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VOL 10
Razorfish Outlook Report Vol 10
3OUTLOOK REPORT | VOL 10
Outlook Report, Volume 10 — There’s no better time to start something.
The Year in Media
Forget Mobile — Think Multiscreen
A Wake-Up Call for Collaboration
It’s Time for Big Data to Improve Customer Experience
Humanity Check — What Consumers Really Think About Tech
How the Social Cloud Can Accelerate Brand Interaction
Beyond the Banner — Unleashing the Power of Digital to Drive Topline Growth
The Rules of Gamification
It’s Not Enough to Be Liked — Getting Serious About Social
Controlling the Retail Environment Through Digital Brand Immersion
Performance Marketing Must Die
Toward a New Global Digital Agency Structure
Limited Time to Prepare for Unlimited Potential of Mobile
How the Open API Movement Can Help Your Brand
Organizing for Digital Success
Authors and Contributors
Contact
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Go to razorfishoutlook.razorfish.com for an interactive version of Outlook Report, Vol 10.
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There’s no better time
to start something.
5OUTLOOK REPORT | VOL 10
In today’s world, social tools that started as communications
and marketing tools have become conduits for revolution.
Cloud-based services have finally emerged as viable methods
for increasing collaboration and driving greater efficiency.
And the investment world increasingly looks to start-ups
to once again push the global economy forward.
This means digital is now a lot bigger than agencies. In fact,
it’s bigger than marketing. It’s increasingly woven into the fabric
of our business and consumer culture. This inspires us more
than ever not only to optimize the status quo, but also to ignite
a business movement of sorts.
But how?
First, there is more pressure on our business to perform
creatively, stemming from the fact that digital ideas come
from more sources than just the agency. Indeed, as the new
generation of creators enters the workforce, we have observed
their natural tendency to put digital at the center of their process
and thinking, regardless of their chosen industry or employer.
As a result, companies like ours have to raise their game
creatively to deliver idea-led value to our clients, while creating
an environment for new ideas to thrive.
Next, there is a strong drive to leverage the power of technology
to increase efficiency and drive down the cost of marketing
and doing business. We are seeing tremendous opportunities
in the media marketplace, with the rise of ad exchanges, analytics
and marketing platforms, to do just that. We’re merely scratching
the surface of what’s possible.
Finally, efficiency alone won’t move business forward forever.
When I meet with CMOs, CIOs and CEOs around the world,
I continue to hear a call for innovation and see an ever-present
search for sources of incremental revenue. Marketers and
business leaders once tasked with spending budgets efficiently
are increasingly challenged with identifying new sources of growth,
as well as product enhancements.
The truth is, building an agency that fires on all cylinders — high
levels of creativity, innovation, efficiency and technology — is a
tremendous challenge. But it’s what agencies and great marketing
organizations will need to do to survive in the face of change.
Which brings me back to the Razorfish Outlook Report. I think
you’ll find it to be a little less theoretical and a bit more practical
than in years past. Why? Aren’t digital agencies supposed to be
the predictors of the digital future? There’s nothing wrong
with dreaming big, but first and foremost, in our view the next
12 months will be about doing.
We’re not just talking about the social media explosion, but
also scaling an organization and agency partners to execute
on a strategy. Not simply checking the boxes of media best
practices, but leveraging every tool available to plan, buy
and measure its effectiveness. Not just accepting the product
experience as it exists today, but using technology to improve
customer experience. Not just ideation, but also execution.
As we publish the Outlook Report, we hope it will inspire you
to think and act. It’s what we mean when we say Ignite.
As we gathered the data and spoke to clients and industry watchers to put together the Razorfish Outlook Report,
we once again found our business in the middle of tremendous global change. The conversation around digital
marketing — long the domain of digital agencies and technology companies — is now part of a much broader
conversation about social and cultural change, the global economy and business landscape.
Bob Lord
Global CEO
@RWLORD
Razorfish Outlook Report Vol 10
7OUTLOOK REPORT | VOL 10
TheYear in Media
Here’s our annual look at Razorfish ad spend, along with the results
of our media team poll to identify the “Best of the Web” and trends
for 2012. As we’ve done in the past, we polled the Razorfish media
team to discover the “Best of the Web,” asking a variety of different
questions to get a directional perspective of upcoming trends.
The questions revolved around creativity, performance, quality
and overall general satisfaction.
The past year in digital media was heavily influenced by the rapid adoption of new
channels like tablets, the explosive growth of new consumer platforms like Twitter
and new innovations in media buying such as ad exchanges. Overall, investments
in digital continue to grow year-over-year, playing an increasingly critical role in
our clients’ marketing plans. Consumer migration to digital media, the emergence
of new media powers and the sophistication of performance metrics made the
year in media one of the most dynamic in decades.
Ad spend in review
Razorfish ad spend is projected to grow by more than 25 percent in 2011, marking
the third consecutive year of more than 20 percent growth in overall ad spend for
the agency. The growth is a result of success in new business and from increased
investment from long-standing clients. After just two years, Publicis Groupe has
proven to be a great fit for Razorfish and our clients.
Now more than ever, the function of media planning is about understanding consumer
behaviors and needs — and how to craft experiences that deliver on the opportunities
The Razorfish Media Team
Thomas Sudassy
Media Research
and Publisher Relations
LINKEDIN.COM/IN/SUDASSY
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presented by those evolving behaviors. This is fundamentally
different than simply accumulating reach and exposure through
mass media. Our paid media spend was distributed across five
main channels, illustrating the increasing complexity faced by
clients and digital marketing teams.
A closer look at the distribution of ad spend reveals several
emerging trends:
1. Growth in ad exchanges
Razorfish has been active in buying through ad exchanges
since the early days of auction-based display media. We were
one of the first agencies to launch a trading desk to directly
access the growing pool of inventory and have continued
to be at the forefront of data integration through the creation
of client-side data mart solutions, now commonly referred
to as DMPs.
The Year in Media
SEARCH
DISPLAY
MOBILE
SOCIAL
NETWORKS/EXCHANGES
43%
36%
4%
4%
43%
13% 36%
4%
4%
Spend
Content is media.
0
50
100
150
200
Yearly media billings
INDEX
2008
2009
2010
2011(e)
9OUTLOOK REPORT | VOL 10
TAIL
BODY
STRATEGIC0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
TOTAL
SPEND
NUMBER OF
PUBLISHERS
2007
1,832
2008
1,024
2009
692
2010
598
Number of publishers vs. number of media partnersOur continued expansion into the auction-based media
marketplace has resulted in tremendous benefits for our clients
in terms of more effective pricing, better targeting and stronger
ROI overall. As we continue to grow and expand our efforts in
this area, we will be focused on integrating first- and third-party
data to build the most sophisticated targeting offering possible.
These efforts will, of course, be balanced by the industry’s
important and ongoing efforts to provide sound self-regulation
around data management and privacy.
Our investment in ad exchanges grew by 66 percent in 2010
and is projected to grow again by more than 60 percent
in 2011. Even with that growth, there is still plenty of upside
in this category since it represents less than 10 percent of our
total ad spend.
2. Consolidation of publisher partners
The emergence of new technologies and consumer channels
continues to provide opportunities for the emergence of new
publisher partners. In 2010, we purchased media across 598
sites, down from a high of 1,832 in 2007. While we expect
many of those buys to be consolidated through the growth
of audience buying across ad exchanges, we still see the
need to test new platforms and technologies.
However, we have continued to increase our concentration
on fewer and more strategic partners. This focus on more
complex, strategic partnerships has resulted in strong benefits
for our clients in terms of scale, price, innovation and access.
The breakout of our spend shows that 55 percent of our
aggregated budget goes to our top five strategic partners,
25 percent to the next 32 largest partners and the remaining
20 percent in our long tail of 584 publisher partners.
0
50
100
150
200
250
300
= TOTAL SPEND
2009
2010
2011
Total spend in ad exchanges
Spend breakout
INDEX
10
3. Increased investment in paid social media
The rapid rise of social media has impacted digital and our
clients’ business in many ways. As social media platforms
continued their explosive growth in the last year to reach
massive scale, leading marketers adjusted their plans
accordingly to begin a two-way dialogue with current and
potential customers.
This has led to the emergence of Facebook as a leading
partner in paid media for Razorfish in the last year. Since our
early tests and inclusion in Facebook media programs in 2008,
the social network has gone from being in the lower tier of our
top 200 publisher partners to catapulting to one of our top five
media partners (as measured by total spend). The growth can
mostly be attributed to the fact that Facebook has innovated
in terms of media offerings and that these new opportunities
are helping our clients meet their marketing goals. Facebook’s
growing audience makes it a platform that our clients need
to include in the development of their marketing plans. Our
projections for 2011 point to continued growth and show no
evidence that the rise of paid media on Facebook will slow down.
4. Shift from paid to earned and owned
The scale of leading social media platforms such as Facebook,
Twitter and YouTube had a strong influence on the overall
marketing mix for our clients. However, the overall amount
of dollars invested against social media still pales in comparison
to search and display. The advertising models of these emerging
media titans are still evolving, but they will undoubtedly garner
a growing share of marketing dollars.
In addition, the investment in social media management on
third-party and owned platforms is not to be overlooked. The
vast majority of our clients now have earned and owned media
strategies to complement their paid media strategies. Over the
last year we’ve seen tighter coordination between the paid,
earned and owned channels. We now manage relationships with
close to 10 million fans and followers on behalf of our clients, not
including audiences on Web sites and microsites that we manage.
That’s roughly nine times what we managed just a year ago.
Our research into social media analytics has given us great
insight into the impact and the amplification effect of earned
and owned media. As we continue to refine our practices, we
fully expect that investments in content and relationships will
continue to grow rapidly.
The Year in Media
11OUTLOOK REPORT | VOL 10
5. Accelerating growth in mobile
Our mobile media and search business nearly doubled last year
and represented close to 10 percent of our total paid media
business. The major factors that affected this accelerating
investment represent trends that will continue to make mobile
one of the fastest growing categories:
Increase in mobile transactions. Our clients are investing
in fully functional mobile experiences where consumers can start
to transact and purchase in the mobile channel. While mobile
commerce is still small and nascent, mobile is becoming an
important touch point in the consumer experience. As marketers
increase the quality and quantity of mobile experiences, the
mobile media and search spends will follow. For example, one
of our clients is seeing pay-per-call increasingly drive significant
scale and ROI.
Growth of tablets. The proliferation of tablets in the marketplace
is creating an entirely new channel. As consumers increase their
consumption of media on tablet devices, it will provide a scaled
medium for advertisers to reach their audience. Innovations in
tablet computing will lead to advertising opportunities that differ
significantly from those on PCs or phones. The ability to bring
touch interactivity together with sound, sight and motion will enable
marketers to provide new, rich experiences to their customers.
Always-on phones. Multitasking with mobile while watching
TV is driving higher consumption of mobile media and providing
new opportunities for marketers to engage with their audience.
Razorfish conducted a study in collaboration with Yahoo! to
understand consumer behaviors and marketing opportunities
across multiple screens. One of the conclusions from our research
is that mobile is emerging as an indispensable activation vehicle
for the massive investments in TV advertising. The complete
details of the study are covered later in the Outlook Report.
“Best of the Web” — A planner’s perspective
As we’ve done in the past, we polled the Razorfish media
team to discover the “Best of the Web.” We asked a variety of
different questions to get a directional perspective of upcoming
trends. The questions revolved around creativity, performance,
quality and overall general satisfaction.
Some of the “Best of the Web” results are listed in the
graphic above.
MOST INNOVATION IN MEDIA OPPORTUNITIES
Preferred Mobile Partner
BEST COLLABORATION
Preferred Video Partner
Partner Where We Most Want To Spend
Money, But Can’t Figure Out How
MOST CONSISTENT PERFORMANCE
(ADVERTISING.COM)
“Best of the Web”
12
Razorfish ad spend is projected to
grow by more than 25% in 2011, marking
the fourth straight year of 20%+ growth
in overall ad spend for our agency.
Themes that will shape the next year in media
There is no doubt that digital media continues to be the most
dynamic and innovative sector in marketing. One of the byproducts
of the rapid pace of change in digital media consumption is the
constant struggle for the industry to evolve traditional delivery
models. Over the next 12 months, agencies must focus on
adapting to the proliferation of new consumer behaviors and
new marketing tactics. In particular, next year will be dominated
by challenges such as how to manage video across multiple
screens, how to rapidly incorporate changes in social media,
how to plan in a cross-platform landscape and how to scale
mobile advertising.
While those trends will certainly dominate the conversation
around media and marketing, it’s our perspective that there
are also four major themes that will work to reshape digital
media in the next year.
1. Content as media
Most marketing professionals admit to having been in a vigorous
debate sometime in the last year about the classification of a
particular tactic as paid, earned or owned media. The construct
is very useful in helping marketers broaden thinking around
marketing strategies. But perhaps the real value is in helping
reinforce the notion that content is media. And content can exist
in many forms. The notion that agency planners are responsible
for content leads to strategies and plans that can have a much
greater impact. In the next year, progressive marketers will
be the ones that begin to integrate all their brand assets into
a single communication platform, creating a unified brand
experience that puts the needs of the consumer at the center.
2. Data management
In the last five years, we’ve increased the amount of data that
we manage in our own servers from 3 terabytes to 90 terabytes.
The ability to manage large and complex data sets has shifted
from being a core differentiator to an absolute requirement.
Data sources are more vast and complicated than ever.
Building a single view of the consumer across all channels is
the only way that marketers can truly build effective marketing
programs. More than 80 percent of our media clients rely on
a data management platform that we have custom built to make
their digital marketing more targeted and more effective. Over
the next year, these platforms will continue to become more
The Year in Media
13OUTLOOK REPORT | VOL 10
sophisticated, taking into account an increasing number of data
sources. Data management pays off for marketers — we’ve
been able to improve return on ad spend more than five times
by serving personalized ads to dynamic segments enabled
by a unified marketing database.
3. Real-time buying
In the last year, we have more than tripled the number of real-
time impressions we’ve purchased. On average, we’ve seen
performance improvements of more than 40 percent for our
clients. The real-time nature of digital data has simply changed
the way we buy media. Those who are able to understand data
and act upon it immediately — in real time — have a strategic
advantage over their competitors. Long gone are the days
when companies and their agencies could buy media months
in advance, then wait several more months to understand
how those media investments performed. Today, agencies
and brands have seconds in which they must respond, or
potentially leave millions on the table in lost value. Brands need
partners who can collect, translate and take action on that data
in real time. Agencies that are well-versed in bid-management
systems, and that invest in the tools and processes to manage
those systems, will become industry leaders. The real-time
and highly complex nature of digitized media allows marketers
to develop a sustainable competitive advantage.
4. Attribution
For the last decade, we’ve been building attribution models
for our clients to help them invest their marketing spend
more effectively. In the pioneering days, this type of analysis
was done infrequently and was limited in breadth and scope.
Today, with the data and processing infrastructure we have
invested in over the last 10 years, and the growth of the
marketing analytics group to more than 100 professionals,
we are actively building these kinds of models for our clients
on a regular basis. In fact, we’ve seen return on ad spending
improve by as much as 3.5 times through smarter allocation
of media investments. While it’s a discipline that demands
constant iteration and analysis, that type of improvement
makes attribution modeling a crucial strategy for marketers.
Razorfish Outlook Report Vol 10
15OUTLOOK REPORT | VOL 10
Forget Mobile —
Think Multiscreen
As is the case with many new technologies, consumers are moving
faster than brands. They’re already using smartphones and tablet
devices in front of the TV to communicate with friends and family,
look up information related to the show they are watching, or else
surf content that is completely unrelated to what’s on the big
screen. Razorfish partnered with Yahoo! to conduct a study
to better understand this rapidly evolving consumer behavior
and to provide guidance for how marketers should approach
the corresponding opportunity.
Mobile devices are used frequently in conjunction with other screens, including
the big TV in your living room. Anyone who has ever tapped out an email on their
iPhone, while checking a score on the VAIO balanced on their lap, while keeping
an eye on American Idol on their 40-inch BRAVIA knows this. Yet many marketers
today are ignoring this ubiquitous consumer behavior as they over-focus on mobile
as a stand-alone medium.
Media multitasking is not a new thing, of course. People have used laptops in front
of the TV since… well, probably since the first laptop entered someone’s home.
We’ve seen data on this behavior for years, and yet, beyond putting a URL on
screen or asking people to “like” a brand on Facebook, most TV spots don’t
acknowledge or attempt to capitalize on the fact that the consumer is watching
with a Web-enabled device on their lap or in their pocket.
At a minimum, multitasking adds another layer of complexity to the evolution of
media measurement. At most, it’s a massive disrupter to television, the medium
that receives the most ad spending. DVRs threw the industry for a loop, and
Jeremy Lockhorn
VP, Emerging Media
@newmediageek
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C3 ratings were born to begin to address a world where the
consumer is increasingly in control.1
Now, add mobile and tablet
multitasking to the mix and marketers everywhere wrestle with
measuring the latest evolution in consumer TV viewing behavior.
On one hand, there is a potential distraction factor with
connected devices, and on the other, there is a much more
engaged viewer who is passionately chasing down more content
on devices beyond the TV. How do marketers account for that
with Gross Rating Points (GRPs) and Target Rating Points (TRPs)?
We don’t yet have a clear answer — give us six months —
but most marketers seem to be ignoring the question and
failing to capitalize on the corresponding opportunity created
by mobile multitasking.
Which leads us to this: Lots of data has been published about
the fact that consumers are using mobile and tablet devices
while watching TV, but little of it has gone deep enough to be
really useful in planning a multi-screen strategy. So Razorfish
partnered with Yahoo! to conduct a survey among Web-enabled
phone owners with the goal of better understanding this rapidly
evolving consumer behavior and providing some guidance
for how marketers should approach them.
We found that a stunning 80 percent of respondents are mobile
multitasking while watching TV. Below are some highlights and
key implications for marketers.
Mobile multitasking is addictive. 70 percent of respondents
who multitask do so at least once a week, with nearly half (49
percent) reporting everyday multitasking. Furthermore, during
the course of a TV program, more than 60 percent check their
phones at least “once or twice,” and 15 percent stay on the
mobile Web for the full duration of the show.
Multitasking is both an enhancement and a distraction.
An equal percentage of multitasking respondents (38 percent)
agreed or strongly agreed with these statements:
of respondents are
mobile multitasking
while watching TV.
FORGET MOBILE — THINK MULTISCREEN
1
“C3” TV Ratings Show Impact of DVR Ad Viewing,” blog.nielsen.com, October 14, 2009, http://blog.
nielsen.com/nielsenwire/media_entertainment/c3-tv-ratings-show-impact-of-dvr-ad-viewing/.
17OUTLOOK REPORT | VOL 10
•	Using the Internet on my mobile or tablet device while
watching TV enhances my viewing experience.
•	I find using mobile devices while watching TV
to be distracting.
This seems to be an opportunity for content producers and
advertisers alike. Some people find multitasking to be a boon,
and we have only begun to scratch the surface in terms
of providing an engaging dual-screen experience. It’s like the
early days of smartphones where it was remarkable that people
were making purchases from sites that were not mobile-optimized.
