Breaking Down the Resistance: Getting Your Organization To Invest (More) Dollars Online iMedia Brand Summit Las Vegas, NV ...
Challenge I: “ Why Rock the Boat?”
Whether we like it or not, the media landscape is changing… <ul><li>We can no longer rely solely on the  traditional appro...
% of adult evening viewers who can name a brand advertised in a TV show watched last night Sources: NAB (1965-1986); Niels...
<ul><li>The State of Television Today: </li></ul><ul><li>While the average US household has  96.4  TV channel choices, the...
Television costs and viewers over the past  10 years + 0 - +40% increase in ad spending 50% decrease in # of viewers
The average costs of advertising on TV continue to go up… <ul><li>Over the past 10 years, ad spending on broadcast TV has ...
78% of leading advertisers agree that the effectiveness of their TV advertising has diminished in the last 2 years.  Sourc...
The ANA study also found: <ul><li>70%  of (ANA) advertisers feel that DVRs and VOD will “reduce or destroy” the effectiven...
Digital Video Recorder (DVR) household penetration in the US Source: eMarketer, 2006: *Nielsen Media Reearch, 2005 Forrest...
In contrast to traditional media, online tools will get even more effective over the next three years
Challenge II: “ Haven’t I Heard This Before?”  Bubble?
The Internet has become an integral part of every day life for Americans… <ul><li>Internet penetration, among all American...
Nearly  70%  of  all  Americans have some kind of access to the Internet, with upwards of  63%  having access directly fro...
On average, American Internet users spend about  65 minutes  per day online Source: eMarketer, 2006; *Among adults 18+
While the average American spends  65  mins/day online, many key demographic groups spend far more time… Mins/day <ul><li>...
Time spent with the Internet comes at the expense of TV, newspapers and magazines
Among online users, the Internet has become an  essential  medium, more important than television “ For marketers, particu...
Challenge III: “ But My Brand Is Different”  A) I need to engage, to connect  emotionally  with my consumer
Particularly with broadband, the Internet allows you to  brand  in new and highly engaging ways… <ul><li>38%  of all onlin...
Two-thirds (67%) of  online  US households are on high-speed broadband connections Source: eMarketer, 2005; OECD (baseline...
The Internet beats magazines, newspapers and radio in terms of  capturing attention
% of marketers ranking the Internet as equal to or better than traditional media for creating brand awareness Source: Forr...
Reasons that Search advertisers are using Search engine marketing (SEM), 2005* Source: SEMPO, December, 2005 *among large ...
Branding as an online objective is increasing relative to direct response
79%  of US Internet users now  access the Web for entertainment (comScore Media Metrix, 2005):   Sources: *eMarketer, for ...
 
 
B) I have a small budget, so I can’t afford to add online to the mix
 
To get more granular, many marketers are using  behavioral targeting :  <ul><li>Allows you to deliver  relevant  messages ...
Challenge IV: “ Can It Really Make a Difference?”
The Internet can deliver more reach than you might expect… “ Can it really make a difference?”… <ul><li>Top Web sites garn...
Top Internet sites deliver large audiences for advertisers needing “reach” Source: comScore Media Metrix, August, 2006
Millions of weekly visitors to Television and online news channels Source: Nielsen Media Research, 2006 (television news c...
The Web is the now the  2nd leading  medium for most of the age/gender groups reached at  home #1  at home #2  at home #5 ...
But the Web is the leading medium for all age/gender groups reached at work #2  at work #3  at work #1 at work #5  at work...
While television campaigns reach the law of diminishing returns Branding Effect Frequency of ad exposures Television reach...
The Internet can extend the reach of TV, especially during the day time
39% 7% 44% 12% 46% 11% 31% 72% The Web also adds to magazines’ reach in  all major dayparts Reach for  Magazines + Web vs....
Global Survey: Over  70%  of global marketing executives believe online will determine how major campaigns are planned and...
Challenge V:  “ Specifically, Can You Drive Sales?”
