Advertising is Dead. Long Live Advertising.

Advertising is Dead!
Long Live Advertising!
IESE / IME Advanced Digital Media Strategies
May 12, 2010
New York City

com
greg@gregstuart.com Twitter.com/gregstuart
1

Double-Think

…the test of a first-rate intelligence is
the ability to hold two opposed ideas
in the mind at the same time, and
still retain the ability to function.
F Scott Fitzgerald

2

First Step: Know your Audience –
Are you?

Buy Side Sell Side
(Ad
(Ad Buyer, Marketer,
Seller, Publisher, etc.
etc.)
)
1 2

Enabler
(Content Creator, technology, etc.)
3

Investor 4
(M&A, Venture, etc.)

3

First Step: Your Reaction to Digital
Media

Love It Hate It
• Best thing that’s • Over hyped
ever happened • Who needs it
• Can’t get enough • Like to turn off

4

3 Areas To Cover Today
1. Why Advertising is Failing
2. What is Advertising’s Exciting Future
3. Where to Look in the Future
Items I Could Speak To:
Digital Media – Sales
Digital Media – Buying
Advertising
Social Media
Mobile Media
Start ups
Venture Capital
5

IT’S TOO BAD ADVERTISERS ARE
NOT GOOD AT ADVERTISING.

6

37% of Ad Spending is
slide title
Wasted

greg@gregstuart.com In the U.S., an estimated $112 Billion is Wasted Twitter.com/gregstuart
7

Researched $1 Billion in Ad Spend

1.1 Million Consumers Surveyed
Note: Of the 30 studies, 25 in U.S., 5 in EU
8

36%
Motivations Messaging Media

What Did Learn From the Research?

9

ING’s 4 Year Campaign: Fresh Thinking

10

Today’s Ads For ING
Simplifies A Complicated Financial World

11

36% 31%

More, What Do We Know?

12

A
B
Source: IAB Cross Media Study

How Big A Difference Can Creative Make?

13

Creative Makes A BIG Difference

A 20%
Purchase Intent

B 2%

0% 5% 10% 15% 20% 25%


14

A

B

And Just to See It Again

15

36% 31% 83%

Yes, It’s That Bad, and Worse

16

The Truth Is…Marketing is Hard

Suppose you have 5 options:
• 5 Brand Positionings
• 5 Customer Segmentations
• 5 Ad Creative Approaches
• 5 Magazine Schedules/Plans
• 5 Online Plans

3,125 Combinations
10 to 10th = 1 billion combinations
17

18

What Sticks was Written to Be…

A Clarion
to Call*

Marketers for Change
Clarion Call * A clarion call is a powerful request for
action or an irresistible mandate. Frequently used in a
religious context, or in a political context, in that a
politician issues a challenge for action from the
public.

19

What If They Don’t Take
slide title
the Call?

20

Donny Deutsch Quote

“We did a wonderful spot…on the Superbowl… for
Mitsubishi Gallant...that stops at the end and [says]
go to “seewhathappens.com.”
We got about 600,000 clicks.
Was that great or that not great?

We told the client it was great, so it was great.”
[nervous laughter]
− Donny Deutsch speaking to 500 Marketers…

Deutsch is the 14 largest agency in the US
21

So What Do We Do?
slide title

22

Focused on
EFFECTIVENESS!
What Did Google Do So Right
$20 Billion in Revenue Right!
23

Google’s Revenue Per Page
$68.00 eCPM
$0.54 CPC x 17% click thru x 74% sell thru

What is That Worth to Google?
Source: Jordan Rohan, Analyst at RBC
24

How Can We Drive
slide title
Effectiveness?

25

Respect Diminishing Returns:
It’s a Law of Physics in Media
100%
Awareness, Image or
% of Brand Impact

80% 5
Purchase Intent

4
3 Diminishing
60% 2 Returns
1
40%

20%

0%
1 2 3 4 5 6 7 8 9 10
Frequency or Budget

26

Heaviest Online Quintile Garners
Half the Ad Imps

70%
Percent of Total Impressions

60% 58%

50% Avg.
Freq: 1.0 2.1 3.2 5.5 25.0
40%
30%
19%
20%
11%
10% 5% 6%

0%
-10% Light All other Heavy
Users quintiles Users

27

Putting in Frequency Caps Greatly Improves
Increased Performance
reach by +50% to 70%
72% in Ad
Effectiveness
Percent of Total Impressions

70% Frequency Cap
60% of 3
implemented
50%
40%
29% 29%
30%
21%
20%
10% 12%
10%
0%
-10% Light All other Heavy
Users quintiles Users

28

Even Bigger Came from Adjusting the
Marketing Mix
Introducing New Menu Item: Grilled Chicken Flatbread Sandwich