If folks were willing to go through that much effort, it stands to
reason that making the experience easier and more streamlined
will lead to even more passionate participants.
Certain programming genres lend themselves to
multitasking. The top five categories that attract
multitaskers are:
so high and social networking so low; we expected the reverse.
On the content side of things, 60 percent of multitaskers
are accessing additional content of some type. 44 percent
is unrelated to what’s on TV versus only 38 percent related to TV.
Clearly there can be a distraction factor here when it comes to
TV commercial time, but the good news for marketers is that 36
percent of multitaskers use their connected devices for looking
up information on a commercial they just saw.
TV ad time = mobile prime time. TV ad breaks are triggers for
multitasking because phones and tablets are, not surprisingly,
more likely to get fired up and accessed during regular
commercial pods. And, our survey respondents were more likely
to state that they frequently engaged in multitasking during
ad breaks. What people do during this time doesn’t change all
that much. It’s still communication first and content second.
An analysis of mobile Web traffic to the Yahoo! homepage
during this year’s Academy Awards broadcast indicated clear
spikes in traffic during TV ad breaks.
Connected devices add fuel to the fire of sports fandom.
Almost half of respondents reported multitasking during sporting
events, with little difference shown between live or pre-recorded.
In fact, even when attending a live sporting event in person,
more than a third can’t stay away from their devices. Another
key difference between sports and other genres is that with
sports, people are driven more by content than by communication
(recall it was the other way around overall). Texting still rules, but
after that, other communication styles drop off — and various
content rises to the top. Leading behaviors include checking
scores and schedules of other games, and looking up team
and player information or statistics. Smack talking showed up
surprisingly low (20 percent) — maybe that’s because it’s not
as rewarding when you can’t see the look on the other guy’s
face — this feels like an opportunity for an inventive developer
(or enterprising marketer).
Again, an analysis of Yahoo! mobile traffic confirmed that with
sports content (in this case, World Cup 2010 and Super Bowl
2011), commercial breaks spark mobile usage. Even bigger
spikes are seen at halftime and after the games. For example,
during the Super Bowl halftime show, Yahoo! Sports saw a 305
1. Reality 2. News 3.Comedy 4. Sports 5. Food
While the top results may not seem surprising, what struck us
about the results further down the list were that drama edged
out genres like talk shows, music videos, how-to and others.
We thought drama and action/adventure shows would be less
likely to see multitasking behavior. Perhaps these intense
programs stoke multitasking as viewers get hooked and seek
ways to further immerse themselves in the show’s world. Think
about Breaking Bad, CSI, Dexter or True Blood — those shows
are intense but they also beg viewers to dig a few levels deeper
than what happens during those weekly 40-plus minutes.
Communication and content are the main drivers for
multitasking. 94 percent of multitaskers engage in some kind
of mobile communication. In order — text, talking, email, social
networking and IM. It’s somewhat surprising to see talking
18
happening in the TV spots, and perhaps even what’s happening
in the current program — especially if it’s live. At a bare minimum,
it’s time to consider what kind of mobile call to action may be
appropriate in the brand’s TV spot.
Pepsi, Old Navy and Heineken have begun experimenting here.
Pepsi gave away a free bottle of Pepsi Max to users who tagged
the commercial using IntoNow, a Yahoo! social tool that allows
you to share what you’re watching with your friends. Old Navy’s
“Old Navy Records” campaign encourages users to tag spots
with Shazam to unlock related content like the featured looks,
and even download the music tracks for free. Heineken’s Star
Player app gives users the chance to play along with soccer
matches by attempting to predict which team will score within
the next 30 seconds. These efforts begin to show the possibilities,
but are only scratching the surface.
Mobile search is about more than local. There’s no doubt that
local search is very important. After all, mobile users are accessing
local search 34 percent more than they were a year ago, according
to research from comScore and the Local Search Association.
But, with the massive amount of multitasking behavior highlighted
here combined with the various studies suggesting that anywhere
from 30-40 percent of mobile data usage happens at home, mobile
percent increase in mobile traffic. After the game, even more
users flooded the sports section, pushing overall increase up
387 percent. And, not surprisingly, Yahoo! saw massive spikes
in mobile search traffic related to TV spots, including several
movies and automobile manufacturers.
Implications for marketers
Your TV content strategy must evolve (again). It used to
be relatively easy. Crank out a few 30-second spots and call
it a day. But then came the Web, video on demand, basic
interactive TV capabilities and so forth. Most marketers are
still struggling to figure out how to truly capitalize on the
opportunities represented by long-form video and — more
recently — social content. Now, a new imperative is clear,
especially for those spending heavily on TV. Content and
experiences that move seamlessly from one screen to another
are an absolute must. This is bigger than simply having
a mobile- or tablet-optimized Web site. It means a cohesive
communications strategy where the spots and the experience
on mobile devices work together and build toward a greater
whole. It means a mobile-optimized site that knows what’s
Content and experiences
that move seamlessly
from one screen to another
are an absolute must.
FORGET MOBILE — THINK MULTISCREEN
19OUTLOOK REPORT | VOL 10
search isn’t exclusively about finding the closest taco joint.
Marketers must reconsider their search strategies. At a minimum,
they need to ensure that their mobile properties are properly
positioned in organic results. It may also be worth re-evaluating
the keywords they’re bidding on, perhaps to include terms that
link the brand to shows and events they’re sponsoring.
Let’s take an automotive company launching a new luxury sports
sedan, for example. Part of the launch is sponsorship of a live
awards show — several spots appear throughout the show and
the celebs hitting the red carpet arrive in the new vehicle.
Bumpers include “sponsored by” mentions and on-screen
logos. The spot closes with a URL. Some viewers might jump
to their phones, fire up the browser and enter the URL.
But a good portion of them will also take what they perceive
to be a shortcut: typing the brand’s name into a search box.
Organic and paid results should appear and direct a relevant
experience — perhaps the site’s homepage temporarily features
the new model as well as content related to the awards
program. Perhaps the red carpet reporter films a walk-through
of the vehicle, and that video is made available. To drive even
more traffic and engagement, the brand could bid on search terms
relevant to the awards show (and popular gossip sites). The call
to action could be something along the lines of “See your favorite
celebs arriving in the new XYZ car,” linking through to a series
of videos and also featuring the red carpet reporter’s overview.
Connected devices are the new water cooler. People aren’t
waiting until the next day to discuss what happened on their
favorite program anymore — it’s happening in real time now,
via text, email and social networking sites/services. Brands can
ride along here as well, but it requires a smart social strategy
that syncs the brand with the programs they’re sponsoring.
It’s not easy, but with more than half of multitaskers getting
active on social networks during TV viewing, there is a massive
opportunity to engage the audience on a new platform.
In the automotive example above, there are several ways
the brand might get involved in the real-time discussion.
Aggregating Twitter feeds on their homepage, for example, allows
users to explore the new sedan while staying connected. Perhaps
sponsored tweets could go out from a few celebs talking about
how much they liked the ride in the car. The brand’s social network
presences could all be talking about the show, perhaps launching
real-time polls asking users to predict who will win the next
category. And so on.
20
Multitasking might finally kill (or at least reinvent)
the GRP. The GRP debate rages on. The metric that has been
the currency of the offline world for decades has tried time
and time again to enter the digital world, only to be beaten back
by legitimate arguments that it doesn’t accurately account for
different levels of engagement, among other weaknesses.
But here’s the remarkable thing about multitasking —
increasingly, the devices are going to know what people are
watching, providing a potentially more accurate view into what
large groups of people are tuning into. And, with so much
brand engagement happening on these connected devices,
effectiveness of spots may also be more accurately measured.
Lastly — and this is the silver bullet — with massive growth
expected in mobile payments and mobile wallets, the same
device that knows what people are watching and what people
are surfing will soon know what they’re buying, creating
the ideal closed loop for ROI-driven marketers. And who
isn’t ROI-driven these days?
Connected
devices are the
new water cooler.
FORGET MOBILE — THINK MULTISCREEN
21OUTLOOK REPORT | VOL 10
By Frederic Bonn
Do you want a
consistent
communication
platform that
works across all
channels and is
relevant to the
consumer
behavior in
each?
Do you rely on more than one agency
to handle your communications and
marketing?
And
you re
satisfied
with that?
Are
you in
denial
?
So you’d
actually
rather work
with multiple
agencies?
Do you have one lead agency creating
ideas while the others simply follow?
Here's a little more about how
agencies think.
They all love what they do,
but their love is blind.
Agency A thinks that Agency B is
clueless about digital, even though
Agency B said they had videos on
YouTube — “That’s digital, right?”
B dismisses A’s ideas because A
doesn’t know anything about the
brand, but come on, A had a video
on YouTube, too! — “That’s brand
building, right?!”
A and B think C should just follow
what they say — “Wait, you didn’t
get our memo?”
And D should just buy what they
all need — “Because we’ve
already figured it out.”
Your lead agency is probably the “traditional”
agency, right? Great, you now have a 30
second spot (or 60) and some print ads.
Do you believe
consumers only
experience your
brand via one
media channel?
And they provide
ground-breaking
creative ideas
that deliver great
results?
Did you develop an integrated brief that
incorporates all agencies, teams and
disciplines involved in your business?
Have you defined your individual
agencies’ roles and responsibilities?
And they never try to
compete anyway?
Do your teams meet regularly
to develop an integrated brand
strategy and campaigns?
Do you know how most
agencies operate?
Is that single agency capable of mastering
integrated communications from social
media to mobile, event planning to media
buying, TV to digital?
And you have operational
flexibility and scale?
Do you want your agencies
to successfully collaborate?
Razorfish Outlook Report Vol 10
23OUTLOOK REPORT | VOL 10
A Wake-Up Call
for Collaboration
The ability to integrate creative, media and technology to meet
the demands of your always-on consumer is ideal. However, most
traditional lead agencies don’t have those capabilities just yet, nor
are most digital agencies prepared to handle lead agency duties.
Coordination of your agencies is not enough — you need to move
more aggressively toward true collaboration.We’ve identified five
big barriers to essential agency collaboration.
People now consume 12 hours of media in just 9 hours of elapsed time, according
to a recent Harvard Business Review study.1
Consumers use a lot of media types
all at once and now brands need to catch up. To do so, marketers must change
how they work with their agencies.
If you are a CMO or a brand leader, you are probably using multiple agencies
to meet the demands of your always-on consumer. A lead agency that can integrate
creativity, media and technology would be a great solution, but traditional lead
agencies aren’t yet capable. In 2009, Forrester Research set off a mini industry
tempest when it reported that only 23 percent of interactive marketers felt
traditional agencies were equipped to handle interactive marketing work.2
Fast
forward two years and Forrester still reports that only 30 percent of those surveyed
use their traditional agencies for digital marketing, and in fact 68 percent of those
marketers work with two or more agencies. Some reportedly have more than 15
Pete Stein
President, East
@pstein211
Frederic Bonn
Executive Creative Director
@fredericbonn
1
“How Internet Junkies will Save Television,” Harvard Business Review, http://hbr.org/web/extras/
how-internet-junkies-will-save-television/4-slide.
2
Sean Corocan, “The State of Interactive Agencies,” Forrester, December 7, 2009.
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24
agencies on their interactive rosters.3
By the same token, most
digital agencies aren’t yet ready to handle lead agency duties. In
three to five years, the landscape will look different, but for now
marketers have to deal with a patchwork of agencies that are
channel specialists and all the complexity that comes from that.
What can you do now to drive the integration of creativity,
media and technology that you need to truly engage consumers?
Coordination of agencies is not enough — you need to move
more aggressively toward collaboration. And guess what?
Agency folk want more collaboration — or at least they claim
they do.
So, what are you waiting for? If you are a CMO or brand leader
and you’re not pushing your agencies for deep collaboration,
you’re missing out on a big opportunity.
We have seen five big barriers to collaboration:
1. Client experience/confidence
As a brand marketer, you probably have more confidence
in one area of the marketing mix or the other. Perhaps you are
a digital native who lives and breathes ones and zeroes, and now
you’ve been promoted to look after the whole mix. Or maybe
you’re a “traditional” marketer with a strong legacy of brand
building, but you’ve had your run with TV commercials.
You find digital exciting, but daunting and maybe even a bit
over-hyped. Wouldn’t life be better if your agencies were
bringing truly integrated ideas to you?
2. Cultural inertia
Success can dull the competitive edge. We have seen many
marketers and their agency teams not adapt fast enough because
they haven’t had to. Sometimes a great track record can put you
A Wake-Up Call for Collaboration
3
Sean Corocan, “How to Optimize your Interactive Agency Roster,” Forrester, May 27, 2011.
Coordination of agencies
is not enough — you need
to move more aggressively
toward collaboration.
25OUTLOOK REPORT | VOL 10
in a position for future failure. Similarly, agencies, particularly
account people, are protective of their turf. Unless they feel
their piece of the pie is protected, change will be difficult.
3. Above-the-line agency snobbery
Some above-the-line agency teams believe that: 1) digital agencies
don’t have anything of value to contribute to the conversation,
or that 2) their team is already leading the way in digital.
4. Digital agency lives in a digital bubble
Digital agency teams tend to fall down in two places: 1) they
don’t fully respect the power of offline communications, or
2) they aren’t able to lift out of the tactical and into the strategic,
and they fail to put their work in this broader strategic context.
This leads clients and above-the-line agencies to keep them
in their digital silo.
5. Client silos
Clients are often organized into silos that make it very difficult
to plan with a focus on how the consumer and the brand should
engage. There are different client owners for traditional creative,
digital creative, media, PR and other elements of the mix, too.
When agencies report into different silos, true collaboration will
not occur.
Despite these barriers, we have had success with our clients
and our agency partners. We recently formalized our partnership
with BBH at Unilever, a client with whom we’ve had a lot
of success rethinking the model. Here are some lessons we’ve
learned on getting the best work out of the right people:
Establish the process. In order to get the most out of each
agency, make sure you define a clear process for them to work
together. You need to clarify the boundaries of their engagement,
expectations and ownership. One exercise we went through
with a partner agency was to play the “what if” game. We talked
through all of the worst-case scenarios we could imagine
and how we would handle them when things went wrong.
It was a fun game and a great way to talk through problems
in an environment where emotions weren’t running high. While
you’re at it, examine your own organization. Agencies tend
to organize around their clients, so if your organization is siloed,
it’s likely that your agencies will be, too. Even if you don’t
change your structure, make sure your organization is aligned
and not operating in silos defined by channel.
Demand creative and media collaboration. Creative
collaboration starts with a solid brief delivered to all agencies
simultaneously. Unearthing an insight that reflects true audience
behaviors is critical to crafting a relevant message, no matter
who makes it or when it’s launched. The brief needs to nail the
business objectives, brand DNA and the digital behaviors —
with the goal of tapping into the rituals that are ripe territory for
the brand. We recently found that if we allow the above-the-line
agency to own the brand DNA, we can own the digital behaviors,
thereby making sure they are embedded into the ideas. This will
enable your creative teams to come back with a true creative
platform — not just a single execution that’s stretched across
channels. One-hit television campaigns or social campaigns do
not a platform make. Don’t settle for anything less than a robust
creative platform. Huge bonus points if your media agency is
part of the team. A successful channel plan is one that considers
how to leverage each channel in a way that makes the whole
greater than the parts. You’ll find that when media and creative
teams work together, you’ll get deeper consumer engagement.
And just to be certain that the ideas are inherently social and
engaging, we have found it beneficial to include explanations
in the brief. Use the brief to articulate why the insights point
toward engagement.
Protect compensation and provide incentives that drive
alignment. Incentives are a powerful lever that should be pushed
to drive behavior. Agencies should be rewarded for collaboration.
Ultimately they need to be rewarded for great work and business
impact, but consider this to be part of a journey. They need to know
that their piece of the business is protected. While strategy
is shared, execution should be handled by channel experts so
that change is managed gradually. In addition to giving agencies
a safety net, give them a reason to jump higher. For one client
we (us and the ATL agency both) receive a bonus if we help
the client exceed key business targets.
26
Keep a slush fund. A key to successful marketing is figuring
out how to integrate always-on and episodic (campaign-based)
communications. Great creative platforms should have plenty
of legs and should be responsive to consumer engagement.
This creates a great opportunity for agency collaboration,
but as the client you need to set aside some money in order
to create relevant content or utilities that can stoke a fire that
you may have created. When we created the Mercedes-Benz
Tweet Race last year, we saw that there was a lot of curiosity
about the tweet-powered vehicles. We jumped on the buzz
and created a spoof video of German engineers driving cars
with their mobile devices. It helped ignite a lot of interest.
You need to start planning for what you can’t plan.
Create urgency. Without a substantial reason to change
behavior, it will not change. You, the client, have the greatest
ability to create urgency. You need to set a high bar. For instance,
point to competitors or other brands that are doing it well.
And you need to shift the risk. Tell your agencies that if they fail
by trying something new and different, you will embrace it, but
if they fail by not collaborating, it will be a strike against them.
In the end, agency collaboration is rooted in something very
fundamental — trust. Your agencies need to trust each other
to produce great work. By setting up a clear process, demanding
creative collaboration, and planning for the unplanned, you can
go a long way toward setting up the structure and incentives
that your agencies need to build trust amongst each other.
With a solid foundation in place you can count on your
agencies to do their job exceptionally well.
A Wake-Up Call for Collaboration
To get the most out of
each agency, make sure you
define a clear process
for them to work together.
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
29OUTLOOK REPORT | VOL 10
Mark Taylor
VP, Customer Insight Group
linkedin.com/in/markchristophertaylor
Marc Sanford, PhD
Director, Customer
Insight Group
@mmsanford
Pradeep
Ananthapadmanabhan
Chief Technology
Officer,VivaKi
linkedin.com/in/pradeepananth
It’s Time for
Big Data to Improve
Customer Experience
Channel-based marketing is dead. The increased amount of data
available at the individual consumer level, combined with the
proliferation of cloud computing, have allowed savvy analysts
and marketers to create a truly singular view of the consumer,
regardless of touch point. This single view enables a truly
enhanced consumer experience and more efficient use of client
and agency resources for decision making. All the customer
data out there is worthless if you can’t process it and turn it into
actionable intelligence.
Unfortunately, older data processing technologies (such as Relational Database
Management Systems, or RDBMS) are simply not capable of processing data
in volumes that the industry has collectively coined “Big Data” — volumes that
are in terabytes/petabytes. As such, we position the consumer as the only real
appreciating asset and we tie everything together through the use of Big Data.
Awareness of the challenges of a multi-channel world is nothing new, but each
channel touch point represents an immense opportunity for insight. An average
Razorfish client has billions of customer interactions a year across paid, earned
and owned channels. With so many opportunities for insight and learning, we
create a 360-degree view of each individual in the database.
Using integrated Big Data approaches, we are now informing the holistic data
view to gain the fullest understanding of consumer interactions, intent and value
possible. This current shift centers on how customer intelligence across channels
is not just used for insights, but actioned at great velocity to power multi-channel
targeting and personalization, made real through dynamic digital messaging.
