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Media Economy Report 4

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We are in the midst of the next great transformative era in the media business. The digital age, supported by data, technology, and predictive analytics has created a new opportunity to be more …

We are in the midst of the next great transformative era in the media business. The digital age, supported by data, technology, and predictive analytics has created a new opportunity to be more precise, more efficient, and more effective with our clients’ media investments:

- New ways of identifying who your customers are.
- New ways of reaching and influencing them at critical moments.
New ways of discovering the 50% of advertising that works, and avo- iding the 50% that doesn’t.

This reports analyses the state to digital media and its impact on the future.

For further information please look up your regional contact here: http://news.ipgmediabrands.com/magna-global/press-releases/

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  • 1. Media Economy Report Vol. 04 Media Economy Report Better, Smarter, Faster: How Data is Changing our Business. Vol. 04 New Value Drivers Demand Magna Global © 2014 MAGNA GLOBAL USA, Inc. All Rights Reserved All property, including trademarks, are the property of their respective owners and have, as applicable, been licensed for use. Supply January 2014
  • 2. Page 3 Table Of Contents Supply Pervasive consumer connectivity generates tons of new data for targeting We are in the midst of the next great transformative era in the media business. The digital age, supported by drive client business results, and less time on chasing new opportunity to be more precise, more efficient, and proposals, units, and invoices. Demand more effective with our clients’ media investments. And, as we move toward automation, toward better use Programmatic trading, born out of necessity to harness of our people’s time, and toward better use of data and Programmatic activity of all types now permeates digital media the explosion in display inventory along the digital long technology, we create an opportunity where EVERYONE tail, has blasted open the door to new ways of thinking can win. Let’s break out of the zero sum game between about media... agencies, clients, and media owners and seize this 06 to spend more time on high level custom solutions that data, technology, and predictive analytics has created a Page We want agencies staffers, clients, and media owners Media Economy Report Vol. 04 Building the Future New ways of reaching and influencing them at critical moments. New ways of discovering the 50% of advertising that works, and avoiding the 50% that doesn’t. opportunity to all grow together. Marketers: Better understanding of customer behavior and improved ROI with less waste. New Value Drivers Timing is becoming and increasingly important aspect of reaching receptive consumers Page Media Owners: Better understanding of their viewers 16 24 with improved yield through audience optimization. Agencies: Time freed up for higher-value activity and increased opportunity to be compensated based on CONCLUSION results instead of FTE hours. Insights for a competitive advantage Thank you to the dozens of real live humans that contributed to this report on data and the improved past two years in digital are now available to improve and processes it creates. I hope that all of us, human and to transform ALL transactions across the traditional and machine, can work together this year to drive the the digital landscape. Not only to make our media work media business forward. harder, but also to eliminate the low value, manual pro- Best, cesses that still dominate the current media work flow. Todd Gordon 34 EVP, US Director Demand Strategies and technologies that have come of age in the Page New Value Drivers New ways of identifying who your customers are. Page Supply MAGNA GLOBAL
  • 3. Media Economy Report Vol. 04 Page 5 Big Data Does Not Mean Smart Data Past behavior is a better predictor of future behavior than age or sex. Traditional Approach Nuanced Approach Beginning with Demographic Begin with Objective, e.g. sell more units 01 age First Layer – begin with clear behaviors of likely buyers, e.g. visited website, searched for product, etc. sex 02 Algorithms and machine-based learning uncover previously unrecognizable patterns New Value Drivers income Pitfalls Assumes all women with these characteristics behave Disregards males that may be in market for your product or service Decision based on opinions about what will drive business rather than demonstrable indicators Smaller, more targeted audience most likely to buy Supply Demand the same
  • 4. Page 7 Media Economy Report Vol. 04 Supply Traditionally, “supply” has simply referred to the potential audience available to see an ad message. However, constant connectivity has created a doubleedged sword that both challenges our ability to capture consumer attention and generates a host of new data points with which to identify receptive audiences. “Opportunity to see” is no longer enough—“likelihood to notice,” and ultimately, “likelihood to purchase” are the characteristics we are striving for. 1. Aligning data from across the behavioral spectrum—from media exposure to sales results—creates a robust targeting methodology that drives better decision making in national TV trading. 2. Moving from ratings to impressions in local TV trading will not only create additional supply, but enable more automated transaction processes. 5. For some categories, contextual targeting may actually be better at driving online conversions than behavioral targeting. New Value Drivers to combine detailed behavioral data with contextual targeting. Demand 4. In online media, the vast number of audience interactions allow marketers Supply precise targeting locally. Key Takeaway 3. Impressions-based transactions will also create the opportunity for more