60%
Reinvested Cut
13.6% 6.4%
50% in Online
% Aided Awareness

40% 5pt Gain!
20% of
30% Broadcast Budget

20%
Point of
Diminished
10% Returns

0%

-10% Ad Frequency (or Budget or Time)
29

Optimizing Each Campaign Is High Value

Brand Contri- Brand Contri-
Imps (M) Performance bution Imps (M) Performance bution
Creative 1 -- -- --
Creative 1 10.0 -15.9% (1.59)
Creative 2 15.0 13.8% 2.07
Creative 2 10.0 13.8% 1.38 Creative 3 15.0 11.3% 1.70
Creative 3 10.0 11.3% 1.13
Total 30.0 3.77
Total 30.0 0.92
Source: Insight Express

Same Media Budget  310% Increase
30

We CAN Really Impact +0% to
Ad Effectiveness INFINITY
increase in Ad
Insights from the What Sticks’ Research Effectiveness
Low High
1. Cut out International impressions 18% to 43%
2. Manage Frequency 50% to 70%
3. Capitalize on Time of Day/DoW 10% to 15%
4. Ad Size matters 20% to 54%
5. Page Placement really matters 6% to 350%
6. Creative is “mission critical” 0% to 400%
Total Gain Possible: 0% 2910%

31

WHAT IF WE GOT ADVERTISING RIGHT?

32

Ford F-150 Case Study
slide title

“Most Important Car Launch in
Ford’s History.” Bill Ford
33

The F-150 Online Ads

34

How Big a Difference Can Little Changes Make?

Demo
35

Online = 10X Value
Brand Metric:
Purchase
Consideration Relative
(top 2 box) Cost Index Relative Cost
TV 1104 $11.04
Magazine 456 $4.56
Roadblock 100 $1.00
Online 135 $1.35
Interpretation: If it cost Roadblock $1 (indexed at 100) to increase purchase consideration, then it
cost $1.35 for Online, $4.56 for magazine and $11.04 to TV to achieve the same increase.

36

Does “Getting It Right”, Impact Sales
100% Online New Mix Added +

80%
Traditional Media
(TV, Magazines)
Online
$$$ $1,350,000,000
in U.S. Truck sales

60%
Before: Cost of Portal Home Page
Take-Over ad in study:
40%
$500,000
20% Today: Cost of Portal Home Page
Take-Over ad:
0%
$2,500,000
Base 2.5% 6%
Plan Online Online
* Approx. $200 Million Budget
37

What Sticks’ Three Steps

1. Universal Agreement to Goals

2. Have a Back Up Plan (Plan B)

3. Know the Value of each Dollar

38

70-20-10
70% budget to what you know works
20% to innovating off of what works
10% to brand new ideas

1. Effectiveness
2. Efficiency

39

SNEAK PEEK AT THE FUTURE

40

The Changetitle
slide is Seismic

General
“The country’s third-largest advertiser,
Motors is getting ready to shift fully half of its
$3 billion budgetinto digital and one-to-one
marketing within the next 3 years.”

Advertising Age
March 17, 2008

41

But slide titleDo?
What to

42

And slide to Do It?
How title

43

slide title
The State of Advertisers?

44

3 Broad Media Trends Today
1.Fragmentation
2.Frugality
3.Fast(er)

45

1966 1996 2006
1. Newspapers 1. Newspapers 1. Newspapers
2. Broadcast TV 2. Magazines 2. Magazines
3. Magazines 3. Cable TV 3. Email
4. Broadcast Radio 4. Broadcast TV 4. Broadcast TV
5. Eight Track 5. Radio 5. Radio
6. Cassette Tapes 6. CD Player
7. Walkman 7. Cable TV
8. VCR 8. Personal Computer
9. Personal Computer 9. Satellite Television
10. Console Video Games 10. Internet
11. PC Video Games 11. Cellphone
12. DVD Players
13. Satellite Radio
14. MP3 Players
15. TivoDVR
16. Slingbox
17. iPod
18. Blogs
19. Online Video
20. Mobile Internet
21. Console Video Games
More Options Than Ever
22. PC Video Games
23. MMORP Games
24. Mobile Games

greg@gregstuart.com
25. Text Messaging Fragmented
Twitter.com/gregstuart
46 26. Mobile Video

People Spend 9 Hours a Day with Media

greg@gregstuart.com
Fragmented
Source: http://www.researchexcellence.com/ 47

Most is Networked Digital Media

greg@gregstuart.com
Fragmented
48

digital advertising more complex than ever and the
options more diverse
Outbound
IM communication iPhone apps
Email SMS/MMS
Streaming Display
marketing marketing
Podcasting Online Microsite
advertising development
Website
Development Influentials

Viral INTERACTIVE AD Seeding
CHANNEL
Online WOM Blogs
Branded
entertainment Microblogging
Search engine App CRM
Video - YouTube mktg Development application RSS

SEO Widgets

greg@gregstuart.com
Fragmented
49

Intense Focus on Adding
slide title
New Value

greg@gregstuart.com
Frugal
50

And the Adoption is Faster than Ever

Years to Reach 50 Million Users

Radio 38
TV 13
Internet 4
Ipod 3
60 million new Facebook user in
Facebook 1 the last two months of 2009

0 10 20 30 40
Source: United Nations Cyber Document, Apple, Facebook

greg@gregstuart.com
Faster
51

Mobile Internet Outpaces Computer Internet
iPhone + iTouch Users = 8x AOL Users 8 Quarters After Launch
60
Mobile Internet Desktop Internet
50
iPhone + iTouch Netscape*
Launched 6/07 Launched 12/94