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•	Better use of the team’s time to focus on what matters
most to their business.
Data enables us to understand customers and to manage
contact and content strategy. Data is a core component of
integrated marketing and, via an integrated approach, we can
speak with a single voice across channels and lines of business.
However, to succeed in a meaningful way at that level of
customer centricity, we have to manage all that data in a way
that holistically fuels customer engagement and experiences.
That effort requires a whole ecosystem of people, processes
and technology.
Even the most sophisticated and modern businesses today are
surprisingly ill equipped to manage even the most basic digital
From insight to action, we’re now finally implementing
consistent and relevant messaging approaches that provide
cohesive consumer experiences.
In our experience, each client using Razorfish’s Big Data-led
performance marketing approach takes a different path. Ultimately,
a client’s path is based on business priorities and what information
can be leveraged from the available tagging and data strategy.
Working with different clients has enabled us to determine
realistic roadmaps.
Holistic integration benefits:
•	Common Data Marketing Platform (DMP) for reporting,
analytics, targeting and media integration.
•	A channel and customer view of success.
•	Metrics that measure end to end, not just in parts.
•	Decision-making through actionable insights.
•	A common language for performance across different
teams, brands and markets.
It’s Time for Big Data to Improve Customer Experience
Paid
Earned Owned
Each touch point is an identifiable interaction
and an opportunity to build value.
Email
Search
.com
Mobile
3rd Party
Data
Analytics
Reporting
Media
Targeting
AOD
Display
Social
Web
Analytics
Platform
OWNED
PAID
EARNED
razorfishOPENTM
3RD PARTY (AOR/Client/3rd Party)
Modular approach to platform and services, by fully
integrating an organization’s owned, paid and earned
channels for insights and targeting.
razorfish-
OPENTM
31OUTLOOK REPORT | VOL 10
marketing standards and activities, let alone jettison forward
into the new world of Big Data techniques.
Through a series of in-depth interviews and client experiences,
Razorfish found a common set of fundamental challenges
holding back meaningful data integration:
•	Fragmentation of efforts between different teams, tools and
data sources across multiple channels, brands and regions.
•	Political and fiscal turf protection.
•	Multiple sales funnel constructs.
•	Inability to identify the customer.
•	Inability to quantify the value of customer experiences.
Let’s take a closer look at how our approach to Big Data, using
the razorfishOPENTM
framework, can remedy these issues.
Fragmentation
We’re in an era where intelligent use of Big Data pays huge
dividends. Implementing solutions that improve integration of
data is very challenging and complex but not for the reasons
you might think. Much of the technical and analytical challenges
for tapping Big Data have been solved — but failures today
often stem from attempting to use legacy small data solutions,
internal politics, effort fragmentation and failure to manage the
true value of Big Data-based solutions. While a lot of niche
players using Big Data approaches have stepped up to solve
parts of this challenge, building incremental capabilities in a silo
can by default push you further into a silo-based culture and
limit your understanding of the customer.
Any holistic Big Data solution requires a scalable measurement
plan and tagging strategy at its foundation so you can take into
account performance marketing efforts across channels, tactics
and disciplines, with a shared strategy of measurement and
tracking that is scalable across international regions and markets.
The end solution provides a subtle and intelligent approach
that can evolve by integrating and building upon other assets,
data sources and capabilities already in place. This approach
enables a modular and organic ability to evolve and grow, but
with a standardized core. These qualities are not always the
prerequisite in Big Data techniques, but without this there is
no foundation for growth.
There’s a new game in town —
it’s cross-channel data
management and marketing.
32
Turf wars
Crossing organizational units can be tricky. Often clients are
not set up internally for a path to success based on complete
integration and use of available data. Organizations are formed
around channels — one unit owns the Web site and its data,
another owns CRM and email, another may own Web media
and yet another may be in charge of social media. Worse yet,
each silo may have its own analytics arm. The only way to be
part of this organizational conversation is to think big. We have
gained phenomenal success by leveraging Big Data-based
techniques as part of a modular, digital roadmap that directs
current and future business investment in the next 100 days/12
months/3 years. Be prepared to think big even while starting
small, and determine your starting point and roadmap — no
matter how audacious your goals.
A Razorfish global technology client decided their initial priority
was to gain cross-channel insights before embarking on targeting
and deep analytics. This was the foundation starting point for their
organization and it ensured they gained political capital across
their business model through an evidence-driven, customer-
centric approach that enabled financial modeling of return on
investment. Their next phase focus is on actioning that data for
targeting across display advertising and the Web site.
Another Razorfish client, a major global retailer, recognized
that they had a wealth of underutilized offline and digital data.
They decided to leverage Big Data approaches to integrate
multiple channels and power media, dynamic re-messaging,
analytics and more. The ultimate purpose is to enhance the
value of those relationships by aggregating information about
the customer and communicating with them in the most relevant
and engaging way. Previous iterations of this approach resulted
in a three- to five-time increase in return on ad spend, and a
significant decrease (about 65-70 percent) in cost per acquisition.
Each phase typically pays for itself in weeks, while providing the
funding for the next incremental phase. This becomes a sound
It’s Time for Big Data to Improve Customer Experience
Media agency
of record (AOR)
Report
DFA
Display
MEDIA
METRICS
Multiple
agencies
Report
Buddy Media
Social
metrics
Social
Search AOR
Report
Marin
Media
metrics
Search
Digital AOR
Report
Omniture
Site
metrics
.com
Digital AOR
Report
Flurry
Mobile
metrics
Mobile
In-house
team 1
Report
ExactTarget
Email
metrics
Email
In-house
team 2
Report
ATG
Merchandising
Metrics
Online
Retail/
Store
In-house
Report
Custom
Tenure and
Product Value
Transaction
Data
Research
agency
Report
Custom
Attitudinal
Profiles 
Segments
Example of a siloed view of data management and reporting.
OWNED
PAID
EARNED
3RD PARTY (Client and 3rd Party Data)
33OUTLOOK REPORT | VOL 10
position to be in when convincing your peers of the rationale
and business case to fund such solutions.
Big Data can be organized without a major disruption or re-
architecture of existing structures, internal teams, vendors,
agencies, platforms or focus. Instead, our approach to Big Data
utilizes an open standard designed to exploit existing assets
and fit the best custom solution for business environments.
This approach has an evolving set of modular relationships
managed as a single solution, resulting in a single and holistic
view of the customer based on all available data. Our clients
are using this common view to engage and encourage their
different teams to speak in the same language.
Multiple sales funnel constructs
Funnel management is where people are getting clever with Big
Data, however it runs the risk of solving only one part, rather than
the whole. We know that leveraging a single view of the consumer
drives value at all levels of the funnel. So why do many continue
to approach client problems and challenges as one-offs or focus
on just one area of the funnel?
Too many distributed engagements will lead to:
1. Single point-in-time solutions that require rebuild with
every new engagement.
2. An additional data silo that requires more time and effort
to manage and process.
razorfishOPENTM
targeting roadmap.
Target 1.0 Target 1.1 Target 1.2 Target 1.3 Target 2.0
Heavy use of
CT with no
dynamic ads
Description
Display or site
Delivery
Option/
Channel
Low complexityBenefits
Some time to set up
the offer, strategy
and creative
Considerations
1.5 X ROASTypical ROI
Dynamic ad, last
action only
Display Display Display
Fast to market
Access to data
is limited
3.5 X ROAS
• Dynamic ad
• User history
• Segmentation
• Processing
Higher relevance
and full data access
Greater set-up
investment to ensure
platform is in place
5 X ROAS
• Dynamic ad
• User history
• Integration of
multiple data sources
• Segmentation
• Processing
Increased relevance
and huge long-term
incremental
data benefits
Time to market
is longer
~6.5 X ROAS
• Dynamic ad
• User history
• Integration of
multiple data sources
• Segmentation
• Processing
• Multi-channel
delivery
Display, site, email,
mobile, call center
Channel agnostic
Greater cross-channel
business coordination
~8 X ROAS
34
For example, the illustration on the right shows how an effective
re-messaging program will grow the bottom of the funnel. However,
if this becomes a one-off without integrated implementation and
access to the data, the solution becomes a very clever silo at the
expense of the broader opportunity.
The reality is that the rules and the data to enable an integrated
view and management of the funnel would need to come from
first-party data via a DMP solution and the organization’s data
assets, rather than a third-party data provider. Third-party data
intelligence can provide these larger insights into what’s working
and where there’s opportunity for more scale. Data providers
can be joined to first-party data, not the other way around.
Within Razorfish’s framework for integrating data and services
(described below as razorfishOPENTM
), targeted, dynamic ads
are combined with a Demand Side Platform (DSP), such as
Audience on Demand (AOD), to match impressions to users
identified in real time. This allows you to only reach users that
have been already “qualified,” and avoid upfront agreements
and negotiation by paying the market price for users meeting
criteria defined in the audience segmentation. By reaching the
right audience at the right price and allowing the ability to
control bids at a cookie level provides a great deal of efficiency
and relevance. This integration also enables the ability to bring
a wide array of data at the bottom of the funnel to the audience
at the top of the funnel.
Inability to identify the customer
Razorfish implements a customer-centric approach through an
organized framework of measurement and tagging that tracks
It’s Time for Big Data to Improve Customer Experience
DIGITAL OFFLINE
Consideration
Awareness
Retargeting
Conversion and remarketing is only
part of the answer.
Funnel management is
where people are getting
clever with Big Data.
35OUTLOOK REPORT | VOL 10
all digital business activity and harnesses the full stream of
data as the core basis of the single view of the customer. From
day one we leverage all existing assets, people, agencies and
platforms, without a big, disruptive overhaul. Chances are these
existing components are there for a reason and are providing
value, but getting that cross-functional view and line of sight is
the first objective.
Inability to quantify the value of customer experiences
Organizations are increasingly demanding faster value return on
their marketing investments. Razorfish has found that businesses
now more than ever need a true, meaningful understanding
of what drives customer value. Rather than using Big Data to
improve one area of the customer experience, we need to build
toward meaningful interactions at a customer level and progress
the value of their brand relationships over time.
We have seen our clients quickly moving toward a culture that
understands customer data as one of its most valued assets.
Focusing on customer value helps companies move away from
channel performance and toward greater customer-centricity.
But to calculate customer value, companies must fully utilize the
recency of interactions, along with the required behavior, revenue
and relationship metrics. A key challenge businesses struggle
with is finding advanced analytical skill sets and analytics-based
approaches that can leverage and interpret that data to determine
the key levers that drive value within their organization, or at
least within a specific team’s control.
Behavioral data captured by the razorfishOPENTM
first-party DMP on client-owned assets integrates with Media DSPs
third-party data to help build more precise audience segments and add to our clients’ audience buying capabilities.
Call Center
Open  DSP Audience
Targeting Integration
Enhanced Segmentation
 Data Provision
Publishers
AUDIENCE/
PROSPECT/
CUSTOMER
PROSPECT/
CUSTOMER
CUSTOMER
MANAGEMENT
CUSTOMER
MANAGEMENT
3rd
Party DSP and
Data Providers
razorfishOPENTM
1st
Party DMP
Client
Proprietary Data
.com
Using an integrated DSP allows you to only reach customers
and prospects that have been qualified by razorfishOPENTM
.
DM
Mobile
Email
Retail
Paid
Owned
Earned
Consistent data collection across touch
points enables analytics, segmentation,
targeting and reporting. For example,
a customer falls into segment 8, based
upon razorfishOPENTM
rules. Razorfish
then targets customer experience,
agnostic of channel (represented
by orange dots).
36
ReportingMedia
AnalyticsTargeting
razorfish-
OPENTM
It’s Time for Big Data to Improve Customer Experience
We define and value the segments of customers we want to
engage with and create Big Data-applied algorithms to create
a new type of value segmentation model that can operationalize
differentiated experiences at high velocity. We not only deliver
unique and consistent experiences to these customers, but also
leverage our knowledge about them to bid for the opportunity
to deliver those experiences. From the beginning, we value
the revenue and other business impact of the opportunity and
in the end we prove it.
*razorfishOPENTM
tagging framework
Report Report Report Report Report Report Report Report Report
Display
MEDIA
METRICS
Media agency
of record (AOR)
Social
metrics
Multiple
agencies
Media
metrics
Search AOR
Site
metrics
Digital AOR
Mobile
metrics
Digital AOR
Email
metrics
In-house
team 1
Merchandising
Metrics
In-house
team 2
Tenure and
Product Value
In-house
Attitudinal
Research
agency
Social Search .com Mobile Email
Online
Retail/
Store
Transaction
Data
Profiles 
Segments
Silo reports provide a detailed view at a channel level and have a role in optimizing channel performance.
Ad serving tags provide a holistic view across the customer journey, at the unique customer level.
razorfishOPENTM
tagging framework that
tracks cross-channel business activity.
* *
*
*
*
* *
* *
37OUTLOOK REPORT | VOL 10
We have seen our
clients quickly moving
toward a culture that
understands customer
data as one of its
most valued assets.
Razorfish Outlook Report Vol 10
39OUTLOOK REPORT | VOL 10
Humanity Check —
What Consumers
Really Think
About Tech
To get outside the digital marketing bubble, we conducted a series
of focus groups, in-depth interviews, and ethnographic sessions
in San Diego, San Francisco, Seattle, Chicago, Ft. Lauderdale,
and Portland, Ore. The goal was to uncover what’s really going
on in the everyday user’s technology life. Among the insights
that emerged: people still need their physical space, brands get
points for effort, there’s a new kind of couch potato and there’s
plenty of tech-fueled confusion in consumers’ lives.
Talk to a few tech pundits about what’s next and you’ll very quickly see a calcified
conventional wisdom form. Facebook and/or Twitter are totally integrated into
everyone’s life and everyone wants to share everything. Quick Response (QR) codes
count as progress. Google and Apple are loved by all and the world is waiting
to see what both will do next.
But talk to real people and you get a different story. To get outside the digital
marketing bubble, we conducted a series of focus groups, in-depth interviews, and
ethnographic sessions in San Diego, San Francisco, Seattle, Chicago, Ft. Lauderdale,
and Portland, Ore. The goal was to uncover what’s really going on in the everyday
user’s technology life. There were 56 respondents age 18-49, all of whom had
broadband access in their home, a smartphone and a computer. But they didn’t
identify themselves as super users or even technology enthusiasts.
OUTLOOK REPORT | VOL 10
Brandon Geary
SVP, Strategy
@brandgear
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Five core observations rose to the top for us:
1. People need their space
While much of the business news centers on the death or
decline of old retail models — bookstores, movie theatres,
consumer electronics and music — we found people continue
to express emotional attachment to the store experience,
despite the shuttering of former stalwarts like Borders. This is
backed up by a recent Accenture survey that found nearly
75 percent of consumers consider a storefront for digital
communications products to be important.1
We found strong,
positive feelings about digital music, the rise of new content
delivery mechanisms like Netflix, and digital content delivered
on the Kindle and iPad, with limited longing for the old days.
“I don’t miss CD boxes to be honest, and lugging books around
wasn’t all that great,” said 29-year-old Cathy. The risk for
retailer disintermediation clearly remains high for media products.
But the desire for consultation and experiences — particularly
shared experiences — remains alive and well.
Solution: Give people a new reason to come back. We found
an openness to reinvention of old models with reliance on physical
space. On music — “Why don’t they broaden the experience
to include more physical objects around the music or have more
events associated with the medium,” said Colin, 27. On movie
theatres, 30-year-old Lisa said, “I’d like to see the opportunity
to rent movie spaces for friend groups so that movies become
more like karaoke in Korea.” Big box retailers under pressure
from Amazon.com and disruptive models should consider
re-evaluation of space, not just the product in question.
2. More knowing, less thinking
Apps, search and social media are rapidly changing human
interaction at the level of the conversation. Knowing stuff has
become easy, which has had a reductive effect on chats that
once might have been more discursive. “When we’re talking
about something we aren’t sure of, we all just look up the
answer and it’s over,” said Heather, 32. In-person interaction
has evolved to become more of an information sharing exercise
and less of a conversation around ideas where one person
1
“The Value, Role and Performance of the Physical Retail Channel for Communications Service Companies: A North American Perspective,” Accenture,
http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture_Communications_Research_Physical_Retail_North_America.pdf (2011).
Humanity Check — What Consumers Really Think About Tech
Provide a small delight
for customers. You don’t have
to go big to get impact.
41OUTLOOK REPORT | VOL 10
builds on another’s thoughts, building on another’s thoughts.
“I check my friends’ stuff more to see what information I should
know now,” said David, 32.
Solution: The brand has to take a stand. For brands interested
in using social media to join a conversation with their consumers,
they may find there is less conversation to join and that they
too are just sharing information or listening in on information
share. Or brands may need to spark conversations. In a world
of information sharing, consider asking a question, creating
a debate and offering an opinion in attempt to get engagement.
3. Brands get points for effort
While only a few big successes in North America appear to get
the majority of mainstream media coverage (Facebook, Apple,
Google, Angry Birds and LinkedIn), we have found the perception
of innovation increasingly comes from the trial of new things,
regardless of whether or not the new thing is a long-term
business success for the company that launched it. Google
is consistently praised in projective exercises as innovative,
despite an inability of users to pinpoint exactly what those
innovations are. “Google is like Apple,” said Steven, 41. “Just
always doing new things.” Companies like Starbucks and Nike
are thought to be more suitable for reinventing dying industries
like books and music, despite not being media companies.
“Starbucks could make a better bookstore than Barnes  Noble
could,” and “Apple could sell anything.”
Solution: Keep on making. Companies don’t have to get
everything right to get credit. Perceived effort associated with
releasing products and services creates a positive cumulative
effect for the brand. For brands remaining on the sideline
or fearing a lack of focus, consider placing smaller bets on app
or development initiatives to provide a small delight for customers.
You don’t have to go big to get impact.
4. Meet the new couch potato
Historically, digital pundits have promised a more interactive
future, in which users move away from passive, couch potato
viewing to more active engagement. While the amount of user-
generated content and sharing supports this movement, we
have found everyday users increasingly leaning back in their
digital consumption habits. Social media is described as a
more ambient activity. “[Facebook] is usually a drag. I just feel
lazy like I’m seeing the same old stuff and looking at people’s
profiles. I feel somewhat guilty about it sometimes, like I’m
wasting time.” Twitter, originally categorized as a social tool,
is described more as a curation tool. “I don’t really tweet
anymore. I just see what I should think about reading.”
And social media in general is making in-person interaction
increasingly difficult to motivate or organize. “It’s just so hard
to make it (an in person meeting) happen now,” said Tran, 29.
Solution: Don’t be afraid to be a pusher. Brands that have
long viewed digital as an engagement medium should also
consider more opportunities and ideas that are more push
in nature: video- and photo-based status updates, viral shorts
and simple games and activities.