  • 5. Page 9 Media Economy Report Vol. 04 Audience Measurement Platform (AMP) AMP pinpoints the relationship between TV and digital ads by media type and the resulting business outcomes. MAGNA GLOBAL's Custom Data Stack Search Identifies audiences and media strategies that deliver results Sales TV Ads for our clients. Digital leads 01 Brand Perception Change Digital Ads Effectiveness Planning & Buying Tools Case Study IPG Mediabrands Client Measurement & Optimization And in addition to measuring more traditional TV ad campaigns, AMP is able to track custom integrations and 04 sponsorships. 02 In Show Integration 107 149 477 20 143 142 294 46 123 147 187 51 Sponsorship 169 145 997 12 Stunted Programming Block with Sneak Peek 163 159 281 31 Total 138 148 333 160 Buying 03 Going beyond traditional age and sex demography to measures resulting brand outcomes. MAGNA GLOBAL’s identify receptive consumers is the first step in an Audience Measurement Platform accomplishes this enhanced national TV planning and investment process; by incorporating cost, observed media behavior, brand one that follows the same targets through exposure and health metrics, verified ad exposures, and sales data. In Percent – Q3 2012 thru Q1 2013 indices New Value Drivers Number of Integrations Demand Purchase Intent Sneak Peek Programmatic Lift in Video Views ROS Vignette Cross-platform reach and affinity Lift in Awareness Supply Promotion type
  • 6. Page 11 Local TV trading Media Economy Report Vol. 04 Local television inventory has long been traded on ratings, but fragmentation has reduced the average rating size, rendering them unstable and unpredictable. Moving to impressions-based trading would accomplish the following: 3. Enable more precise tar- 1. Create additional supply by turning tiny, fickle percentages geting when combined with into hard numbers that can be additional qualitative data. aggregated. 1 Target Consumer Forecast and Plan Optimization Automated Execution and Management 3 Campaign Optimization 4. Feed into new, more efficient 2. Make local TV more comparab- buying processes for both le to other media. Ingest target data Impressions reporting Insertion, verification, and invoicing Adjustment of creative 37.1 Forecast 34.8 29.6 29.5 35.3 34.7 38.2 Segment creative and goals 48.9 37.7 Place one multi-market execution Confirm schedule and impressions broadcast and cable inventory. 49.5 2 Generate schedule and schedule Export data Ingest CPMs and adjust DF Low Rated Half Hours vs. Total Half Hours CHI Provide recommendation BO S NY Increase in Available Inventory Using Impressions WideOrbit for Local Broadcast Programmatic Buying Platform Reach DF CHI NY BO S US Buy Directly connects agencies agencies Efficiency up to with 75% of US TV stations Enables data-driven targeting to optimize buying Provides a CPM-based model efficiency and consumer reach that allows agencies to buy Delivers real-time analytics that provides audience insight and enables on-the-fly buying optimization DMA s in % across markets 62 % Buying process reduction Demand LA New Value Drivers 97 Supply LA
  • 7. 11 My media buyer agency recommended it 0 35 25 using one type alone Another partner (such as 21 In Percent a search agency, portal or 50 35% of advertisers are using 4. Increased focus on private marketplaces to augment open auction 59 recommended it 23% 2. Use both display and video formats 3. Exclude below-the-fold impressions My DSP or trading desk their programmatic buys on 1. Maximize share-of-voice using contextual targeting in addition to audience targeting, 2. Prove value of display ads in driving results Investment Mix 23% 20% 34% Predictive Targeting 1 Contextual Targeting Behavioral Targeting Re-Targeting 2 1 Anticipating actions based on previous behavior 2 Leveraging cookie pools built from company website network) contextual targeting in Tactics 1. Drive lowest possible cost per action Leading Reasons for Buying Greater accuracy than % Goals 17 Higher performance than using one type alone 75 Page 13 Case Study: Major Real Estate Company Using DoubleClick Bid Manager Media Economy Report Vol. 03 Online Programmatic Goes Beyond Audience Data with Contextual Targeting Google’s DoubleClick Bid Manager platform. % Result 0,12 Contextual drove the highest Note: n=141 interactive marketers who combine contextual and audience targeting; numbers may not add up to 100% due to rounding. Source: Forrester Consulting, "Display Media Buyers Value click-through rate – at a cost- 0,10 0,08 0,06 0,04 havioral or predictive targeting. Audience in Context"commissioned by Google, Sept. 18, 2012 per-action 50% lower than be- 0,00 0,02 Contextual Re-Targeting Predictive Behavioral Combining tactics (audience + contextual) can drive better results across the marketing funnel, and can be utilized across formats (display, video), Interest Intent Remarketing Keyword-contextual Based on the specific topic a user is reading on a web page Interests Based on online browsing activity Category-contextual Based on the content category of the web page Remarketing Re-engage based on previous engagements Language settings Of the browser Female 18-24 Female 18-24 Female 18-24 Tennis enthusiast Awareness Female 18-24 Read tennis racket reviews Added tennis rackets to cart Purchase & Loyalty Environment How the ad renders based on user’s device Demand Demographic Age, gender, income level, geography Other Lookalike modeling, onlineto-offline, time of day Location Increased precision Supply Demographic Intent In-market for products or services CONTEXTUAL New Value Drivers BEHAVIORAL screens, and inventory types (open auction or private marketplaces).
