Left Side is Branding Right Side is Performance by Augustine Fou

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TV ad spend will continue to flow to digital, but those dollars will be looking for branding-like impacts of awareness. This means that more of those dollars will flow into something like Facebook which has enormous reach (and frequency) while less will flow into performance channels like search.

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Left Side is Branding Right Side is Performance by Augustine Fou

  1. 1. Augustine Fou- 1 - Left-side Right-side branding performance “Soup and Soda” “Cars and Computers” • Low cost • Low complexity • Low consideration • High cost • High complexity • High consideration
  2. 2. Augustine Fou- 2 - TVvs Digital Ad Spend 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%
  3. 3. Augustine Fou- 3 - The Grand Digital Canyon Traditional • TV • Magazines • Newspapers • Radio Digital • Search • Social • Mobile • Video Metric: Size of Audience Metric: Actions of Users
  4. 4. Augustine Fou- 4 - The Evolution of Media One-way Media Two-way Media banner ads search ads Always on Always informed Always connected Many-Way Media branding performance
  5. 5. Augustine Fou- 5 - 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
  6. 6. Augustine Fou- 6 - 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
  7. 7. Augustine Fou- 7 - Traditional Digital Metric: Size of Audience Metric: Actions of Users Pitching Catching+ Should be ... + Pitching AND Catching “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.”
  8. 8. Augustine Fou- 8 - Digital is Mainly a Performance Channel
  9. 9. Augustine Fou- 9 - “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
  10. 10. Augustine Fou- 10 - Digital is a Performance Channel Source: IAB 2012 Annual Report Retail is mostly direct reponse.
  11. 11. Augustine Fou- 11 - 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
  12. 12. Augustine Fou- 12 - Main Types of Digital Ads 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
  13. 13. Augustine Fou- 13 - 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 $35.5B 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 $6.5B branding performance
  14. 14. Augustine Fou- 14 - Digital 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
  15. 15. Augustine Fou- 15 - What Users Find Useful... • Recommendations from friends • Consumer opinions/ratings posted online
  16. 16. Augustine Fou- 16 - 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- 16 -
  17. 17. Augustine Fou- 17 - 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
  18. 18. Augustine Fou- 18 - 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- 18 -
  19. 19. Augustine Fou- 19 - APPENDIX Data Pack
  20. 20. Augustine Fou- 20 - Combined Projections Mar 2014 eMarketer shows TV decreasing slightly as percentage of total ad spend Digital will continue to grow at the expense of print and other offline forms
  21. 21. Augustine Fou- 21 - U.S. Digital Ad Spend, by Format Data derived from IAB/PwC data
  22. 22. Augustine Fou- 22 - U.S. Digital Ad Spend, by Industry Data derived from IAB/PwC data
  23. 23. Augustine Fou- 23 - Combined Projections Aug 2013 Source: eMarketer, August 2013 eMarketer shows TV still growing strongly Digital will continue to grow at the expense of print and other offline forms
  24. 24. Augustine Fou- 24 - Global Ad Spend - ZenithOptimedia
  25. 25. Augustine Fou- 25 - ZenithOptimedia
  26. 26. Augustine Fou- 26 - ZenithOptimedia (2011)
  27. 27. Augustine Fou- 27 - eMarketer Aggregated Data
  28. 28. Augustine Fou- 28 - Change in Ad Spend Source: Kantar Media, December 2013
  29. 29. Augustine Fou- 29 - Change in Ad Spend Source: Kantar Media, December 2013
  30. 30. Augustine Fou- 30 - Power Shift to Consumers Augustine Fou- 30 - 92% trust “recommendations from people I know” 47% trust “ads on TV” 29% trust “text ads on mobile phones” 33% trust “online banner ads” Source: Nielsen, April 2012 Users trust peers the most, ads the least.

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