are helped them to attain the skills, expertise and not worth employing. operations needed to be social brands. The reality is that social may seem like something new and foreign — the platforms, vendors and tools overwhelming and confusing. However, it’s still just about continuing to build relationships with consumers through marketing. The difference is that marketers and agencies must develop a deeper understanding of how consumers’ social behavior is constantly evolving and align resources around it.

photography TIM PETHEL ATLANTA HOW TO BECOME A SOCIAL BRAND 45

photography GREG CARLEY AUSTIN 06 The New Brand Health Metric: Your SIM Score Using it to Make Smarter Marketing Decisions Across All Channels and Platforms By Shiv Singh, VP, Global Social Media Lead, @shivsingh, http://goingsocialnow.com

6 On January 21st, all hell broke loose for Toyota. Its sudden car recall was the most challenging crisis the company had ever faced. In fact, a few industry insiders even wondered whether the mighty Toyota brand could survive, as six million cars were recalled worldwide. The crisis is going to change Toyota forever and it may take years to recover lost market share. Around the same time, something rather dramatic happened to another company, but this time by Why the SIM Score matters beyond the social Web its own choosing — for the first time in 23 years, PepsiCo decided not to advertise its flagship Pepsi Nine months ago, we introduced the SIM Score brand on the Super Bowl. With Coca-Cola spon- and at the time, felt that it was an accurate measure soring the Winter Olympics, Pepsi launched a year of how people perceive your brand in the social round “movement” called “Refresh Everything” to Web in one moment of time. But since then, donate money to charities based on consumer through our experiences in deploying the SIM voting. For the traditional marketer, this was Score and the even more explosive growth of social indeed a bold and risky move. media (now it transcends all media and all platforms including mobile and gaming devices), we have What do Toyota and Pepsi have in common? They come to believe that the SIM Score can and should both are in business situations that demand new be used as a broader measure of a brand’s health, ways of measuring their brand health — measure- not just as a measure of the strength of a brand in ments they haven’t had before. And that’s where the social Web. the SIM Score — monitoring how a brand ranks in Social Influence Marketing — comes in. At the root of this thinking is the belief that we now live in a world where brands are shaped in real-time more by how consumers talk about them — versus anything the brands may do to market themselves or that we as an agency may help them do. This does not mean brand-building is dead. You shouldn’t fire your marketing department or your marketing agency. In fact, please don’t. THE NEW BRAND HEALTH METRIC 47

Nor does it mean brand equity has no meaning. However, in the meantime, let us show you how But whether your brand is worth $55 billion (as the SIM Score is already being used as a broader Apple is, according to one analysis) or $10 billion brand health metric by taking you back to the Toyota cannot be revealed through annual, laborious and and Pepsi examples. expensive brand tracking studies. You need to be tracking your SIM Score every day, every week and Toyota: SIM score numbers result every month of every year. Brand health, measured in shocking short term findings using a SIM Score, is dynamic, because it constantly When the Toyota recall crisis first broke, we captures the consumer conversations of your brand uncovered something extremely surprising. In the relative to its competitors and determines whether first two weeks, the Toyota SIM Score, (see figure they are helping or hurting your brand. The SIM 06.01) instead of dropping dramatically, actually Score tells you whether your brand is healthy, increased. In some bizarre way, the crisis at first based on actions that you, your competitors or actually helped Toyota. your customers are making every day. This happened for two reasons. First, as With 50 billion tweets being published every Edmunds.com later pointed out, the crisis made 24 hours and millions and millions of consumer many prospective buyers believe they could get a conversations taking place across social platforms bargain on a Toyota. They felt the cars would be and company Web sites via desktop computers, fixed and there’d be a special discount on them laptops and mobile devices, your brand health is a because of the bad publicity. Second, at first it reflection of how consumers are talking about you wasn’t clear how big a deal the crisis was and in real-time everywhere. Toyota brand advocates came to the automak- But it also means that the SIM Score must be er’s defense. As a result, not just negative — but further optimized to address this new responsibility. also neutral and positive — conversations about Thus, watch for announcements as we work with Toyota increased as the advocates spoke about additional analytic partners to refine the SIM Score their experiences with the cars and their safety — methodology. We will be focusing on four areas: all helping to prop up the Toyota brand. In fact, Toyota saw a sharp increase in the number of fans 1 better automated sentiment analysis on its Facebook page during this period too. 2 manual analysis of conversations via sampling Without the SIM Score, one would never have 3 a sharper mechanism for applying influence uncovered these findings — findings that, as we’ll weight-age explain on the following page, warranted a unique response strategy. Did Toyota know this 4 a tighter formula to give additional weight-age was happening? Did it respond to these findings? to positive mentions It is hard to tell from the outside. But one thing is

improve its brand health by finding ways to get Toyota SIM score consumers talking positively about the brand again 40.00 and building trust with those brand advocates first 35.00 and foremost. Discounting cars and running ad- 30.00 vertising campaigns touting their safety message will not be enough. They will need to focus on 25.00 Ford learning how they can build trust and figure out 20.00 GM what it takes to inspire their advocates once again. 15.00 Honda In a sense, it is like a marriage that’s spiraling 10.00 Nissan downward and needs counseling. We’ll be watch- Toyota ing the SIM Score to see whether they are able to 5.00 save the marriage with their advocates or not. 0.00 NOV DEC JAN figure 06.01 Pepsi: Strategic choice or blunder? Let the SIM score decide certain; if we were in Toyota’s shoes at the time, The Cola Wars are probably among the most we’d have discounted the cars just as the crisis fascinating and historic rivalries in consumer broke (without waiting to see sales drop first) and marketing. The choices made by Coke and Pepsi would have actively started explaining the situation in the last few months epitomize how daring their to the brand advocates of Toyota across the social brand marketers feel they need to be. Web and especially on the brand’s Facebook Pepsi, as mentioned earlier, chose not to advertise page. Those brand advocates needed the right in- on the Super Bowl, which would have given it formation quickly as they were becoming Toyota’s instant, and momentary, visibility with 100 million- new sales force. plus U.S. TV viewers. Coke, for its part, chose Unfortunately, the SIM Score uptick was short-term to sponsor the Winter Olympics and had its logo for Toyota. After those first two weeks, its score plastered everywhere from billboards to advertise- started dropping, precipitously partly because the ments and t-shirts, potentially reaching even more advocates felt betrayed by the brand too — not U.S. TV viewers (the estimate over the course of to mention the fact that the full extent of the crisis the Vancouver Games was 190 million). Which slowly came to light. approach resulted in a higher SIM Score? Arguably, Toyota’s fate will be decided by whether The chart on the next page captures the story. The it can stop its SIM Score from dropping the way Pepsi “Refresh Everything” movement helped its it has been lately. In other words, Toyota needs SIM Score significantly around the time of the THE NEW BRAND HEALTH METRIC 49

program’s December 13th launch and through the What does this tell us? That by not advertising in course of it opening up for suggested charities the Super Bowl and launching “Refresh Everything,” submissions on February 7th. In real terms, that Pepsi was able to gain on Coca-Cola, gains that translated into 1 billion media impressions, includ- were only reversed at the time of the Winter Olympics. ing 44 million on blogs, 70 million tweets and Would the Super Bowl advertisements have 300,000 new Facebook fans. (It is worth pointing resulted in similar gains? Probably not, and an out that a recent study by a social media vendor analysis of the previous year’s SIM Score numbers puts the value of Facebook fan to a company at would answers that question. $3.60 annually.) Does this mean “Refresh Everything” was a good However, those gains were halted when the Winter idea? It certainly improved the overall health of Olympics began on February 10th and Coke re- the brand in the short-term. But what excites us turned to its earlier SIM Score numbers. The scores is how the SIM Score, tracked through the course have since leveled off, leading one to believe that at of the year, can give these two brands a stronger least so far, the Pepsi “Refresh Everything” initiative measure of the impact of their marketing choices only gave the brand a short-term SIM Score bump over a period of time, more so than any other that was halted by the Winter Olympics. metric we know of (other than sales, of course). Pepsi & Coca-Cola: SIM comparision figure 06.02 11/08 11/15 11/22 11/29 12/06 12/13 12/20 12/27 01/03 01/10 01/17 01/24 01/31 02/07 02/14 02/21 02/28 67.19 68.54 68.05 69.12 67.74 66.89 62.60 67.52 69.17 60.06 63.77 63.00 64.91 52.29 68.64 62.96 57.52 43.60 40.06 33.95 45.54 49.84 35.44 34.88 40.54 37.11 39.6735.52 36.30 34.67 34.12 35.6340.00 37.16 Coca-Cola Pepsi

This longer-term application of the SIM Score is new experience for consumers — an experience an evolution in our thinking about its value. that was useful, helped people manage their spending — and have some fun with it too. The If the gains are significant as the year progresses, fact that this cool new product is associated with it’ll be the proof that Pepsi made a smart choice the three large corporations can only serve to by not advertising in the Super Bowl and launching improve their SIM Scores in time as they benefit the social media-driven cause marketing effort from the halo effect. instead. It will also show that making the switch from a campaign-oriented mentality to a longer How brands will make multi-million term movement has paid rich dividends. And when dollar decisions because of it those numbers are examined, we’ll also need to correlate them to overall market share metrics to The SIM Score, which measures a company’s see if brand health translated into sales. brand health in the social Web, is increasingly a reflection of the overall health of the brand — as Integrating the SIM Score long as you accept the fundamental premise into your business that a brand today is shaped as much by how consumers talk about it as by anything that the No more can one ignore the conversations taking brand may do itself. place in the social Web. In fact, they’re so significant in volume, that today they don’t just As a marketer, your challenge today is to manage represent a slice of your customer base — but your SIM Score effectively and to launch campaigns, increasingly are the voices of your entire customer marketing programs, innovative products and base. Businesses must take actions and create services that help you improve your SIM Score experiences for their consumers that ignite their versus your competitors that then result in sales social influencers to change their impression of upticks. Yes, you need to create social experiences the brand, share their perceptions with the world, for your consumers that provide value, encourage and directly influence sales, too. them to advocate for your brand and appear responsive to them in real-time. Because one One good example of this is what Citibank, thing is certain: If you aren’t seeing the SIM Score Microsoft and Morningstar chose to do in January. correlations, as a leading indicator to market Realizing that trust in big brands had dropped share today, you definitely will in the near future. significantly due to the financial crisis, they needed to find a new way to connect with consumers about the issue of money and serve their needs more directly. By launching Bundle Corporation, a new company to help people view spending habits of others around the country and then talk about them, these three corporations created a THE NEW BRAND HEALTH METRIC 51

photography CARSTEN LINDSTEDT FRANKFURT One-to-One Marketing to the Masses How Can You Extend Personalized Communication Beyond Your Existing Customers? Mike Selman, Strategy Director with input from Marc Sanford, Strategy Consultant