The Web is exceptional at driving sales, whether the actual purchase happens online or off… <ul><li>Americans depend heavi...
242 M  Aged 14+ in US Population 156.8 M Online Aged 14+ Source: eMarketer, 2006 122.2 M Shoppers (78% of users) Online sh...
Over  80%  of broadband users buy products online
Expected  use of information sources  for buying a new car, according to consumers Source: Capgemini, June, 2005 N = 2,700...
“ When you’re ready to make a grocery purchase, which media do you turn to first?” Source: Vertis Customer Focus Retail, 2...
Plus,  80%  of Internet users use search engines, often for product research* 25%  went on to   make a purchase (on or off...
80%  of Internet users regularly use search engines, and frequently for product research 25%  went on to   make a purchase...
IAB’s  XMOS  studies show consistent link of online ads to offline sales <ul><li>4 consumer packaged goods brands </li></u...
Challenge VI: “ Let’s Just Watch and Wait”
We’re wasting valuable time not moving forward quickly with interactive… <ul><li>Success in interactive requires moving al...
Total media in the US is growing at ~5% for 2006 Myers Group   6.1% Citigroup   5.9% Zenith   5.2% Merrill Lynch  5.3% TNS...
But online advertising spending is now growing at over  30%  (dollars in billions) Source: eMarketer, 2006 Growth =  30%  ...
US online ad spending growth in 2006   No Search! Source: eMarketer, 2006
<ul><li>BtoB*:  72%  of marketing execs worldwide plan to increase their spending online in 2006 </li></ul><ul><li>ANA**: ...
Online’s share of total media dollars will fly pass  5.0%  this year, and reach over 10% by 2010 Source: eMarketer, March,...
Consider the growth rates for online advertising spending among major product categories, 2006 versus 2004 Source: eMarket...
Challenge VII: “ Do We Really Have the Resources and  Know-How To Make This New Media Work?”
We’re spending inefficiently now and with little understanding of effectiveness… <ul><li>We need to learn about interactiv...
Marketers today rank the Internet highly for its measurability and accountability: <ul><li>ARF :  73%  of advertising lead...
You’ve invested in me and my team. Here’s my plan: It covers <ul><li>Internal Capabilities </li></ul><ul><li>Partners </li...
Next steps: Give us your feedback Adapt it for your needs, and  present it to your boss or upper management Get a copy of ...
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Breaking Down the Barriers

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iMedia Executive Editor Brad Berens leads a discussion at iMedia Summit on top ten reasons to invest in interactive.

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  • Breaking Down the Barriers

    1. 1. Breaking Down the Resistance: Getting Your Organization To Invest (More) Dollars Online iMedia Brand Summit Las Vegas, NV September 12, 2006 Geoff Brad Tony
    2. 2. Challenge I: “ Why Rock the Boat?”
    3. 3. Whether we like it or not, the media landscape is changing… <ul><li>We can no longer rely solely on the traditional approach </li></ul><ul><ul><li>TV effectiveness is waning, and yet costs continue to rise </li></ul></ul><ul><ul><li>With fragmentation, TV doesn’t have the reach it once had and has become far less cost-effective </li></ul></ul><ul><ul><li>Plus, all media are going digital anyway (i.e., digital TV, digital radio, digital billboards, etc) </li></ul></ul>“ Why rock the boat?”
    4. 4. % of adult evening viewers who can name a brand advertised in a TV show watched last night Sources: NAB (1965-1986); Nielsen (2000)
    5. 5. <ul><li>The State of Television Today: </li></ul><ul><li>While the average US household has 96.4 TV channel choices, the average viewer watches only 15.4 * </li></ul><ul><li>Ad clutter has increased </li></ul><ul><li>Ratings have dropped </li></ul><ul><li>Fewer than 10% of consumers say that television ads influence their purchase decisions** </li></ul>Source: *Nielsen Media Research, 2006 **Forrester Research, 2006 Jim Stengel, CMO, P&G: “ In 1965, 80% of 18-49 year-olds in the US could be reached with three 60-second TV spots. In 2002, it required 117 prime-time commercials to do the same.”
