Grand Unified Theory of Marketing by Augustine Fou 2014 Update

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Grand Unified Theory of Marketing states that all marketing channels and tactics have their place, and can work together to optimally assist modern users along their individual purchase journeys, and even afterward.

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Grand Unified Theory of Marketing by Augustine Fou 2014 Update

  1. 1. Augustine Fou- 1 - Grand Unified Theory of Marketing Dr. Augustine Fou http://linkd.in/augustinefou acfou @mktsci .com March 2014
  2. 2. Augustine Fou- 2 - Original Blog Post 2009 The Grand Unified Theory of Marketing by Augustine Fou
  3. 3. Augustine Fou- 3 - Author’s Commentary -- Dr. Augustine Fou “For many years, I have been studying the inter- relationships between traditional marketing and digital marketing. While they have historically been treated as different channels, they actually can and should work together harmoniously. Furthermore, different tactics are optimally used in different ways. The unifying thread that ties all marketing together and helps advertisers chose the right tactic and channel to use is the target users‟habits and expectations‟. Let me explain.”
  4. 4. Augustine Fou- 4 - We used to think of ... Traditional • TV • Magazines • Newspapers • Radio Digital • Search • Social • Mobile • Video Metric: Size of Audience Metric: Actions of Users vs
  5. 5. Augustine Fou- 5 - Traditional Digital Metric: Size of Audience Metric: Actions of Users Pitching Catching+ Should be ... + We need to think of ... “Advertisers can do their “pitching” with offline, one-way channels like TV, print, and radio; but they should make sure they are doing enough “catching” in digital channels when users come online to research their purchases.”
  6. 6. Augustine Fou- 6 - How it all works together ...
  7. 7. Augustine Fou- 7 - Left-side Right-side Branding aka “awareness” Performance aka “direct response” “Soup and Soda” “Cars and Computers” • Low cost • Low complexity • Low consideration • High cost • High complexity • High consideration
  8. 8. Augustine Fou- 8 - TV is left Digital is right 2013 - $108B (U.S. Only) 2017E - $131B branding performance “Soup and Soda” “Cars and Computers” Television 61% ($66B, 2013) Digital 39% ($42B, 2013) Display (Facebook) 22% Search (Google) 46% Other 32%55% 45% Broadcast Cable Television 53% ($70B, 2017E) Digital 47% ($61B, 2017E) 49% Other 9%49% 51% Broadcast Cable Branding (Facebook) Performance (Google) 42%
  9. 9. Augustine Fou- 9 - 1st screen 2nd screen 3rd screen • Television • Magazines • Newspaper • Radio • Display Ads • Search Ads • Search Optimization • Email • Social Media Marketing • Mobile Marketing awareness consideration choice purchase advocacy • In-store The Marketing Continuum branding performance
  10. 10. Augustine Fou- 10 - Role of the Channel 0% 20% 40% 60% 80% 100% Email Mobile App Direct Mail SMS Text Message Website Social Media (not paid) Search Radio Print Ads Online Display Ads Social Display Ads TV Greeter (Awareness) Influencer (Consideration) Closer (Decision) Source: Experian Marketing Services March 2014 Sorted by Awareness “left”
  11. 11. Augustine Fou- 11 - Digital is Mainly a Performance Channel
  12. 12. Augustine Fou- 12 - Users Ignore More Digital Ads Source: Harris Interactive via MarketingCharts Feb 2014
  13. 13. Augustine Fou- 13 - “When users come online to research their purchases, advertisers should make sure they can find the info they need to move expeditiously down the purchase funnel to the purchase – and therefore do the „catching‟ and harvesting of ROI.” -- Dr. Augustine Fou