“The old paradigm, a system of That’s certainly not a new concept — in fact, this quote is more than 15 years old. But even today, mass production, mass media, you have to look hard to find a company that’s and mass marketing, is being gotten serious about embracing one-to-one marketing beyond implementing loyalty programs, replaced by a totally new paradigm, inserting a person’s name in an email, or other a one-to-one economic system.” efforts targeted toward its existing customer base. That’s a start, but these are all post-purchase – Don Peppers and Martha Rogers, activities, and we know customer relationships The One to One Future begin well before a purchase is made. So why do we continue to rely on the same old one-to-many, mass-marketing approach when it comes to reaching new prospects? Marketing engagement landscape: Increased adoption of technology makes it possible for 1:1 engagement methods to radically improve performance Conventional Advertising & Engagement 1:1 Advertising & Engagement Pre-Purchase Post-Purchase Pre-Purchase Post-Purchase Description Broadcast TV, radio, Direct mail and email Uniquely tageted and Targeted direct mail and email conventinally targeted online purchasers based on database dynamically personalized online to purchasers based on unique advertising segmentation (or not) ads and other digital experiences customer level behavior. based on knowledge of user and recent behavior. Required data None Basic CRM system Integrated anonymous CRM system integrated with customer behavioral and/or behavioral data household level data Typical hurdle to Demonstrated ROI Scalability Scalability and data Scalability and data greater adoption availability integration Relative ROAS X ~10-15X ~5-10X ~20-40X Enabling technology Ad serving or agency Basic CRM system Personalization engine Personalization engine, partnerships CRM system Adoption among marketers figure 07.01 ONE-TO-ONE MARKETING TO THE MASSES 53

photography CARSTEN LINDSTEDT FRANKFURT Because even with the great technological What’s “personalized” in this model is not just advances of the digital era, it still hasn’t been the person’s first name but the content of possible to scale such efforts due to the the message itself — the products, the offers, resources required. Broadcast media has been the calls to action — all based on what is most inefficient from a performance standpoint, but relevant to the user. Because each ad is tailor- hugely efficient from a resource standpoint — a made for the user at the point of impression, media buyer can buy $50 million worth of TV a uniquely relevant message is delivered every using his iPhone while riding the bus. One-to-one time. Now, one-to-one marketing can be done marketing, however, has required more time on a mass scale because there are efficiencies and people to implement. Fortunately, things in both technology and resources; it can truly are changing. Razorfish believes there is a new move the needle for a $10 billion company. and compelling opportunity to create one-to- And the opportunity will only get better. Today, one personalized messaging that can be aimed online is the only media channel that can do at the mass of consumers that are further up this; it will expand to others, such as TV, as they the purchase funnel, in the awareness and become interactive, and therefore, addressable. consideration stages. The logical conclusion is that one day most Increasingly, marketers can access and aggregate advertising will in some way be customized. That massive amounts of data across multiple media will be great news for advertisers, who are always sources, and use it to build a smart, behavior-based looking for better ROI, and consumers, who “personalization engine” which can dynamically increasingly want advertising on their own terms. serve ads to millions of prospects every day.

The impact of customizing to the masses The adoption of one-to-one marketing, as mentioned campaign. When used in conjunction with more before, tends to start with the existing customer traditional top-of-the-funnel activities, the lift is base. For most companies, there is certainly room maximized across an even larger base. While for more sophisticated personalization in this area; that’s impressive, it will only get better as other however, the overall business impact is tempered media channels come on board. by the relatively small budgets most companies When this happens, and addressable media allocate to loyalty marketing and other customer comes to platforms such as mobile, digital retention vehicles. The real impact begins when a readers and tablets — such as the Kindle and robust, data-agnostic personalization platform is iPad — and even TV, it is not hard to envision as established and used to drive relevant advertising much as 30 percent of an entire media budget to new prospects. being allocated to one-to-one messaging In our experience running personalized online campaigns. This is when the full impact of ad campaigns, we’ve seen ROI that is typically personalization will be realized and truly become 5 to 10 times that of a standard, broad-reach a competitive advantage. Marketing budget ROI: progressively shifting ATL budgets to 1:1 channels can double media efficiency at scale Today Max 1:1 Online Maximize Long-Term Post-Purchase Pre-Purchase 1:1 Pre-Purchase 1:1 Performance Conventional Shift greater % of CRM Shift greater % of online Shift greater % of CRM, Maximized 1:1 marketing driver tactics budget to 1:1 display media budget to 1:1 online, TV, radio and print advertising display advertising budgets to 1:1 messaging Enabling Integration of behavioral Continued shift of media TV, print and radio media data with CRM systems mix to digital channels; become addressable. dynamics become less costly increased data availability Personalization enabled and integration solutions across all digital channels. Budget allocated 1:1 <1% ~5% ~15% ~30% ROAS $ 10 $30 $5 $35 $80 figure 07.02 ONE-TO-ONE MARKETING TO THE MASSES 55

How to build a personalization engine While the technical details are complex, the basic components of a personalization platform can be broken down into five core building blocks: 1 Data aggregation. Data is aggregated from various sources, typically leveraging cloud computing due to the size and the TV POS CRM WWW. frequency of updates necessary to keep the profiles fresh. 2 Decision engine. A decision engine Last Action Recommendations makes sense of the data, offering an intelligent recommendation for what message should be served up. Rules 3 Creative development. Personalized ads are produced with an eye to developing as many different ad units as possible in Offers Messaging a way that maximizes efficiency. To do this, creative assets are developed in a modular fashion with heavy use of existing Images Design assets, allowing the emphasis to go toward creating ads that are relevant to the consumer. 4 Media targeting and dynamic ad Messages serving. Media networks find targeted users and assemble the ad using dynamic Image Offer ad serving. Logo/CTA 5 Marketing channel. Finally, the customized ad is delivered to the user through the relevant channel in real-time. figure 07.03

photography RICARDO SANTOS BERLIN Why now is the time to get personal with your prospects Companies that start to develop pre- sale one-to-one marketing efforts now will seize a significant competitive advantage by more effectively communicating with their prospects and squeezing more results out of marketing dollars that traditionally have been spent in expensive mass media. It will also set the stage for when personalized advertising will be delivered across all major media channels. Starting now could be the thing that keeps you one relevant message ahead of the competition. 57

How the Ad Exchange Ecosystem Works And Why Marketers Need to Understand Its Disruptive Power By Matt Greitzer, VP, Search Marketing & Head of ATOM Systems 08 photography JASON DRAKEFORD NEW YORK

8 What a difference a year makes. When we released our Outlook Report last year, the ad exchange market was in its infancy, perceived as an intriguing side-show by mainstream marketers. Today, this market is in full growth mode and is sending shockwaves through the media community as advertisers, agencies, publishers — and everyone in between — scramble to figure out exactly how this market is taking shape. While there are no hard industry estimates of the size of the ad exchange market, industry observers suggest agency trading desks, which execute deals on ad exchanges, will control $500 million in media spending in 2010. Since we at Razorfish have seen this market up close, we’ll walk you through the ad exchange ecosystem, and why so many marketers are enthralled by it. How the advertising exchange ecosystem works As we said above, the ad exchange market Ad networks: Networks that aggregate online is an ecosystem consisting of interdependent ad inventory across multiple sites, repackaging components. Below are definitions, followed by it along various targeted parameters for sale a chart showing how they interconnect: to advertisers. Agency trading desks: Consolidated agency Data providers: Third-parties offering behavioral, buying groups, which work with demand-side demographic, psychographic and social graph data platforms and data providers, to optimize and to enhance ad targeting and pricing decisions on leverage buying clout across ad exchanges. ad exchanges, for example. Demand side platforms (DSPs): Cross-exchange Publisher-side platforms (PSPs) and yield platforms used by trading desks (and others) to tap optimizers: Cross-exchange and cross-ad into exchange inventory. network platforms and service companies used by publishers to manage demand and generate Ad exchanges: Marketplaces that allow for the maximum ad revenue. buying and selling of ad inventory in a biddable, real-time spot market on an open platform. HOW THE AD EXCHANGE ECOSYSTEM WORKS 59