    6. 6. Television costs and viewers over the past 10 years + 0 - +40% increase in ad spending 50% decrease in # of viewers
    7. 7. The average costs of advertising on TV continue to go up… <ul><li>Over the past 10 years, ad spending on broadcast TV has risen 40% , while the number of viewers has dropped by almost 50% * </li></ul><ul><li>Upfront CPMs for TV broadcast spots increased 7.3% in 2004/2005 and 2.6% in the 2005/2006 season </li></ul><ul><li>The cost of a Super Bowl ad has increased 14% between 2003 – 2006, yet the audience shrank </li></ul><ul><ul><li>John Hayes, </li></ul></ul><ul><ul><li>CMO: </li></ul></ul>“ Where else in the world can you be convinced to pay more for a commodity that’s experiencing diminishing returns?!” Source: McKinsey & Co., 2006
    8. 8. 78% of leading advertisers agree that the effectiveness of their TV advertising has diminished in the last 2 years. Source: ANA and Forrester Research, March 2006 (n = 133) McKinsey: By 2010, traditional TV advertising will be 1/3 as effective as it was in 1990!
    9. 9. The ANA study also found: <ul><li>70% of (ANA) advertisers feel that DVRs and VOD will “reduce or destroy” the effectiveness of :30 spots </li></ul><ul><li>When DVRs enter 30 million HHs, 60% of advertisers said they would cut back on TV, with one quarter slashing their spending by 25% </li></ul><ul><ul><li>80% claimed they would reallocate these dollars to the Web </li></ul></ul><ul><li>According to eMarketer, the 30-million mark for DVR penetration occurs in late 2008 </li></ul>Source: ANA and Forrester Research, March 2006 (n = 133)
    10. 10. Digital Video Recorder (DVR) household penetration in the US Source: eMarketer, 2006: *Nielsen Media Reearch, 2005 Forrester Research…. 10% Magna Global…..... 10% Nielsen Media….… 10% eMarketer…….….….. 10% Magna Global…….…. 14% Forrester Research… 14% eMarketer…….…….. 15% DIMA Group………… 16% Nielsen Media………. 18% JupiterResearch…… 44% eMarketer…….……. 41% Forrester Research.. 40% PwC………………… 31% Magna Global……… 27%
    11. 11. In contrast to traditional media, online tools will get even more effective over the next three years
    12. 12. Challenge II: “ Haven’t I Heard This Before?” Bubble?
    13. 13. The Internet has become an integral part of every day life for Americans… <ul><li>Internet penetration, among all Americans, is at 63% of homes, but over 70% have access overall </li></ul><ul><li>People are spending more time online, about 65 minutes per day on average (and some groups spend far more time) </li></ul><ul><li>People are highly dependent upon the Internet, both for pivotal points in their lives and for daily activities </li></ul>“ Haven’t I heard this before?”
