Interac(ve Marke(ng Trends 2012 Reﬂexions of the Mexican Internet Adver5sing Industry Adriana Pena, Sweden Dec 2011
Being on top of trends and making business decisions based on their implica5ons has never been harder but in the other hand has never been as fascina5ng I´ve been a passionate participant of innovation all my life. Doing things different or for the first time has been the driver of my career. Now I have a unique opportunity to sit down from the pits and watch the cars running at accelerating speed and drawing conclusion from what I see. From these cold lands of Sweden I have been able to analyze great sources like Forrester, e-marketer, Mashable, Sociagility, Comscore, Brand Republic and tons of bloggers and journalist who had published an enormous amount of information. The data is all there, making sense of it and drawing conclusion for our market has been a thrilling endeavor. I hope you find this presentation interesting and useful, but most of all I hope you share the same passion I feel for being part of the generation that is driving such amazing changes in our business.
Interac5ve marke5ng budgets will be as big as TV sooner than expected in US In Mexico we still have a long way to go, but online advertising budgets are still expected to grow double digits in the next coming yearsSource: Forrester
Disregarding the actual size of online adver(sing budget of Mexican adver(sers the trend heads towards a strong growth, making online marke(ng a discipline that cannot be minimized anymore In Mexico despite what official sources have been publishing, I estimate based on industry information that online budgets may not be more than 4.5% in 2011 On the other hand expected growth for 2012 is 20-30% at the expense of other media like magazines, TV and Newspapers One of the challenges to agree on the size of the internet adver5sing budgets lays in the deﬁni5on of online budget: is it only money being paid to media partners, or does it inlcudes brand web pages, development of aplica5ons and agency fees?
In Mexico we have to consider these other factors as well: 1. Younger brand managers and younger employees in general at clients and agencies will pitch for Interac5ve Embeds itself in their fresher ideas to be heard 2. Social Media and recent political the mix: the next digital effects of it makes anyone who is not in touch with new media look decade is here outdated 3. Marketing effectiveness has not being proved for consumer brands The following factors in US will enable the but a 40% reach of internet in growth over the next ﬁve years: Mexico makes a very compelling argument 4. Tablets, Iphones androids and 1. Bigger interac(ve teams other ”cool” devices in the hands of tons of people will make it very 2. Excitement about emerging media hard to ignore the relevance of new media 3. Interac(ve marke(ng eﬀec(veness 5. Rebates paid by media players to media agencies above 10%, makes 4. Customer obsession online adverstising the most profitable media for media agenciesSource: Forrester
Percep5on of eﬀec5veness will drive a diﬀerent mix of interac5ve marke5ng spending Although in Mexico investments on Internet Marketing will grow, lack of proper use of ad serving technology as well as an over use of clicks or cost per click as measurement of campaign´s ROI makes it very difficult for Marketing Directors to be fully convinced of effectiveness of online media The overall effectiveness of online media is still somehow a myth to be proven especially for the mass consumption advertisers that happen to have the biggest marketing budgets • TV penetration is overwhelming in the country and is the most easy to be measured and proven media • Media agencies rarely use the required technology or proper methodology to prove basic metrics like unique total reach of an online campaign so traditional media planning parameters like audience reach or number of people touched by an online campaign are unknown or severely under estimated since most campaigns are being measured only by website visits or ad clicks • There are very little studies on actual effects on brand health from an interactive marketing campaign in Mexico • Very few big advertisers have an e-commerce business and the consequent experience of efficiencies in conversion rates that internet has in e-commerce strategies
Social Media, Mobile Marke5ng and Display adver5sing will drive US Interac5ve Marke5ng Spend Search’s Share Shrinks Share will shrink 11 points as marketers refocus their search marke5ng strategies based on ”geTng found” by users. Brands will expand the play ﬁeld in which they could be found by its customers by moving their search budgets to be present in mobile devices and social networks Source: Forrester