Why ad exchanges interest marketers Meanwhile, yield optimizers increasingly do business directly with DSPs, cutting the exchange out of the Marketers are interested in ad exchanges for mix and playing that role themselves. their ability to deliver highly-targeted advertising at levels of efficiency not found elsewhere; both The relative stability on the buy-side of the equation brand advertisers and performance marketers may be a result of buyers’ enthusiastic embrace are tapping into these benefits. But, as the chart of this new channel. Barely a market in 2008, the suggests, with an alphabet soup of vendors in Agency Trading Desk model is in full swing at most hyper-niche categories, this is not an easy landscape of the major ad holding companies, and is one of to navigate, partly because not all players are coming the fastest growing segments of the agency business. to the ecosystem with equal levels of enthusiasm. Marketers and agencies are receptive to this buying model for two reasons. First and foremost, the ad While the buy-side players on the left hand side of exchanges are an efficient way for marketers to the chart are relatively consistent in their behavior target specific audience segments through the (an agency trading desk always works with a DSP, smart use of their internal and third-party data. for example), the sell-side players on the right are The opportunity to target audience without using anything but. Publishers often forgo yield optimizers content as a proxy for audience is very appealing. and work directly with ad networks or exchanges. optimizers and work directly with ad networks or Second, the ability to de-average pricing across The advertising exchange ecosystem Agency DSP’s Data providers Ad networks PSPs/ trading desks yield optimizers Advertisers Publishers Ad exchanges Buy Side Sell Side

audience segments (i.e., set a different price for The broader implications each audience segment based on its predicted of ad exchanges value) and employ tactics like re-marketing with no arbitrary markups is a boon for direct- But the ad exchange phenomenon isn’t just about response marketers who are seeing their ad the buy-side/sell-side divide. Its greater impact exchange campaign performance rival that of may be in the flood of technologies it’s unleashed, search marketing. which automate the buying and selling process for online display. Automated buying and selling of Why some on the sell side IAB-standard ad sizes is inherent in the exchange are treading carefully model, as is automated optimization of placements, pricing and ad creative. It’s easy to envision this While buy-side adoption has been overwhelming, technology expanding beyond the exchange spot sell-side counterparts have been less aggressive market to accommodate other forms of standard in their embrace of ad exchanges. Inventory is ad buys, greatly reducing the administrative burdens in no short supply, to be sure, but many top-tier on buyers, sellers and campaign managers. publishers, such as The New York Times, have expressed skepticism this new sales channel is in And therein, perhaps, lies the true revolutionary their best interest because they believe it devalues power of exchanges, cleaving the media landscape their premium inventory. In fact, some, like Turner into two parts: highly transactional, automated, Digital, actively deride the ad exchanges despite algorithmic buying on one side, and highly customized, the strong buy-side signals. Publisher reluctance bespoke, integrated buys on the other. Such a to place inventory on exchanges is perhaps the shift has implications for marketers, agencies and greatest barrier to the channel’s growth. publishers in how they plan, organize and optimize their businesses. Marketers embracing exchange And if publishers are confused, many ad networks buying techniques in 2010, then, will not only to are downright fearful of the new market forces tap into a highly efficient buying channel, but will brought about by the growth of the ad exchange also get a front row seat to the unfolding of this ecosystem. The vast majority of the aforementioned new paradigm, next year and beyond. $500 million controlled by agency trading desks are coming straight out of budgets that would have previously been allocated to broad-reach ad networks. Several progressive ad networks such as Undertone Networks, Collective Media, Turn and InterClick to shift their businesses to respond to this new dynamic. How the other broad reach networks fare in 2010 and beyond, however, remains to be seen. HOW THE AD EXCHANGE ECOSYSTEM WORKS 61

photography VENUS LEE & JADE LAU, SIU FUNG SHANGHAI 09

Measuring What Matters Say No to Meaningless Metrics and Define Your Measurement Ecosystem By Jason Leigh, Group VP, Analytics & Sandy Schlee, Ph.D., VP, Analytics, West Here we are, in the midst of the anything useful. Razorfish believes it’s time to just say “no” to meaningless metrics, and adopt a information revolution, where disciplined mindset that focuses on measurement practically everything we do is that truly matters to your business. measured, and our daily lives leave The search for meaning in behind a trail of digital bits. During the data universe: Identifying the course of this year, according accountable measures to a February report on the data There’s a need to take a practical look at what deluge by The Economist, mankind this means for marketers dedicated to collecting will produce 1,200 exabytes (or 1.2 insights. It means measuring and focusing on trillion gigabytes). Individuals and accountable measures, measures that matter businesses have never produced to you and your business, and pretty much ignoring everything else. This approach will such an incredibly detailed trail of deliver better decisions and, ultimately, a measurable activity — a potential sustained business advantage. treasure trove for marketers. Paul Musante, Vice President of Individual Investor Group, puts the challenge facing So why can’t marketers make better decisions analytically-driven organizations this way, “We with the sophisticated data measurement tools have limited internal bandwidth, so we haven’t they now have at their disposal? been able to expand our analyses at a rate in Because, we’re trying to measure everything, when line with demand. Across all business units, we should be focusing on accountable measures the demand for incremental analyses has that matter to us and our businesses. In our fascination outstripped our capacity to produce them.” with gathering and storing as much marketing data It’s the dilemma faced by so many internal, and as possible, it’s becoming impossible to decide external analytics groups; everyone in the MEASURING WHAT MATTERS 63

organization clamors for more analysis, and those disclosures, and are often discussed in internal teams struggle to provide enough bandwidth planning sessions. Some measures that don’t to fulfill the requests. Meeting current analytical pass those tests are useful to keep around, but demand requires a shift iMeeting current analytical they shouldn’t draw focus, attention and analytics demand requires a shift in focus, which starts with resources away from key measures. knowing how to identify accountable measures, Identifying which measures are important will likely along with the discipline to apply good standards, require some robust discussion amongst various smart analysis and timely delivery of facts to key stakeholders, ideally, starting as a top-down decision-makers. It requires the curiosity to move exercise; namely, what is the C-suite interested in from knowing what happened to knowing why it measuring? Usually, it’s a combination of sales, happened, and the willingness to make decisions unit volume or profit, but it takes heavy lifting to based on this knowledge. articulate those measures in a unique way that Taming the jungle: Looking at makes sense for your business. your measurement ecosystem Recently we worked with a sales-driven organization We talk a lot about ecosystems. It’s an instructive to uncover its accountable measures. We concept, especially when applied to the possible ultimately realized that the measure of “sales ways we can measure business. Organizations generated per sales rep hour worked” was the needs to shift their thinking away from the mindset most important measure — after several weeks that all measures are equal, and begin thinking of mapping out their measurement ecosystem, of a living measurement ecosystem with all that conducting one-on-one stakeholder interviews, entails. Some measures are the big bad predators: and, finally, holding an animated four-hour debate They carry outsized influence on the rest of that included key decision-makers and tactical the measures available; they are the proverbial analytics staff. We all walked out of the room 800-pound gorillas of your business’ potential knowing exactly how we’re all going to be held performance measures. These heavy hitters are accountable for our work. That’s the key point: composed of, or relate to, a sometimes infinite “Sales generated per sales rep hour worked” was set of other measures. Examples would include the accountable measure for this client because sales volume, margin, return on investment or the components of it are the things this group of net present value. executives has to deliver. It’s a useful exercise to at least list all the possible There were two things that made this analysis measures that your company looks at today — to particularly challenging. The first was that most begin the process of mapping out your own of the measures we were gathering paled in measurement ecosystem. Typically, the accountable comparison to this one all-important measure. measures are the ones the senior executives ask The second was that we had to figure out how about over and over again, the ones that show up to distill measurements that cross disciplinary and on P&L statements, within the company’s financial P&L silos within the organization. Each of those

silos had their one true measure of success, so are the responsible measures — the ones that we needed to combine them in a way that members of the team use to optimize their actions satisfied each group. That required honest day-in, day-out. Other measures that are related discussion and delicate negotiations. (It’s worth to, highlight or explain the accountable measure noting that most organizations we’ve worked — but aren’t used day-in and day-out to run the with never have more than two to five true key business, are the consulted measures. Finally, any performance indicators — or accountable measures.) other measures that people might think are worth tracking fall into the realm of informative measures. It’s not enough to identify these all-important accountable measures, however. Finding them Recently, for a national healthcare provider, we went and setting up systems to track them accurately through the process of helping them plan out and enough won’t drive business all by itself. If you clean up their measurement ecosystem using this don’t like what you’re seeing in those accountable approach. Most of their marketing efforts were measures, they usually aren’t enough in and of aimed at generating leads — and once those leads themselves to uncover why the results were either turned into appointments, they had a well tooled terrific or poor. person-to-person process to close those leads and turn them into paying customers. We chose Refining your measurement lead volume as the accountable measure. ecosystem using the RACI chart Lead volume was based, in this case, on the reach We’d like to suggest a type of chart to help and frequency of the client’s advertising, and how organizations flesh out their measurement good those ads were at getting customers to act. ecosystems. Called a RACI chart, it uses an The responsible measures we selected were acronym that stands for Responsible, Accountable, impressions, ad frequency and clickthrough Consulted and Informed, and comes from project rates at several key steps in the sales funnel, management and process engineering circles. the cost associated with those efforts, and the It’s a tool to map processes that highlights which cost per impression; these were measures that person takes which action at each critical step of each marketing channel needed to optimize to a process. There is lots of good information on efficiently generate the most leads for the business. how RACI charting works available online (a good Information about the tagline, offer and time of day primer can be found here: http://en.wikipedia.org/ the ads were presented all fell into the consulted wiki/Responsibility_assignment_matrix). measures bucket — as these dimensions were used mostly to help understand why the key We’d like to suggest that for each critical part of your performance measure and responsible measures business, you identify one accountable measure as performed as they did. There were a series of other outlined above — the key performance indicator. measures that particular stakeholders wanted to Then, think about measures that are used to define track, but that frankly had no direct bearing on that measure, or have a direct impact on it. These MEASURING WHAT MATTERS 65

understanding why leads were or were not gen- Finally, smart analysis, as alluded to earlier, involves erated. These became the informative measures. providing answers, not just data. All too often, we analysts fall in love with the detailed charts and The next step: Using smart analysis graphs that build a case for a simpler answer. We to understand your data do all that work to ensure the answer is right — and we like to show our work. But the reality is, Getting this robust understanding of what’s driving most decision-makers don’t have time to wade your business, and weeding out everything else, through all the interesting factoids to get to the won’t magically make your business better. That’s one nugget they need to make a better decision why it’s necessary to apply smart analysis — — so ensure that your analytics organization is set uncovering why the accountable measures are up to answer your key questions, not just produce trending the way they are. Analysis-driven insight charts and graphs. comes from comparing one key measure to another, such as looking at a measure’s value this week Successfully managing your measurement as opposed to last week — and then asking and ecosystem requires you to focus on the few answering: Why did this measure change? In short, metrics that can indicate when your business it’s about generating hypotheses and then finding is succeeding and when it is failing. Here are data to prove (or disprove) those hypotheses. five ways you can stay on track: Uncovering why performance is what it is remains 1 Measure what matters to your business; half the battle, however. The other half is delivering don’t measure everything possible. answers to key decision-makers in a timely manner, and having the discipline to act upon those findings. 2 Take the time to institutionalize your key A well-developed measurement ecosystem includes measures across the organization. not only a full list of potential business measures, 3 Create an environment that can ask “why.” but also a robust organizational governance model, which focuses on which decision makers can direct 4 Provide adequate resources to your analytics the organization to change tactics in response to providers so that they can deliver results in a new and emerging information. It’s therefore critical timely manner. that you set up processes to monitor the accountable 5 Set aside resources for testing and learning measures, quickly uncovering why they’re moving to increase your analytics prowess. in a given direction, and appropriate methods of communicating these answers to the right people at Companies that can derive insight and value from the right time. the analytics, and make decisions based on the facts, will lead the way in the new millennium.