    14. 14. Nearly 70% of all Americans have some kind of access to the Internet, with upwards of 63% having access directly from the home Source: eMarketer, 2006; *Access at home; **Among adults 18+; ***American Consumer Institute
    15. 15. On average, American Internet users spend about 65 minutes per day online Source: eMarketer, 2006; *Among adults 18+
    16. 16. While the average American spends 65 mins/day online, many key demographic groups spend far more time… Mins/day <ul><li>Teens Spend Much More Time Online: </li></ul><ul><li>JupiterResearch ……………… 86 mins/day </li></ul><ul><li>CBS News survey …………… 174 mins/day </li></ul><ul><li>Grunwald Associates ………… 210 mins/day </li></ul>Forrester Research: In addition to teens, people aged 18 – 26 also spend more time online than they do watching television 120 Jupiter Research, 2005 25 – 44-year-olds 137 GartnerG2, Mar 2005 C-level Execs 86 Jupiter Research 18 – 24-year olds 144 Harris Interactive Teenagers 113 C&R Research/Disney Mothers
    17. 17. Time spent with the Internet comes at the expense of TV, newspapers and magazines
    18. 18. Among online users, the Internet has become an essential medium, more important than television “ For marketers, particularly those looking to reach consumers at pivotal points in their lives, such as planning a marriage, buying a home, or having a baby, few media can match the Web’s ability to facilitate communications keyed to an individual’s specific needs.” --Peter Daboll, CEO, comScore Media Metrix
    19. 19. Challenge III: “ But My Brand Is Different” A) I need to engage, to connect emotionally with my consumer
    20. 20. Particularly with broadband, the Internet allows you to brand in new and highly engaging ways… <ul><li>38% of all online advertising dollars today go towards branding efforts </li></ul><ul><li>67% of all US households will be on broadband by year-end 2006, and over one-fifth of Internet users regularly watch video content online today </li></ul><ul><li>Broadband video allows us to reach our audience with the sight, sound, motion and emotion of television, but with better measurement , more granular targeting and opportunities for interaction and viral sharing </li></ul>“ My brand is different – I need to engage. ”
    21. 21. Two-thirds (67%) of online US households are on high-speed broadband connections Source: eMarketer, 2005; OECD (baseline years of 2001-2003) *Leichtman figure reflects 1Q 2006, not end-of-year = 52.2 million households Magna Global….…. 56.8 Deutsche Bank….. 55.2 eMarketer………… 52.2 Forrester Research.. 52.0 Strategy Analytics… 50.2 Yankee Group.……. 49.7 Leichtman…………. 46.0*
    22. 22. The Internet beats magazines, newspapers and radio in terms of capturing attention
    23. 23. % of marketers ranking the Internet as equal to or better than traditional media for creating brand awareness Source: Forrester Research, May, 2005 40% of B2B marketers consider online marketing to be very/extremely effective for building a brand image --Forrester Research/ABM, 2005
    24. 24. Reasons that Search advertisers are using Search engine marketing (SEM), 2005* Source: SEMPO, December, 2005 *among large firms with 500+ employees Outsell: 69% of US advertisers use search for branding, and 58% rate it “extremely/somewhat effective”
    25. 25. Branding as an online objective is increasing relative to direct response
    26. 26. 79% of US Internet users now access the Web for entertainment (comScore Media Metrix, 2005): Sources: *eMarketer, for year-end 2006; Forrester, 2006; OPA, 2006; Solutions Research Group, 2005; Nielsen//NetRatings, 2006; Ipsos Insight, May 2006 InsightExpress/Universal McCann Among heavy Internet users, those regularly watching online video…….. 54%
    27. 29. B) I have a small budget, so I can’t afford to add online to the mix
    28. 31. To get more granular, many marketers are using behavioral targeting : <ul><li>Allows you to deliver relevant messages to those who, by their past surfing behavior, have demonstrated an interest in your product/service category </li></ul><ul><li>This not only reduces waste , it can create a deeper “engagement” with the target you’re trying to reach </li></ul><ul><li>MarketingSherpa : 22% of marketers said they planned substantial budget increases for behavioral targeting, and 36% said they got “great results” </li></ul><ul><li>Ponemon Institute: 84% of marketers say they’re “satisfied” or “very satisfied” with behavioral targeting </li></ul><ul><li>US Advertising Agencies that are Satisfied with their Marketing Efforts: </li></ul><ul><ul><li>Among those using behavioral targeting, 88% </li></ul></ul><ul><ul><li>Among those not using BT, 56% --JupiterResearch, June, 2006 </li></ul></ul>
    29. 32. Challenge IV: “ Can It Really Make a Difference?”