40
Mobile Internet
Subscribers (MM)

NTT docomo i-mode
30 Launched 6/99

20
Desktop Internet

10 AOL*
V2.0 Launched 9/94

Q1 Q3 Q5 Q7 Q9 Q11 Q13 Q15 Q17 Q19
Quarters Since Launch

greg@gregstuart.com
Faster
52
Source: Morgan Stanley

The Twitter Phenomena
Registered Users
106 million
100.0 • Adding 300,000
registered a day
80.0
• 180 million uniques
‘Millions

60.0
a mo.
40.0 • 55 million tweets a
20.0
day

0.0
2006 2007 2008 2009 2010

Source: Twitter April 2010
greg@gregstuart.com
Faster
53

Maybe, Someday?

54

3 Digital Trends for Tomorrow
1. Ad Avoidance
2. Social
3. Mobile

55

Ad Blocking

Ad Blocking estimated at 7-8%*
• up from 2-3% in 2003
• eBay reports closer to 10-15%.
Search is lower at 5-6%
3 of the top 10 most popular software
downloads are ad blockers

Source: DCLK Analysis in 2005

greg@gregstuart.com
Avoidance
56

Ad Blocking: Before and After
Before After

greg@gregstuart.com
Avoidance
57

Cookie Deletion Rates by
(anonymous) Site
Cross Site User Breakdown
100%

18% 20% 17% 13% 13% 14%
90%
20%
80%
17% 13% 18%
19% 14% 26%
Percentage of Users

70%
29%
60%

50%

74%
40%

63% 66% 69% 68%
30%
57% 51%
20%

10%
Rejectors
Inconsistent
Acceptors
0%

Site A (8-27-05 Site B (11-17-05 Site C (9-1-05 Site D (2-14-06 Site E (2-22-06 Site F (2-01-06 Site G (2-01-06
thru 4-20-06) thru 4-19-06) thru 1-31-06) thru 4-20-06) thru 4-01-06) thru 4-20-06) Avoidance
thru 4-20-06)
58

People Want Relationships More than Content
Facebook – Largest Share Gainer of Online Usage Over Past 3 Years

Share of Global Online Time Spent, 6/06 – 6/09
14%

12%
Facebook
% Share of Global Minutes

10%

8% MSN YouTube
6%

4%

2% Yahoo!

0%
6/06 9/06 12/06 3/07 6/07 9/07 12/07 3/08 6/08 9/08 12/08 3/09 6/09

Yahoo.com Msn.com Google.com YouTube.com Facebook.om

greg@gregstuart.com
Social
59

• 76% of consumers visit a social
network in a month *

• 17% of time is Social Media **
– Social now represents 22% of
display impressions *

Explosion of Social
* comScore July 2009
** Nielsen 2009
greg@gregstuart.com
Social
60

Social Media is Evan Overtaking Email

Number of Global Users (MM) Global Minutes Spent per Month (B)
11/06 – 12/09 11/06 – 12/09

900 250

Social Networking Users
800
Surpassed Email = 7/09 200
Social Networking Usage
700 Surpassed Email = 11/07
150

600

100
500

50
400

300 0
11/06 7/07 3/08 11/08 7/09 11/06 7/07 3/08 11/08 7/09

Social Networking Email

greg@gregstuart.com
Social
61

2010 slide of Mobile
Year title

4.6B Mobile Users WW
17% Smartphone's in U.S.

projected @ 46% WW in 2013

greg@gregstuart.com
Mobile
62

Global Web Access is Going Mobile

2000 Mobile Web
Total Internet
1500

1000

500 Total
Internet
0
Mobile Web
2009
2013

Forrester 2009
greg@gregstuart.com
Mobile
63

What Does the Future Hold for Social Media?

64

Welcome to Double Think

In the novel 1984, doublethink
is simultaneously accepting as
correct, two mutually
contradictory beliefs.
It is related to, but distinct from, hypocrisy and neutrality. Its
opposite is Cognitive Dissonance, where the two beliefs
cause conflict in one's mind.

65

What Will Historians Say
Regarding Advertising?

It was the best of
the times, it was
the worst of times
66

What Sticks’ Three Steps

1. Universal Agreement to Goals

2. Have a Back Up Plan (Plan B)

3. Know the Value of each Dollar

67

70-20-10
70% budget to what you know works
20% to innovating off of what works
10% to brand new ideas

68

Industry On Brink of Change

I cannot say whether things
will get better if we change;
what I can say is they must
change if they are to get better.
− Georg Christoph Lichtenberg
18th-century German scientist,
satirist and Anglophile
69

com
greg@gregstuart.com
Website: www.gregstuart.com +1 631 702 0682
Speakersite: www.gregstuartspeaker.com
Blog: Mansavesdog.wordpress.com
www.slideshare.net/gregstuart
www.twitter.com/gregstuart
www.facebook.com/stuartnyc thank you!
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70

Advertising is Dead. Long Live Advertising.

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