photography TIM PETHEL ATLANTA 67

photography LAUREN EDWARDS LONDON 10 The Power of Small Thinking Agency Creativity Should Move Beyond the Big Idea to Meet Demands of Evolved Marketers By Brandon Geary, SVP Strategy for Americas

0 Despite the increasing emphasis on ad platforms, exchanges, automation and cost-reduction, creativity is still vital to marketing effectiveness. It remains an elusive X factor in the quest for results. But we have found that creativity, as it has been traditionally expressed in advertising, needs to change to meet the demands and opportunities inherent in both changes in consumer behavior and advances in ad technology. Further, creativity has to meet the demands of the evolved CMO, experience and identifying new sources of revenue, the advertising creative team is not necessarily the first, and certainly not the only, stop in their journey to improve the prospects for the brands they’re stewarding. They now also call upon product development firms, innovation consultancies, co-creation panels and forums to provide the sparks necessary to drive marketing innovation. JetBlue has effectively used social platforms to improve customer service and experiment with new trial and pricing models in a manner outside of most ad agency mandates. General Electric’s marketing organization has secured help from who must show a quarter-by-quarter value to his IDEO and the academic community in an effort or her business beyond campaign results. This to influence a culture of innovation beyond the creates a problem for campaigns centered around campaign. Community platforms from Starbucks, The Big Idea — a grand, sweeping and fixed Nokia and Dell represent co-ideation and vision of a brand — because they don’t have the co-creation efforts, which allow for a daily agility to adapt to consumer reaction and evolve a infusion of ideas sourced from the crowd. brand narrative. Thus, agency creative teams, if they are to stay We see the need for a creative approach that better in the game, need to shed old habits of how ideas complements today’s marketplace; one that are generated and how campaigns are created. is faster, more informed and structured around They need to leverage external sources and multidisciplinary teams which can constantly customer insight with the same level of zeal to iterate a brand’s advertising based on customer generate and perpetuate their ideas. And they feedback. Otherwise, agency creative will have need to move quickly. an ever diminishing role in supporting the overall marketing mission. In working with multiple agency partners, Razorfish has found most continue to hold onto such marketing The evolved marketing organization traditions as annual planning cycles, campaign and the look beyond ad agencies launches and measures of sales activity and brand Because today’s CMOs have so many health that occur long after a campaign has launched; responsibilities — from evaluating a steady this, even though CMOs are responsible for driving stream of new technologies, platforms and media short-term results and if they don’t, they’re out. opportunities, to improving the customer THE POWER OF SMALL THINKING 69

Though their average tenure has moved up since Putting small thinking to work its 2006 low point of 23 months, most CMOs, per Spencer Stuart, stayed in the job for only 28.4 So how does thinking small work in practice? months. While traditional creative efforts move Looking at some of the most successful marketing from a single-minded brief onto concept, test, efforts of the last 12 months shows five key execution and results, the evolved CMO requires components of how these new multidisciplinary more immediate action, along with customer teams are using to guide marketing ideas today. participation and ideas that generate momentum. 1 What are we really doing here? Uncovering the brand truth. A new way of looking at creativity: Creatives have often spoken of the need to Small is the new big begin with a brand truth. McCann-Erickson, Therefore, agency creatives need to adopt a “think one of the world’s first global advertising small” mindset, which transforms the search for agency brands, has long used the phrase The Big Idea to an experiment and learn approach “Truth Well Told” to describe its mission which adapts constantly to changes in the and offering. marketplace. Certainly, some of this has been The difference today is that uncovering the happening for some time; ad platforms such as most essential truth about a product — what Google have proven a great testing ground for consumers think of it — is less difficult than what kinds of ads elicit response. But this new it used to be. Social monitoring tools provide model isn’t just about paid search. In contrast a clear sense of how consumers perceive to the high risk and slow approach to get to The brands. And getting to the truth today is fast — Big Idea, the creative side of the business needs feedback from the marketplace is more rapid to move quickly and show the agility of its than ever. technology counterparts. But obviously, brands have to be listening Small thinking isn’t emphasizing tactics over to know what their brand truth is. As an strategy and “seeing what sticks.” We found example, take the situation with two major evolved marketing organizations instead deploying beer brands, Razorfish client Coors Light cross-functional teams made up of both behavioral and Bud Light: insight and technology specialists to generate ideas born from observation and a sense of what’s Coors Light’s relentless pursuit of “cold” possible. They use flat organizational structures positioning is reflected in all aspects of its to allow and encourage ideas to surface, while marketing efforts. Packaging innovations crowd-sourced platforms bring a steady stream support cold positioning and digital experiences of ideas from consumers into the process. The like happy-hour locators, cold experimentation new creativity looks more like a writer’s approach communities and detailed advice for keeping to the constantly-evolving Lost, than the book- product cold allow the brand to constantly ended sitcoms of the previous century.

launch new experiments into the marketplace. Similarly, energy drink stalwart Red Bull is The effort increased sales volume. constantly refining its active sports network to align its brand with the activities and people In contrast, competitor Anheuser-Busch, that drive volume and reduce its emphasis on working closely with a consulting firm, poured those that don’t. Having sponsored action millions of dollars into a major, relatively static, sports events and athletes for several years, brand re-positioning of its flagship Bud Light Red Bull makes it easy for fans to follow the brand around “drinkability.” The Big Idea, Twitter feeds of snowboarder Shaun White, which was scrapped as of this year’s Super NASCAR driver Brian Vickers and countless Bowl, is held by some as responsible for its others to maximize brand ambassadorship. first-ever decline in shipments during 2009. New, lesser-known events and efforts 2 Who will tell the others? Identifying the like the Stratos mission to the edge of space brand ambassadors or brand network. are integrated constantly to create an Marketers have long touted the importance addictive quality to the brand’s Web site of trendsetters, influencers and influentials and social presence. in spreading brand ideas. But the method of 3 What should we make? Connecting the identifying and reaching the right individual has right experiences to the right platforms. been the domain of black-box approaches As consumers adopt new platforms and espoused by trend hunting consultants devices, it’s all too easy for creatives to and hipsters. Today, the rapid emergence of quickly jump to a checklist approach to using multiple social platforms and behaviors make them: iPhone app (check!), Twitter distribution any effort incomplete, unless it defines a core (check!), YouTube channel (check!). However, influencer or network. Razorfish has found the most successful Ashton Kutcher’s 4.6 million Twitter followers efforts are closely tied to the brand truth and may be dismissed as nothing more than celebrity desired set of influencers. worship or self-promotion. But his social media Starbucks has leveraged the passion of its production company, Katalyst, provides a critical consumers and used CRM to dramatically value to willing brands: the teaming of brand turn around loyalty and same store sales with appropriate individual and voice. The Web through its crowdsourcing mystarbucksidea. show, KatalystHQ, which follows a day in the com. The site came from the insight that life of Katalyst headquarters and is sponsored many customers have opinions about what the by Nestle’s HOT POCKETS, has been a viral company should do next, born from their hit. Kutcher not only leveraged his own followers, emotional connection with their local Starbucks. but incorporated other social channels, such as Facebook. It has been distributed 62 times per viewer. THE POWER OF SMALL THINKING 71

JetBlue’s effective use of its Twitter channels who are actively engaged in ideation and has gained it more than 1.6 million followers refinement. On-trend brands like Adidas, Coke interested in bargain travel. Rather than and Mercedes-Benz are constantly deploying coming up with a big-ticket ad campaign to new ideas into Passenger panels to build the promote last year’s “All You Can Jet” program, insights into both product refinements and which allowed purchasers to travel as much as new marketing experiments. they wanted in September, it went straight to 5 Where will the story go next? Twitter. The program sold out within days. That Guiding the narrative. doesn’t mean that every brand needs a Twitter Once the truth, ambassador and experience account, but that it’s important to find the has launched, we have found evolved platform that fits with the brand’s customers marketers in a mode of narrative guidance and what it’s trying to do. steering consumers forward down the path 4 What is the market telling us? to using their brand. This is in stark contrast Deploying and adapting. to the “wait for the brand tracking” mindset of While concept testing has long been used by marketers past, and it’s being employed by disciplined brand marketers, multiple plat- marketers big and small. forms and methods have emerged as fertile Kogi, a Korean BBQ truck in Los Angeles tips in-market testing grounds for creative leverage. off its 55,000 Twitter followers each day to Research/marketing hybrid Passenger has locations, menu changes and special events. effectively combined the consumer panels Taco Bell responded with a similar effort on constructed by online research firms with a larger scale. And Virgin America leverages product designers and account planners who a core group of influencers and media-like offer creativity support and projective techniques, partnerships to constantly create a story of which help respondents express their feelings category re-invention. about something in a more compelling way. The result is a panel made up of brand advocates