    30. 33. The Internet can deliver more reach than you might expect… “ Can it really make a difference?”… <ul><li>Top Web sites garner audiences of 100 million or more </li></ul><ul><li>The Web has become the 2 nd leading medium for most age/gender groups reached in the home , and is the #1 medium for reaching people at work </li></ul><ul><li>The Internet can add significant reach to traditional media campaigns, such as television and magazines </li></ul><ul><li>The Internet is quickly becoming the central hub for integrated media plans </li></ul>
    31. 34. Top Internet sites deliver large audiences for advertisers needing “reach” Source: comScore Media Metrix, August, 2006
    32. 35. Millions of weekly visitors to Television and online news channels Source: Nielsen Media Research, 2006 (television news channels for week of August 7, 2006); comScore Media Metrix, 2006 (online news sites for week of July 30, 2006) Television Internet
    33. 36. The Web is the now the 2nd leading medium for most of the age/gender groups reached at home #1 at home #2 at home #5 at home #4 at home #3 at home Source: Ball State University and OPA, 2006
    34. 37. But the Web is the leading medium for all age/gender groups reached at work #2 at work #3 at work #1 at work #5 at work #4 at work Source: Ball State University and OPA, 2006 Over 50 million Americans are regularly online at work --comScore, 2006
    35. 38. While television campaigns reach the law of diminishing returns Branding Effect Frequency of ad exposures Television reaches ~75% of HHs The Internet can provide incremental reach (at a lower cost)
    36. 39. The Internet can extend the reach of TV, especially during the day time
    37. 40. 39% 7% 44% 12% 46% 11% 31% 72% The Web also adds to magazines’ reach in all major dayparts Reach for Magazines + Web vs. Magazines alone Source: Ball State University and OPA, 2006
    38. 41. Global Survey: Over 70% of global marketing executives believe online will determine how major campaigns are planned and executed by 2008
    39. 42. Challenge V: “ Specifically, Can You Drive Sales?”
    40. 43. The Web is exceptional at driving sales, whether the actual purchase happens online or off… <ul><li>Americans depend heavily on the Web to find information about products and services </li></ul><ul><li>Over three-fourths ( 78% ) of those online use the Web to shop for products and services before buying, and two-thirds ( 66% ) make purchases directly online </li></ul><ul><li>80% of Americans online use search engines, and they frequently use them to research products they’re intending to purchase </li></ul><ul><ul><li>Using search, marketers can reach highly interested prospects (“hand raisers”) with great efficiency </li></ul></ul>“ Can the Internet drive sales?”
    41. 44. 242 M Aged 14+ in US Population 156.8 M Online Aged 14+ Source: eMarketer, 2006 122.2 M Shoppers (78% of users) Online shopping & buying model for U.S. (2006) 102.8 M Online Buyers (66% of Net users) Jupiter……….. 65% Burst Media…. 77% eMarketer ……. 78% Pew………….. 78% Retail Forward.. 87% eMarketer ……. 66% Pew………….. 67% Forrester…….... 68% Retail Forward… 79%
    42. 45. Over 80% of broadband users buy products online
    43. 46. Expected use of information sources for buying a new car, according to consumers Source: Capgemini, June, 2005 N = 2,700 in-market consumers across five countries 89% of new-vehicle buyers use a search engine or portal at some point in their research, and 94% of used-vehicle buyers do so --J.D. Power & Associates, 2005
    44. 47. “ When you’re ready to make a grocery purchase, which media do you turn to first?” Source: Vertis Customer Focus Retail, 2004 Harris Interactive : 58% of Internet users say they have responded to a promotion or coupon received via e-mail
    45. 48. Plus, 80% of Internet users use search engines, often for product research* 25% went on to make a purchase (on or offline)** Source: *eMarketer, 2006; comScore Networks, 2006 During 2005 holiday shopping season, among consumers searching for various products**…
