3. Context of my thinking ...
Marketing and Advertising
Chief Digital Officer, HCG (Omnicom)
Digital
Business Strategy Technology / Innovation
McKinsey Consultant PhD, MIT Mat‟l Science
-3- Augustine Fou
11. Newspaper Ads Declining
Classified ad revenue Overall ad revenues fell
declining since 2000 off cliff (back to 1950‟s
levels)
- 11 - Augustine Fou
12. Newspaper Companies
Gannett Co., Inc. (GCI) - $3.4B market cap July 2012
New York Times (NYT) - $1.1B market cap July 2012
Both off 70-80% since 2007 peak
- 12 - Augustine Fou
13. Magazine Ads Declining
Circulation
declining
Ad prices
pressured by
online
alternatives
Shift away
from reach to
performance
- 13 - Augustine Fou
14. Magazine Companies
Meredith Corp (MDP) - $1.4B market cap July 2012
Martha Stewart (MSO) - $235M market cap July 2012
Off 50% (MDP) and 80% (MSO)
since 2007 peak
- 14 - Augustine Fou
15. Comparing Costs of Media
Normalizing (CPM) cost to reach 1,000 users or impressions
Elle Magazine Superbowl 2013 Websites/Digital
Circulation 1.1M Audience 108M Target Audiences
$156k /pg $4M /30s eCPM: $1‟s of dollars
eCPM: $141 eCPM: $37
Source: AP March 10, 2013
- 15 - Augustine Fou
16. From Traditional to Digital
Television is 42%
Online is 38%
Source: IAB and Business
Insider Oct 2012
- 16 - Augustine Fou
18. Users watch what they want
Broadcast Cable Online Video
mass audience niche audience individuals
‟80s-‟98 ‟99-‟12 ‟05-pres
- 18 - Augustine Fou
19. When they want …
Tivo Research
(Sep 2012)
Finds up to 72%
ads skipped
IPG/YuMe (May 2011) study found
63% of TV ads are avoided or simply ignored.
Nielsen (Dec 2010) estimates 44% of ads are not skipped
– i.e. 56% of ads ARE SKIPPED
- 19 - Augustine Fou
20. On whatever device …
Source: Google, August 2012 Multi-screen World
- 20 - Augustine Fou
21. Users go where they want …
Content Portals Major Blogs Facebook
Twitter
audience size
- 21 - Augustine Fou
22. Users share more online …
HTML Coding Blogs Social Networks
<!DOCTYPE html>
<html>
<body>
<h1>My First Heading</h1>
<p>My first paragraph.</p>
</body>
</html>
only developers writers/individuals everyone
„90s 2000s ‟05-pres
- 22 - Augustine Fou
23. Users search more often
Users rely on search even Google reports more than 3
more frequently. billion searches per day
Source: Pew Internet March 2012 Source: Business Insider 2012
- 23 - Augustine Fou
24. Users search more savvy
Long tail terms imply users • Users are searching longer terms
type longer phrases to get • Average query word count is
more accurate search results. greater than 4 words, in 2012
Source: Optify 2012 Source: Chitika, Jan 2012
- 24 - Augustine Fou
25. Search is more efficient...
Pay for impressions
CPM
CPC
Pay for clicks
… pay only for results (clicks).
- 25 - Augustine Fou
26. From CPM to Performance
Source: IAB, PwC April 2012
- 26 - Augustine Fou
28. Users have instant and …
“no, that isn‟t the „best
price‟ for this HDTV
and the reviews aren‟t
even that good… ”
• 43% smartphone owners used
device in-store
• 15% checked prices in-store and
then bought from competitor
Source: comScore 2012
…constant access to info
- 28 - Augustine Fou
29. Users Avoid Display Ads
Source: Banner
Blindness
“The ads to the right are only noticed by 23%
of the respondents, and they spend only half a
second on the ads.” Source: Mashable 12/29/2011
- 29 - Augustine Fou
30. Users Ignore/Delete Email
“this is what
gmail filters
are made for!”
Source: Feb 24, 2012 “2012 Digital Advertising Attitudes Report” via @eMarketer
- 30 - Augustine Fou
31. Users Revolt in Social
Forces BofA to rescind $5 monthly debit card fee
- 31 - Augustine Fou
32. Feb 2013 – Tesla Owners Refute
Falsified NYTimes Report
NYTimes reporter
seemingly deliberately
ran down the battery
and reported negatively
on the Tesla S. Now
owners set out to
publicly refute the
report.
Source: Gizmodo Feb
18, 2013
- 32 - Augustine Fou
33. Feb 2013 – Maker‟s Mark Reverses
Decision to Water Down
Whiskey drinkers didn‟t
like the idea of their
drink being diluted yet
still cost the same price.
Source: Business
Insider, Feb 17, 2013
- 33 - Augustine Fou
34. Users Exert Their Power
• 200 million phone numbers in the
National Do Not Call Registry
• 1 in 1000 direct mail pieces opened
(estimated, ever wonder why they never publish actual results?)
• FSIs (free standing inserts) –
performance unknown or estimated
- 34 - Augustine Fou
35. People search for products
People search for the products they want, not the brand in most cases
- 35 - Augustine Fou
38. Users look for context …
378 reviews
# of shares
- 38 - Augustine Fou
39. Users trust peers most …
92% trust
“recommendations from
people I know”
47% trust
“ads on TV”
Source: Nielsen, April 2012
33% trust
“online banner ads”
29% trust “text ads on
mobile phones”
… and ads the least.
