The document outlines seven key digital trends for 2011, including the rise of apps across all platforms, convergence in content consumption, and the increasing importance of location-based services. It highlights the significant shift in marketing budgets towards social media, with a growing emphasis on integrating these tools across company functions. Additionally, the document discusses the implications of real-time bidding, audience targeting versus content targeting, and the escalating debate surrounding online privacy.

1. Principal Analysts, eMarketer, Inc. Key Digital Trends for 2011 Sponsored by: Presented By: Noah Elkin Debra Aho Williamson David Hallerman D E C E M B E R 1 6 2 0 1 0 N E W Y O R K NY

2. 7 Trends for 2011 Trend 1: Apps Invade All Platforms Trend 2 : Content Consumption Convergence Trend 3: Location, Location, Location Trend 4: Social Gets Its Share of Marketing Dollars Trend 5: Real-Time Bidding Trend 6: Targeting Audiences vs. Content Trend 7: Online Privacy Debate Heats Up

3. Trend #1 Apps Invade All Platforms Noah Elkin Principal Analyst, eMarketer, Inc. @noahelkin

4. We’re accustomed to using apps on mobile devices Source: Distimo, Dec 2010

5. Next phase in evolution: apps go everywhere — mobile, desktop, TV

6. Trend #2 Content Consumption Convergence

7. Consumers engage seamlessly with content across multiple platforms Twitter: #eMwebinar

8. Exploit unique characteristics each platform offers… Source: Rhythm NewMedia, “Q3 2010 Mobile Video Advertising Report”

9. … and pay close attention to the way devices and context increase the appeal of advertising

10. Trend #3 Location, Location, Location

11. Social networks are increasingly the conduit for mobile communication

12. Mobile social network usage will more than double between 2010 and 2015 Twitter: #eMwebinar

13. Location-based services have surged but aren’t yet mainstream

14. Checking in motivated by prospect of value exchange: obtaining useful information and finding deals

15. Marketer spending around location is starting to ramp up

16. Trend #4 Social Gets Its Share of Marketing Dollars Debra Aho Williamson Principal Analyst, eMarketer, Inc. @DebraWilliamson

17. Social media is no longer an add-on for marketers Usage of social media tools is still growing. 80% of companies with 100+ employees will use social media marketing in 2011. Budgets are increasing. Marketers are shifting funds into social media and away from other types of marketing. Integration is key. Although some companies have created separate social media departments, the more common trend is to integrate it across company functions. The need for ROI is critical. Without it, future spending increases may be curtailed. Twitter: #eMwebinar

18. Four out of five marketers will utilize social media tools in 2011

19. Changing consumer usage patterns make social media a must Facebook is still growing. It’s a top site around the world and the fourth largest in the US (comScore) . Worldwide usage is rising. Six out of 10 frequent internet users worldwide have a social network profile (UM). Brand interactions are increasing. Coupons, deals and discounts are encouraging consumers to engage with marketers.

20. More than 8 in 10 companies plan spending increases next year Twitter: #eMwebinar

21. However, not every industry has adopted social media at the same rate—and some never will

22. Among those that do use social media, usage rates are approaching the level of email marketing

23. As marketers funnel more funds toward social media, spending on traditional forms of advertising is falling

24. Businesses are divided on who should manage social media Only 6% have a dedicated group

25. Marketer perspectives: Intel and GM “ Intel has been an early adopter in social media, but we haven’t funded it as well as many of us would like. Social media is not free. We don’t want to tap into our paid media budget. We want to separate those two while driving deeper integration between paid and social media.” — eMarketer interview with Kathleen Malone, Senior Manager and Social Media Strategist “ The brand teams have never budgeted their own line items [for social media marketing]. Now, marketing rightfully is becoming more involved in the planning and budgeting, and also the strategic side of it. The brands are now baking social into their overall marketing budget.” — eMarketer interview with Christopher Barger, Global Director of Social Media