  • 8. approach, one in which customer behavior and preference data determine the content and timing—and action. This is why you see most executives looking delivery channel—of marketing messages. Marke- for use cases to help them to identify the low hanging ting campaigns should be cohesive: content should fruit. Once companies see results, it helps create a be versioned and distributable across multiple data-driven culture. channels. Marketers should collect holistic data profiles on consumers, including channel response and It wasn’t too long ago when marketers thought the Holy Grail would be a corporate data warehouse. Back then data systems were fairly new and users didn’t know quite know what they wanted. IT was How should marketers think about approaching big Head of Business Development operating under the adage “build it and they will data and integrating it into their operations? come.” Eventually users understood what an ana- 1. Start small. Identify the top three areas of high MAGNA GLOBAL MasterCard Advisors Author of Partnering with the CIO (Wiley, 2007) and Big Data Big Analytics (Wiley, 2013) lytical platform was and worked together with IT to define the business needs and approach for deriving insights for their firm. cheaper), mobile computing (that smart phone or mo- In today’s Big Data Age there is an interactional Big data is the next generation of data warehousing bile tablet in your hand), social networking (Facebook, model between various companies, creating more and business analytics and is poised to deliver top line Foursquare, Pinterest, etc.), and cloud computing social collaboration beyond your firm’s walls. This is revenues cost-efficiently for enterprises. The grea- (you don ’t even have to own hardware or software the only way marketers can cope with the major shift test part about this phenomenon is the rapid pace of anymore; you can rent or lease someone else ’s). in today’s consumer. 2. A perfect data storm. Volumes of transactional data Today’s consumer has new options that better fit we’ll be in just two years and definitely not where we’ll have been around for decades for most big firms, but their digital lifestyle. They can choose which marke- be in a decade. This new age didn’t suddenly emerge. the flood gates have now opened with more volume , ting messages they receive, when, where, and from It’s not an overnight phenomenon. It’s been coming for velocity, and variety— the three Vs. This makes it ext- whom. They prefer marketers who talk with them, not a while. It has many deep roots and many branches. In remely complex and cumbersome with current data at them. fact, database marketers were pioneers of big data back management and analytics technology and practices. The linear concept of a traditional funnel, or even a in the 1960s! 3. A perfect convergence storm. Traditional data succession of lifecycle “stages,” is no longer a useful So why does it seem to be a hot topic now? management and analytics software and hardware framework for planning marketing campaigns and There are three main reasons: technologies, open-source technology, and commo- programs. Today’s cross-channel consumer is more dity hardware are merging to create new alternatives dynamic, informed, and unpredictable. While using for IT and business executives to address big data a lifecycle model is still the best way to approach analytics. marketing, today’s new cross-channel customer 1. A perfect computing storm. Big data analytics are the natural result of four major global trends: Moore ’s Law (which basically says that technology always gets potential impact. 2. Make sure your advertising team is fully leveraging your direct/database marketing analytics talent. 3. Seek big data use cases from your peers—even if they are in different industries. 4. Hire or consult some data scientists and engineers that understand the “open source” technology world. It’s amazing how much analytics innovation is happening on a daily basis- and it’s free! 5. Create an R&D or lab function where people are 100% focused on testing new big data approaches that can be implemented. It’s too hard to do it with 10% of someone’s time. New Value Drivers Information Services innovation and change; where we are today is not where into account channel preferences. Michael Minelli Research & Analytics What’s your definition of big data? and more. Segmentation strategies should now take 6. Leverage the big data vendor community. They often will put some skin in the game if you treat them like a partner! 7. Make sure you have a good working relationship Demand EVP preference data, social footprint/area of influence, with your technology colleagues—they need to be an integral part of the team. Photo: David Sundberg/ESTO Supply Keith Camoosa Page 15 channel consumer demands a more nimble, holistic How has big data & analytics changed marketing? A at a moment’s notice. Marketing to today’s cross- people, technology tools, and most importantly pro- and providing the ability for turning the insights into & Marketers must be ready with relevant marketing value from “big data”. This “lens” is a mix of smart per direction from management on where the focus Q annoyed, vocal, or quiet at any given moment. In general, I see “smart data” as the lens to deriving Partner Perspective is online, offline, captivated, distracted, satisfied, data? Media Economy Report Vol. 04 Do you make a distinction between smart data & big
