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Digital Advertising - Trends -<br />Chris Schaumann<br />Global Advertising & Digital Lead<br />Asia Pacific & Greater China Region<br />CMG | Global Marketing Group<br />

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1. Changing Landscape<br />Did you know?<br />Bring the Love back<br />Digital Divide<br />Future Shape of Advertising<br />Agenda<br />2. Advertising v3.0<br />Trade Maps<br />New Marketing Model<br />Experiential Marketing<br />Measuring Engagement<br />3. Media & Management<br />Altered Media Universe<br />Role of Media & Agencies<br />Case Study from the Future<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />2<br />

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Did you know?<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />Slide 3<br />

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So what does it all mean?<br />Change!<br />“In 10 years, allmedia will be digital!”- Steve Ballmer, CEO Microsoft<br />We’ll need to rethink<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />Slide 4<br />a few things<br />media<br />advertising<br />marketing<br />agencies<br />ourselves<br />

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Bring the Love back!<br />Join the conversation at<br />www.bringtheloveback.com<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />5<br />

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Exploding Online Users in APAC<br />Source: www.internetworldstats.com , July 2009<br />17 July 2009<br />© Microsoft Corporation 2009 | WW CMG<br />6<br />Almost 1.6 Billion Users Worldwide<br />

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Still huge Potential in APAC<br />Source: www.internetworldstats.com , July 2009<br />17 July 2009<br />© Microsoft Corporation 2009 | WW CMG<br />7<br />Internet Penetration <br />World Average: 24%<br />

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Average Time of Media Exposure per Day - Asia<br />Source: Synovate PAX Digital Life, Nov 2008<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />8<br />

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2009 Internet Ad Share<br />Source: Zenith Media Pyramid Estimates, Dec 2008<br />17 July 2009<br />9<br />© Microsoft Corporation 2009 | WW CMG<br />13% APAC average<br />

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Global Ad Spend Share by Media<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />10<br />Source: Zenith Optimedia<br />

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Asia Pacific Net Advertising Growth<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />11<br />Source: MPA Research Estimates<br />

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The Digital Divide<br />The Marketing Confidence Gap<br />17 July 2009<br />© Microsoft Corporation 2009 | WW CMG<br />Slide 12<br />Source: Neo@Ogilvy<br />

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2007 Online Ad Market = $34B<br />6% of total Ad Market<br />2009 Online Ad Market = $52B<br />8% of total Ad Market<br />Total Advertising Industry = $570B<br />Total Software Industry = $135B<br />Software & Ad Market<br /> Online Ads<br />2009: $52B<br />Online Ads<br />$34B<br />Sources: <br /><ul><li>Market Sizes: Microsoft & Universal McCann

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Online Market Sizes: Oppenheimer & Co. Inc., June 2007 (sources include Universal McCann, Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers )</li></ul>17 July 2009<br />© Microsoft Corporation 2009 | WW CMG<br />13<br />

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Global Media Consumption<br />17 July 2009<br />© Microsoft Corporation 2009 | WW CMG<br />Slide 14<br />

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…what about Microsoft?<br />Of the $500 million Microsoft allocated to the introduction of its Vista operating system, 30% went online.<br />Source: Times UK Online, October 21, 2005<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />15<br />

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Future Shape of Advertising<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />16<br />

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1. Changing Landscape<br />Did you know?<br />Bring the Love back<br />Digital Divide<br />Future Shape of Advertising<br />Agenda<br />2. Advertising v3.0<br />Trade Maps<br />New Marketing Model<br />Experiential Marketing<br />Measuring Engagement<br />3. Media & Management<br />Altered Media Universe<br />Role of Media & Agencies<br />Case Study from the Future<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />17<br />

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17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />Slide 18<br />

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The New Marketing Funnel<br />“The traditional AIDA funnel has become a sea of complexity”<br />Source: Forrester Research<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />19<br />

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Trade Maps: Then and Now<br />18th Century: Map of the Northwest Passage<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />20<br />

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Trade Maps: Then and Now<br />21st Century: Social Trade Map<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />21<br />

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17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />Slide 22<br />Source: http://www.caida.org/tools/visualization/walrus/gallery1/<br />

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Customer-2-CustomerGeneration ‘C’ (for Content)<br />Research shows that 65%of all marketing spend in 2007 had no effect on consumers <br /><ul><li>70% of all Asian marketers are not tracking the effectiveness of their spending</li></ul>Source: The Fournaise Marketing Group’s 2007 Global Marketing Effectiveness Report<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />23<br />

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Case Study: Unilever<br />http://www.campaignforrealbeauty.com<br />http://www.youtube.com/results?search_query=dove<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />24<br />Source: Youtube.com – 19,036,415 Views, October 2008<br />

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Campaign for real Beauty<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />Slide 25<br />Source: Youtube.com – 19,036,415 Views, October 2008<br />

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Campaign against real Life<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />Slide 26<br />Source: Youtube.com – 2,697,709 Views, October 2008<br />

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Talk to your Daughter before they do!<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />Slide 27<br />Source: Youtube.com – 2,697,709 Views, October 2008<br />

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Talk to your Daughter before Unilever does!<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />Slide 28<br />Source: Youtube.com – 164,946 Views, October 2008<br />

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Talk to Dove before it’s too late!<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />Slide 29<br />Source: Youtube.com – 557,368 Views, October 2008<br />

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Customer-2-Customer<br />Research shows that 86%of consumers no longer believe what brands say about themselves<br /><ul><li>Whereas 78% of consumers believe what other consumers say about brands</li></ul>Source: http://bbdolab.typepad.com/the_lab/2006/10/generation_c.html<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />30<br />