Summing it up Both agency partners and marketers agree that creativity still matters. But in order to keep up with the new demands of the marketplace, and therefore of the evolved marketing organization, it will need to evolve from an over-reliance on The Big Idea to a more agile definition of creativity that constantly adapts to the marketplace. At the same time, it must get rid of such hoary institutions as individual creative rock stars, and an over-reliance on annual planning and development cycles. Today, moving fast requires small thinking — cross-functional teams that use behavioral insights to quickly identify a brand truth, find the appropriate brand ambassadors and platforms, deploy and iterate new ideas and guide a brand narrative onward. photography PAUL KARLIK CHICAGO 73

photography RICARDO SANTOS BERLIN Becoming More Agile: Iterating for Innovation By Ray Velez, Chief Technology Officer & John Ewen, Program Director

Marketers and product managers That’s why Razorfish has been increasingly employing Agile practices to deliver digital exper- no longer need to swing for the iences, Anyone who cares about building an fences to create a great customer experience that resonates with consumers needs experience — gone is the era when to embrace the Agile way. every step in a campaign or product So, what is it? Unlike old-world “waterfall” design launch had one shot at success, approaches in which technologists and designers and when, once The Big Idea was work in isolation and hand off finished ideas to each other — an Agile approach allows technologists live, you had to wait, sometimes for and designers to work together in small teams to months, before you learned, if you develop digital experiences that are constantly learned at all, how effective it was revised based on continual customer feedback. going to be. Agile is a process of testing and testing again; where ideas are rolled out, tweaked and reintro- Not anymore. In the digital world, marketers don’t duced to the marketplace. Users benefit because have to wait, and shouldn’t — there’s just too much their input has been embedded into the design — pressure to develop innovative experiences quickly and of course the brand benefits by providing before a more nimble competitor (or consumer) an experience their customers really want. beats you to the punch. Using traditional approaches often means designing complex features that, by the time they reach the market, are either “If you’re not somewhat too late or ignored. As the Standish Group posits, if your customers only use 36 percent of what you embarrassed by your 1.0 build, the risk is too great to waste time building product launch, then you’ve the other 64 percent. released too late.” – Reid Hoffman, founder of LinkedIn BECOMING MORE AGILE 75

Changing the game plan Definitely a scary thought, but it’s not just about conceived of won’t be needed — and the ideas moving quickly, it’s about accepting the fact that for many new features that were never thought implementing a perfect, fully-formed strategy is not of will be discovered. more important than listening to your customers. How Web site X is designed is as important In fact, a strategy can’t be perfect until it contains as how it is built. Designing a complete solution customer input. and handing it over to a development team won’t The best way to hear about what customers want ensure that you can release it any sooner. It must is to give them something to use. Release the be designed in such a way that it can be built and re- smallest possible pieces of your strategy, and then leased in small pieces. This means designing many tap into the many forms of consumer feedback increasingly complex final states instead of just one. that are available. Web analytics data is obviously one, but you also need to use social feedback, Checking the box score: direct feedback from message boards, comments, The Razorfish Iterative Index™ emails and so forth. Think about successful digital We’ve seen the implementation of Agile method- properties — they are constantly evolving and ologies run the gamut from highly-effective ways that means setting up your strategy so that it can of enabling incremental product improvements evolve too. Ruthlessly cutting out anything but the to a mere set of tactics used to organize team highest priority features is the only way to learn activities. There is certainly value to be found and meet your customers’ needs. across the spectrum, but how do you know if Show me the sign your process is truly driving the kind of innovation we’re describing? There are some keys to look for To better explain the Agile process, let’s use an to help determine how your initiative scores. example. Web site X thinks it is going to change the game in its category. Its list of features clearly The Razorfish Iterative Index outlines the benefits differentiates it from everything else on the market. and characteristics of these various points within Or so its creators hope. But, how do they find out? that spectrum and puts them on a scale. It starts First, they get something in front of customers as with the product backlog and how it is used. A early as possible, so they can start playing with it. product backlog is simply a list of features, There are ramifications in such a customer-centric enhancements or improvements that are prioritized approach. First, it means that not all of the features based on what their perceived value is to the on the list can be completed for the first release; experience. As feedback from users is gathered, second, not everything envisioned for Web site X this prioritization will change rapidly, and often will make the cut; third, this means that it will be dramatically. The easier it is for your process to built in iterations instead of a single, drawn out address this scoping and de-scoping of functionality, phase. The benefit? Many of the features originally the faster you can respond to the feedback.

The second factor in determining how effectively you’re implementing Agile methodologies, is the availability and commitment of the individual The combination of these factors responsible for the overall project. His or her role on can help place an initiative on the an Agile project is to represent all the constituencies involved with it, and, on their behalf, make critically following scale: important adjustments to the priority of each item in the product backlog. Therefore, he or she needs Level 1 to be available to provide consistent direction and Scope Rigidly Defined at Onset. Agile tactics maybe be authorized to make key decisions. used for daily communication and continuous improvement, but not for managing change. Often, The final factor is how closely a team adheres to the design must precede all development to meet restrictive deliverable schedules. Agile methodology being used. Innovation within rapidly changing digital experiences requires the Level 2 input and commitment of the entire team. The Upfront, Yet Flexible, Product Parameters. Scope is team must be empowered to assign themselves committed to, but with the expectation it will change responsibilities they feel qualified to take on, to over time as high-priority items supplant lower ones. However, design may be too far removed from the estimate how long each task will take and, development process and not able to respond quickly ultimately, to determine how much can be enough to feedback for upcoming releases. accomplished within each iteration. see figure 11.01 Level 3 The intent of the Razorfish Iterative Index is to Backlog Defines Scope. Scope is strictly based on team help evaluate where teams are encouraging speed and time. Functionality that is not considered essential is excluded. Increasing priority of one backlog innovation with their process and where they can item is able to lower priority of another. Design may not improve. Moving up the index decreases time be modified for every iteration. to market and increases the likelihood that your customers’ needs will be met. Level 4 Backlog Defines Evolution of the Experience. Design If you’re a marketer used to implementing big completed incrementally from simplest functional form to more complex to ensure that only areas of high ideas, switching to an Agile process will mean value are included. Scope is defined by the product re-thinking long-held practices. However, today’s backlog and the methodology is broadly understood empowered consumers give feedback whether and adhered to. it’s been solicited or not. Using an Agile process assures them not only that you’re listening figure 11.01 to their concerns, but that you’re committed to taking action. BECOMING MORE AGILE 77

photography GREG CARLEY AUSTIN It’s Time for Everyday Innovation With Consumers Rapidly Adopting Emerging Platforms Marketers Need to Build Them Into the Planning Process. By Jeremy Lockhorn, VP Emerging Media & Paul Gelb, Manager, Emerging Media

Too often, marketers take a schizo- In our view, emerging channels are so important that CMOs must treat them as a strategic part of phrenic approach to emerging media their marketing mix — even possibly the core of like digital out-of-home or mobility: their marketing plan — on an everyday basis, On the one hand, dismissing the regardless of what metrics like reach or total line “emerging stuff” until they see it spend indicate. Industry leaders like Mercedes-Benz and Microsoft, discussed here, demonstrate three achieve a scale measured by reach principles of making emerging media rewarding. or aggregate ad spend and, on the In last year’s Digital Outlook Report, we discussed other hand, treating emerging media how digital media had outgrown the PC, amping like an experimental toy — fun to up the magnitude and pace of change in the media play with in one’s spare time but not ecosystem. A year later, the pace of change in taken seriously. the ecosystem refuses to slow. The global mobile phone subscriber base has reached 4.6 billion. By comparison, the worldwide market owns a mere 800 million cars, 1.1 billion PCs and 1.5 billion TV sets. Already, there are nearly 84 million American mobile Web users who spend, on average, 2.7 hours per day using the mobile Internet. IT’S TIME FOR EVERYDAY INNOVATION 79

Do small dollars equal Incorporating emerging missed opportunities? media into the plan As the usage of new platforms by consumers Whether leveraging mobile, digital out-of-home or explodes, it’s easy to see why old metrics to broadband video, some Razorfish clients are dem- evaluate them lead marketers astray. Tools such onstrating how strategically important andeffective as financial analysis underestimate their actual it can be to make emerging media a core part of importance. According to Kantar Media, U.S. ad the planning process, instead of merely being spending was more than $125 billion in 2009. an add-on. With only $3.8 billion spent on mobile ads, per JP Morgan, and a mere $1.6 billion spent on online video, per Piper Jaffray & Co., it’s not hard to ask: Brand: Mercedes-Benz And you’re saying these platforms should be central to the planning process? Program: Exclusive sponsorship of Motor Trend’s iPhone app But looking at those sorts of numbers misses the point. We’re not talking about a line item on a Mercedes-Benz was the only advertising presence budget here. We’re talking about dramatic shifts on the app for the first six months after its February in consumer media consumption, which requires launch, and included both a full welcome ad as it a significant shift in planning, strategies and loaded and a fixed homepage logo that allowed objectives. Obviously, even if the mobile Web users to find a dealer. The app gave the brand doesn’t command the money that the PC-bound 100 percent share-of-voice and a full interactive Web does, those 2.7 hours a day Americans are experience during key flight dates. spending with it should be significant to marketers. Assessment of program’s value: At one point, And that’s just one example. Consumers have the Motor Trend iPhone app surpassed The New leapt well past the tipping point in terms of adop- York Times as the #1 free news app. Because of tion of new platforms, but marketers have not. its popularity, Mercedes-Benz got access to a True, some marketers are already shifting huge large segment of its target audience. The sponsorship portions of their budgets (e.g., Pepsi bowing out also had two other major benefits: It allowed users of the Super Bowl in favor of its social program, to access content wherever they were in a device- “Refresh Everything”). However, that’s more the friendly format, and gave them the ability to exception than the rule. The point is this — whether juxtapose the brand against respected third-party or not large buckets of dollars are getting reallocated, content. Reviews and ratings have a significant new digital touchpoints demand to be an everyday impact on auto purchase decisions, and Motor consideration in the minds of CMOs. Trend news and reviews on the app were enhanced with a vast library of videos and photos that interactively demonstrated the value proposition of Mercedes-Benz cars.