  • 9. Demand Advertisers are no longer approaching programmatic as a segment of their Page 17 Inventory that is easily standardized is quickly auto- by machines. This integration pyramid will be mirrored anything in a commoditized size will be bought and sold in other media as programmatic methods encroach on primarily by machines in the not-too-distant future. for programmatic dollars, both real time and automated. ted, other aspects of the transaction will be managed campaigns will always require human stewardship, and brands are demanding that media owners make their inventory available Even at the high end where creative can’t be automa- mated. While high-touch sponsorships and customized overall strategy; data and targeting permeates all aspects of digital planning, Media Economy Report Vol. 04 Digital formats Migrating to programmatic traditional ecosystems. 1. Programmatic spend no longer refers only to real-time bidding (RTB); audience targeting now occurs via both real-time and non-real-time methods, and as a result advertisers are accessing more and more premium data-enhanced inventory. 2. Global growth in digital programmatic trading was nearly 60% in 2013, and will continue at nearly 40% this year. Customized & ‘native’ campaigns targeting tool; programmatic brand advertising is becoming more popular, and is measurable with today’s suite of campaign tools. 5. Long term growth of advertiser spend will depend on the availability of data in emerging markets. Premium formats are starting to be Premium formats display advertising that will remain largely untouched by automated buying mechanisms. transacted programmatically. Little of 03 it will be fully RTB, at least at first. Within 5 years in the US (a bit longer elsewhere) the Mid-tier inventory 02 overwhelming majority of non-premium inventory will be transacted through programmatic, primarily Remnant New Value Drivers 4. Advertisers aren’t only thinking about programmatic spend as a direct Key Takeaway rapidly increase as the ecosystem expands globally. 04 through RTB. inventory 01 Demand programmatic fashion, the number of advertisers trading in this way will Non-standard campaigns are the only form of Supply 3. While only the largest digital markets are already spending in a
  • 10. Page 19 Global Programmatic spend While ‘programmatic’ was 2013’s marketing buzzword of the year, Media Economy Report Vol. 04 Definition/Scope Global Programmatic Spend ($bn) the term itself has been used in various ways since its inception and continues to evolve. To us, the difference between RTB and non-RTB 30 (automated) transactions within programmatic can be recognized by 30 whether the transaction is … 30 01 RTB NRTB 20 03 Dollar 2.8 $ 0 2012 China 17.6 $ 15.2 $ 12.6 $ 9.9 $ 7.5 $ 4.8 $ Japan United States 2013 2014 2015 2016 2017 Global Programmatic Market Share 2011 80% 80 Targeting specific demographic groups or behavioral groups while being vendor-agnostic and content-agnostic... 70 60% 60 05 United Kingdom 7.6 $ 4.5 $ 90 04 Germany 12.1 $ 2011 Capable of adressing discrete impressions as opposed to packages of impressions, in a cost efficient way... Australia 16.7 $ 15 Integrated with, and empowered by, media usage and consumer data... France 22.1 $ 10 02 Netherlands 27.7 $ 25 Driven by advanced technology and streamlining the traditional mediabuying workflow... Spain 33.3 $ 59% 2012 2014 2015 2016 2017 56% 52% 50 Can be bought in "real-time", allowing feed-back loop and continued adjustment in campaign settings... 2013 40% 40 33% 3o 31% 23% 20 Matches demand and supply from multiple vendors and multiple buyers through bidding mechanisms... 10 % 06 0 United States Netherlands United Kingdom France Australia Japan Germany Spain China Ecosystem 1 1 0 0 1 1 Agency Desks 0 1 0 1 1 0 1 1 1 0 1 1 0 1 0 0 0 0 DSP's 0 0 1 1 0 1 0 1 0 0 0 1 0 1 0 0 0 1 1 1 0 1 1 Advertisers 0 0 1 1 1 0 1 1 0 0 Demand 0 0 0 1 1 1 Supply 0 0 1 1 0 1 0 1 0 0 0 1 New Value Drivers Data Providers Exchanges Publishers
  • 11. Page 21 Many networks and cable operators are hesitant to make their inventory available on automated platforms. Radio The ecosystem to implement non-real time programmatic processes is already far along in its development. There is significant transactional infrastructure in place that will take time to evolve. The tech infrastructure for hyper-targeting isn't widespread on digital radio, so it is largely limited to demographics by station for now. Digital radio already has enough measurement in place to show the value of each ad and therefore the value of programmatic efficiencies can be seen quantitatively. Radio ads can be sold in real time as well as cross-channel, making it attractive as a part of broader ad campaigns. Digital OOH is not a common existing element of most campaigns; programmatic dollars will have to grow organically and won't have much existing spend to cannibalize. Out-of-Home Digital OOH inventory can be updated in real time (and potentially, in the future, depending on who is observing). The ecosystem is already developing with solutions like Vistar and Vukunet. Even before exchanges develop, programmatic direct will be offered. Radio only represents 7% of total spend globally so there isn't nearly the same drive behind programmatic development as there is for television. Digital OOH inventory is unique so it's difficult to set standardized inventory types on which to bid. Location data will have to be very specific to give context to impressions. New Value Drivers The most money is spent in television, therefore the greatest gains are available from increases in efficiency. Demand TV Media Economy Report Vol. 04 Inhibitors Supply Drivers Programmatic for traditional media