Video ads will be the fastest-‐rising category of online spending in the next coming years 1. US online video ad spending to grow 43% in 2012. Digital video ads reproduces the richness consumer associate with TV at a lower cost and can be used a reach extender medium for TV with the same ad. Source: eMarketer.com
Search spend shicing to display 1. Search behavior and their associated marke5ng spend moves to other media. A por5on of marketer´s search budgets will move to mobile and social networks as users rely more on non-‐PC devices and nontradi5onal search engines like Youtube or FaceBook 2. SEO Technology tempers the growth of agency fees. Development of be]er SEO pla^orms will make it easier for brand pages to be found therefore these technologies will undercut or replace agency fees dropping SEO costs about 15% 3. Rich search ads capture brand dollars. Improved search engines interfaces will deliver new display-‐like ad formats embedded into search results 4. Small and medium-‐size business (SMB´s) adopt and grow search programs. Aﬀordable search management solu(ons like Clickable and oﬄine directories like SuperMedia from Verizon Superpages are managing search adver5sing for local marketers who want to transi5on away from yellow pages ads 5. Search spend shicing to display. Increasing keywords costs will eschew paid search for biddable display search, display ads bought through automated auc(ons Source: Forrester
Marketer´s love aﬀair with display media is back: Driven by ad exchanges that simplify media buying process 1. Increasing cost of niche and remnant inventory. Online ad exchanges like AdBrite enable adver5sers to buy niche inventory and also to buy all inventory for its real market value 2. Be]er online ad management tools. New data management pla^orms improve audience targe(ng, eliminate overlap across mul5ple publishers and measure the contribu(ons of a given impression towards business goals Source: Forrester
According to Forrester This year Mobile overtakes Email and Social Media in US 1. Marketers will create more relevant mobile ads. A skyrocket growth in acquisi5on of smartphones and tablets will allow be]er ads for mobile devices. Also be]er mobile ad servers will enable be]er ad targe5ng to speciﬁc clusters of users 2. Tablets with their expensive ad units will become mainstream. These devices will contribute to the increase of mobile marke5ng investment due to the innova5ve and expensive ad formats they enable 3. Adop5on of smartphones and tablets accelerates the demand for content consumed on these devices including, video, audio, social media, games, news, books and other types 4. Buyers will embrace mobile commerce and adver5sing that drives it. Mobile commerce will top 31 billion and the upcoming explosion of tablet adop5on will amplify this virtual circle. Already 47% of tablet owners have shopped on their devices 5. Email will s5ll be part of the mix of interac5ve marke5ng but spend on email marke5ng delivery, crea5ve, analy5cs and so won’t increase mainly because of their very low CPM´s Source: Forrester and KPCB
Although all brands will jump into some kind of social media ac5vity, Social Media total investment will grow moderately 1. Due to the rela5vely low-‐cost of Social media management, brand expenditures on it won´t grow as much. 2. Developing own social assets like a Facebook page or TT proﬁle involves low costs, mostly community managing related only. Listening pla^orms cost only 5k-‐10k a month and there are very good open source pla^orms 3. Social networks oﬀer limited paid inventory. The biggest social media outlets for adver5sers FB and TT have only a few pay per click adver5sing op5ons, signiﬁcantly smaller than tradi5onal media portals 4. Listening will develop into social intelligence. Social data will be integrated to exis5ng CRM databases 5. More interac5ve marke5ng investment will spawn more ad-‐supported content Source: Forrester and KPCB
e-‐commerce reloaded: Mobile and in-‐store digital experiences Mobile commerce is the next big thing in business. This will have an impact specially on retailers and the way consumers interact with them. 70% of those who have smartphones have used them on store. On the other hand following what Trendwatching.com calls “Retail Renaissance” consumers will enjoy shopping products and services in the real world more than ever and this will be driven by the fusion of technology and engaging experiences. 1. Oﬄine in-‐store experiences will have its online experience too. 8 out of 10 consumers research their purchases online. While online conversion rates for e-‐commerce are around 2-‐3.5% oﬄine conversion rates from digital ads to stores for fashion retailers are 20-‐25% 2. Barcode scanning is on the rise 3. Time-‐or-‐loca5on-‐based oﬀers and rewarding visits through some kind of geo-‐ located social media like Foursquare will be more frequently used 4. Tablets will fuel deeper experiences and interac5ons with retailers and products, especially luxury products and cars Source: Trendwatching and e-‐Marketer