5. The rise of digital confusion
In launching new digital services in an app-filled, multi-device,
multi-operating system world, consumers have become
increasingly confused by messages. They’re less certain about
the difference between a browser and operating system, PC
and tablet, and OS and device manufacturer than ever before —
“I’m not sure what Chrome or a Chromebook is.” “I’ve used
Bing, but what does it do again?” While not every brand can
be Apple from a product perspective, few beyond them appear
to be delivering messages that are connecting.
Solution: Ditch the strategy and get to clarity. As marketers
well versed in the creation of the emotional benefit look to new
services for old or new brands, it’s paramount they continue to
scrub their message strategies to get to the essential elements that
drive clarity. Even more than before, attention and/or emotional
attachment appear to be less of an issue than understanding.
Digital devices, social platforms, mobile and commerce are all
changing consumer behavior rapidly, but not entirely in the ways
many had predicted. In the future, it’s the brands that rethink
space, not just the product, take a stand in the social space,
push content that’s easy to consume and simplify the message
that win. This means the most surprising thing about the future
might just be its similarity to the past.
Razorfish Outlook Report Vol 10
43OUTLOOK REPORT | VOL 10
How the Social
Cloud Can Accelerate
Brand Interaction
From March 2010 to March 2011, Facebook online video and mobile
device consumption time were all up, but the rest of the Web was
down. This means that while these social areas have grown, they’ve
also taken users away from more established sites. Brands need
to take the conversation to where the users already are. Social
cloud services connect digital experiences with Facebook,
Twitter, LinkedIn, Google, Microsoft and other social services.
We’ve identified some dos and don’ts to take full advantage
of these APIs.
The Web isn’t dead, but it sure has taken a hit. Wired Editor Chris Anderson’s
prediction that the free, interconnected world of the Web would be replaced
by the paid-for, walled gardens that are apps hasn’t necessarily come true.
Yet the Web is a changing place with fewer winners and more losers because
of audience consolidation around a few key platforms. From March 2010 to
March 2011, Facebook use was up 69 percent, online video consumption was
up 45 percent and mobile device time was up 28 percent.1
The rest of the Web
was down 9 percent. This means that while these areas have grown, they’ve also
taken users away from more established sites.
With social and video sites, the users are already there — you don’t need to drive
them to your destination site. Instead, you can take the conversation to where the
OUTLOOK REPORT | VOL 10
Ray Velez
Global Chief
Technology Officer
@rvelez
Rafi Jacoby
Social Technology Lead
@rjacoby
1
Ben Elowitz, “The Web is Shrinking. Now What?” Digital Quarters, June 2011,
http://digitalquarters.net/2011/06/the-web-is-shrinking-now-what/.
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users are already. For instance, Facebook makes up 25 percent
of all page views, with users averaging 15.5 hours per month
on the site. This requires a rethink on how you spend your media
dollars to acquire users.
In order to acquire information about those users, all you need
to do is offer something small: a fun experience, chance to win
something or a coupon (which do amazingly well).
When you have reached the right audience, the users you have
acquired will continue spreading the message for you. According
to “Zuckerberg’s Law,” users share twice as much content every
year as the previous year. Your brand’s content will be disseminated
by real people to the people who trust them (high “earned” value).
In the future, the brand with the most compelling content wins.
Arguably this is already happening, but we need to develop new
metrics to understand this. What is clear is that users want
to share creative, fun and engaging content — not product
specs or regular marketing collateral.
Soon, more experiences will be connected: tweeting from inside
an Xbox game that they have unlocked a new level; sharing
the act of viewing a TV show on Twitter/Facebook/GetGlue;
leading other users on an augmented reality treasure hunt
on their phones while tracking the progress inside a Facebook
leaderboard and tweeting out results.
With the rise of social check-in services (Foursquare, Twitter,
Facebook), you can have trackable digital marketing tying into
brick and mortar. Then, you can build an experience around
that location with communities, discussions, deals and events.
You can learn exactly how far users will go to make a purchase,
which users are more likely to purchase where, and what
other locations they frequent that might be interesting for your
business — all without commissioning surveys or having to
integrate with many different point-of-sale systems.
Social cloud services provide your digital experiences or Web
properties with the ability to connect up with Facebook, Twitter,
LinkedIn, Google, Microsoft and other social services. These
services come in the form of Application Programming Interfaces
(APIs) that your technologist can integrate. Whether your digital
experience is a mobile application or a traditional desktop site,
these APIs are available.
Marketing and business needs a blueprint for how these
all interact. The graphic, to the right, describes the key API
categories in the social space.
Three core areas make up social APIs
1. Authentication
The first core API area is authentication or the ability to leverage
the services of a social network to help people gain access
to your digital property. You can now enable users to log in
to your Web properties without having to create a new account.
Registration through a social cloud service breaks down
the barrier to entry of creating an account. OAuth and OpenID
are the main technology standards for ensuring secure access
to digital sites and properties. Sites can support both or just
one, but ultimately these technologies can have a drastic impact
on the number of folks who sign up. Once authenticated, there
is the concept of profile data sharing or the sharing of data
elements about people — pictures, birthdate, email, etc.
Obviously, there are privacy considerations that have slowly
evolved. For example, when we first used Facebook Connect
profile sharing, anyone could grab a person’s picture, but then
Facebook evolved their privacy controls to give users control
of who can see their picture. Of course there are limitations
on what you can do with the identification, but at that point you
can grab more information from the person contextually to your
experience as needed. Lastly, it’s important to make sure you
use whatever the connection type is, whether OAuth, OpenID
or proprietary with secure sockets layer. This will ensure the
hacker hanging at Starbucks doesn’t steal your password.
After logging in, you can leverage locally saved tokens so
users don’t have to login to Facebook across every site they
go to during the day. One login will work. Letting users pick
their account type to log into (Facebook, Twitter, etc.) affords
the most flexibility, and you can leverage a lot of the same
development when you code to a standard like OAuth.
How the Social Cloud Can Accelerate Brand Interaction
45OUTLOOK REPORT | VOL 10
2. Conversation and sharing
The second core API area is commenting and message
boards — basically the ability to create messages around
a topic area. Let users drive conversations like comments
or message boards without having to write custom code to
support it. Consider a Twitter message a conversation around
a topic area, or a Facebook wall post a growing interaction
for your experience. A lot of the API needs in this area are
bringing order to the chaos. The Facebook plugins are pretty
easily implemented and high value. Replace your own comment
boards with Facebook comments — no additional sign-up
required, and content can be shared on a user’s wall. It’ll drive
traffic in and out of your Web property. Technologies available
in the Software as a Service (SaaS) approach such as DISCUS
or Echo enable you to bring the messaging to your site, while
still existing on Twitter and Facebook. Considerations down the
line include the ability to moderate and monitor posts, which are
especially important when considering branded experiences.
3. Social graph
Lastly, one of the most important social API areas is sharing
of the social graph. That means not only connecting with the
current person, but with their friends as well. All of this is made
available through the API. Similar to OAuth and OpenID, there
is a technology standard for accessing this information called
OpenSocial. While this has evolved considerably over the
last couple of years, it still seems to lack broad adoption by
the major players, most notably, Facebook. For now it seems
proprietary API calls to social engines are still the norm.
Authentication, commenting and social graph sharing are
the three key social services, but there are lots of other social
services that can also power your digital experiences, whether
mobile, desktop or in-retail. These will continue to grow as
people innovate in the space. Social video services like Vimeo
and YouTube allow you to embed your videos in your own
digital experiences while still allowing the video content
to be accessible from the YouTube and Vimeo platforms.
DATA
PORTABILITY
OAUTH/OPENID/
CUSTOM
PROPRIETARY
FACEBOOK
GOOGLE
TWITTER
LINKEDIN
WINDOWS LIVE
FACEBOOK
GOOGLE
WINDOWS LIVE
TWITTER
LINKEDIN
Social Application
Programming Interfaces (API)
Social
Graph
Sharing
Authentication
Commenting
 Message
Boards
Profile
Data
Sharing
OPEN SOCIAL
TWITTER
ECHO
FACEBOOK
DISCUS
46
The obvious benefit is that you save on bandwidth costs, but
the even greater benefit is that you are where users are. You
create a branded experience on YouTube, and then extend that
experience through YouTube embed codes onto your branded
property. YouTube continues to grow their API to allow more
flexibility around how your player looks and whether or not ads
should show up on your videos.
Simple plugin buttons such as Facebook’s “Like” and “Share,”
Google’s “+1,” and Twitter’s “Tweet” and “Follow” dramatically
lower the barrier to users sharing content from your site out
to their entire social graph.
Data resources
If social cloud services accelerate traffic to your branded digital
experience, core cloud infrastructure services will enable your
social cloud services. Infrastructure as a service or rent-as-you-
go Infrastructure as a Service (IaaS) or Platform as a Service
(PaaS) let businesses like Zynga, Groupon, LivingSocial and
Airbnb go from nothing to $1 billion valuations with negligible
IT overhead, scaling when they need it, without overbuying
capacity. But make sure you architect for fault tolerance (see
AWS failure this spring). PaaS leaders make deployment,
database and background jobs easy: consider Heroku, AppFog,
Engine Yard, VMware and Cloud Foundry.
We can learn from the technologies, processes and concepts
that have enabled huge social cloud growth for those companies.
They are using PHP (Facebook), Ruby on Rails (Twitter, Groupon,
Airbnb), Python (Yelp), MySQL, unobtrusive JavaScript, server-
side JavaScript, cloud hosting, Scala, Clojure, MongoDB, CSS3,
HTML5, REST, JSON and WebSockets. These technologies
are being used by cutting-edge companies and they are
contributing their cutting-edge work back to the community.
Plus they are generally much more cost-effective than traditional
enterprise-based approaches, stuck within slow-moving,
expensive corporate IT data centers. Agile approaches have
pushed innovative approaches like continual builds of code
or continual releases of production code. Both approaches
are made practical through platform cloud services.
Cloud-based performance monitoring tools like New Relic can
identify performance problems in your application and give
you starting points for optimization. LinkedIn uses this kind
of information to identify functionality that can be replaced
How the Social Cloud Can Accelerate Brand Interaction
Learn exactly how far users will go
to make a purchase, which users
are more likely to purchase where,
and what other locations they frequent.
47OUTLOOK REPORT | VOL 10
with higher performance languages and frameworks, migrating
key services over to Node.js and Scala to take advantage
of their high degree of parallelization. If you need deeply
integrated analytics, a service like Mixpanel solves storage,
presentation, organization, querying and export problems,
and provides simple toolkits for instrumenting both the server
and client components of your Web app.
Build with multiple screens in mind. A single codebase can easily
support Web, Facebook canvas and mobile touch if you abstract
out your views well and use a framework that is designed for
such flexibility. Why not launch on three surfaces simultaneously
for almost the same price in development? There’s no need to
think of your site and your Facebook presence as completely
different animals. They can be two views of the same thing, with
slight differences. Platform cloud services can help you optimize
and speed delivery, regardless of the screen. Look at cloud-based
caching delivery networks like Amazon’s CloudFront or Google’s
Page Speed to accelerate delivery, regardless of targeting a
Facebook page or a traditional Web page.
Cloud services like Mashery or Apigee enable your brand to get
into more places than just your owned digital properties.
Razorfish’s Open Digital Services approach helps clients’
strategic view of services. Think about freeing some of your
data (product catalog, etc.) with a public API and see what
the community might build around/for you.
Cautions
There are many useful services available to build your
applications. Yahoo! Query Language (YQL) lets you query
a myriad of pieces of information against many of the Yahoo!
properties. Geocoding services identify user locations and
help you provide locally interesting content. It is important
to understand how dependent your application is on these
services and what their limitations are. Most will have limits
on the number of API calls you can make; it’s advisable
to build a layer into your own application to cache whatever
you can to avoid hitting those caps. A local cache will also
keep your application running and useable if the services
experience an interruption. Lastly, ensure that you are
subscribed and follow any announcements around APIs;
they have change deadlines and if you don’t update in time
you can be out of service.
48
If you build something that depends on the major social networks,
your app will require occasional work in order to keep in sync
with the latest changes, as well as monitoring to make sure
that things outside of your app are live and working. During
one campaign on Twitter, the tweets were not all appearing
in the search feed and Twitter had to help fix an issue on their
side. Facebook has had several major changes on their API,
with the latest coming Fall 2011 — a security overhaul of the
application authentication system that will disable applications
that do not comply. In the past, Facebook switched from
its proprietary Facebook Markup Language (FBML) to IFrames,
but if you had an app that hadn’t launched yet, you had
to make sure to pre-provision it on Facebook or you wouldn’t
be grandfathered in and would have to scramble to do a rewrite.
Social conversations are hard to control. You may want to take
a fresh look at how you relate with your consumers. Some
brands have elected to be very hands-off. Others are very
engaged. Third-party social monitoring tools (Context Optional,
Involver, Buddy Media) and a community manager are a must
in that case for doing escalation, bad word filtering, auto delete
and more. This can be a recurring budget consideration.
Your Facebook page should be a destination with many doors,
not just a flat campaign. Engaged users spend more time
with your brand, and become your biggest advocates — often
jumping in to defend the brand on the wall before the brand
can respond. So give them a reason to stay and interact
with something more than a lead generation form. Consider,
“Why would someone share this with their friends?” when
designing your social presence.
Don’t oversaturate your fans with content. You’ve spent time
and money on earning them, so make your posts to their
streams or tweets compelling and not too frequent in order
to avoid them “un-liking” or blocking you.
Social isn’t a one-off. You’ve acquired lots of fans so keep
using them. Think of longer strategies, not just short campaigns.
You built an app that has 3 million users — don’t just end,
extend. Those people are linked to you now, so keep giving them
something. Add more content and create new ways to interact.
This probably involves a new way of looking at budget.
How the Social Cloud Can Accelerate Brand Interaction
OUTLOOK REPORT | VOL 10
Razorfish Outlook Report Vol 10
51OUTLOOK REPORT | VOL 10
Beyond the Banner —
Unleashing the Power
of Digital to Drive
Topline Growth
Industry leaders have to reinvent themselves periodically to
maintain their preeminence. But as the rate of technology-driven
change continues to increase over time, the speed and frequency
with which companies must reinvent themselves also increases.
And unfortunately for industry incumbents, technology-driven
disruption tends to favor new entrants, who are often faster,
hungrier and unencumbered by legacy systems and processes.
We believe digital should be at the core of any industry leader’s
growth strategy, and we’ve identified three ways digital can drive
step-change improvement in topline growth — above and beyond
efficiency maximization of existing efforts.
The first wave of digital disruption came crashing into the business world about
15 years ago, when the Internet first exploded as a consumer technology. Since
then, leading companies across industries have been scrambling to master the art
of marketing and selling online. Most large companies now maintain multiple Web
experiences and marketing programs — all of which require periodic upgrades
in the form of redesigns and replatformings, as well as ongoing testing and
optimization. (All bread and butter for digital agencies, of course.)
Meanwhile, in what sometimes seems to be a parallel universe, pure-play digital
startups continue to spawn, swarm and thrive, often squeezing out weaker
competitors and overturning established industry structures in the process.
Industry leaders have had to reinvent themselves periodically to maintain their
preeminence. But as the rate of technology-driven change continues to increase
over time, the speed and frequency with which companies must reinvent
OUTLOOK REPORT | VOL 10
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Tim Perlstein
Group VP, Strategy
linkedin.com/in/timperlstein
Bethany Fenton
VP, Experience
LINKEDIN.COM/IN/BETHANYFENTON
52
themselves also increases. And unfortunately for industry
incumbents, technology-driven disruption tends to favor new
entrants, who are often faster, hungrier and unencumbered
by legacy systems and processes.
Now, as companies emerge from the recession looking to deliver
step-change improvements in revenue growth — and as growth
becomes harder and harder to find within existing markets —
digital channels, programs and agencies must do more than
deliver incremental improvements from evolutionary change.
Optimizing your way to greater efficiency is good, but not
enough. Digital can and must do more.
Digital should be at the core of any industry leader’s growth
strategy. In fact, given the relative maturity of established
platforms and programs — and the ever-increasing competitive
pressure from new entrants — now is the time to ignite a new
round of digital innovation within your organization. To begin
the conversation, we’ve identified three ways digital can drive
step-change improvement in topline growth — above and beyond
efficiency maximization of existing efforts.
1. New markets
As domestic growth in core segments becomes harder to come
by for U.S. companies — and as emerging markets continue
their dramatic expansion — we expect industry leaders to seek
new growth from markets that are new to the company and/or
broadly underserved by their industry. Digital can and should
be a powerful, cost-efficient method of reaching and serving
these markets.
That said, leveraging digital for new market entry isn’t as simple
as launching a version of your Web site in your target market’s
local language, although this might not be a bad start.
Localization means more than translation. For online retailers,
serving international markets means dealing with foreign
exchange rates, taxes, sizing systems and — of course —
fulfillment. Despite the complexity, retail giants Macy’s,
Barneys New York, PBteen, and JoS. A. Bank all extended
their ecommerce operations internationally this year. Macy’s
now has an ecommerce presence in 90 countries, although
its physical stores are all within the U.S.1
The logic is
obvious: With domestic growth stalled, foreign markets offer an
appealing opportunity to extend brands and capture growth while
requiring only minimal capital investment (compared to rolling
out more brick-and-mortar operations).
Of course, overseas growth isn’t just for retailers. Even
manufacturers for whom digital is not a direct sales channel
are using digital tools and partnerships as a cornerstone
of market entry strategy. As always, deep knowledge of local
players and local infrastructure is key. For example, given
the relatively high adoption of mobile phones (versus desktop
PCs) in developing countries, some Consumer Packaged
Goods (CPG) companies are looking to advance by partnering
with local telecom operators to expand mobile coverage —
in exchange for marketing access to consumers. Other firms,
such as General Mills, leverage digital for insight and customer
collaboration, as well as outbound communication. In China
and other markets where standard retail channel data
is inconsistent or nonexistent, General Mills is building
a proprietary database of consumer households, and using
real-time digital communications tools to allow consumers
to voluntarily share data on their preferences and behaviors.2
These are just some of the ways in which digital can support
successful new market entry — well beyond the banner ad. We
expect to see much more innovation in the coming year, as early
initiatives prove successful and best practices begin to emerge.
2. Enhancements for existing products and services
“Digital” can be more than a marketing or sales channel; it can
fundamentally transform a product or service by providing
additional functionality and consumer value. Even companies
Beyond the Banner — Unleashing the Power of Digital to Drive Topline Growth
1
Allison Enright, “Macy’s Goes Global,” InternetRetailer.com, June 27, 2011, http://www.internetretailer.com/
2011/06/27/macys-goes-global.
2
2011 Financial Performance Report, PWC/Grocery Manufacturers Association, page 43.
53OUTLOOK REPORT | VOL 10
accustomed to delivering tangible, “real world” value propositions
should treat digital as a core component of product strategy —
not just marketing or sales.
The most obvious example of this dynamic is the ongoing upheaval
within the media industry, where traditional core “products”
have been entirely digitized, radically expanding the dimensions
of competition and dramatically increasing the importance
of distribution channels and the overall “experience” of content
access. The list of recent digital product innovations within
the media industry seems endless. It encompasses multiple new
access platforms, ancillary or “exclusive” premium content
options, user-generated or participatory content development,
sharing, commentary, other social features, and on and on.