  • 12. Page 23 Media Owner Perspective this approach will explode creativity in the marketplace and enable agencies, advertisers and publishers to focus on driving unprecedented client value and the most engaging user experiences. What proportion of your advertising sales are Media Economy Report Vol. 04 wanted to be involved. We firmly believe that you expecting to be automated in one year, in three years? It’s an interesting question for us because we actually use the same platform to operate our managed services business as our clients use Q & A as self-service programmatic tools. So I guess I would say 100% of our business will continue to be run using programmatic/automated tools. Can you comment on the drivers and obstacles for mobile and video inventory on the road to automation and programmatic? The primary driver is consumer behavior, for both mobile and video. No one in our industry – Vincent Letang EVP, Director of Forecasting Bob Lord brands, agencies or publishers – can afford to CEO of AOL ignore the dramatic movement by consumers to Networks multi-screen and video consumption. Obviously MAGNA GLOBAL as these trends continue, inventory constraints will lessen, but the real issue is making sure the platforms buyers use can access and analyze from an inventory and screen-agnostic view. brands scale across all screens and formats to solve programmatic and automation following the AOL real business problems. And I believe we’re at the right Programmatic Upfront of September 2013? place at the right time given the structural and econo- So we are very bullish on achieving our goal of moving mic pressures digital is putting on the advertising and the conversation around programmatic from remnant media ecosystems. fourteen cities have participated since. We’ve seen over $50 million in commitments thus far so I feel very good that we are changing the agency media model in realtime. We have worked very hard to refocus our teams and technologies on platforms that help agencies and What prompted your decision to join the MAGNA Consortium on automation? We continue to have tremendous respect for IPG Mediabrands and MAGNA’s leadership in a move to automating Demand attended the Upfront and over 300 additional clients in the processes that can and should be automated to drive more client and agency value. It was a very quick decision once we heard the focus as to whether we Supply RTB to automation and efficiency. Over 650 people New Value Drivers Can you give us a sense of your inroads into
  • 13. Page 25 Media Economy Report Vol. 04 New Value Drivers As technology and data speed have improved, timing has become increasingly important as a component of successful targeting. Relevance can hinge not only on when the message is delivered to the consumer, but on the cadence of subsequent communications. 1. Consumers are twice as likely to interact with online ad content when it is delivered in real-time. 2. Incorporating real-time content into online display ads improves brand favorability and purchase intent. 3. In a multi-screen campaign, the shorter the interval between TV and their needs based on passively collected data. New Value Drivers 5. Many global internet users are in favor of their devices anticipating Demand responses to the brand. Supply 4. Sequential messaging across TV and online also improves positive Key Takeaway online ad exposures, the more memorable the messages will be.
  • 14. Page 27 Consumers 2x as Likely to interact with content when it is real-time Ad Recall By Time (TV + Online) Media Economy Report Vol. 04 Timing Matters A recent collaborative research study between the IPG Media Lab and multi-screen audience aggregator Collective demonstrated that closely timed exposures across tele- Real -Time Ad Non Real-Time vision and online generated significant bumps in ad recall and key brand metrics. Interactions with Intent: % of viewers who actively and intently engage by: % 01 Rolling over ad for min of 0.5 seconds 100 85% 80% 90 02 AND conducting a min. of one positive action (e.g. expand, click-through, play video, etc.) 71% 80 24% 70% 67% 63% 70 60 48% 42% 50 27% 37% 35% 40 32% 30 20 Aided Ad Recall 10 Unaided Ad Recall 12% 12% Total Audience Da y 7+ Da y 7 3- 1 -3 Da y Da y 1 tPa r Da y in ith W Se qu Da y en Pa r tia t l 0 Multi-Screen Plans Have Most To Gain From Condensed Timing In-Market Audience Gain In Metric With Sequential Exposures 60 50 60% 68% 40 69% 58% 30 20 Real -Time Ad 10 Non Real-Time Brand Favorability Purchase Intent TV Only TV + Online Unaided Ad Recall +3% +12% Aided Ad Recall +12% +21% Overall Favourability 0% +4% Likelihood To Recommend 0% +9% Purchase Intent -1% +10% Demand 70 Supply 80 Source: IPG Lab/AOL Study: The Power of Real Time % New Value Drivers (Sequential Exp. Minus 7+ Day Exp.) Incorporating Real-Time Content Into ads Drives Favorability & Intent
  • 15. Anticipatory Computing The idea of targeting in real-time is to create a mutually passively collected data streams like sound and location beneficial scenario for the brand and consumer—you’re to proactively provide information. It is already being offering something they need. But what if you could anti- used in some mobile apps, and a survey of global internet cipate those needs before they even arise? vealed that many are ready and willing for their devices to rather than waiting for the user to make a query, uses anticipate their needs and recommend new experiences. Page 29 users performed in collaboration with Microsoft has re- That is the promise of anticipatory computing, which, “I like devices and services that provide me with recommendations that are based on my previous behaviour online and are provided on regular basis.” Media Economy Report Vol. 04 “I love digital devices and services that provide me with new recommendations or content at the moment when I need them without me actively seeking them out." Global Internet Users – “I expect technology to introduce me to new and surprising experiences” 31% 20% i Source: IPG Mediabrands/Microsoft, “The Future Laboratory,” May 2013 Q23. “Which of the following statements best describes your attitude to how you discover things using technology?” 38% “I expect brands to know me and offer me something I didn’t even know I wanted” 30% 12% 28% 29% e gre isa N e gre er A h eit D nor ee agr Dis ly ong Str ee agr Dis Strongly Agree Agree Source: IPG Mediabrands/Microsoft, “The Future Laboratory,” May 2013 Q22. “I expect technology to introduce me to new and surprising experiences that are uniquely tailored to me and that feel like coincidences” 41% 31% New Value Drivers 7% ee Agr 20% Neither Agree nor Disagree Disagree Demand o Str 5% 15% 8% e gre yA ngl 6% 13% Strongly Disagree Source: IPG Mediabrands/Microsoft, “The Future Laboratory,” May 2013 Q29b. And still thinking about the brands or services that you interact with on a day- to -day basis, on and offline, to what extent do you agree with the following statements Supply 17% “I am much more likely to buy a product or service from a brand that delivers pleasantly surprising experiences”