Reﬂexions for Mexican Marke5ng Industry: Display Adver5sing Following the interna5onal trend in Mexico online display adver5sing (be]er known as banners and videos) will get the mayor chunk of the growth in interac5ve spend. These are great news for media players and bloggers as well. The local drivers of this growth are: 1. Tradi(onal media players like magazines, TV and radio are becoming full mul(media companies and will encourage a strong growth of their digital new business 2. Small niche content players are jumping in since digital is cheaper to produce than all other media (bloggers like whatevertomorrow, etc) and some old small players will shut down their printed edi5ons and leave only their online versions
Reﬂexions for Mexican Marke5ng Industry: Display Marke5ng: Ad-‐exchanges already here but s5ll with a long way to go 1. As in the US ad-‐exchanges are already in the local market, providers like Ad-‐ Ne5ck are successfully selling to adver5sers. This technology enables a much more cost eﬃcient alloca5on of ads and makes it much easier to buy space in niche content players including bloggers 2. These players could represent a threat to tradi5onal media buying agencies since they automa(zed the media buying process and reduce the need for “alloca5on” advice. On the other hand they bring more transparency to the buying process since buying prices are auc5oned directly by the adver5ser. These could represent a long term challenge to agencies that buy media since another source of revenue for them are markups in adver5sing rates
Reﬂexions for Mexican Marke5ng Industry: Social Media brand ac5vity will increase tremendously 1. Relevance of social media has grown tremendously, due to many recent public events the percep5on of it importance in society has grown 2. Mexico is one of most ac5ve countries in Social Media (see Comscore graphic in slide 11) 3. Brands and Cyber stars are already ac5ve. Many brands already have a proﬁle in FaceBook , or twi]er. Celebri5es are already charging “Product Placement” fees ranging from 1k to 60k just to post a comment about a brand. 4. Most of Mexican adver(sers will jump into some kind of social media ac(vity in the near future since Social Media is the “cool thing” to be doing right now and to open a brand proﬁle in FB, TT or YT is free.
Reﬂexions for Mexican Marke5ng Industry: Social Media brand ac5vity will increase but social ad investments will not necessarily grow as much Social Media Brand ac5vity will grow, crea5ng a new market for related service providers 1. Media buying within social media pla^orms is somehow a limited ground since mayor players oﬀer few adver5sing op5ons (although this may change in the near future since 52% of traﬃc goes to SM). On the other hand a signiﬁcant factor in Mexico is that FB, TT, and Google ´s You Tube do not pay direct rebate fees to media agencies (some ad networks who resell social media ads do so) therefore social media ads investments won´t grow as much as one might expect 2. Related services like community managing, content crea5on, consul5ng, development services like social media applica5ons and “social-‐media5on” of tradi5onal webpages will sprout. This will bring room for new revenue streams for tradi5onal online agencies and as well as new independent players (many bou5que specialists have appeared in the market to provide with community managing services and analy5c services) 3. Mexico is par5cularly fond of Twi]er so the new brand´s proﬁle that they have launched for 21 global adver5sers will drive more brands to Twi]er (h]p://bit.ly/tv0yfn) . Some of these global adver5sers already have interac5ve marke5ng investments through their Mexican branches like Coca-‐Cola, Dell, American Express, Pepsi and Nike