    46. 49. 80% of Internet users regularly use search engines, and frequently for product research 25% went on to make a purchase (on or offline)** During 2005 holiday shopping season, among consumers searching for various products**… 37% bought online 63% bought offline Source: *eMarketer, 2006; comScore Networks, 2006
    47. 50. IAB’s XMOS studies show consistent link of online ads to offline sales <ul><li>4 consumer packaged goods brands </li></ul><ul><li>Ford F-150 </li></ul>+7 – 12.5% lift in sales from Web +6% lift tied to online Source: IAB/Marketing Evolution, 2004
    48. 51. Challenge VI: “ Let’s Just Watch and Wait”
    49. 52. We’re wasting valuable time not moving forward quickly with interactive… <ul><li>Success in interactive requires moving along a learning curve </li></ul><ul><li>Those who move quickly will have a competitive advantage </li></ul><ul><li>Plus, our competitors are moving to interactive, and that’s where the money is shifting – FAST! </li></ul>“ Let’s just watch and wait”…
    50. 53. Total media in the US is growing at ~5% for 2006 Myers Group 6.1% Citigroup 5.9% Zenith 5.2% Merrill Lynch 5.3% TNS 4.9% S&P 5.0% eMarketer 4.2% McCann 5.6% TNS First Half ’06 4.1%
    51. 54. But online advertising spending is now growing at over 30% (dollars in billions) Source: eMarketer, 2006 Growth = 30% Growth = 33.6%
    52. 55. US online ad spending growth in 2006 No Search! Source: eMarketer, 2006
    53. 56. <ul><li>BtoB*: 72% of marketing execs worldwide plan to increase their spending online in 2006 </li></ul><ul><li>ANA**: 80% of advertisers say they will spend more of their budgets on Web ads </li></ul><ul><li>TNS***: 49% of CMOs at Fortune 500 firms plan to increase their online ad spending by 30% </li></ul>Source: * BtoB Magazine Survey, Dec. 2005; **Assoc. of National Advertisers and Forrester Research, March 2006 (n = 133); ***TNS Survey, 2005; Many surveys support the trend towards increased spending online…
    54. 57. Online’s share of total media dollars will fly pass 5.0% this year, and reach over 10% by 2010 Source: eMarketer, March, 2006 “ We are at the tipping point of dollars sailing out of traditional media and into Internet or emerging media.” --Mark Rosenthal, CEO, Interpublic Media
    55. 58. Consider the growth rates for online advertising spending among major product categories, 2006 versus 2004 Source: eMarketer, 2006, with baseline 2004 and 2005 figures from the IAB
    56. 59. Challenge VII: “ Do We Really Have the Resources and Know-How To Make This New Media Work?”
    57. 60. We’re spending inefficiently now and with little understanding of effectiveness… <ul><li>We need to learn about interactive, and there is plenty of data, outside support and expertise that we can tap into </li></ul><ul><li>Plus, the Internet, because of it’s measurability, allows you to quickly and cheaply test what works (and what doesn’t) </li></ul><ul><li>We need to get on the learning curve now </li></ul>“ Do we have the resources and know how?”
    58. 61. Marketers today rank the Internet highly for its measurability and accountability: <ul><li>ARF : 73% of advertising leaders think digital delivers higher ROI than traditional media </li></ul><ul><li>Millward Brown : 61% of marketers say online does a better job at providing measurable ROI than does television, magazines or radio </li></ul><ul><li>We’ve learned that some online techniques – e.g., large display ads, rich media, video ads, behavioral targeting, integrated sponsorships and search marketing – work better than others </li></ul>“ Measurements are extremely important…In the online world, you can have a direct answer. You have a click and you know where it came from.” --Matthias Lilja, Marketing Manager
    59. 62. You’ve invested in me and my team. Here’s my plan: It covers <ul><li>Internal Capabilities </li></ul><ul><li>Partners </li></ul><ul><li>Learning by Example </li></ul><ul><li>Education and Training </li></ul><ul><li>Industry data and case studies available </li></ul>
    60. 63. Next steps: Give us your feedback Adapt it for your needs, and present it to your boss or upper management Get a copy of this presentation If you need more supporting data, especially for a particular industry category, contact me at: [email_address] 212-763-6042

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