  • 16. Page 31 Media Economy Report Vol. 04 Start-Ups to Watch The explosive growth of connected media devices in consumers’ hands and the resulting data they provide has created numerous paths to better targeting. New companies with different ideas on how to harness that information are cropping up all the time. What it Does - Sticky uses What it Does - Vistar uses What it Does - Triple Lift powers eyetracking technology to mobile location data to inform native visual ad content at scale measure attention on display OOH buys that can be bought by automatically reformating advertising to provide insights programatically image assets to match the look and feel of publisher's sites and marketing accountability Ad Experience - Premium Ad Experience - Digital Out of Ad Experience - Native Visual display ads Home Ads similar to Pinterest Marketing Objective - Marketing Objective - Awareness Marketing Objective - Build Brand Image, Awareness, Accountability & Measurement Conversion What it Does - Perch marries What It Does - Placed is a location- real customer data into video motion-sensing cameras, driven consumer insights and to create personalized content software and a projector to mobile ad intelligence service. rendered on the fly detect product interaction at They measure billions of location shelf that can inform in-store data points across the U.S. displays using an opt-in panel of 100,000 video typically delivered via participants Ad Experience - In store media displays using a projector Marketing Objective - Educate, Build Relationship, Sales Ad Experience - Survey questions via mobile app Demand email Marketing Objective - Sales Marketing Objective Measurement & Attribution Supply Ad Experience - Personalized New Value Drivers What it Does - Idomoo integrates
  • 17. Page 33 Media Economy Report Vol. 04 Agency Perspective Direct response advertisers have generally adopted programmatic buying. What about brand advertisers? What is the agency's role in an increasingly data-driven marketplace? Brian Hughes Forrester Research appropriately labeled this dynamic the "Splinternet" Analysis Practice Lead at MAGNA GLOBAL inventory (at the impression level) and near real-time measurability and, as such, aligns very well with their marketing goal and in a 2010 report. Consumers engage with content and advertising across a wide spectrum of paid, owned, and earned media channels. These changing media consumption habits have resulted in an underlying media buying ecosystem that is constantly evolving, highly fragmented, Direct response advertisers were quick to adopt programmatic because it provides an unprecedented level of choice over The Internet continues to expand and fragment at a rapid pace. SVP, Audience Brian Hughes Neeraj Kochhar priorities. However, brand advertisers are starting to realize Neeraj Kochhar that programmatic management of individual exposures, via the EVP, Managing Director Programmatic at use of first-and-third-party data and other indicators such as MAGNA GLOBAL content and context, has the potential to drive highly personalized and massively complex. Targeted reach at scale while theoretically communications at scale in the right environments. We are achievable, hinges on the proper utilization and intersection of data beginning to see a healthy increase in brand spend and I expect this (huge amounts of it) and technology. So, agencies are now in the data to continue and grow throughout 2014. and tech business just as much as they are in the intelligence and investment business. The agency’s role, in my opinion, has never been more important. Agencies need to insulate marketers from the complex underlying circuitry involved and establish an agile programmatic Does scale matter in programmatic? buying capability – with investments in talent, proprietary insights, and technology partnerships – to power highly targeted conversations with Brian Hughes customers across devices and channels. It’s not a trivial undertaking by Absolutely. Swaths of premium inventory are not currently available on the open exchanges. The combination of scale plus any means and a massive opportunity for agencies. programmatic buying means that we can continue to bring leverage to bear on our deals with premium publishers at the macro level yet Neeraj Kochhar extract maximum value by applying programmatic techniques at What is the biggest challenge to more widespread adoption the micro individual exposure level. of programmatic buying? There is no overarching agreement in the industry regarding the Is programmatic really this transformative force that many definition or scope of programmatic. Programmatic has, for in the industry suggest? many, come to represent remnant inventory, distressed CPMs, and strictly direct-response tactics. This simplistic association New Value Drivers Brian Hughes Neeraj Kochhar Brian Hughes Yes. Well, that’s my personal opinion and I guess you can say that I’m programmatic as the unprecedented opportunity to drive targeted biased! As Stephen Baker, technology journalist, said in a post in the reach at scale through the use of data and technology across all New York Times about a related topic: classes of inventory. So, in that sense, programmatic has a brand “The Impact of new technologies is invariably misjudged because we problem! The good news is that programmatic is very much in its measure the future with yardsticks from the past.” Neeraj Kochhar Demand has understandably left the sell side wary. The buy side views the potential transformative power of programmatic buying. Supply infancy. I’m very optimistic that we can work together to fully realize