Brand: Microsoft Windows Phone 7 Series Assessment of program’s value: Because of continued media fragmentation and the explosion Program: Digital out-of-home touch of online video consumption, it’s crucial for big screen experience TV spenders to understand the role broadband This large-format touch screen application emulated video can play in reaching target audiences. The the user interface of Microsoft’s new smartphone analysis showed that shifting roughly 10 percent OS during the 2010 Mobile World Congress. of budget from TV to an online-video-heavy plan (supplemented by broad reach non-video ad Assessment of program’s value: The touch units) for a single month could nearly double screen experience attracted enormous crowds combined reach at the desired frequency level. and became the focal point of Microsoft’s launch Though quarterly analysis showed a less dramatic event at the Mobile World Congress, allowing the shift, reallocating dollars still led to increased product to be demonstrated and tested in front aggregated reach. of a large, influential audience of bloggers, press and conference attendees. The experience also spread virally, as audience members not only lined up to play with the product simulation first-hand, Three Necessary Steps for Analyzing but also videotaped other users’ interactions with and Using Emerging Media it, posting those video clips to social networks. What has enabled these marketers to have the But the program’s value went beyond buzz; every confidence to capitalize on new platforms? There user interaction was measured and analyzed to are three common elements: improve the experience and the actual smartphone product. The touch screen application 1 Rethinking funding and staffing. Some also can be leveraged at future promotional clients have set aside a certain percentage of events and in retail stores. their budgets for experimentation or innovation. Others have made emerging media a part of agency retainer, tasking the agency with actively Brand: Undisclosed portfolio of CPG brands pushing these kinds of programs. Some clients are also looking at their internal structures, Program: Reach and frequency analysis appointing in-house specialists who are charged with collaborating with agencies and serving A detailed analysis (conducted in partnership with as the internal champions of innovative programs. an offline agency) of reach and frequency in TV These approaches are starting to remove the and online video was compared with the money fear of the new and are setting the expectation spent to achieve reach and frequency goals. The at both the marketer and the agency that analysis also included aggregated totals at various innovation is a not an option, but a requirement. budget levels. IT’S TIME FOR EVERYDAY INNOVATION 81

2 Never forgetting the consumer. It can be such as CES, SXSW Interactive, Digital Signage easy to lose sight of your consumer while Expo, Digital Hollywood, Web 2.0 and ad:tech. chasing new platforms and shiny objects. We While you can grok the trends by reading find the key to success is really understanding industry trades and blogs, you often need to consumer behavior within these new channels be there to witness key trends and meet those and identifying gaps in how to reach them. behind them face-to-face. We’re also heavily The question savvy clients are asking is: How involved in trade organizations like the American can my brand deliver value within the new Association of Advertising Agencies, media channels my consumer is using? the Digital Screen Media Association, the Mobile Marketing Association and the Digital Place- 3 Developing ways to uncover the right based Advertising Association. These organiza- opportunities. This may be the hardest part, tions help us build connections and separate but just like the other steps, it’s a place where the wheat from the chaff. Lastly, we’ve built strong agencies play a crucial role in guiding their bridges to the venture capital community, which clients. There is no shortage of shiny objects. help us not only identify useful opportunities but Finding the right ones for a brand’s objectives also help us gain connections and improve our can be a challenge, but there are systematic trendspotting abilities. ways to do it. We look to a group of partners, who we connect with at key conferences photography TIM PETHEL ATLANTA, RONALD NG HONG KONG, DAN COE PHILADELPHIA

It’s not about the money, but the power in emerging media Those examples of effective emerging Clients will need these tools before media are just the tip of the iceberg, they know it. If 2009 was the year but they clearly demonstrate the of experimentation, 2010 will be the strategic power and importance of year of strategic integration and incorporating emerging channels into effective execution. Since emerging the planning process and the market- media programs, however small ing mix. Marketers should re-examine their budgets, are continuing to how they go about planning by ensuring generate unmatched ROI, 2011 the correct amount of funding and will be the year clients who are staffing exists, that they continue to committed to staying a step ahead focus on consumer behavior and that will significantly reallocate budget. they have mechanisms in place to The marketers who succeed will discover and assess new opportunities. be those that make innovation an everyday consideration. 83

photography FRED WELTERLIN LOS ANGELES Retail Therapy A Guide for Building Shopping Experiences Around Today’s Consumer By Jory Edmunds, Associate Director, Account Planning 13

It’s Always a Shame to Start Out mall? When shoppers are more selective in their spending, why wouldn’t you want to capture the With Such a Negative Statement, spend that still exists? But Let’s Tell It Like It Is: We need to get consumers excited about shopping Retail Kinda Sucks again. They don’t just want places to buy products; Not just because of the anemic economy, but they want accessible ways to escape their standard because it hasn’t changed with the times. lives for a moment, tap into something emotional, Consumers are more empowered — they have feel like a better version of themselves or test more tools than ever before to build, create and out a new life entirely. This is a sharp contrast to share — and the toolbox grows by the day. Now the fact that some, if not many, stores haven’t anyone can have a voice, like Tavi Gevinson, the changed in years. Why is it OK to envelop the 13-year-old blogger who sits alongside Anna customer in an experience that’s 20 years old, Wintour at fashion shows. And yet, despite these when it would be unthinkable to sell leftover products great advancements in consumer empowerment from the 80s? If the product and experience (and therefore data about what consumers really — from the store, to the Web site and all the think), retail has been slow to respond. Sure, you other little bits in between — create the overall can mix-and-match your outfit online, send it to a impression, we should stop separating the pieces friend and declare your brand love on Facebook. so easily. We should make it possible for consumers But for all the talk about two-way conversations to experience the brand at every touchpoint. between brand and consumer, the retail experience is largely unchanged from the 90s, or 80s, or let’s be honest, the 70s. “If we went into stores only when we needed to buy something, and Oh, and when the not-so-insignificant recession reared its ugly head and made consumers retrench, if once there we bought only what 3 the malls and stores, rather than taking a step back we needed, the economy would and realizing how much the retailing experience sucked, stuck their heads in the sand. What collapse, boom.” better time to reinvent than a time when shoppers are feeling skittish and need a new call to the – Paco Underhill RETAIL THERAPY 85

In addition to getting stale, many old standby merchandise to local tastes. Initial results point to retailers have become boring and unfocused increased sales in Chicago, a city that held quite a (GAP: Your sales figures don’t lie). Malls and stores grudge after the conversion of Marshall Field’s to largely look the same, despite vast geographic the red-star empire. and demographic differences in tastes, local appeal and so forth. In the digital age, there are huge, and Retail needs to get back to its roots and consider largely untapped, ways for retailers to leverage a consumer-centric approach to why people buy. this diversity within vast amounts of customer It boils down to three key components: data; data that can take the guesswork out of 1 Inspiration: Feeling like you’re buying more who your customer is, what she’s interested in than just more “stuff” — you’re buying into a and what she likes and dislikes. If a restaurant cause, a mindset, a different way to live. sees consistently-negative feedback on Yelp. Every inch of the L.L. Bean flagship store in com, they’ll probably reconsider their menu. Freeport, Maine helps you discover gear you Retailers should be doing the same, because never realized you needed, live greener and these connected consumers aren’t exactly shy feel tapped into the L.L. Bean lifestyle. about voicing their opinions. Macy’s, a brand that nearly hit rock bottom in the recession, 2 Validation: Feeling confident in what you’re recognized this and smartly introduced the “My buying; this comes from both the store helping Macy’s” program, which allows regions to tailor you feel smart, and peers helping you make the right decision. LittleMissMatched lets tweens play with colorful combinations of socks, accessories, bedding and more. Social shopping is encouraged, and customers are actually invited to play both visual and product designer. The store empowers customers to create their own window displays, while “Project Sock” lets budding artists create new sock patterns for the 2010 collection.

photography MICHAEL MABALE SEATTLE & GABE JOYNT SAN FRANCISCO 3 Exhilaration: Feeling a sense of escape or transformation. On the affordable end, Hollister gives customers a live, three-story video view of the California surf in the New York City flagship store. On the high-end, Harvey Nichols department store in Jakarta reinterprets local elements, like a taxicab turned into a feature wall, to create a wildly artistic representation of escapist luxury. Of course, these are just starting points. But tackle even one, and way to go! You’re back on the road to recovery. In the era of wanting customers to Facebook, tweet and blog about brands, fresh- and-new trumps tired and hum-drum. So retail, listen up. Your days of hiding in that comfortable, well-worn box are numbered. You have to stop thinking, “We can’t,” and start thinking “Let’s try.” If you want your customer to invest in you, you have to invest in yourself first. As the wise diva RuPaul says on her TV show RuPaul’s Drag Race: “If you can’t love yourself, how the hell you gonna love someone else?” This is taking shape right now in a handful of key trends. Check out the Razorfish retail blog shoptalk.razorfish.com to check out more trends and see who’s helping to make retail a little bit more awesome — and not suck. 87

photography FRED WELTERLIN LOS ANGELES The Fragmented Consumer Creating Sustained Engagement Amidst the Chaos By Teresa Caro, Director CRM Solutions & John Zell, VP Technology CRM Solutions