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The top Brands that will be those whose Consumers... <br />...tell the best Stories<br />

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Brands with themost Recommendation in theirCategory grow 4x faster than theCategory Average.Increasing recommendation by12% doubles sales growth.<br />Source: London School of Economics<br />Source: Bain Consulting<br />

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Exploding Referral Spectrum<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />Slide 33<br />Source: The Value Profit Chain, Heskett/Sasser, Jan 2003<br />

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Engaging Customers<br />“The essential difference between reason (logic) and emotion is that reason leads to conclusions while emotion leads to actions.” <br />- Neurologist Donald Calne<br />17 July 2009<br />34<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />

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Engaging Customers<br />“95 percent of our purchase decision making takes place in the subconscious mind...” <br />- Gerald Zaltman, Professor, Harvard Business School<br />17 July 2009<br />35<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />

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New Marketing Model<br />Source: Mohan Sawhney, Kellogg School of Management<br />17 July 2009<br />Slide 36<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />

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Experiential Marketing<br />Attract<br />Engage<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />37<br />Excite<br />

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Engaging Consumers<br />Immersive<br />Interactive<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />38<br />Participatory<br />

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Perception<br />80% of CEO’s believe their brands provide a superior customer experience<br /><ul><li> 8% of their customer agree</li></ul>Source: Bain & Company<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />39<br />

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Rich Digital Experiences<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />Slide 40<br />Source: AvenueARazorfish :: Showreel<br />e.g. http://www.audi.com/a4globaldrives<br />

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PUBLISHER<br />TOOLS PROVIDER<br />Microsoft Media Network<br />17 July 2009<br />© Microsoft Corporation 2009 | WW CMG<br />Slide 41<br />

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Engagement Duration<br />Challenge<br />The new Marketing needs to not only to attract, but also engage & excite <br />Reach & Frequency are not catering to measure the quality of Engagement & Excitement<br />Solution<br />This new metric is coined: Brand Exposure Duration - BXD<br />BXD is the length of time an individual is exposed to a given advertisement<br />BXD = Views × Percent of Segment Viewed × Segment Length<br />BXD = Video Ad Views x %65 x 30 sec.<br />17 July 2009<br />42<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />

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Engagement Mapping<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />Slide 43<br />Engagement Mapping is a flexible attribution model <br />that enable advertisers to include many factors<br />In their Engagement ROI calculations<br />Source: Atlas Engagement Mapping Paper, 2008<br />

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1. Changing Landscape<br />Did you know?<br />Bring the Love back<br />Digital Divide<br />Future Shape of Advertising<br />Agenda<br />2. Advertising v3.0<br />Trade Maps<br />New Marketing Model<br />Experiential Marketing<br />Measuring Engagement<br />3. Media & Management<br />Altered Media Universe<br />Role of Media & Agencies<br />Case Study from the Future<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />44<br />

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17 July 2009<br />Slide 45<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />

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The End of Mass Media<br />7,109<br />Number of TV Channels<br />~3,000<br />1,686<br />416<br />246<br />93<br />UK<br />Japan<br />US<br />France<br />Germany<br />Source: Europe: Screen Digest 2005, Japan: Wikipedia May 2006, US: US Federal Comms Commission, 2004<br />17 July 2009<br />46<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />China<br />

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The KING still reins<br />17 July 2009<br />47<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />

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Breadth & Depth across APAC<br />17 July 2009<br />© Microsoft Corporation 2009 | WW CMG<br />Slide 48<br />Total APAC reach : 288 million | 34.1% coverage of all APAC online<br />20.8musers in Japan <br />145m users in China<br />7.1m users in S Korea<br />5.7musers in Taiwan<br />2.4musers in Hong Kong<br />8.5m users in India <br />0.7musers in Philippines<br />4.2musers in Thailand<br />4.3m users in Malaysia<br />8.7musers in Australia<br />1.9musers in Singapore<br />1.5musers in New Zealand<br />Source: ComScore & iResearch : Dec 08<br />

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YOU as the editor<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />49<br />

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Planning & Creativity<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />50<br />

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The Future of Marketing - From Monologue to Dialogue<br />“Media execution &media buying is becoming the new creative in advertising”<br />Source: The Economist Intelligence Unit, September 2006<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />51<br />

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Placement vs. Audience<br />Digital Lifestyle<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />52<br />

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Future Advertising Scenario<br />Integrated Advertising Campaign with<br />Real-time automated Optimization<br />Based on End Actions/Conversions<br />Based on Brand Metrics<br />Utilizing 100-1,000s of Creative Versions<br />In 100s of Sizes and Formats<br />Personalized and hyper-targeted<br />In multiple Advertising Exchanges and Platforms<br />Online, IPTV, Mobile, Music Players, In-Game, Digital POS, Digital Outdoor<br />With bidded CPA (Cost per Acquisition)<br /><ul><li>Advertising will move from

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A fixed Cost to the Business

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To a variable Cost of Production</li></ul>17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />Slide 53<br />

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A Vision of the Digital Future<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />54<br />

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1. Changing Landscape<br />Did you know?<br />Bring the Love back<br />Digital Divide<br />Future Shape of Advertising<br />Summary<br />2. Advertising v3.0<br />Trade Maps<br />New Marketing Model<br />Experiential Marketing<br />Measuring Engagement<br />3. Media & Management<br />Altered Media Universe<br />Role of Media & Agencies<br />Case Study from the Future<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />55<br />

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Advertising v3.0 Bloghttp://advertising3.spaces.live.com<br />17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />Slide 56<br />

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17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />57<br />

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17 July 2009<br />© Microsoft Corporation 2009 | CMG | Global Marketing Group<br />58<br />