- 39 - 26, 2012
November 39
Augustine Fou
40. From CPM to CPC to CPA
$7 CPM means $70 ad spend on CPM basis
$1 CPC means $100 ad spend on CPC basis
CPA is lowest risk and most cost effective
1% CTR 1% conversion $20 avg ticket, 5%
10,000 impressions 100 clicks 1 purchase $1 rev share
(CPM) (CPC) (CPA)
- 40 - Augustine Fou
45. Selecting Optimal Words
How do we ensure our content is findable
“baby bedding” is the way more users
search; 16x more than “infant bedding”
- 45 - Augustine Fou
46. Some visitors are more valuable
Visitors from display ads
Visitors from search Source: Google Analytics Sample CPG client
… site analytics show they stayed and engaged.
- 46 - Augustine Fou
47. What words to use?
How do we describe LinkedIn to small biz cardholders
“Business Networking?”
“Computer
Networking?” “Professional
Networking?”
“Social
“Networking?”
Networking?”
- 47 - Augustine Fou
48. Godaddy – Superbowl Ads
Search volume rises with Superbowl ads and NASCAR sponsorship
SuperBowl Ads NASCAR
- 48 - Augustine Fou
50. Study Cause and Effect
Purell demand and
search volume lifted
swine flu swine flu drove 1st peak
h1n1 h1n1 drove 2nd peak
- 50 - Augustine Fou
51. Demand Planning
See when users search for which products
chocolate covered strawberries (Valentine‟s)
chocolate covered cherries (Christmas)
- 51 - Augustine Fou
52. Grandma with Harley
Harley would usually not advertise to her because
she is not in their typical demographic, but ...
- 52 - Augustine Fou
52
53. Grandma with Harley
But .. when she comes online to search, our job as
marketers is to make sure she can find the information
she needs … and quickly get to the purchase.
- 53 - Augustine Fou
53
54. Marketing in a Digital World
Traditional Advertising Marketing in Digital World
1. Who is our target 1. What information does
customer? target user need?
2. What message do we 2. Do we have that info
push/shout at them? available?
3. Where do we stick the 3. Is it optimized so they can
message? find and use it?
storytelling performance
- 54 - Augustine Fou
55. Traditional
Digital
Performance
- 55 - Augustine Fou
57. Burberry – direct interactions
14 million fans
historic images
25,495 like the item
1,168 comments
- 57 - Augustine Fou
58. A Direct Way to Interact
Brands have more fans than top TV shows in viewership
Brands’ Facebook Top TV Shows
Burberry 12.6M 8.4M Once Upon A Time
Dior 7.8M 8.5M Desperate Housewives
Gucci 7.6M 8.6M Rules of Engagement
Louis Vuitton 7.3M 8.9M Touch
Chanel 6.5M 9.5M CSI: NY
Dolce & Gabbana 5.3M 9.7M Body Of Proof
Ralph Lauren 4.9M 10.0M SURVIVOR: ONE WORLD
Calvin Klein 4.0M 10.1M 60 Minutes
Coach 3.3M 10.5M Unforgettable
Armani 3.1M 10.7M Blue Bloods
Prada 1.7M 12.0M The Voice
Fendi 1.6M 14.0M Big Bang Theory
Versace 0.8M 14.6M Person Of Interest
Cartier 0.7M 18.0M Dancing with the Stars
Hermes 0.6M 18.6M NCIS
Source: Facebook, April 2012 Source: TVByTheNumbers, April 2012
- 58 - Augustine Fou
59. A Direct Way to Interact
Brands have more fans than top magazines have circulation
Brands’ Facebook Top Magazines
Burberry 12.6M 1.0M Marie Claire
Dior 7.8M 1.0M GQ
Gucci 7.6M 1.1M Lucky
Louis Vuitton 7.3M 1.1M Elle
Chanel 6.5M 1.2M Vanity Fair
Dolce & Gabbana 5.3M 1.3M Vogue
Ralph Lauren 4.9M 1.5M Self
Calvin Klein 4.0M 1.5M Fitness
Coach 3.3M 1.6M Shape
Armani 3.1M 1.7M InStyle
Prada 1.7M 2.0M Real Simple
Fendi 1.6M 2.0M Seventeen
Versace 0.8M 2.4M Glamour
Cartier 0.7M 3.0M Cosmopolitan
Hermes 0.6M 3.6M People
Source: Facebook, April 2012 Source: Wikipedia, 2H 2011
- 59 - Augustine Fou
60. Social Actions Are Free
Paid Advertising Social Actions
10k Impressions People telling people can lead to
the same 1 action for FREE
0.001% click-
rate
Share, recommend,
comment, rate, etc.
1 action (go to website) 1 action (go to website)
… and more effective (comes from a friend)
- 60 - Augustine Fou
61. Timex – real-time insights
Which styles are being
searched for
What users spend time
viewing on site
What users are buying
- 61 - Augustine Fou
63. Netflix (b2c)
Leveraged their Facebook fan base (1.6M) to do continuous customer research
by asking questions and posting useful content.
- 63 - Augustine Fou
64. B2B Enterprise
Demo videos for
IT
Professionals, prop
erly SEO‟ed with
technical terms
- 64 - Augustine Fou
67. Performance is …
• A digital tactic (affiliate)
• A business/pricing model
• Speedy innovation
• Efficient organization
• THE new mindset
- 67 - Augustine Fou
68. Dr. Augustine Fou – Agency Czar
“I study trends and advise clients
on optimizing their marketing mix
as well as increasing efficiency and
effectiveness of current tactics.”
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
ClickZ Articles: http://www.clickz.com/author/1151/augustine-fou
Slideshares: http://www.slideshare.net/augustinefou
LinkedIn: http://www.linkedin.com/in/augustinefou
- 68 - Augustine Fou