A more subtle but equally interesting evolution is happening
within the hardware and networking industries that typically
support content delivery. Digital TVs are becoming “smart,”
adding Internet connectivity and their own application platforms.
Network providers are delivering increasingly integrated digital
services with new, digitally enabled functionality (set TV
recordings from your smartphone, view caller ID on your TV,
manage call routing and voicemail settings from your PC,
etc.). Add in a host of innovative new hardware options (Roku,
Boxee, Slingbox, Apple TV, Xbox 360) and service providers
(Netflix, Skype, Google TV), and you have a full-on battle for
control of the digital home.
More established providers of “traditional” products and services
cannot help but be affected by this domestic, digital landscape
and the new consumer behaviors it generates. Home security
and automation providers must inevitably develop new strategies
and products to compete within the increasingly networked
home. (ADT’s Pulse product is a good, early example of this
trend.) Consumer electronics manufacturers may find ways
to embed digital “smarts” in appliances beyond TVs. Even
supposedly staid utility companies may get in on the act,
with more efficient and convenient controls, monitoring
and service solutions.3
3
See for example: M2M and Embedded Strategies, Juniper Networks, May 2011, page 81-85.
54
For service providers outside the home, digital enhancements
are becoming just as commonplace — and perhaps even more
important. The ability to conduct secure online banking
or day trading from our smartphones is something many
of us already take for granted. (Can you even imagine opening
a new checking account that didn’t offer free online bill pay?
We can’t.) Travel providers, from airlines to cruise lines, are
scrambling to provide ever-more convenient digital applications
for booking, trip management and customer service — both
during and after travel. Even brick-and-mortar service providers
are finding ways to integrate digital add-ons within their core
experiences, whether it’s providing access to a vastly extended
assortment (JCPenney’s in-store kiosks) or free, premium digital
content (Starbucks’ “Digital Network”) while on-premises.
The lesson behind all these examples is the need to view digital
as an arena for fundamental product innovation, not just
marketing communications. Rapid technology change continues
to open up vast, uncharted whitespace for products and services
yet to be invented. And as new and established players across
multiple industries continue to extend their offerings into the
digital realm, the consumer’s digital ecosystem becomes an
ever-richer environment within which to innovate.
3. Entirely new businesses
This brings us to the third major digitally driven growth
opportunity: the development of entirely new business lines.
Although it’s still early days, we’re seeing more and more
companies in “traditional” industries using digital to launch new
businesses and ventures that are adjacent (or even outside)
their core comfort zones. An even greater number of companies
now maintain digital innovation skunkworks, with a mission
to identify and pursue promising opportunities outside the
umbrella of the main organizational structure and brand.
Just a few examples should help paint the picture. GameStop,
the leading physical retailer of video games, made a splash
this summer when it announced its move into online streaming
of console games — clearly a hedge against declining physical
retail sales of a fundamentally digital product. It’s a move that
requires fundamentally different capabilities and processes
from the core retail business, and will likely benefit if managed
separately from store operations. Additionally, GameStop
maintains a vibrant portfolio of digital properties, including
Kongregate.com and GameInformer.com, which could form
the seeds of future all-digital ventures.
Now is the time to ignite
a new round of digital innovation
within your organization.
Beyond the Banner — Unleashing the Power of Digital to Drive Topline Growth
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
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Razorfish Outlook Report Vol 10
Razorfish Outlook Report Vol 10
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Razorfish Outlook Report Vol 10

  • 3. 3OUTLOOK REPORT | VOL 10 Outlook Report, Volume 10 — There’s no better time to start something. The Year in Media Forget Mobile — Think Multiscreen A Wake-Up Call for Collaboration It’s Time for Big Data to Improve Customer Experience Humanity Check — What Consumers Really Think About Tech How the Social Cloud Can Accelerate Brand Interaction Beyond the Banner — Unleashing the Power of Digital to Drive Topline Growth The Rules of Gamification It’s Not Enough to Be Liked — Getting Serious About Social Controlling the Retail Environment Through Digital Brand Immersion Performance Marketing Must Die Toward a New Global Digital Agency Structure Limited Time to Prepare for Unlimited Potential of Mobile How the Open API Movement Can Help Your Brand Organizing for Digital Success Authors and Contributors Contact 4 6 14 22 28 38 42 50 58 62 70 78 84 90 98 102 108 120 Go to razorfishoutlook.razorfish.com for an interactive version of Outlook Report, Vol 10.
  • 4. 4 There’s no better time to start something.
  • 5. 5OUTLOOK REPORT | VOL 10 In today’s world, social tools that started as communications and marketing tools have become conduits for revolution. Cloud-based services have finally emerged as viable methods for increasing collaboration and driving greater efficiency. And the investment world increasingly looks to start-ups to once again push the global economy forward. This means digital is now a lot bigger than agencies. In fact, it’s bigger than marketing. It’s increasingly woven into the fabric of our business and consumer culture. This inspires us more than ever not only to optimize the status quo, but also to ignite a business movement of sorts. But how? First, there is more pressure on our business to perform creatively, stemming from the fact that digital ideas come from more sources than just the agency. Indeed, as the new generation of creators enters the workforce, we have observed their natural tendency to put digital at the center of their process and thinking, regardless of their chosen industry or employer. As a result, companies like ours have to raise their game creatively to deliver idea-led value to our clients, while creating an environment for new ideas to thrive. Next, there is a strong drive to leverage the power of technology to increase efficiency and drive down the cost of marketing and doing business. We are seeing tremendous opportunities in the media marketplace, with the rise of ad exchanges, analytics and marketing platforms, to do just that. We’re merely scratching the surface of what’s possible. Finally, efficiency alone won’t move business forward forever. When I meet with CMOs, CIOs and CEOs around the world, I continue to hear a call for innovation and see an ever-present search for sources of incremental revenue. Marketers and business leaders once tasked with spending budgets efficiently are increasingly challenged with identifying new sources of growth, as well as product enhancements. The truth is, building an agency that fires on all cylinders — high levels of creativity, innovation, efficiency and technology — is a tremendous challenge. But it’s what agencies and great marketing organizations will need to do to survive in the face of change. Which brings me back to the Razorfish Outlook Report. I think you’ll find it to be a little less theoretical and a bit more practical than in years past. Why? Aren’t digital agencies supposed to be the predictors of the digital future? There’s nothing wrong with dreaming big, but first and foremost, in our view the next 12 months will be about doing. We’re not just talking about the social media explosion, but also scaling an organization and agency partners to execute on a strategy. Not simply checking the boxes of media best practices, but leveraging every tool available to plan, buy and measure its effectiveness. Not just accepting the product experience as it exists today, but using technology to improve customer experience. Not just ideation, but also execution. As we publish the Outlook Report, we hope it will inspire you to think and act. It’s what we mean when we say Ignite. As we gathered the data and spoke to clients and industry watchers to put together the Razorfish Outlook Report, we once again found our business in the middle of tremendous global change. The conversation around digital marketing — long the domain of digital agencies and technology companies — is now part of a much broader conversation about social and cultural change, the global economy and business landscape. Bob Lord Global CEO @RWLORD
  • 7. 7OUTLOOK REPORT | VOL 10 TheYear in Media Here’s our annual look at Razorfish ad spend, along with the results of our media team poll to identify the “Best of the Web” and trends for 2012. As we’ve done in the past, we polled the Razorfish media team to discover the “Best of the Web,” asking a variety of different questions to get a directional perspective of upcoming trends. The questions revolved around creativity, performance, quality and overall general satisfaction. The past year in digital media was heavily influenced by the rapid adoption of new channels like tablets, the explosive growth of new consumer platforms like Twitter and new innovations in media buying such as ad exchanges. Overall, investments in digital continue to grow year-over-year, playing an increasingly critical role in our clients’ marketing plans. Consumer migration to digital media, the emergence of new media powers and the sophistication of performance metrics made the year in media one of the most dynamic in decades. Ad spend in review Razorfish ad spend is projected to grow by more than 25 percent in 2011, marking the third consecutive year of more than 20 percent growth in overall ad spend for the agency. The growth is a result of success in new business and from increased investment from long-standing clients. After just two years, Publicis Groupe has proven to be a great fit for Razorfish and our clients. Now more than ever, the function of media planning is about understanding consumer behaviors and needs — and how to craft experiences that deliver on the opportunities The Razorfish Media Team Thomas Sudassy Media Research and Publisher Relations LINKEDIN.COM/IN/SUDASSY SPEND ANALYTICS PROVIDED BY WRITTEN BY Scan the QR code to explore additional content associated with this article. Read More
  • 8. 8 presented by those evolving behaviors. This is fundamentally different than simply accumulating reach and exposure through mass media. Our paid media spend was distributed across five main channels, illustrating the increasing complexity faced by clients and digital marketing teams. A closer look at the distribution of ad spend reveals several emerging trends: 1. Growth in ad exchanges Razorfish has been active in buying through ad exchanges since the early days of auction-based display media. We were one of the first agencies to launch a trading desk to directly access the growing pool of inventory and have continued to be at the forefront of data integration through the creation of client-side data mart solutions, now commonly referred to as DMPs. The Year in Media SEARCH DISPLAY MOBILE SOCIAL NETWORKS/EXCHANGES 43% 36% 4% 4% 43% 13% 36% 4% 4% Spend Content is media. 0 50 100 150 200 Yearly media billings INDEX 2008 2009 2010 2011(e)
  • 9. 9OUTLOOK REPORT | VOL 10 TAIL BODY STRATEGIC0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% TOTAL SPEND NUMBER OF PUBLISHERS 2007 1,832 2008 1,024 2009 692 2010 598 Number of publishers vs. number of media partnersOur continued expansion into the auction-based media marketplace has resulted in tremendous benefits for our clients in terms of more effective pricing, better targeting and stronger ROI overall. As we continue to grow and expand our efforts in this area, we will be focused on integrating first- and third-party data to build the most sophisticated targeting offering possible. These efforts will, of course, be balanced by the industry’s important and ongoing efforts to provide sound self-regulation around data management and privacy. Our investment in ad exchanges grew by 66 percent in 2010 and is projected to grow again by more than 60 percent in 2011. Even with that growth, there is still plenty of upside in this category since it represents less than 10 percent of our total ad spend. 2. Consolidation of publisher partners The emergence of new technologies and consumer channels continues to provide opportunities for the emergence of new publisher partners. In 2010, we purchased media across 598 sites, down from a high of 1,832 in 2007. While we expect many of those buys to be consolidated through the growth of audience buying across ad exchanges, we still see the need to test new platforms and technologies. However, we have continued to increase our concentration on fewer and more strategic partners. This focus on more complex, strategic partnerships has resulted in strong benefits for our clients in terms of scale, price, innovation and access. The breakout of our spend shows that 55 percent of our aggregated budget goes to our top five strategic partners, 25 percent to the next 32 largest partners and the remaining 20 percent in our long tail of 584 publisher partners. 0 50 100 150 200 250 300 = TOTAL SPEND 2009 2010 2011 Total spend in ad exchanges Spend breakout INDEX
  • 10. 10 3. Increased investment in paid social media The rapid rise of social media has impacted digital and our clients’ business in many ways. As social media platforms continued their explosive growth in the last year to reach massive scale, leading marketers adjusted their plans accordingly to begin a two-way dialogue with current and potential customers. This has led to the emergence of Facebook as a leading partner in paid media for Razorfish in the last year. Since our early tests and inclusion in Facebook media programs in 2008, the social network has gone from being in the lower tier of our top 200 publisher partners to catapulting to one of our top five media partners (as measured by total spend). The growth can mostly be attributed to the fact that Facebook has innovated in terms of media offerings and that these new opportunities are helping our clients meet their marketing goals. Facebook’s growing audience makes it a platform that our clients need to include in the development of their marketing plans. Our projections for 2011 point to continued growth and show no evidence that the rise of paid media on Facebook will slow down. 4. Shift from paid to earned and owned The scale of leading social media platforms such as Facebook, Twitter and YouTube had a strong influence on the overall marketing mix for our clients. However, the overall amount of dollars invested against social media still pales in comparison to search and display. The advertising models of these emerging media titans are still evolving, but they will undoubtedly garner a growing share of marketing dollars. In addition, the investment in social media management on third-party and owned platforms is not to be overlooked. The vast majority of our clients now have earned and owned media strategies to complement their paid media strategies. Over the last year we’ve seen tighter coordination between the paid, earned and owned channels. We now manage relationships with close to 10 million fans and followers on behalf of our clients, not including audiences on Web sites and microsites that we manage. That’s roughly nine times what we managed just a year ago. Our research into social media analytics has given us great insight into the impact and the amplification effect of earned and owned media. As we continue to refine our practices, we fully expect that investments in content and relationships will continue to grow rapidly. The Year in Media
  • 11. 11OUTLOOK REPORT | VOL 10 5. Accelerating growth in mobile Our mobile media and search business nearly doubled last year and represented close to 10 percent of our total paid media business. The major factors that affected this accelerating investment represent trends that will continue to make mobile one of the fastest growing categories: Increase in mobile transactions. Our clients are investing in fully functional mobile experiences where consumers can start to transact and purchase in the mobile channel. While mobile commerce is still small and nascent, mobile is becoming an important touch point in the consumer experience. As marketers increase the quality and quantity of mobile experiences, the mobile media and search spends will follow. For example, one of our clients is seeing pay-per-call increasingly drive significant scale and ROI. Growth of tablets. The proliferation of tablets in the marketplace is creating an entirely new channel. As consumers increase their consumption of media on tablet devices, it will provide a scaled medium for advertisers to reach their audience. Innovations in tablet computing will lead to advertising opportunities that differ significantly from those on PCs or phones. The ability to bring touch interactivity together with sound, sight and motion will enable marketers to provide new, rich experiences to their customers. Always-on phones. Multitasking with mobile while watching TV is driving higher consumption of mobile media and providing new opportunities for marketers to engage with their audience. Razorfish conducted a study in collaboration with Yahoo! to understand consumer behaviors and marketing opportunities across multiple screens. One of the conclusions from our research is that mobile is emerging as an indispensable activation vehicle for the massive investments in TV advertising. The complete details of the study are covered later in the Outlook Report. “Best of the Web” — A planner’s perspective As we’ve done in the past, we polled the Razorfish media team to discover the “Best of the Web.” We asked a variety of different questions to get a directional perspective of upcoming trends. The questions revolved around creativity, performance, quality and overall general satisfaction. Some of the “Best of the Web” results are listed in the graphic above. MOST INNOVATION IN MEDIA OPPORTUNITIES Preferred Mobile Partner BEST COLLABORATION Preferred Video Partner Partner Where We Most Want To Spend Money, But Can’t Figure Out How MOST CONSISTENT PERFORMANCE (ADVERTISING.COM) “Best of the Web”
  • 12. 12 Razorfish ad spend is projected to grow by more than 25% in 2011, marking the fourth straight year of 20%+ growth in overall ad spend for our agency. Themes that will shape the next year in media There is no doubt that digital media continues to be the most dynamic and innovative sector in marketing. One of the byproducts of the rapid pace of change in digital media consumption is the constant struggle for the industry to evolve traditional delivery models. Over the next 12 months, agencies must focus on adapting to the proliferation of new consumer behaviors and new marketing tactics. In particular, next year will be dominated by challenges such as how to manage video across multiple screens, how to rapidly incorporate changes in social media, how to plan in a cross-platform landscape and how to scale mobile advertising. While those trends will certainly dominate the conversation around media and marketing, it’s our perspective that there are also four major themes that will work to reshape digital media in the next year. 1. Content as media Most marketing professionals admit to having been in a vigorous debate sometime in the last year about the classification of a particular tactic as paid, earned or owned media. The construct is very useful in helping marketers broaden thinking around marketing strategies. But perhaps the real value is in helping reinforce the notion that content is media. And content can exist in many forms. The notion that agency planners are responsible for content leads to strategies and plans that can have a much greater impact. In the next year, progressive marketers will be the ones that begin to integrate all their brand assets into a single communication platform, creating a unified brand experience that puts the needs of the consumer at the center. 2. Data management In the last five years, we’ve increased the amount of data that we manage in our own servers from 3 terabytes to 90 terabytes. The ability to manage large and complex data sets has shifted from being a core differentiator to an absolute requirement. Data sources are more vast and complicated than ever. Building a single view of the consumer across all channels is the only way that marketers can truly build effective marketing programs. More than 80 percent of our media clients rely on a data management platform that we have custom built to make their digital marketing more targeted and more effective. Over the next year, these platforms will continue to become more The Year in Media
  • 13. 13OUTLOOK REPORT | VOL 10 sophisticated, taking into account an increasing number of data sources. Data management pays off for marketers — we’ve been able to improve return on ad spend more than five times by serving personalized ads to dynamic segments enabled by a unified marketing database. 3. Real-time buying In the last year, we have more than tripled the number of real- time impressions we’ve purchased. On average, we’ve seen performance improvements of more than 40 percent for our clients. The real-time nature of digital data has simply changed the way we buy media. Those who are able to understand data and act upon it immediately — in real time — have a strategic advantage over their competitors. Long gone are the days when companies and their agencies could buy media months in advance, then wait several more months to understand how those media investments performed. Today, agencies and brands have seconds in which they must respond, or potentially leave millions on the table in lost value. Brands need partners who can collect, translate and take action on that data in real time. Agencies that are well-versed in bid-management systems, and that invest in the tools and processes to manage those systems, will become industry leaders. The real-time and highly complex nature of digitized media allows marketers to develop a sustainable competitive advantage. 4. Attribution For the last decade, we’ve been building attribution models for our clients to help them invest their marketing spend more effectively. In the pioneering days, this type of analysis was done infrequently and was limited in breadth and scope. Today, with the data and processing infrastructure we have invested in over the last 10 years, and the growth of the marketing analytics group to more than 100 professionals, we are actively building these kinds of models for our clients on a regular basis. In fact, we’ve seen return on ad spending improve by as much as 3.5 times through smarter allocation of media investments. While it’s a discipline that demands constant iteration and analysis, that type of improvement makes attribution modeling a crucial strategy for marketers.