Reﬂexions for Mexican Marke5ng Industry: Search will keep growing but at a lower speed 1. Bigger Adver5sers in Mexico have less need of Search based online strategies. Search is a fundamental piece of the interac5ve mix when a brand is doing e-‐commerce or when the main objec5ve of a campaign is to drive traﬃc to a webpage. Adver(sers of consumer brand products who are currently under-‐spending in online and who will be the ones driving the upcoming growth in the Mexican market are not into e-‐commerce. Therefore they most likely tend to use more display, social media or develop glossy applica5ons for smart phones and tablets than search They don´t need to be found as much as they need to be remembered 2. An addi5onal force in Mexico to keep holding back the share of Search Marke5ng is that the main player Google does not pay to any agency rebate fees. Therefore proﬁtability of media alloca5on in search is signiﬁcantly lower for agencies than recommending display adver5sing or other digital online ini5a5ves to their clients
Reﬂexions for Mexican Marke5ng Industry: Search will keep growing but at a lower speed As in the US market, aﬀordable search management solu(ons for small and medium companies (PYMES) are in the way to burst into the market. The dominant player in this sector has been Seccion Amarilla, from grupo Carso. They have a very good chance to lead the conversion of these adver5sers since they already have them as clients and they have all the resources and the strategy to do so. Most of these adver5sers won´t develop a webpage on their own or a Facebook proﬁle but would gladly migrate to something digital if a one-‐stop shop solu5on is oﬀered to them. It´s hard to speculate if this market will be shared with Google or other big players including Facebook or if it will be mainly a transi5on of business model within Seccion Amarilla who is the leader in Yellowpages segment
Reﬂexions for Mexican Marke5ng Industry: Mobile Marke5ng will be a more common part of the mix than before 1. Explosion of Smart phones and Tablets acquisi5on. There are already at least 9 million smart phones in Mexico and penetra5on of this kind of devices will grow at a 85% rate. Also tablets are in the rise worldwide and in Mexico as well. These premium consumers will be a very a]rac5ve market to be reached 2. Innova5ve ad formats will a]ract trendy adver5sers as well as luxury brands. Smartphones and especially tablets allow more engaging ad formats and branded content. These will be very appealing to early adop(ng adver5sers and to agencies or developers that will try to sell these higher revenue ads to its clients
4 Take outs for the road 1. In 2012 Interac(ve spending will surpass magazines and maybe even Paid TV in Mexico 2. Brands will fully embrace social media ac5vity this will sprout many new services related to community management, content produc5on and measurement 3. Mexican adver5sers will increase their investments on display adver5sing triggering more demand for online inventory, specially the one for video ads 4. Brands will explore diﬀerent ways to get advantage of the rise of Smart Phone and tablets euphoria
Challenges and Opportuni5es Agencies Clients Media and Content producers 1. The center of the conversa5on will 1. Clients will demand more mature 1. More revenue will come from digital be how the online marke5ng agencies that can provide them with adver5sing budget should be split among all solid clear integrated interac5ve 2. Tradi5onal media companies will the possible interac5ve ac5vi5es strategies; the core issue will how seize the opportunity reinforcing and how these make sense in a much they should be inves5ng in their online adver5sing s oﬀer to bigger scheme of things. This is a online marke5ng but how. their clients challenge for most of the current 2. Level of complexity of interac5ve 3. Social Media and Mobile will trigger par(cipants in the market since marke5ng for clients will rise since demand for content, content they are specialized in their discipline. brands will need to have an any-‐ Time any-‐where digital points of producers could produce content for clients or ﬁnd new ways to get 2. More budget on online will demand contacts with their consumer digital sponsored deals more produc(on of ad formats, deploying conversa5ons and 4. Small players will become more social media and mobile apps, social presence according to each digital relevant media glossy proﬁles therefore channel many independent providers will jump in to the arena 3. More clients will have their own internal experts on interac5ve 3. Social Media bring opportunity for marke5ng new services 4. Mobile e-‐commerce and mobile apps will be explored by early adopter adver5sers
Some References US interac5ve Marke5ng Forecast 2011 to 2016 Forrester Research State of Media-‐Social Media Report Nielsen KPCB Internet Trends 2011 October 18 Millward Brown UK Predi5ons 2012 Contagiousmagazine.com 2011-‐2012 digital predi5ons eMarketer 2012 trends Euro-‐RSCG TrenspoTng for 2012 Trendwatching.com 12 crucial consumertrends 2012 Trendwatching.com Retail Renaissance