  14. 14. Augustine Fou- 14 - Digital is a Performance Channel Source: IAB 2012 Annual Report Retail is mostly direct reponse.
  15. 15. Augustine Fou- 15 - Within The Digital Channel Display and social (display) are for awareness Search (organic and paid) are most useful just before the decision to purchase. Source: Google Think Insights branding performance Display ads (social, mobile) Video ads (desktop, mobile) Consumer Reviews Search Ads Organic Search Lead Generation Twitter Ads
  16. 16. Augustine Fou- 16 - Types of Digital Ad Spend Impressions (CPM/CPV) Clicks (CPC) Leads (CPL) Sales (CPA) • Display ads • Video ads • Social display • Mobile display • Search ads • Mobile search • Affiliate revenue share • Completed lead forms sold on cost- per-lead basis Awareness Performance
  17. 17. Augustine Fou- 17 - Digital Ad Spend (IAB H1 2013) Impressions (CPM/CPV) Clicks (CPC) Leads (CPL) Sales (CPA) Search 43% $18.1B Video 7% $2.9B Lead Gen 4% $1.7B 11% Other $4.8B Source: IAB, 1H 2013 Digital Advertising Report, Oct 2013 Display 19% $8.0B Mobile 15% $3.7B$2.8B NOTE: revenues annualized from actual 1H 2013 figures from IAB (assumes $42B annual ad spend) • classifieds • sponsorship • rich media • email branding performance $13.7B $28.3B
  18. 18. Augustine Fou- 18 - DR vs Branding by Industry 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Direct Response Branding Direct response vs branding by industry Travel is heavily DR while entertainment is mainly branding branding direct response
  19. 19. Augustine Fou- 19 - Maps to the Way Users Use Each Medium
  20. 20. Augustine Fou- 20 - In the past WEEK, do you recall seeing ANY of the following types of ads? 44% Don’t Recall ANY Ads Source: Marketing Science Custom Research, March 2014
  21. 21. Augustine Fou- 21 - “Which of the following help you decide to buy a specific low- cost/big-ticket item (e.g. soda, candy, toilet paper, shampoo)” N = 1,000 70% Think Ads Don’t Help Source: Marketing Science Custom Research, March 2014
  22. 22. Augustine Fou- 22 - Ads Drive Awareness “Through which advertising medium are you and other people your age most likely to be introduced to or find out about a new brand you‟ll consider for trial?” Source: AdroitDigital, March 2014
  23. 23. Augustine Fou- 23 - Peers Fuel Consideration • Recommendations from friends • Consumer opinions/ratings posted online
  24. 24. Augustine Fou- 24 - Users research in digital Source Parago via Marketing Charts March 24, 2014
  25. 25. Augustine Fou- 25 - Context of my thinking ... Marketing and Advertising Chief Digital Officer, HCG (Omnicom) Business Strategy McKinsey Consultant Technology / Innovation PhD, MIT Mat’l Science Digital Augustine Fou- 25 -
  26. 26. Augustine Fou- 26 - Dr. Augustine Fou – Chief Digital Strategist “Facebook is for branding and has the reach to cannibalize revenues from TV; Google will remain performance oriented and better serve specific industries and sectors – like cars and computers.” FORMER CHIEF DIGITAL OFFICER, HCG (OMNICOM) MCKINSEY CONSULTANT CLIENT SIDE / AGENCY SIDE EXPERIENCE PROFESSOR AND COLUMNIST ENTREPRENEUR / SMALL BUSINESS OWNER PHD MATERIALS SCIENCE (MIT '95) AT AGE 23 Augustine Fou@acfou ClickZ Articles: http://bit.ly/augustine-fou-clickz Slideshares: http://bit.ly/augustine-fou-slideshares LinkedIn: http://linkd.in/augustinefou
  27. 27. Augustine Fou- 27 - Related Articles Trends in Advertising By: Augustine Fou, Nov 15, 2012 Branding Today: Why It’s Ineffective, Irrelevamt, Irritating, and Impotent By: Augustine Fou, June 21, 2012 Search Kicks Display in Effectiveness By Augustine Fou, April 2012 Display Ad Benchmarks By Augustine Fou, August 2013 Augustine Fou- 27 -

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