  • 18. Page 35 1. Consumers are twice as likely to interact with online ad content when it is delivered in real-time. Contributors Brian Hughes @bhughes_magna Supply Demand 1. Aligning data from across the behavioral spectrum— 1. Programmatic spend no longer refers only to real- from media exposure to sales results—creates a time bidding (RTB); audience targeting now occurs robust targeting methodology that drives better via both real-time and non-real-time methods, and decision making in national TV trading. as a result advertisers are accessing more and more New Finding: Past behavior is a better predictor of premium data-enhanced inventory. future behavior than age and sex. New Finding: Non real-time processes will make 2. Moving from ratings to impressions in local TV premium publishers more comfortable with doing trading will not only create additional supply, but business programmatically. enable more automated transaction processes. 2. Global growth in digital programmatic trading was New Finding: Inventory may increase by more than nearly 60% in 2013, and will continue at nearly 40% 30%, depending on the market. this year. 3. Impressions-based transactions will also create the New Finding: By 2017, the digital programmatic spend opportunity for more precise targeting locally. across nine major markets will exceed $33 billion. New Finding: Overlaying impressions with qualitative 3. While only the largest digital markets are already and purchase data will make this possible. spending in a programmatic fashion, the number of 4. In online media, the vast number audience advertisers trading in this way will rapidly increase as interactions allow marketers to combine detailed the ecosystem expands globally. behavioral data with contextual targeting. New Finding: An expansion of infrastructure in New Finding: Contextual indicators can include emerging programmatic markets will make keywords, content categories, and location. this possible. 5. For some categories, contextual targeting may 4. Advertisers aren’t only thinking about programmatic actually be better at driving online conversions than spend as a direct targeting tool; programmatic behavioral. brand advertising is becoming more popular, and is New Finding: Cost must also be taken into account measurable with today’s suite of campaign tools. when determining the success of different New Finding: The growth in available data in EVP, US Director, MAGNA GLOBAL targeting methods. developed markets has enabled highly personalized todd.gordon@magnaglobal.com New Finding: The results are even better among the in-market audience (i.e. those seeking to buy). 2. Incorporating real-time content into online display ads improves brand favorability and purchase intent. New Finding: Percent increases compared to non real-time ads were between 13-19%. MAGNA GLOBAL brian.hughes@magnaglobal.com Vincent Letang @vletang_magna EVP, Director of Forecasting, MAGNA GLOBAL vincent.letang@magnaglobal.com Luke Stillman @lukestillman 3. In a multi-screen campaign, the shorter the interval Forecasting Manager, MAGNA GLOBAL between TV and online ad exposures, the more luke.stillman@magnaglobal.com memorable the messages will be. Janice Finkel-Greene New Finding: The difference in unaided recall between EVP, Buying Analytics, MAGNA GLOBAL sequential exposures and those seven days apart janice.finkel-greene@magnaglobal.com was 33%. Keith Camoosa 4. Sequential messaging across TV and online also EVP, Research & Analytics, MAGNA GLOBAL improves positive responses to the brand. keith.camoosa@magnaglobal.com New Finding: The results for sequential exposures on Tanya Kolosova TV alone were not nearly as positive. SVP, Director of Research and Analytics, AMP, 5. Many global internet users are in favor of their MAGNA GLOBAL tanya.kolosova@magnaglobal.com devices anticipating their needs based on passively collected data. New Finding: More than 60% agreed that they would Kara Manatt @karamanatt VP, Consumer Research Strategy, IPG Media Lab kara.manatt@ipglab.com be much more likely buy a product or service that delivered “pleasantly surprising experiences.” Jack Pollock @pollockj07 Senior Analyst, IPG Media Lab jack.pollock@ipglab.com Neeraj Kochhar @neeraj_kochhar Managing Director, Programmatic, MAGNA GLOBAL neeraj.kochhar@magnaglobal.com the availability of data in emerging markets. Concluding Tweet Natalie Bokenham @natlikethat SVP, Managing Partner, Digital, UM programmatic ecosystem. Brian Hughes @bhughes_magna natalie.bokenham@umww.com Demand 5. Long term growth of advertiser spend will depend on New Value Drivers Todd Gordon @tpgtweets communications at scale. New Finding: Data is the life-blood of the SVP, Audience Analysis Practice Lead, Media Economy Report Vol. 04 New Value Drivers Data is inching us ever closer to that “Minority Report” moment of real-time, one-to-one messaging, regardless of location. Design by Bureau Oberhaeuser @oberhaeuserinfo contact@oberhaeuser.info Supply Summary Cheat Sheet