Today’s consumers are elusive: They Start “defragging” your consumer are everywhere across the online and To obtain a defragmented, united view of your offline worlds — on blogs, in immer- consumers and to create a sustained engagement, sive games, on YouTube, in stores, use these three primary components: see figure 14.01 on mobile devices and on the Web. 1 Integration Platform: Ensure your consumer data is healthy. This fragmentation makes it more challenging Identifying new sources of data and mixes of than ever for marketers to get a solid view of the experiences is putting pressure on businesses consumers they care about and give them what to look deeper at all touchpoints. Without a they need. When marketers do not have data that solid platform for integrating data, it will be is fresh and complete enough to connect with impossible to accommodate new data sources consumers, the consumers simply disengage with — especially unstructured social data sources. the brand. Many customer databases today are Start by tracking down all the data points, as much as 50 percent inactive or dormant, which identifying all the flows (how data is driven just underlines the seriousness of the challenge to into and out of the system) and getting these integrate more sources, more meaningfully, and in to a state in which you can see a single real time. consumer view and complete and relevant The marketers who really understand consumer data through an integration platform. Maintain behavior have a clear advantage over those it with metrics and a dashboard to quickly operating with half-guesses. But, understanding the identify what data you can leverage. Include fragmented consumer will require a fundamental data points such as: shift in how marketers do business in 2010. The 2 Business Intelligence: good news is it presents a stellar opportunity to Create the ability to look forward. outwit competitors. We believe the answer lies in Unfortunately, reporting and analytics only using business intelligence, uniting data across allow you to look back — they do not give systems and using cross-channel campaign you the flexibility to react in real time, thus management (as defined by Forrester Research1) fragmenting the value exchange between you to track consumer behavior. and your consumer. Therefore, you need to work cross-department to build a clear view of the consumer, make a consumer experience 1 Suresh Vittal, Forrester, The Forrester Wave™: map and apply predictive business intelligence Cross-Channel Campaign Management, Q4 2009, December 14, 2009 to create sustained engagements with customers. THE FRAGMENTED CONSUMER 89

If you are prepared, have a solid data policy 3 Cross-Channel Campaign Management: (which defines how data is gathered, cleaned, Enable real-time communication. shared, and maintained), and have a progressive If the last decade was about ensuring consumers view of business intelligence, your programs not have a consistent experience in the online only will deliver on your promise, but will deliver and offline channels, then 2010 ushers in new what consumers expect as well. As Henry challenges due to the Splinternet. First defined Harteveldt said at Forrester’s Consumer Forum, by Forrester, the Splinternet reflects people’s “Consumers are focused on their needs, not on new media and shopping behavior — behavior your channels.2” that has shifted from the desktop and laptop to a transient world that is mobile and much • The number and sources of data assets more fluid. For marketers, the chaos of the used to unify customer data, month- Splinternet means you have less control over over-month the transactional experience, as your consumers • Data completeness, accuracy, validity have even higher expectations for consistency and relevance to marketing needs and real-time communication throughout every channel. That spreadsheet your team • Business value and the cost to replace has been using to keep track of campaigns existing systems and results is no longer going to work. When you assess the time and money it takes to get This may be even harder than it looks. With a single campaign out the door, and then look increased sources of data come the need to make at the opportunity cost of running fewer and sense of them. This is a huge issue, since as much less-targeted campaigns, it’s easy to make as 80 percent of enterprise data is unstructured, the case for an automation platform. Automation and customer data found externally on the Web — can reduce the burn of resources while increasing in blogs and elsewhere — is virtually 100 percent the number of campaigns and delivering unstructured. Somehow, you need to make sense more relevant messaging. Your team will be of this deluge and figure out how to align it with more agile in an ever-changing environment CRM data. 2010 will force you to be smarter about and deliver the real-time communication and how you leverage and react to new social behav- relevancy your consumers want. iors, how you listen to your consumers, and how you build these brand engagement expectations. 2 Henry Harteveldt, Forrester Research’s Annual Consumer Forum – Chicago, October 27, 2009

The Fragmented Consumer Points of Entry 1 Defragged 2 Segmented 3 Sustained Consumer Consumer Engagement Points Cross-Channel Campaign Management Financial Data Email/ Direct Mail Business Intelligence Warranty Cards Integration Platform Customer Care Web site Loyalty Digital Media Marketing Research Sales Support Contact Center Scripts Behavorial Data UGC figure 14.01 Organize for the future The marketing organization of the long-term value. Take a progressive future will certainly feature cross- view of business intelligence today, channel campaign management to and you can leverage what’s coming include media, search, Web, affiliates, tomorrow, such as text analytics partners, email, customer service applications now in development and social. Yet marketing automation to model, structure and enable the tools are simply enablers. Without a analysis of unstructured data. Take solid data supply chain and action the necessary steps to create building framework to defragment your view of blocks today for sustained engagement the consumer, your business will fail to with your consumers tomorrow, when maximize consumer experiences and the chaos will only deepen. THE FRAGMENTED CONSUMER 91

photography GABE JOYNT SAN FRANCISCO Search Everywhere: The Outlook for Search By Joshua Palau, VP, Search Engine Marketing 15

5 Four years ago, Razorfish introduced a rallying cry of sorts. We talked to marketers about the concept that “search is search.” Since the majority of the population does not distinguish between paid and organic search listings, marketers should not manage them separately and instead should develop integrated search strategies. When we first brought this concept to clients, it was a different world. Universal search and social media did not have the same groundswell they Though things were gloomy, a silver lining emerged that made us look forward to search marketing in 2010 with hope. We believe that 2010 is the currently do. So, nailing down a uniform strategy year where “search is search” evolves into should have been easy! “search everywhere.” Successful marketers will stop managing search tactics and, instead, adopt The theory seemed so logical that it did not sound the mindset that search impacts every marketing at all revolutionary. What we found out, however, tactic. Search isn’t a standalone tactic. Search is was that very few marketers thought about (much a verb that touches everything. It is part of the less executed) their search engine marketing strat- balanced ecosystem that is the marketing mix. egy in a unified manner. Search was viewed as very tactical and pushed further away from C-level With major game-changers such as widespread conversations. Still, search made tremendous smartphone adoption and real-time search results strides despite this, performing with incredible occurring last year, search has stepped out of the efficiency and success. engines and into our phones, social media and the world at large. Search is no longer just a service; As we predicted, 2009 was a challenging year for it’s a user behavior. 2009 showed us that users will search marketing. Several industries historically dictate where they want to search and what they linked to search marketing spend were scram- expect to receive. Isolated marketing efforts will no bling just to stay afloat. Marketers scaled back longer cut it. their spending but still needed results. And, search was asked to do more with less. SEARCH EVERYWHERE 93

We can’t talk about 2010 without looking back at the Consumers interested in a movie such as “Avatar” major story of 2009, the economic downturn. Initially, do not want to be confined to information on the marketers reacted by focusing on high performing branded Web site. They want to read reviews on tactics and scaling back the “waste.” This increased Twitter. They want to find the closest 3D IMAX on the focus on search and, as always, provided flexibil- their mobile devices. They want to watch multiple ity and performance. Search was required to do more trailers, and they want to connect with other fans. with less — and not just less budget. Even though we text the person sitting right next But search budgets were cut, which required to us, it shouldn’t be mistaken that we don’t want more scrutiny on every keyword. Even with this to talk to one another. It’s that we want to connect focus, many search campaigns did not maintain and communicate in a different way. And search is a their previous performance. Marketers learned the gateway to that. Consumers search for everything — painful lesson that search cannot succeed on an and not just on search engines. They expect to find island. Search needs digital and offline in order to you whenever they search, wherever they are on the drive demand. Once these tactics were pulled out Web on whatever device they are using. of the market, search performance suffered. The There are few better examples of meeting consumer economy served as search’s tipping point. demand than the world of online shoe sales. Meeting digital Since the dawn of the Internet, buying shoes online consumer expectations has always been possible. Every major brand, off- Consumer demand for information was unaffected line retailer — and aggregate reseller, has provided by the economy, as was their adoption of digital consumers with ways to buy shoes online. However, experiences. Consumers are no longer satisfied Zappos — a brand born online — has beaten them with a 30-second spot and a tagline with a Web all. With Amazon’s purchase of Zappos, one can address. They want customized, immersive experi- argue that while neither paid nor organic search will ences that can be found in multiple places and make or break this business, a holistically search- formats, and this will take greater shape in 2010. friendly operation can dominate a market. “Search is search” started as managing paid and When Amazon, the Gap and others all essentially organic search together. It morphed into search fail to sell shoes online, something’s up. Searchers infiltrating all of your digital channels. It now de- expect sites will be useful, innovative, easy to use mands that everything has a search component and relevant — even more so with mobile search. because it’s what consumers expect. Zappos not only gets this but also finds additional ways to reach people when they may not think they’re searching.