26. Although budgets are rising, the ROI question is still not answered

27. Trend #5 Real-Time Bidding David Hallerman Principal Analyst, eMarketer, Inc. @DHallerman

28. Display advertising will be an even bigger source of spending growth than search

29. When marketers buy ads using real-time bidding, they bid on impressions based on: The specific site The location of the ad on the site The number of impressions desired Any potential cookie data for segmentation Helps marketers buy audience instead of inventory Helps publishers sell lesser inventory at higher prices Targeting typically demographic and psychographic (less so behavioral, so sidesteps many privacy issues) What real-time bidding (RTB) means for marketers looking to buy display ads Twitter: #eMwebinar

30. Demand side platforms (DSPs) and advertising exchanges : two key elements of the RTB ecosystem ( ad networks, too )

32. Trend #6 Targeting Audiences vs. Content

33. Battle about targeting tactics is, in many ways, a battle between ad networks and publishers about data Who owns the data? ( gets into privacy issues ) Which method is more effective? ( marketers in middle ) Which data targets best? ( demographic goes two ways ) Is the audience equally receptive to message anywhere? What’s the value of premium sites? ( context vs. reach ) A bottom line question: What’s most useful for ads, community or content? ( publishers can do both ) On one side , classic content targeting On the other side , only audiences matter

34. In 2010, four types of targeting used by 50% or more: • Demographic • Behavioral • Channel • Contextual Twitter: #eMwebinar

35. Audience segmentation and targeting key factors driving the move to digital marketing

36. Audience targeting for display part of larger, holistic online advertising

37. Trend #7 Online Privacy Debate Heats Up

38. 7 key factors driving the debate about digital privacy Consumer concern about being tracked Advertiser-publisher need to monetize Combining online with offline data Rapid growth of Facebook’s ad system Rise of check-ins, location-based services EU’s focus on stricter privacy protection Consumer choice vs. marketer goals Twitter: #eMwebinar

39. Behavioral targeting: The more people know, the less they seem to like it

40. Marketers’ own concerns about privacy limit spending on behavioral targeting

41. Regulation: More people trust the government than advertisers ( but most don’t trust either entity )

42. Privacy concerns ( or not ) among half of social network users Source: Marist Institute, July 2010

43. Unica’s Definition of Interactive Marketing Engaging each customer and prospect in a cross-channel dialog that builds upon their past and current behavior

44. Survey Results: “Are you doing ‘interactive marketing?’” From Unica’s global survey of senior marketers, launched October 2010

45. Survey Results: “What makes interactive marketing hard?” From Unica’s global survey of senior marketers, launched October 2010

46. Unica’s Interactive Marketing Technology Framework Facilitates collaboration and cross-channel planning, design, execution, and measurement. Integrated Marketing Operations Awareness Decisioning Execution Plans & Budgets People & Processes Data & Assets Measurement & Performance Web Analytics Predictive Analytics Visual Exploration Event Detection Segmentation Offer Management Real-Time Targeting Interaction History Contact Optimization Email Inbound Integration Lead Routing & Monitoring Distributed Marketing Search Optimization

47. Unica, an IBM Company 100% focused on marketing Over 1,500 customers worldwide Market leading cross-channel campaign management Solutions available both OnDemand and Enterprise

48. Privacy concerns ( or not ) among half of social network users Source: Marist Institute, July 2010

49. 7 Trends for 2011 Trend 1: Apps Invade All Platforms Trend 2 : Content Consumption Convergence Trend 3: Location, Location, Location Trend 4: Social Gets Its Share of Marketing Dollars Trend 5: Real-Time Bidding Trend 6: Targeting Audiences vs. Content Trend 7: Online Privacy Debate Heats Up

50. Twitter hashtag: #eMwebinar Sponsored by: Key Digital Trends for 2011 Questions & Answers Registrants will receive an email tomorrow that includes a link to view the slide deck and webinar recording. For more discussion, please join us after the webinar on LinkedIn. Search for the eMarketer Group and click on Discussions. To learn about eMarketer Total Access please visit www.emarketer.com/products or contact us: (800) 405-0844 [email_address] Principal Analysts, eMarketer, Inc. Presented by: Noah Elkin, Debra Aho Williamson and David Hallerman