  • 15. 15OUTLOOK REPORT | VOL 10 Forget Mobile — Think Multiscreen As is the case with many new technologies, consumers are moving faster than brands. They’re already using smartphones and tablet devices in front of the TV to communicate with friends and family, look up information related to the show they are watching, or else surf content that is completely unrelated to what’s on the big screen. Razorfish partnered with Yahoo! to conduct a study to better understand this rapidly evolving consumer behavior and to provide guidance for how marketers should approach the corresponding opportunity. Mobile devices are used frequently in conjunction with other screens, including the big TV in your living room. Anyone who has ever tapped out an email on their iPhone, while checking a score on the VAIO balanced on their lap, while keeping an eye on American Idol on their 40-inch BRAVIA knows this. Yet many marketers today are ignoring this ubiquitous consumer behavior as they over-focus on mobile as a stand-alone medium. Media multitasking is not a new thing, of course. People have used laptops in front of the TV since… well, probably since the first laptop entered someone’s home. We’ve seen data on this behavior for years, and yet, beyond putting a URL on screen or asking people to “like” a brand on Facebook, most TV spots don’t acknowledge or attempt to capitalize on the fact that the consumer is watching with a Web-enabled device on their lap or in their pocket. At a minimum, multitasking adds another layer of complexity to the evolution of media measurement. At most, it’s a massive disrupter to television, the medium that receives the most ad spending. DVRs threw the industry for a loop, and Jeremy Lockhorn VP, Emerging Media @newmediageek WITH CONTRIBUTOR WRITTEN BY Scan the QR code to explore additional content associated with this article. Read More
  • 16. 16 C3 ratings were born to begin to address a world where the consumer is increasingly in control.1 Now, add mobile and tablet multitasking to the mix and marketers everywhere wrestle with measuring the latest evolution in consumer TV viewing behavior. On one hand, there is a potential distraction factor with connected devices, and on the other, there is a much more engaged viewer who is passionately chasing down more content on devices beyond the TV. How do marketers account for that with Gross Rating Points (GRPs) and Target Rating Points (TRPs)? We don’t yet have a clear answer — give us six months — but most marketers seem to be ignoring the question and failing to capitalize on the corresponding opportunity created by mobile multitasking. Which leads us to this: Lots of data has been published about the fact that consumers are using mobile and tablet devices while watching TV, but little of it has gone deep enough to be really useful in planning a multi-screen strategy. So Razorfish partnered with Yahoo! to conduct a survey among Web-enabled phone owners with the goal of better understanding this rapidly evolving consumer behavior and providing some guidance for how marketers should approach them. We found that a stunning 80 percent of respondents are mobile multitasking while watching TV. Below are some highlights and key implications for marketers. Mobile multitasking is addictive. 70 percent of respondents who multitask do so at least once a week, with nearly half (49 percent) reporting everyday multitasking. Furthermore, during the course of a TV program, more than 60 percent check their phones at least “once or twice,” and 15 percent stay on the mobile Web for the full duration of the show. Multitasking is both an enhancement and a distraction. An equal percentage of multitasking respondents (38 percent) agreed or strongly agreed with these statements: of respondents are mobile multitasking while watching TV. FORGET MOBILE — THINK MULTISCREEN 1 “C3” TV Ratings Show Impact of DVR Ad Viewing,” blog.nielsen.com, October 14, 2009, http://blog. nielsen.com/nielsenwire/media_entertainment/c3-tv-ratings-show-impact-of-dvr-ad-viewing/.
  • 17. 17OUTLOOK REPORT | VOL 10 • Using the Internet on my mobile or tablet device while watching TV enhances my viewing experience. • I find using mobile devices while watching TV to be distracting. This seems to be an opportunity for content producers and advertisers alike. Some people find multitasking to be a boon, and we have only begun to scratch the surface in terms of providing an engaging dual-screen experience. It’s like the early days of smartphones where it was remarkable that people were making purchases from sites that were not mobile-optimized. If folks were willing to go through that much effort, it stands to reason that making the experience easier and more streamlined will lead to even more passionate participants. Certain programming genres lend themselves to multitasking. The top five categories that attract multitaskers are: so high and social networking so low; we expected the reverse. On the content side of things, 60 percent of multitaskers are accessing additional content of some type. 44 percent is unrelated to what’s on TV versus only 38 percent related to TV. Clearly there can be a distraction factor here when it comes to TV commercial time, but the good news for marketers is that 36 percent of multitaskers use their connected devices for looking up information on a commercial they just saw. TV ad time = mobile prime time. TV ad breaks are triggers for multitasking because phones and tablets are, not surprisingly, more likely to get fired up and accessed during regular commercial pods. And, our survey respondents were more likely to state that they frequently engaged in multitasking during ad breaks. What people do during this time doesn’t change all that much. It’s still communication first and content second. An analysis of mobile Web traffic to the Yahoo! homepage during this year’s Academy Awards broadcast indicated clear spikes in traffic during TV ad breaks. Connected devices add fuel to the fire of sports fandom. Almost half of respondents reported multitasking during sporting events, with little difference shown between live or pre-recorded. In fact, even when attending a live sporting event in person, more than a third can’t stay away from their devices. Another key difference between sports and other genres is that with sports, people are driven more by content than by communication (recall it was the other way around overall). Texting still rules, but after that, other communication styles drop off — and various content rises to the top. Leading behaviors include checking scores and schedules of other games, and looking up team and player information or statistics. Smack talking showed up surprisingly low (20 percent) — maybe that’s because it’s not as rewarding when you can’t see the look on the other guy’s face — this feels like an opportunity for an inventive developer (or enterprising marketer). Again, an analysis of Yahoo! mobile traffic confirmed that with sports content (in this case, World Cup 2010 and Super Bowl 2011), commercial breaks spark mobile usage. Even bigger spikes are seen at halftime and after the games. For example, during the Super Bowl halftime show, Yahoo! Sports saw a 305 1. Reality 2. News 3.Comedy 4. Sports 5. Food While the top results may not seem surprising, what struck us about the results further down the list were that drama edged out genres like talk shows, music videos, how-to and others. We thought drama and action/adventure shows would be less likely to see multitasking behavior. Perhaps these intense programs stoke multitasking as viewers get hooked and seek ways to further immerse themselves in the show’s world. Think about Breaking Bad, CSI, Dexter or True Blood — those shows are intense but they also beg viewers to dig a few levels deeper than what happens during those weekly 40-plus minutes. Communication and content are the main drivers for multitasking. 94 percent of multitaskers engage in some kind of mobile communication. In order — text, talking, email, social networking and IM. It’s somewhat surprising to see talking
  • 18. 18 happening in the TV spots, and perhaps even what’s happening in the current program — especially if it’s live. At a bare minimum, it’s time to consider what kind of mobile call to action may be appropriate in the brand’s TV spot. Pepsi, Old Navy and Heineken have begun experimenting here. Pepsi gave away a free bottle of Pepsi Max to users who tagged the commercial using IntoNow, a Yahoo! social tool that allows you to share what you’re watching with your friends. Old Navy’s “Old Navy Records” campaign encourages users to tag spots with Shazam to unlock related content like the featured looks, and even download the music tracks for free. Heineken’s Star Player app gives users the chance to play along with soccer matches by attempting to predict which team will score within the next 30 seconds. These efforts begin to show the possibilities, but are only scratching the surface. Mobile search is about more than local. There’s no doubt that local search is very important. After all, mobile users are accessing local search 34 percent more than they were a year ago, according to research from comScore and the Local Search Association. But, with the massive amount of multitasking behavior highlighted here combined with the various studies suggesting that anywhere from 30-40 percent of mobile data usage happens at home, mobile percent increase in mobile traffic. After the game, even more users flooded the sports section, pushing overall increase up 387 percent. And, not surprisingly, Yahoo! saw massive spikes in mobile search traffic related to TV spots, including several movies and automobile manufacturers. Implications for marketers Your TV content strategy must evolve (again). It used to be relatively easy. Crank out a few 30-second spots and call it a day. But then came the Web, video on demand, basic interactive TV capabilities and so forth. Most marketers are still struggling to figure out how to truly capitalize on the opportunities represented by long-form video and — more recently — social content. Now, a new imperative is clear, especially for those spending heavily on TV. Content and experiences that move seamlessly from one screen to another are an absolute must. This is bigger than simply having a mobile- or tablet-optimized Web site. It means a cohesive communications strategy where the spots and the experience on mobile devices work together and build toward a greater whole. It means a mobile-optimized site that knows what’s Content and experiences that move seamlessly from one screen to another are an absolute must. FORGET MOBILE — THINK MULTISCREEN
  • 19. 19OUTLOOK REPORT | VOL 10 search isn’t exclusively about finding the closest taco joint. Marketers must reconsider their search strategies. At a minimum, they need to ensure that their mobile properties are properly positioned in organic results. It may also be worth re-evaluating the keywords they’re bidding on, perhaps to include terms that link the brand to shows and events they’re sponsoring. Let’s take an automotive company launching a new luxury sports sedan, for example. Part of the launch is sponsorship of a live awards show — several spots appear throughout the show and the celebs hitting the red carpet arrive in the new vehicle. Bumpers include “sponsored by” mentions and on-screen logos. The spot closes with a URL. Some viewers might jump to their phones, fire up the browser and enter the URL. But a good portion of them will also take what they perceive to be a shortcut: typing the brand’s name into a search box. Organic and paid results should appear and direct a relevant experience — perhaps the site’s homepage temporarily features the new model as well as content related to the awards program. Perhaps the red carpet reporter films a walk-through of the vehicle, and that video is made available. To drive even more traffic and engagement, the brand could bid on search terms relevant to the awards show (and popular gossip sites). The call to action could be something along the lines of “See your favorite celebs arriving in the new XYZ car,” linking through to a series of videos and also featuring the red carpet reporter’s overview. Connected devices are the new water cooler. People aren’t waiting until the next day to discuss what happened on their favorite program anymore — it’s happening in real time now, via text, email and social networking sites/services. Brands can ride along here as well, but it requires a smart social strategy that syncs the brand with the programs they’re sponsoring. It’s not easy, but with more than half of multitaskers getting active on social networks during TV viewing, there is a massive opportunity to engage the audience on a new platform. In the automotive example above, there are several ways the brand might get involved in the real-time discussion. Aggregating Twitter feeds on their homepage, for example, allows users to explore the new sedan while staying connected. Perhaps sponsored tweets could go out from a few celebs talking about how much they liked the ride in the car. The brand’s social network presences could all be talking about the show, perhaps launching real-time polls asking users to predict who will win the next category. And so on.
  • 20. 20 Multitasking might finally kill (or at least reinvent) the GRP. The GRP debate rages on. The metric that has been the currency of the offline world for decades has tried time and time again to enter the digital world, only to be beaten back by legitimate arguments that it doesn’t accurately account for different levels of engagement, among other weaknesses. But here’s the remarkable thing about multitasking — increasingly, the devices are going to know what people are watching, providing a potentially more accurate view into what large groups of people are tuning into. And, with so much brand engagement happening on these connected devices, effectiveness of spots may also be more accurately measured. Lastly — and this is the silver bullet — with massive growth expected in mobile payments and mobile wallets, the same device that knows what people are watching and what people are surfing will soon know what they’re buying, creating the ideal closed loop for ROI-driven marketers. And who isn’t ROI-driven these days? Connected devices are the new water cooler. FORGET MOBILE — THINK MULTISCREEN
  • 21. 21OUTLOOK REPORT | VOL 10 By Frederic Bonn Do you want a consistent communication platform that works across all channels and is relevant to the consumer behavior in each? Do you rely on more than one agency to handle your communications and marketing? And you re satisfied with that? Are you in denial ? So you’d actually rather work with multiple agencies? Do you have one lead agency creating ideas while the others simply follow? Here's a little more about how agencies think. They all love what they do, but their love is blind. Agency A thinks that Agency B is clueless about digital, even though Agency B said they had videos on YouTube — “That’s digital, right?” B dismisses A’s ideas because A doesn’t know anything about the brand, but come on, A had a video on YouTube, too! — “That’s brand building, right?!” A and B think C should just follow what they say — “Wait, you didn’t get our memo?” And D should just buy what they all need — “Because we’ve already figured it out.” Your lead agency is probably the “traditional” agency, right? Great, you now have a 30 second spot (or 60) and some print ads. Do you believe consumers only experience your brand via one media channel? And they provide ground-breaking creative ideas that deliver great results? Did you develop an integrated brief that incorporates all agencies, teams and disciplines involved in your business? Have you defined your individual agencies’ roles and responsibilities? And they never try to compete anyway? Do your teams meet regularly to develop an integrated brand strategy and campaigns? Do you know how most agencies operate? Is that single agency capable of mastering integrated communications from social media to mobile, event planning to media buying, TV to digital? And you have operational flexibility and scale? Do you want your agencies to successfully collaborate?
  • 23. 23OUTLOOK REPORT | VOL 10 A Wake-Up Call for Collaboration The ability to integrate creative, media and technology to meet the demands of your always-on consumer is ideal. However, most traditional lead agencies don’t have those capabilities just yet, nor are most digital agencies prepared to handle lead agency duties. Coordination of your agencies is not enough — you need to move more aggressively toward true collaboration.We’ve identified five big barriers to essential agency collaboration. People now consume 12 hours of media in just 9 hours of elapsed time, according to a recent Harvard Business Review study.1 Consumers use a lot of media types all at once and now brands need to catch up. To do so, marketers must change how they work with their agencies. If you are a CMO or a brand leader, you are probably using multiple agencies to meet the demands of your always-on consumer. A lead agency that can integrate creativity, media and technology would be a great solution, but traditional lead agencies aren’t yet capable. In 2009, Forrester Research set off a mini industry tempest when it reported that only 23 percent of interactive marketers felt traditional agencies were equipped to handle interactive marketing work.2 Fast forward two years and Forrester still reports that only 30 percent of those surveyed use their traditional agencies for digital marketing, and in fact 68 percent of those marketers work with two or more agencies. Some reportedly have more than 15 Pete Stein President, East @pstein211 Frederic Bonn Executive Creative Director @fredericbonn 1 “How Internet Junkies will Save Television,” Harvard Business Review, http://hbr.org/web/extras/ how-internet-junkies-will-save-television/4-slide. 2 Sean Corocan, “The State of Interactive Agencies,” Forrester, December 7, 2009. WITH CONTRIBUTOR WRITTEN BY Scan the QR code to explore additional content associated with this article. Read More
  • 24. 24 agencies on their interactive rosters.3 By the same token, most digital agencies aren’t yet ready to handle lead agency duties. In three to five years, the landscape will look different, but for now marketers have to deal with a patchwork of agencies that are channel specialists and all the complexity that comes from that. What can you do now to drive the integration of creativity, media and technology that you need to truly engage consumers? Coordination of agencies is not enough — you need to move more aggressively toward collaboration. And guess what? Agency folk want more collaboration — or at least they claim they do. So, what are you waiting for? If you are a CMO or brand leader and you’re not pushing your agencies for deep collaboration, you’re missing out on a big opportunity. We have seen five big barriers to collaboration: 1. Client experience/confidence As a brand marketer, you probably have more confidence in one area of the marketing mix or the other. Perhaps you are a digital native who lives and breathes ones and zeroes, and now you’ve been promoted to look after the whole mix. Or maybe you’re a “traditional” marketer with a strong legacy of brand building, but you’ve had your run with TV commercials. You find digital exciting, but daunting and maybe even a bit over-hyped. Wouldn’t life be better if your agencies were bringing truly integrated ideas to you? 2. Cultural inertia Success can dull the competitive edge. We have seen many marketers and their agency teams not adapt fast enough because they haven’t had to. Sometimes a great track record can put you A Wake-Up Call for Collaboration 3 Sean Corocan, “How to Optimize your Interactive Agency Roster,” Forrester, May 27, 2011. Coordination of agencies is not enough — you need to move more aggressively toward collaboration.
  • 25. 25OUTLOOK REPORT | VOL 10 in a position for future failure. Similarly, agencies, particularly account people, are protective of their turf. Unless they feel their piece of the pie is protected, change will be difficult. 3. Above-the-line agency snobbery Some above-the-line agency teams believe that: 1) digital agencies don’t have anything of value to contribute to the conversation, or that 2) their team is already leading the way in digital. 4. Digital agency lives in a digital bubble Digital agency teams tend to fall down in two places: 1) they don’t fully respect the power of offline communications, or 2) they aren’t able to lift out of the tactical and into the strategic, and they fail to put their work in this broader strategic context. This leads clients and above-the-line agencies to keep them in their digital silo. 5. Client silos Clients are often organized into silos that make it very difficult to plan with a focus on how the consumer and the brand should engage. There are different client owners for traditional creative, digital creative, media, PR and other elements of the mix, too. When agencies report into different silos, true collaboration will not occur. Despite these barriers, we have had success with our clients and our agency partners. We recently formalized our partnership with BBH at Unilever, a client with whom we’ve had a lot of success rethinking the model. Here are some lessons we’ve learned on getting the best work out of the right people: Establish the process. In order to get the most out of each agency, make sure you define a clear process for them to work together. You need to clarify the boundaries of their engagement, expectations and ownership. One exercise we went through with a partner agency was to play the “what if” game. We talked through all of the worst-case scenarios we could imagine and how we would handle them when things went wrong. It was a fun game and a great way to talk through problems in an environment where emotions weren’t running high. While you’re at it, examine your own organization. Agencies tend to organize around their clients, so if your organization is siloed, it’s likely that your agencies will be, too. Even if you don’t change your structure, make sure your organization is aligned and not operating in silos defined by channel. Demand creative and media collaboration. Creative collaboration starts with a solid brief delivered to all agencies simultaneously. Unearthing an insight that reflects true audience behaviors is critical to crafting a relevant message, no matter who makes it or when it’s launched. The brief needs to nail the business objectives, brand DNA and the digital behaviors — with the goal of tapping into the rituals that are ripe territory for the brand. We recently found that if we allow the above-the-line agency to own the brand DNA, we can own the digital behaviors, thereby making sure they are embedded into the ideas. This will enable your creative teams to come back with a true creative platform — not just a single execution that’s stretched across channels. One-hit television campaigns or social campaigns do not a platform make. Don’t settle for anything less than a robust creative platform. Huge bonus points if your media agency is part of the team. A successful channel plan is one that considers how to leverage each channel in a way that makes the whole greater than the parts. You’ll find that when media and creative teams work together, you’ll get deeper consumer engagement. And just to be certain that the ideas are inherently social and engaging, we have found it beneficial to include explanations in the brief. Use the brief to articulate why the insights point toward engagement. Protect compensation and provide incentives that drive alignment. Incentives are a powerful lever that should be pushed to drive behavior. Agencies should be rewarded for collaboration. Ultimately they need to be rewarded for great work and business impact, but consider this to be part of a journey. They need to know that their piece of the business is protected. While strategy is shared, execution should be handled by channel experts so that change is managed gradually. In addition to giving agencies a safety net, give them a reason to jump higher. For one client we (us and the ATL agency both) receive a bonus if we help the client exceed key business targets.
  • 26. 26 Keep a slush fund. A key to successful marketing is figuring out how to integrate always-on and episodic (campaign-based) communications. Great creative platforms should have plenty of legs and should be responsive to consumer engagement. This creates a great opportunity for agency collaboration, but as the client you need to set aside some money in order to create relevant content or utilities that can stoke a fire that you may have created. When we created the Mercedes-Benz Tweet Race last year, we saw that there was a lot of curiosity about the tweet-powered vehicles. We jumped on the buzz and created a spoof video of German engineers driving cars with their mobile devices. It helped ignite a lot of interest. You need to start planning for what you can’t plan. Create urgency. Without a substantial reason to change behavior, it will not change. You, the client, have the greatest ability to create urgency. You need to set a high bar. For instance, point to competitors or other brands that are doing it well. And you need to shift the risk. Tell your agencies that if they fail by trying something new and different, you will embrace it, but if they fail by not collaborating, it will be a strike against them. In the end, agency collaboration is rooted in something very fundamental — trust. Your agencies need to trust each other to produce great work. By setting up a clear process, demanding creative collaboration, and planning for the unplanned, you can go a long way toward setting up the structure and incentives that your agencies need to build trust amongst each other. With a solid foundation in place you can count on your agencies to do their job exceptionally well. A Wake-Up Call for Collaboration To get the most out of each agency, make sure you define a clear process for them to work together.