Consumers expect that when they search, regard- strategy gaps. And search can serve as a wide- less of where they are, they will find you. And if they reaching, cost-efficient, responsive medium for don’t, it doesn’t matter who you are; they won’t research in several ways. buy from you. You cannot have a mobile, social, Zappos demonstrates the benefits of making the local or video strategy without including search. entire customer experience as quick and intuitive Driving marketing as search. It created this experience by making strategy with search search the locomotive and their inventory, site content and shipping strategies the train. In the With consumers pushing the demand of “search retail space, we may see more retailers attempt to everywhere,” it will be critical for marketers to work with demand as it exists in real-time. develop search-focused strategies that go beyond the Web site. Marketing is usually understood as This doesn’t affect retail alone; real-time demand capturing demand through media — which is a has ramifications in all industries. In healthcare, we’ll targeting challenge. continue to see experiences that fuel Americans’ sense that better access to information improves In search, the perfect target is at least 85 percent our ability to take care of ourselves. Travel and of relevant clicks. There is also less ambiguity hospitality companies will build experiences that around properties with which to work. For market- cater to the desire to find the cheapest alternative ers, meeting this demand is difficult because it’s to stoke our appetites for adventure and discovery. not demand as you shape it but demand as it really In banking, we’ll see more money management is. You can’t force people to search for services in tools such as Bundle that combine search and which they have no interest. Beyond conversions, social to provide guidance from trusted sources. marketers must learn from customers and serve them what they really want, where they actually are. Successful marketers will understand that in a world of “search everywhere,” they need to use We discussed creating search-focused content in search for more than just demand collection. our 2009 Digital Outlook Report but did not observe Instead, they must integrate search data into all enough marketers take proper advantage of it. channels. This will create the kinds of improvements and experiences that, in turn, build brands. Orga- For years, we operated under the belief that it’s nizationally, CMOs will push their marketing leads fully within the domain of marketers to make strat- to align all channels, ensuring planning is not done egy recommendations rooted in search data. By in a vacuum. Consumers won’t care about your in- combining search behavior with on-site behavioral ternal structure or who reports to whom. But they data, one can discover Web site problems and will care when your competitor provides a video that you do not, costing you a visit. SEARCH EVERYWHERE 95

1 Creative testing 3 Audience targeting Use search to identify top performing messaging Providing detailed surveys of brand searchers concepts through ad copy testing and determine will help to define (or redefine) your user target, what can then be carried into other tactics. In seasonality, campaign parameters and op- the travel space, testing will help identify user portunities for local testing. This learning can motivations. Search can handle this in a swift be used to inform site changes, including where timeframe. From a media perspective, you can your assets live. Several clients in the health segment the sites within your media plans and space discovered that while they focused on creative to a specific target. From an email per- patient education, caregivers were frequent spective, you can re-engage with your database visitors. Content, or even new site development, around new experiences. may be needed to fully serve this audience. Surveys can also illustrate how people would 2 Social monitoring like to interact with your brand. If your audience and content development desires video and social content, it indicates Search query reports can be used for more that your video and social strategies need to than just identifying content gaps. They can have a search focus as well. also be used to see how people are consuming their information and what social sites they 4 Data focus frequent. Marketers have the opportunity Marketers must learn to measure the value to create tools around these findings. CPG of non-converting search traffic. Most traffic companies will invest in quality content on the doesn’t convert, and a series of quantitative scale of the Golden Age of television, only this and qualitative metrics are necessary to show time, it will be interactive experiences they’ll value. Healthcare companies do a great job sponsor. In 2010, knowing your customers with site-side surveys since most don’t sell means knowing what they do and how they products online. A concerned friend who do it, and that’s where search becomes vital. searches for “Alzheimer’s symptoms” may All of this will inform the development of more not convert, but can be the link to getting their social tools and content. Better content and friend to talk to a doctor. In the magazine world, social usage will allow your brand to dominate we talk about pass-along rate even though we the search listings for your brand, giving you don’t have the same metrics to follow up on control over your brand experience. what that pass-along yielded. Marketers need to value this audience and find ways to track and message them appropriately.

Talking search with your CEO Microsoft introduced Bing, a “decision engine” based on the premise that a high percentage of The challenge for the CMO will not only be to create people that searched on Google were not satisfied an integrated marketing organization but also present with its answers. Bing rolled out an interface orga- this information in a compelling fashion to their C-level nized around taking a broad search and narrowing team. This requires you to work with your partners it down. Additionally, it integrated non-text based on developing metrics and scorecards that tie to assets (such as video and images) and was one of revenue generation and/or customer acquisition. the first to integrate tweets. This is a story that is simply not told as well as it Even with its flaws, Bing still represents the first should be. Search data can be employed to inform real challenge to Google. And it forced a response. site decisions that help increase conversion rate, traf- Over the past several months, Google has introduced fic and visibility. However, those are simple stories. its Caffeine update, real-time search and a deeper We expect that good marketers will go further, integration of universal assets. It’s also started as- finding ways to tie in projected revenue in order to signing more link value to Twitter and Facebook links. speak the language of their CEO. Instead of high- The partnership between Yahoo! and Bing will also lighting how we will increase traffic for “cashmere force more innovation as the search landscape sweater,” we must show demand, current traffic settles. The wave of acquisition and partnership ac- and current rank. This is data that can be less tivity is the final validation that the “search is search” than exciting, so more enticing metrics (such as mentality must now utilize all parts. Search is, well, projected rank, additional traffic, conversion rate, everywhere. monthly sales, transaction price and lifetime value) should be included. This now motivates the CEO In 2010, we will see more partnerships similar to to push his organization toward taking an inte- Google’s acquisition of AdMob and Teracent and grated approach and spending appropriately. the Bing agreement with Wolfram Alpha. Both engines have made improvements in the areas of The engines will continue to innovate mobile and maps that will meet and reframe the expectations of the consumer search experience. Roughly three years ago, Google launched universal We also believe there will be more targeting search to expand users’ choices beyond 10 blue opportunities available through search, as ad links. Despite its intentions, adoption within the results exchanges and cookie targeting further evolve. was low, and rarely were more than one or two non-text based results displayed. All of that changed, however, over the course of the last six months. SEARCH EVERYWHERE 97

User targeting and Both Google and the Bing/Yahoo! pairings see cross-service data integration tremendous opportunity in developing more programs that integrate search with their tremendous We believe very strongly in the principle of “search display volume. Our industry will be left to speculate everywhere,” which dictates that marketers include on how they will execute against this while keeping search in every aspect of their marketing strategies. the privacy police at bay. The engines have made As marketers embrace and execute against this, a living out of figuring out how to tie the keyword the next evolution will be to not only find these data they have to target user intent. The question consumers, but more efficiently target them. for now will be how they draw in other forms of media. Ad exchanges, search retargeting and user intent Based on their recent acquisitions, we can guess targeting will take a greater hold in 2010. These that mobile advertising you receive in the future tactics will be influenced by marketers’ needs to through AdMob will be influenced by the search capture the instant gratification mindset of consumers data Google already has. This is also an area where with an integrated approach. Bing has a shot to succeed thanks to its vast display network. Both Microsoft and Yahoo!, however, Marketers want to be more efficient and reach need to break out of their past track records of the right audience, even if it’s somewhat smaller failed execution. since the economic downturn. As we combine paid search principles with cookie data, we will be able When search is everywhere, to create much more complex programs. search is everywhere A hotel chain looking to segment business travelers In 2010, search will become more than just a service; from vacation seekers can employ search-focused it will be viewed as a necessity. We are past the strategies to cut down on waste. It will also be able point where users think about searching. It is now a to provide tailored messaging and tie together their reflex, and it is an expected part of the user experi- display and offline strategies with what it’s learned ence — no matter where that experience may be. in the search world. If more vacationers search for Social, video, mobile, local and shopping are all “pet-friendly hotels,” that data can influence many tied to search. components including the content sites to target, the pages to create, the tone of offline materials, the The budget cuts of 2009 showed us that search Twitter conversations to initiate, the questions to ask cannot succeed without other services, and the on registration forms, etc. All of this data can now reverse has proven true as well. be used to re-market and make your consumers brand loyalists.

Search data can fuel and streamline other marketing efforts. Search innovation can and will bleed into new, unexpected channels. And the search experience will grow and alter user expectations. We must now view and address search everywhere. “Search everywhere” illustrates our belief that you can’t simply think that you have a search problem. You have a marketing problem that search can help solve. It shows search for what it is: a vibrant, vital component of, not just marketing, but our daily lives. photography CARSTEN LINDSTEDT FRANKFURT 99

Razorfish Locations United States Europe Asia/Pacific @razorfish neue-digitale.com razorfish.com.cn Atlanta +1 678.538.6000 @neuedigitale Beijing +86 10 5869 2065 Austin +1 512.532.2000 Hong Kong +852 3102 4512 Berlin +49 (0) 30 2936388 0 Chicago +1 312.696.5000 Shanghai +86 21 5237 8811 Frankfurt +49 (0) 69 704030 Los Angeles +1 310.846.5400 London +44 020 7907 4545 New York +1 212.798.6600 Singapore +65 8323 1958 @razorfishlondon Philadelphia +1 267.295.7100 amnesia.com.au Portland +1 503.423.2900 wysiwyg.net @amnesiafish San Francisco +1 415.369.6300 Madrid +34 91 308 11 30 Sydney +61 2 9380 9317 Seattle +1 206.816.8800 duke-interactive.com dentsu-razorfish.com @dukerazorfish Osaka +81 6 6360 1461 London +44 (0) 20 7851 4141 Tokyo +81 3 5551 9885 Paris +33 (0) 1 53 44 19 00

For Additional Information: Media Inquiries: Jeremy Lockhorn Katie Lamkin VP, Emerging Media Public Relations +1 206.816.8670 +1 312.696.5241 jeremy.lockhorn@razorfish.com katie.lamkin@razorfish.com @newmediageek @ktlamkin About Razorfish Razorfish creates experiences that build businesses. As one of the largest interactive marketing and technology companies in the world, Razorfish helps its clients build better brands by delivering business results through customer experiences. Razorfish combines the best thought leadership of the consulting world with the leading capabilities of the marketing services industry to support our clients’ business needs, such as launching new products, repositioning a brand or participating in the social world. With a demonstrated commitment to innovation, Razorfish continues to cultivate our expertise in Social Influence Marketing, emerging media, creative design, analytics, technology and user experience. Razorfish has offices in markets across the United States, and in Australia, China, France, Germany, Japan, Spain and the United Kingdom. Clients include Carnival Cruise Lines, MillerCoors, Levi Strauss & Co., McDonald’s and Starwood Hotels. With sister agencies Starcom MediaVest, ZenithOptimedia, Denuo and Digitas, Razorfish is part of Publicis Groupe’s (Euronext Paris: FR0000130577) VivaKi, a global digital knowledge and resource center. Visit www.razorfish.com for more information. Follow Razorfish on Twitter at @razorfish.

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2010 Razorfish Outlook Report

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2010 Razorfish Outlook Report — Document Transcript