The document discusses the challenges facing the advertising industry due to economic crisis and digital disruption. It notes increased competition, uncertainty, and complexity in the business environment. It also highlights opportunities in digital advertising, such as the growth of mobile devices, social media, and targeted data. However, it warns that the digital advertising market faces issues like oversupply, low prices, and commoditization. It argues the industry needs to add more value through better targeting, experiences and conversations in order to address these challenges.

1. Turning COGS
Thursday, 9th June 2011
Anthony Rhind

2. Business environment ischallenging
... heightened by economic crisis
 Ultra Competition
 In a world of cheap interaction, entry
barriers are few & firms must compete
with a larger set of global rivals
 Uncertainty
 Difficult to predict market change;
where tomorrow’s consumer,
competitor or category innovation will
come from
 Complexity
 When interaction with everyone in
real-time is possible, decision-making
becomes significantly more complex
 Fragility
 Interaction shifts the balance of power
away from firms, to consumers,
governments & other stakeholders

3. Crisis has created a challenging
advertising environment

4. ... but a digital opportunity

5. Certainly consumer „connection‟
is extending very rapidly
Smartphones WW
2 billion internet 4.6 billion active Symbian 36.6 (44.6) 500+ million
users worldwide mobile „phones Android 25.5 (3.5) active Facebook
(Internet World Stats) worldwide iPhone 16.7 (17.1) users worldwide
(UN Telecommunications Agency)
(Facebook)
Blackberry 14.8 (20.7)
(Gartner Q3 2010)
1 million Kinect units
517 million digital
sold first 10 days. 5 7.5 million iPads
TV households
(Informa Telecoms & Media) million expected by sold in 6 months
Christmas (Apple)
(Microsoft)
4 million Foursquare 190 million Twitter
registered users registered users
(Twitter)
(Twitter)
72% of teens have 62% of European
become a brand "fan" shoppers consult
or "friend“ on a social online forums before
network buying

6. ... & capital stakeholders are confident
$9 billion cap
$8.5 billion Trading $95 vs.
10.5x revenue $45 IPO price
$575 million €750 million reported
2.6x revenue acquisition fund
6/16/2011 :: 7

7. So digital inherits the
(advertising) earth ... ?
6/16/2011 :: 8

8. Something isn‟t working ...

9. Supply & demand market disconnect
Source: Cisco Visual Networking Index: 2009–
2014

10. Audience is over supplied
& growth areas under valued
...
Fixed cost entertainment
Driven by social
Growth in low cost
advertising markets Impactful, innovative, mobile ...
hard to measure ROI

11. Familiar trading paradigm?

12. „Price‟ & „value‟ not the same ...
but price is an optimisation lever
Auditing is a fact of life ...
it‟s scope will increase

13. Digital content value
destruction ...
„publisher‟ &
„media agency‟
business model
Source: Cisco Visual Networking Index: 2009–2014
stress
6/16/2011 :: 14

14. Digital „tonnage‟ ...
advertising commoditisation
Cluttered consumer experience
Advertising poor, generic, annoying

15. Digital „tonnage‟ ...
advertising commoditisation
Cluttered consumer experience
Advertising poor, generic, annoying
Low publisher sell-through / yield
Stressed content business model
Agency margin stressed by commission
model, complexity & operational scale

16. Digital „tonnage‟ ...
advertising commoditisation
Cluttered consumer experience
Advertising poor, generic, annoying
Low publisher sell-through / yield
Stressed content business model
Agency margin stressed by commission model,
complexity & operational scale
Advertisers perceive digital as low
value

17. ...must ad(d) value
6/16/2011 :: 18

18. Less inventory is a requirement ...
scarcity & certainty drive value
Better consumer experience ...
Better advertiser experience …
6/16/2011 :: 19 Better publisher margin

19. “The next phase of media will be after the
page & after the site. Media can‟t expect
us to go to it all the time. Media must
insinuate itself into our steams.”
Jeff Jarvis
6/16/2011 :: 20

20. “1 billion impressions, 0.5% CTR”
... mustn‟t forget they are PEOPLE !!!
1963
The consumer isn't a moron;
she is your wife.
You insult her intelligence if
you assume that a mere slogan
& a few vapid adjectives will
persuade her to buy anything.
She wants all the information
you can give her.
6/16/2011 :: 21

21. Reflect person‟s many selves ...
reflect person‟s inter-related devices
CUSTOMER
USER
CONSUMER
PRODUCER PERSON
PARTICIPANT COMMUNITY
Content & advertising ...
authorised, user generated ...
peer to peer conversations

22. Touchpoints paid, owned, earned
& outcomes talk, think, trust
I talk WE talk THEY talk
TALK THINK TRUST
What the consumer What others
What the
experiences say about the
company says (interactions &
conversations) company
thebrand.com 23

23. Execution
must better exploit:
technology,
data,
automation,
programmatic - segmentation,
trading,
& „experience‟
6/16/2011 :: 24

24. Hype, hype, hype, hype, hype, hype
Believe it!
6/16/2011 :: 25

25. Today is only the dawn ...
Adoption
inevitable,
opportunity
significant
... move first!
6/16/2011 :: 26

26. Privacy no longer a “social norm”*
User level real-time data must enrich
digital planning & buying & creative
6/16/2011 :: 27
* Crunchie Awards: January 2010

27. Live „listening‟ to design
contact strategies is critical

28. New planning tools to balance
all touchpoints locally ... globally
6/16/2011 :: 29

29. Real-time execution based on
integrated consumer data-sets
Planning User-based Tailored Data
Guidance Optimization Management
Display Campaign Benchmarks by Client Industry, CTR (Left) and CPC (Right)
Timeframe: January-December 2007
• Pricing benchmarks • Cross-channel digital • Integration of sales &
• Reach & frequency reach & frequency engagement activity
estimates • Display influence on • Tailored KPIs
• Daypart synergy with search activity • Customized dashboard
offline • Keyword attribution reporting
and learning model

30. Impression level „audience‟ & „domain‟
optimised programmatic buying
6/16/2011 :: 31

31. Clashing cultures:
Creativity & intuition vs. technology & mathematics
“Philosophy is dead. “Dangerous primacy of
Philosophers have not mathematics over
kept up with modern psychology ...
developments in in business thinking &
science.” decision making”
6/16/2011 :: 32

32. Digital marketing must balance
„art‟ & „science‟
... whilst also enforcing RESPONSIBLY
6/16/2011 :: 33

33. “Re-tooling talent”
All levels & disciplines, especially management
6/16/2011 :: 34

34. Radical reinvention
doesn‟t happen overnight
6/16/2011 :: 35 130 years ... unfinished

35. Thank you!
Obrigado!
Gracias!
Merci!
Grazie!
Arigatô!
Vielen Dank!
Terima Kasih!
谢谢您!
6/16/2011 :: 36