  • 29. 29OUTLOOK REPORT | VOL 10 Mark Taylor VP, Customer Insight Group linkedin.com/in/markchristophertaylor Marc Sanford, PhD Director, Customer Insight Group @mmsanford Pradeep Ananthapadmanabhan Chief Technology Officer,VivaKi linkedin.com/in/pradeepananth It’s Time for Big Data to Improve Customer Experience Channel-based marketing is dead. The increased amount of data available at the individual consumer level, combined with the proliferation of cloud computing, have allowed savvy analysts and marketers to create a truly singular view of the consumer, regardless of touch point. This single view enables a truly enhanced consumer experience and more efficient use of client and agency resources for decision making. All the customer data out there is worthless if you can’t process it and turn it into actionable intelligence. Unfortunately, older data processing technologies (such as Relational Database Management Systems, or RDBMS) are simply not capable of processing data in volumes that the industry has collectively coined “Big Data” — volumes that are in terabytes/petabytes. As such, we position the consumer as the only real appreciating asset and we tie everything together through the use of Big Data. Awareness of the challenges of a multi-channel world is nothing new, but each channel touch point represents an immense opportunity for insight. An average Razorfish client has billions of customer interactions a year across paid, earned and owned channels. With so many opportunities for insight and learning, we create a 360-degree view of each individual in the database. Using integrated Big Data approaches, we are now informing the holistic data view to gain the fullest understanding of consumer interactions, intent and value possible. This current shift centers on how customer intelligence across channels is not just used for insights, but actioned at great velocity to power multi-channel targeting and personalization, made real through dynamic digital messaging. WITH CONTRIBUTORs WRITTEN BY Scan the QR code to explore additional content associated with this article. Read More
  • 30. 30 • Better use of the team’s time to focus on what matters most to their business. Data enables us to understand customers and to manage contact and content strategy. Data is a core component of integrated marketing and, via an integrated approach, we can speak with a single voice across channels and lines of business. However, to succeed in a meaningful way at that level of customer centricity, we have to manage all that data in a way that holistically fuels customer engagement and experiences. That effort requires a whole ecosystem of people, processes and technology. Even the most sophisticated and modern businesses today are surprisingly ill equipped to manage even the most basic digital From insight to action, we’re now finally implementing consistent and relevant messaging approaches that provide cohesive consumer experiences. In our experience, each client using Razorfish’s Big Data-led performance marketing approach takes a different path. Ultimately, a client’s path is based on business priorities and what information can be leveraged from the available tagging and data strategy. Working with different clients has enabled us to determine realistic roadmaps. Holistic integration benefits: • Common Data Marketing Platform (DMP) for reporting, analytics, targeting and media integration. • A channel and customer view of success. • Metrics that measure end to end, not just in parts. • Decision-making through actionable insights. • A common language for performance across different teams, brands and markets. It’s Time for Big Data to Improve Customer Experience Paid Earned Owned Each touch point is an identifiable interaction and an opportunity to build value. Email Search .com Mobile 3rd Party Data Analytics Reporting Media Targeting AOD Display Social Web Analytics Platform OWNED PAID EARNED razorfishOPENTM 3RD PARTY (AOR/Client/3rd Party) Modular approach to platform and services, by fully integrating an organization’s owned, paid and earned channels for insights and targeting. razorfish- OPENTM
  • 31. 31OUTLOOK REPORT | VOL 10 marketing standards and activities, let alone jettison forward into the new world of Big Data techniques. Through a series of in-depth interviews and client experiences, Razorfish found a common set of fundamental challenges holding back meaningful data integration: • Fragmentation of efforts between different teams, tools and data sources across multiple channels, brands and regions. • Political and fiscal turf protection. • Multiple sales funnel constructs. • Inability to identify the customer. • Inability to quantify the value of customer experiences. Let’s take a closer look at how our approach to Big Data, using the razorfishOPENTM framework, can remedy these issues. Fragmentation We’re in an era where intelligent use of Big Data pays huge dividends. Implementing solutions that improve integration of data is very challenging and complex but not for the reasons you might think. Much of the technical and analytical challenges for tapping Big Data have been solved — but failures today often stem from attempting to use legacy small data solutions, internal politics, effort fragmentation and failure to manage the true value of Big Data-based solutions. While a lot of niche players using Big Data approaches have stepped up to solve parts of this challenge, building incremental capabilities in a silo can by default push you further into a silo-based culture and limit your understanding of the customer. Any holistic Big Data solution requires a scalable measurement plan and tagging strategy at its foundation so you can take into account performance marketing efforts across channels, tactics and disciplines, with a shared strategy of measurement and tracking that is scalable across international regions and markets. The end solution provides a subtle and intelligent approach that can evolve by integrating and building upon other assets, data sources and capabilities already in place. This approach enables a modular and organic ability to evolve and grow, but with a standardized core. These qualities are not always the prerequisite in Big Data techniques, but without this there is no foundation for growth. There’s a new game in town — it’s cross-channel data management and marketing.
  • 32. 32 Turf wars Crossing organizational units can be tricky. Often clients are not set up internally for a path to success based on complete integration and use of available data. Organizations are formed around channels — one unit owns the Web site and its data, another owns CRM and email, another may own Web media and yet another may be in charge of social media. Worse yet, each silo may have its own analytics arm. The only way to be part of this organizational conversation is to think big. We have gained phenomenal success by leveraging Big Data-based techniques as part of a modular, digital roadmap that directs current and future business investment in the next 100 days/12 months/3 years. Be prepared to think big even while starting small, and determine your starting point and roadmap — no matter how audacious your goals. A Razorfish global technology client decided their initial priority was to gain cross-channel insights before embarking on targeting and deep analytics. This was the foundation starting point for their organization and it ensured they gained political capital across their business model through an evidence-driven, customer- centric approach that enabled financial modeling of return on investment. Their next phase focus is on actioning that data for targeting across display advertising and the Web site. Another Razorfish client, a major global retailer, recognized that they had a wealth of underutilized offline and digital data. They decided to leverage Big Data approaches to integrate multiple channels and power media, dynamic re-messaging, analytics and more. The ultimate purpose is to enhance the value of those relationships by aggregating information about the customer and communicating with them in the most relevant and engaging way. Previous iterations of this approach resulted in a three- to five-time increase in return on ad spend, and a significant decrease (about 65-70 percent) in cost per acquisition. Each phase typically pays for itself in weeks, while providing the funding for the next incremental phase. This becomes a sound It’s Time for Big Data to Improve Customer Experience Media agency of record (AOR) Report DFA Display MEDIA METRICS Multiple agencies Report Buddy Media Social metrics Social Search AOR Report Marin Media metrics Search Digital AOR Report Omniture Site metrics .com Digital AOR Report Flurry Mobile metrics Mobile In-house team 1 Report ExactTarget Email metrics Email In-house team 2 Report ATG Merchandising Metrics Online Retail/ Store In-house Report Custom Tenure and Product Value Transaction Data Research agency Report Custom Attitudinal Profiles Segments Example of a siloed view of data management and reporting. OWNED PAID EARNED 3RD PARTY (Client and 3rd Party Data)
  • 33. 33OUTLOOK REPORT | VOL 10 position to be in when convincing your peers of the rationale and business case to fund such solutions. Big Data can be organized without a major disruption or re- architecture of existing structures, internal teams, vendors, agencies, platforms or focus. Instead, our approach to Big Data utilizes an open standard designed to exploit existing assets and fit the best custom solution for business environments. This approach has an evolving set of modular relationships managed as a single solution, resulting in a single and holistic view of the customer based on all available data. Our clients are using this common view to engage and encourage their different teams to speak in the same language. Multiple sales funnel constructs Funnel management is where people are getting clever with Big Data, however it runs the risk of solving only one part, rather than the whole. We know that leveraging a single view of the consumer drives value at all levels of the funnel. So why do many continue to approach client problems and challenges as one-offs or focus on just one area of the funnel? Too many distributed engagements will lead to: 1. Single point-in-time solutions that require rebuild with every new engagement. 2. An additional data silo that requires more time and effort to manage and process. razorfishOPENTM targeting roadmap. Target 1.0 Target 1.1 Target 1.2 Target 1.3 Target 2.0 Heavy use of CT with no dynamic ads Description Display or site Delivery Option/ Channel Low complexityBenefits Some time to set up the offer, strategy and creative Considerations 1.5 X ROASTypical ROI Dynamic ad, last action only Display Display Display Fast to market Access to data is limited 3.5 X ROAS • Dynamic ad • User history • Segmentation • Processing Higher relevance and full data access Greater set-up investment to ensure platform is in place 5 X ROAS • Dynamic ad • User history • Integration of multiple data sources • Segmentation • Processing Increased relevance and huge long-term incremental data benefits Time to market is longer ~6.5 X ROAS • Dynamic ad • User history • Integration of multiple data sources • Segmentation • Processing • Multi-channel delivery Display, site, email, mobile, call center Channel agnostic Greater cross-channel business coordination ~8 X ROAS
  • 34. 34 For example, the illustration on the right shows how an effective re-messaging program will grow the bottom of the funnel. However, if this becomes a one-off without integrated implementation and access to the data, the solution becomes a very clever silo at the expense of the broader opportunity. The reality is that the rules and the data to enable an integrated view and management of the funnel would need to come from first-party data via a DMP solution and the organization’s data assets, rather than a third-party data provider. Third-party data intelligence can provide these larger insights into what’s working and where there’s opportunity for more scale. Data providers can be joined to first-party data, not the other way around. Within Razorfish’s framework for integrating data and services (described below as razorfishOPENTM ), targeted, dynamic ads are combined with a Demand Side Platform (DSP), such as Audience on Demand (AOD), to match impressions to users identified in real time. This allows you to only reach users that have been already “qualified,” and avoid upfront agreements and negotiation by paying the market price for users meeting criteria defined in the audience segmentation. By reaching the right audience at the right price and allowing the ability to control bids at a cookie level provides a great deal of efficiency and relevance. This integration also enables the ability to bring a wide array of data at the bottom of the funnel to the audience at the top of the funnel. Inability to identify the customer Razorfish implements a customer-centric approach through an organized framework of measurement and tagging that tracks It’s Time for Big Data to Improve Customer Experience DIGITAL OFFLINE Consideration Awareness Retargeting Conversion and remarketing is only part of the answer. Funnel management is where people are getting clever with Big Data.
  • 35. 35OUTLOOK REPORT | VOL 10 all digital business activity and harnesses the full stream of data as the core basis of the single view of the customer. From day one we leverage all existing assets, people, agencies and platforms, without a big, disruptive overhaul. Chances are these existing components are there for a reason and are providing value, but getting that cross-functional view and line of sight is the first objective. Inability to quantify the value of customer experiences Organizations are increasingly demanding faster value return on their marketing investments. Razorfish has found that businesses now more than ever need a true, meaningful understanding of what drives customer value. Rather than using Big Data to improve one area of the customer experience, we need to build toward meaningful interactions at a customer level and progress the value of their brand relationships over time. We have seen our clients quickly moving toward a culture that understands customer data as one of its most valued assets. Focusing on customer value helps companies move away from channel performance and toward greater customer-centricity. But to calculate customer value, companies must fully utilize the recency of interactions, along with the required behavior, revenue and relationship metrics. A key challenge businesses struggle with is finding advanced analytical skill sets and analytics-based approaches that can leverage and interpret that data to determine the key levers that drive value within their organization, or at least within a specific team’s control. Behavioral data captured by the razorfishOPENTM first-party DMP on client-owned assets integrates with Media DSPs third-party data to help build more precise audience segments and add to our clients’ audience buying capabilities. Call Center Open DSP Audience Targeting Integration Enhanced Segmentation Data Provision Publishers AUDIENCE/ PROSPECT/ CUSTOMER PROSPECT/ CUSTOMER CUSTOMER MANAGEMENT CUSTOMER MANAGEMENT 3rd Party DSP and Data Providers razorfishOPENTM 1st Party DMP Client Proprietary Data .com Using an integrated DSP allows you to only reach customers and prospects that have been qualified by razorfishOPENTM . DM Mobile Email Retail Paid Owned Earned Consistent data collection across touch points enables analytics, segmentation, targeting and reporting. For example, a customer falls into segment 8, based upon razorfishOPENTM rules. Razorfish then targets customer experience, agnostic of channel (represented by orange dots).
  • 36. 36 ReportingMedia AnalyticsTargeting razorfish- OPENTM It’s Time for Big Data to Improve Customer Experience We define and value the segments of customers we want to engage with and create Big Data-applied algorithms to create a new type of value segmentation model that can operationalize differentiated experiences at high velocity. We not only deliver unique and consistent experiences to these customers, but also leverage our knowledge about them to bid for the opportunity to deliver those experiences. From the beginning, we value the revenue and other business impact of the opportunity and in the end we prove it. *razorfishOPENTM tagging framework Report Report Report Report Report Report Report Report Report Display MEDIA METRICS Media agency of record (AOR) Social metrics Multiple agencies Media metrics Search AOR Site metrics Digital AOR Mobile metrics Digital AOR Email metrics In-house team 1 Merchandising Metrics In-house team 2 Tenure and Product Value In-house Attitudinal Research agency Social Search .com Mobile Email Online Retail/ Store Transaction Data Profiles Segments Silo reports provide a detailed view at a channel level and have a role in optimizing channel performance. Ad serving tags provide a holistic view across the customer journey, at the unique customer level. razorfishOPENTM tagging framework that tracks cross-channel business activity. * * * * * * * * *
  • 37. 37OUTLOOK REPORT | VOL 10 We have seen our clients quickly moving toward a culture that understands customer data as one of its most valued assets.
  • 39. 39OUTLOOK REPORT | VOL 10 Humanity Check — What Consumers Really Think About Tech To get outside the digital marketing bubble, we conducted a series of focus groups, in-depth interviews, and ethnographic sessions in San Diego, San Francisco, Seattle, Chicago, Ft. Lauderdale, and Portland, Ore. The goal was to uncover what’s really going on in the everyday user’s technology life. Among the insights that emerged: people still need their physical space, brands get points for effort, there’s a new kind of couch potato and there’s plenty of tech-fueled confusion in consumers’ lives. Talk to a few tech pundits about what’s next and you’ll very quickly see a calcified conventional wisdom form. Facebook and/or Twitter are totally integrated into everyone’s life and everyone wants to share everything. Quick Response (QR) codes count as progress. Google and Apple are loved by all and the world is waiting to see what both will do next. But talk to real people and you get a different story. To get outside the digital marketing bubble, we conducted a series of focus groups, in-depth interviews, and ethnographic sessions in San Diego, San Francisco, Seattle, Chicago, Ft. Lauderdale, and Portland, Ore. The goal was to uncover what’s really going on in the everyday user’s technology life. There were 56 respondents age 18-49, all of whom had broadband access in their home, a smartphone and a computer. But they didn’t identify themselves as super users or even technology enthusiasts. OUTLOOK REPORT | VOL 10 Brandon Geary SVP, Strategy @brandgear WRITTEN BY Scan the QR code to explore additional content associated with this article. Read More
  • 40. 40 Five core observations rose to the top for us: 1. People need their space While much of the business news centers on the death or decline of old retail models — bookstores, movie theatres, consumer electronics and music — we found people continue to express emotional attachment to the store experience, despite the shuttering of former stalwarts like Borders. This is backed up by a recent Accenture survey that found nearly 75 percent of consumers consider a storefront for digital communications products to be important.1 We found strong, positive feelings about digital music, the rise of new content delivery mechanisms like Netflix, and digital content delivered on the Kindle and iPad, with limited longing for the old days. “I don’t miss CD boxes to be honest, and lugging books around wasn’t all that great,” said 29-year-old Cathy. The risk for retailer disintermediation clearly remains high for media products. But the desire for consultation and experiences — particularly shared experiences — remains alive and well. Solution: Give people a new reason to come back. We found an openness to reinvention of old models with reliance on physical space. On music — “Why don’t they broaden the experience to include more physical objects around the music or have more events associated with the medium,” said Colin, 27. On movie theatres, 30-year-old Lisa said, “I’d like to see the opportunity to rent movie spaces for friend groups so that movies become more like karaoke in Korea.” Big box retailers under pressure from Amazon.com and disruptive models should consider re-evaluation of space, not just the product in question. 2. More knowing, less thinking Apps, search and social media are rapidly changing human interaction at the level of the conversation. Knowing stuff has become easy, which has had a reductive effect on chats that once might have been more discursive. “When we’re talking about something we aren’t sure of, we all just look up the answer and it’s over,” said Heather, 32. In-person interaction has evolved to become more of an information sharing exercise and less of a conversation around ideas where one person 1 “The Value, Role and Performance of the Physical Retail Channel for Communications Service Companies: A North American Perspective,” Accenture, http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture_Communications_Research_Physical_Retail_North_America.pdf (2011). Humanity Check — What Consumers Really Think About Tech Provide a small delight for customers. You don’t have to go big to get impact.