  • 19. In Percent 5.5 4.2 North America This will primarily benefit television and digital media year-on-year growth since 2010 (+8.4%, following the where new formats and opportunities are being explo- 2009 recession). The non-recurring sports events of These insights are based on the bi-annual global and the US mid-term elections will contribute to the advertising forecast update published on December 9, global growth of television (+7.5%). That compares a 2013. The next update will be published in June 2014. 10.0 red for activation and branding campaigns. 2014 (Sochi Winter Olympics, Brazil Soccer World Cup) 8.7 7.6 6.3 to unlock marketing and branding budgets in 2014. +6.1%) and reach $521.6bn, which will be the strongest 9.5 12.9 CEE WE ment and stronger than usual cyclical drivers is bound advertising revenues to grow by +6.5% (previously: -0.8 The combination of an improved economic environ- so will advertising spending. We now expect global Developed Markets 11.3 1.5 As the world economy gradually improves in 2014, 0.9 14.6 2.1 12.3 Page 37 The Global Advertising Market 2013-2014 9.5 7.9 Media Economy Report Vol. 04 Revenue growth by region with a modest 1.8% growth in 2013 for TV globally. -0.3 MEA LATAM Emerging Markets Revenues by Media 20% 15.9 15.5 15% 10% 7.5 5% 1.5 2.2 1.8 0% Revenues 1999-2018 Emerging Asia APAC -2.9 -5.0 -5% Magazine 4.8 6.5 3.2 -3.9 -5.6 Newspaper 3.0 -10% Television $600 Internet Radio Out of Home 2013 All Media 2014 10% Global Media Mix Ad Market by Region Latam 0% $300 7% Free TV -5% $200 -10% $100 7% Pay TV Search Display emea 12% emerging 31% 7% 28% Mobile -15% $0 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 Video Other Digital Radio Out-of-home 30% 17% mature 17% 3% Canada 10% Magazine YOY growth/decline 2% mea 4% CeE 21% WE Newspaper Advertising Revenues in constant billion USD (2012) apac 7% New Value Drivers $400 3% 2% 6% 1% 9% Demand 5% 33% USA North america Supply $500
  • 20. SE Europe North America United Kindom FI Page 39 $2,105 DK $22,092 490 Billion Dollars $1,592 Media Economy Report Vol. 04 $3,450 NO market size $3,031 Total The Global Advertising Market 2013 Germany $23,621 IE $13,004 PL $2,463 France $1,147 Switzerland $3,863 USA Italy $8,122 Spain $5,434 PT $673 CO $4,914 South Africa $4,541 Puerto Rico $918 Africa Latin America Brazil $17,804 $8,083 China $44,100 Turkey $3,327 Lebanon $188 Saudi Arabia $1,707 Pakistan Kuwait $308 $534 Bahrain $121 UAE Taiwan $1,939 India $6,882 Thailand Hong $4,341 Kong $3,032 $936 Oman $161 Sri Lanka $143 Philippines $1,438 Vietnam $711 Malaysia $2,637 Singapore $2,012 Indonesia $6,326 Asia Pacific VE $1 ,2 31 29 $7 $4 31 EC PE Kenya $536 Korea Greece $940 Qatar $236 Panama $514 Romania $406 Egypt $2,456 Morocco $420 $52,070 Bulgaria $252 Middle East Mexico $3,739 Costa Rica $694 HU Serbia $173 Croatia $251 $156,546 Kazakhstan $329 Slovak Republic $384 $620 Austria $3,036 Japan $1,258 UA CZ $1,303 $13,376 $10,876 New Value Drivers Belgium $2,463 Chile $1,419 AR UY $446 $5,788 1bn 5bn 10bn in USD Advertising Spending in $ per capita (2013) $0 $100 $200 $300 $400 $500 $600 Reading this map: the size of each country is proportional to advertising spending in billion USD; the color reflects the level of spend per capita, akin to the intensity of advertising pressure: green is very low (less than $50), red is very high ($400 and more). This map reveals that the US alone represents a third of global advertising market while some large countries by surface or population, like India or Russia, remain largely underdeveloped. Australia $13,234 New Zealand $1,406 Demand Canada Russia Supply $4,090 LT LV EE $1 $9 $1 44 7 10 NL
  • 21. About MAGNA GLOBAL MAGNA GLOBAL is the strategic global media unit of IPG Mediabrands, comprised of two key divisions. MAGNA GLOBAL Investment harnesses the aggregate power of all IPG media investments to create power and leverage in the market, drive savings and efficiencies, and ultimately make smarter, more effective media investments on behalf of our clients. With a stated goal of reaching 50% automated buying by 2016, the team in North America invests across digital, programmatic, broadcast and all traditional media platforms and is therefore considered the most comprehensive buying and negotiating unit in the media industry. The architects of the MAGNA Consortium – a powerful committee of executives from A&E Networks, AOL, Cablevision, Clear Channel Media and Entertainment, ESPN and Tribune – MAGNA North America is also dedicated to shaping industry automation and audience specific buying. MAGNA GLOBAL Intelligence has set the industry standard for more than 50 years by predicting the future of media value. MAGNA GLOBAL Intelligence produces more than 40 annual reports on audience trends, media spend and market demand, and ad effectiveness. For more information, please visit www.magnaglobal.com or follow us on Twitter @MAGNAGLOBAL. About IPG Mediabrands We were founded by Interpublic Group (NYSE: IPG) in 2007 to manage all of its global media-related assets. Today that means we manage and invest $37 billion in global media on the behalf of our clients, employ over 8,500 diverse and daring marketing communication specialists worldwide and operate our company businesses in more than 130 countries. A proven entity in helping clients maximize business results through integrated, intelligence-driven marketing strategies, IPG Mediabrands is committed to driving automated buying, pay-for-performance and digital innovation solutions through its network of media agencies including UM, Initiative, BPN, Orion Holdings, and ID Media. Its roster of specialty service agencies including MAGNA GLOBAL, Mediabrands Audience Platform, Mediabrands Publishing, IPG Media Lab, Ensemble, and Identity offer technologies and industry moving partnerships that are recognized for delivering unprecedented bottom line results for clients. For more information, please visit www.ipgmediabrands.com or follow us on Twitter @IPGMediabrands.

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