  • 41. 41OUTLOOK REPORT | VOL 10 builds on another’s thoughts, building on another’s thoughts. “I check my friends’ stuff more to see what information I should know now,” said David, 32. Solution: The brand has to take a stand. For brands interested in using social media to join a conversation with their consumers, they may find there is less conversation to join and that they too are just sharing information or listening in on information share. Or brands may need to spark conversations. In a world of information sharing, consider asking a question, creating a debate and offering an opinion in attempt to get engagement. 3. Brands get points for effort While only a few big successes in North America appear to get the majority of mainstream media coverage (Facebook, Apple, Google, Angry Birds and LinkedIn), we have found the perception of innovation increasingly comes from the trial of new things, regardless of whether or not the new thing is a long-term business success for the company that launched it. Google is consistently praised in projective exercises as innovative, despite an inability of users to pinpoint exactly what those innovations are. “Google is like Apple,” said Steven, 41. “Just always doing new things.” Companies like Starbucks and Nike are thought to be more suitable for reinventing dying industries like books and music, despite not being media companies. “Starbucks could make a better bookstore than Barnes Noble could,” and “Apple could sell anything.” Solution: Keep on making. Companies don’t have to get everything right to get credit. Perceived effort associated with releasing products and services creates a positive cumulative effect for the brand. For brands remaining on the sideline or fearing a lack of focus, consider placing smaller bets on app or development initiatives to provide a small delight for customers. You don’t have to go big to get impact. 4. Meet the new couch potato Historically, digital pundits have promised a more interactive future, in which users move away from passive, couch potato viewing to more active engagement. While the amount of user- generated content and sharing supports this movement, we have found everyday users increasingly leaning back in their digital consumption habits. Social media is described as a more ambient activity. “[Facebook] is usually a drag. I just feel lazy like I’m seeing the same old stuff and looking at people’s profiles. I feel somewhat guilty about it sometimes, like I’m wasting time.” Twitter, originally categorized as a social tool, is described more as a curation tool. “I don’t really tweet anymore. I just see what I should think about reading.” And social media in general is making in-person interaction increasingly difficult to motivate or organize. “It’s just so hard to make it (an in person meeting) happen now,” said Tran, 29. Solution: Don’t be afraid to be a pusher. Brands that have long viewed digital as an engagement medium should also consider more opportunities and ideas that are more push in nature: video- and photo-based status updates, viral shorts and simple games and activities. 5. The rise of digital confusion In launching new digital services in an app-filled, multi-device, multi-operating system world, consumers have become increasingly confused by messages. They’re less certain about the difference between a browser and operating system, PC and tablet, and OS and device manufacturer than ever before — “I’m not sure what Chrome or a Chromebook is.” “I’ve used Bing, but what does it do again?” While not every brand can be Apple from a product perspective, few beyond them appear to be delivering messages that are connecting. Solution: Ditch the strategy and get to clarity. As marketers well versed in the creation of the emotional benefit look to new services for old or new brands, it’s paramount they continue to scrub their message strategies to get to the essential elements that drive clarity. Even more than before, attention and/or emotional attachment appear to be less of an issue than understanding. Digital devices, social platforms, mobile and commerce are all changing consumer behavior rapidly, but not entirely in the ways many had predicted. In the future, it’s the brands that rethink space, not just the product, take a stand in the social space, push content that’s easy to consume and simplify the message that win. This means the most surprising thing about the future might just be its similarity to the past.
  • 43. 43OUTLOOK REPORT | VOL 10 How the Social Cloud Can Accelerate Brand Interaction From March 2010 to March 2011, Facebook online video and mobile device consumption time were all up, but the rest of the Web was down. This means that while these social areas have grown, they’ve also taken users away from more established sites. Brands need to take the conversation to where the users already are. Social cloud services connect digital experiences with Facebook, Twitter, LinkedIn, Google, Microsoft and other social services. We’ve identified some dos and don’ts to take full advantage of these APIs. The Web isn’t dead, but it sure has taken a hit. Wired Editor Chris Anderson’s prediction that the free, interconnected world of the Web would be replaced by the paid-for, walled gardens that are apps hasn’t necessarily come true. Yet the Web is a changing place with fewer winners and more losers because of audience consolidation around a few key platforms. From March 2010 to March 2011, Facebook use was up 69 percent, online video consumption was up 45 percent and mobile device time was up 28 percent.1 The rest of the Web was down 9 percent. This means that while these areas have grown, they’ve also taken users away from more established sites. With social and video sites, the users are already there — you don’t need to drive them to your destination site. Instead, you can take the conversation to where the OUTLOOK REPORT | VOL 10 Ray Velez Global Chief Technology Officer @rvelez Rafi Jacoby Social Technology Lead @rjacoby 1 Ben Elowitz, “The Web is Shrinking. Now What?” Digital Quarters, June 2011, http://digitalquarters.net/2011/06/the-web-is-shrinking-now-what/. WITH CONTRIBUTOR WRITTEN BY Scan the QR code to explore additional content associated with this article. Read More
  • 44. 44 users are already. For instance, Facebook makes up 25 percent of all page views, with users averaging 15.5 hours per month on the site. This requires a rethink on how you spend your media dollars to acquire users. In order to acquire information about those users, all you need to do is offer something small: a fun experience, chance to win something or a coupon (which do amazingly well). When you have reached the right audience, the users you have acquired will continue spreading the message for you. According to “Zuckerberg’s Law,” users share twice as much content every year as the previous year. Your brand’s content will be disseminated by real people to the people who trust them (high “earned” value). In the future, the brand with the most compelling content wins. Arguably this is already happening, but we need to develop new metrics to understand this. What is clear is that users want to share creative, fun and engaging content — not product specs or regular marketing collateral. Soon, more experiences will be connected: tweeting from inside an Xbox game that they have unlocked a new level; sharing the act of viewing a TV show on Twitter/Facebook/GetGlue; leading other users on an augmented reality treasure hunt on their phones while tracking the progress inside a Facebook leaderboard and tweeting out results. With the rise of social check-in services (Foursquare, Twitter, Facebook), you can have trackable digital marketing tying into brick and mortar. Then, you can build an experience around that location with communities, discussions, deals and events. You can learn exactly how far users will go to make a purchase, which users are more likely to purchase where, and what other locations they frequent that might be interesting for your business — all without commissioning surveys or having to integrate with many different point-of-sale systems. Social cloud services provide your digital experiences or Web properties with the ability to connect up with Facebook, Twitter, LinkedIn, Google, Microsoft and other social services. These services come in the form of Application Programming Interfaces (APIs) that your technologist can integrate. Whether your digital experience is a mobile application or a traditional desktop site, these APIs are available. Marketing and business needs a blueprint for how these all interact. The graphic, to the right, describes the key API categories in the social space. Three core areas make up social APIs 1. Authentication The first core API area is authentication or the ability to leverage the services of a social network to help people gain access to your digital property. You can now enable users to log in to your Web properties without having to create a new account. Registration through a social cloud service breaks down the barrier to entry of creating an account. OAuth and OpenID are the main technology standards for ensuring secure access to digital sites and properties. Sites can support both or just one, but ultimately these technologies can have a drastic impact on the number of folks who sign up. Once authenticated, there is the concept of profile data sharing or the sharing of data elements about people — pictures, birthdate, email, etc. Obviously, there are privacy considerations that have slowly evolved. For example, when we first used Facebook Connect profile sharing, anyone could grab a person’s picture, but then Facebook evolved their privacy controls to give users control of who can see their picture. Of course there are limitations on what you can do with the identification, but at that point you can grab more information from the person contextually to your experience as needed. Lastly, it’s important to make sure you use whatever the connection type is, whether OAuth, OpenID or proprietary with secure sockets layer. This will ensure the hacker hanging at Starbucks doesn’t steal your password. After logging in, you can leverage locally saved tokens so users don’t have to login to Facebook across every site they go to during the day. One login will work. Letting users pick their account type to log into (Facebook, Twitter, etc.) affords the most flexibility, and you can leverage a lot of the same development when you code to a standard like OAuth. How the Social Cloud Can Accelerate Brand Interaction
  • 45. 45OUTLOOK REPORT | VOL 10 2. Conversation and sharing The second core API area is commenting and message boards — basically the ability to create messages around a topic area. Let users drive conversations like comments or message boards without having to write custom code to support it. Consider a Twitter message a conversation around a topic area, or a Facebook wall post a growing interaction for your experience. A lot of the API needs in this area are bringing order to the chaos. The Facebook plugins are pretty easily implemented and high value. Replace your own comment boards with Facebook comments — no additional sign-up required, and content can be shared on a user’s wall. It’ll drive traffic in and out of your Web property. Technologies available in the Software as a Service (SaaS) approach such as DISCUS or Echo enable you to bring the messaging to your site, while still existing on Twitter and Facebook. Considerations down the line include the ability to moderate and monitor posts, which are especially important when considering branded experiences. 3. Social graph Lastly, one of the most important social API areas is sharing of the social graph. That means not only connecting with the current person, but with their friends as well. All of this is made available through the API. Similar to OAuth and OpenID, there is a technology standard for accessing this information called OpenSocial. While this has evolved considerably over the last couple of years, it still seems to lack broad adoption by the major players, most notably, Facebook. For now it seems proprietary API calls to social engines are still the norm. Authentication, commenting and social graph sharing are the three key social services, but there are lots of other social services that can also power your digital experiences, whether mobile, desktop or in-retail. These will continue to grow as people innovate in the space. Social video services like Vimeo and YouTube allow you to embed your videos in your own digital experiences while still allowing the video content to be accessible from the YouTube and Vimeo platforms. DATA PORTABILITY OAUTH/OPENID/ CUSTOM PROPRIETARY FACEBOOK GOOGLE TWITTER LINKEDIN WINDOWS LIVE FACEBOOK GOOGLE WINDOWS LIVE TWITTER LINKEDIN Social Application Programming Interfaces (API) Social Graph Sharing Authentication Commenting Message Boards Profile Data Sharing OPEN SOCIAL TWITTER ECHO FACEBOOK DISCUS
  • 46. 46 The obvious benefit is that you save on bandwidth costs, but the even greater benefit is that you are where users are. You create a branded experience on YouTube, and then extend that experience through YouTube embed codes onto your branded property. YouTube continues to grow their API to allow more flexibility around how your player looks and whether or not ads should show up on your videos. Simple plugin buttons such as Facebook’s “Like” and “Share,” Google’s “+1,” and Twitter’s “Tweet” and “Follow” dramatically lower the barrier to users sharing content from your site out to their entire social graph. Data resources If social cloud services accelerate traffic to your branded digital experience, core cloud infrastructure services will enable your social cloud services. Infrastructure as a service or rent-as-you- go Infrastructure as a Service (IaaS) or Platform as a Service (PaaS) let businesses like Zynga, Groupon, LivingSocial and Airbnb go from nothing to $1 billion valuations with negligible IT overhead, scaling when they need it, without overbuying capacity. But make sure you architect for fault tolerance (see AWS failure this spring). PaaS leaders make deployment, database and background jobs easy: consider Heroku, AppFog, Engine Yard, VMware and Cloud Foundry. We can learn from the technologies, processes and concepts that have enabled huge social cloud growth for those companies. They are using PHP (Facebook), Ruby on Rails (Twitter, Groupon, Airbnb), Python (Yelp), MySQL, unobtrusive JavaScript, server- side JavaScript, cloud hosting, Scala, Clojure, MongoDB, CSS3, HTML5, REST, JSON and WebSockets. These technologies are being used by cutting-edge companies and they are contributing their cutting-edge work back to the community. Plus they are generally much more cost-effective than traditional enterprise-based approaches, stuck within slow-moving, expensive corporate IT data centers. Agile approaches have pushed innovative approaches like continual builds of code or continual releases of production code. Both approaches are made practical through platform cloud services. Cloud-based performance monitoring tools like New Relic can identify performance problems in your application and give you starting points for optimization. LinkedIn uses this kind of information to identify functionality that can be replaced How the Social Cloud Can Accelerate Brand Interaction Learn exactly how far users will go to make a purchase, which users are more likely to purchase where, and what other locations they frequent.
  • 47. 47OUTLOOK REPORT | VOL 10 with higher performance languages and frameworks, migrating key services over to Node.js and Scala to take advantage of their high degree of parallelization. If you need deeply integrated analytics, a service like Mixpanel solves storage, presentation, organization, querying and export problems, and provides simple toolkits for instrumenting both the server and client components of your Web app. Build with multiple screens in mind. A single codebase can easily support Web, Facebook canvas and mobile touch if you abstract out your views well and use a framework that is designed for such flexibility. Why not launch on three surfaces simultaneously for almost the same price in development? There’s no need to think of your site and your Facebook presence as completely different animals. They can be two views of the same thing, with slight differences. Platform cloud services can help you optimize and speed delivery, regardless of the screen. Look at cloud-based caching delivery networks like Amazon’s CloudFront or Google’s Page Speed to accelerate delivery, regardless of targeting a Facebook page or a traditional Web page. Cloud services like Mashery or Apigee enable your brand to get into more places than just your owned digital properties. Razorfish’s Open Digital Services approach helps clients’ strategic view of services. Think about freeing some of your data (product catalog, etc.) with a public API and see what the community might build around/for you. Cautions There are many useful services available to build your applications. Yahoo! Query Language (YQL) lets you query a myriad of pieces of information against many of the Yahoo! properties. Geocoding services identify user locations and help you provide locally interesting content. It is important to understand how dependent your application is on these services and what their limitations are. Most will have limits on the number of API calls you can make; it’s advisable to build a layer into your own application to cache whatever you can to avoid hitting those caps. A local cache will also keep your application running and useable if the services experience an interruption. Lastly, ensure that you are subscribed and follow any announcements around APIs; they have change deadlines and if you don’t update in time you can be out of service.
  • 48. 48 If you build something that depends on the major social networks, your app will require occasional work in order to keep in sync with the latest changes, as well as monitoring to make sure that things outside of your app are live and working. During one campaign on Twitter, the tweets were not all appearing in the search feed and Twitter had to help fix an issue on their side. Facebook has had several major changes on their API, with the latest coming Fall 2011 — a security overhaul of the application authentication system that will disable applications that do not comply. In the past, Facebook switched from its proprietary Facebook Markup Language (FBML) to IFrames, but if you had an app that hadn’t launched yet, you had to make sure to pre-provision it on Facebook or you wouldn’t be grandfathered in and would have to scramble to do a rewrite. Social conversations are hard to control. You may want to take a fresh look at how you relate with your consumers. Some brands have elected to be very hands-off. Others are very engaged. Third-party social monitoring tools (Context Optional, Involver, Buddy Media) and a community manager are a must in that case for doing escalation, bad word filtering, auto delete and more. This can be a recurring budget consideration. Your Facebook page should be a destination with many doors, not just a flat campaign. Engaged users spend more time with your brand, and become your biggest advocates — often jumping in to defend the brand on the wall before the brand can respond. So give them a reason to stay and interact with something more than a lead generation form. Consider, “Why would someone share this with their friends?” when designing your social presence. Don’t oversaturate your fans with content. You’ve spent time and money on earning them, so make your posts to their streams or tweets compelling and not too frequent in order to avoid them “un-liking” or blocking you. Social isn’t a one-off. You’ve acquired lots of fans so keep using them. Think of longer strategies, not just short campaigns. You built an app that has 3 million users — don’t just end, extend. Those people are linked to you now, so keep giving them something. Add more content and create new ways to interact. This probably involves a new way of looking at budget. How the Social Cloud Can Accelerate Brand Interaction
  • 51. 51OUTLOOK REPORT | VOL 10 Beyond the Banner — Unleashing the Power of Digital to Drive Topline Growth Industry leaders have to reinvent themselves periodically to maintain their preeminence. But as the rate of technology-driven change continues to increase over time, the speed and frequency with which companies must reinvent themselves also increases. And unfortunately for industry incumbents, technology-driven disruption tends to favor new entrants, who are often faster, hungrier and unencumbered by legacy systems and processes. We believe digital should be at the core of any industry leader’s growth strategy, and we’ve identified three ways digital can drive step-change improvement in topline growth — above and beyond efficiency maximization of existing efforts. The first wave of digital disruption came crashing into the business world about 15 years ago, when the Internet first exploded as a consumer technology. Since then, leading companies across industries have been scrambling to master the art of marketing and selling online. Most large companies now maintain multiple Web experiences and marketing programs — all of which require periodic upgrades in the form of redesigns and replatformings, as well as ongoing testing and optimization. (All bread and butter for digital agencies, of course.) Meanwhile, in what sometimes seems to be a parallel universe, pure-play digital startups continue to spawn, swarm and thrive, often squeezing out weaker competitors and overturning established industry structures in the process. Industry leaders have had to reinvent themselves periodically to maintain their preeminence. But as the rate of technology-driven change continues to increase over time, the speed and frequency with which companies must reinvent OUTLOOK REPORT | VOL 10 WRITTEN BY Scan the QR code to explore additional content associated with this article. Read More Tim Perlstein Group VP, Strategy linkedin.com/in/timperlstein Bethany Fenton VP, Experience LINKEDIN.COM/IN/BETHANYFENTON
  • 52. 52 themselves also increases. And unfortunately for industry incumbents, technology-driven disruption tends to favor new entrants, who are often faster, hungrier and unencumbered by legacy systems and processes. Now, as companies emerge from the recession looking to deliver step-change improvements in revenue growth — and as growth becomes harder and harder to find within existing markets — digital channels, programs and agencies must do more than deliver incremental improvements from evolutionary change. Optimizing your way to greater efficiency is good, but not enough. Digital can and must do more. Digital should be at the core of any industry leader’s growth strategy. In fact, given the relative maturity of established platforms and programs — and the ever-increasing competitive pressure from new entrants — now is the time to ignite a new round of digital innovation within your organization. To begin the conversation, we’ve identified three ways digital can drive step-change improvement in topline growth — above and beyond efficiency maximization of existing efforts. 1. New markets As domestic growth in core segments becomes harder to come by for U.S. companies — and as emerging markets continue their dramatic expansion — we expect industry leaders to seek new growth from markets that are new to the company and/or broadly underserved by their industry. Digital can and should be a powerful, cost-efficient method of reaching and serving these markets. That said, leveraging digital for new market entry isn’t as simple as launching a version of your Web site in your target market’s local language, although this might not be a bad start. Localization means more than translation. For online retailers, serving international markets means dealing with foreign exchange rates, taxes, sizing systems and — of course — fulfillment. Despite the complexity, retail giants Macy’s, Barneys New York, PBteen, and JoS. A. Bank all extended their ecommerce operations internationally this year. Macy’s now has an ecommerce presence in 90 countries, although its physical stores are all within the U.S.1 The logic is obvious: With domestic growth stalled, foreign markets offer an appealing opportunity to extend brands and capture growth while requiring only minimal capital investment (compared to rolling out more brick-and-mortar operations). Of course, overseas growth isn’t just for retailers. Even manufacturers for whom digital is not a direct sales channel are using digital tools and partnerships as a cornerstone of market entry strategy. As always, deep knowledge of local players and local infrastructure is key. For example, given the relatively high adoption of mobile phones (versus desktop PCs) in developing countries, some Consumer Packaged Goods (CPG) companies are looking to advance by partnering with local telecom operators to expand mobile coverage — in exchange for marketing access to consumers. Other firms, such as General Mills, leverage digital for insight and customer collaboration, as well as outbound communication. In China and other markets where standard retail channel data is inconsistent or nonexistent, General Mills is building a proprietary database of consumer households, and using real-time digital communications tools to allow consumers to voluntarily share data on their preferences and behaviors.2 These are just some of the ways in which digital can support successful new market entry — well beyond the banner ad. We expect to see much more innovation in the coming year, as early initiatives prove successful and best practices begin to emerge. 2. Enhancements for existing products and services “Digital” can be more than a marketing or sales channel; it can fundamentally transform a product or service by providing additional functionality and consumer value. Even companies Beyond the Banner — Unleashing the Power of Digital to Drive Topline Growth 1 Allison Enright, “Macy’s Goes Global,” InternetRetailer.com, June 27, 2011, http://www.internetretailer.com/ 2011/06/27/macys-goes-global. 2 2011 Financial Performance Report, PWC/Grocery Manufacturers Association, page 43.
  • 53. 53OUTLOOK REPORT | VOL 10 accustomed to delivering tangible, “real world” value propositions should treat digital as a core component of product strategy — not just marketing or sales. The most obvious example of this dynamic is the ongoing upheaval within the media industry, where traditional core “products” have been entirely digitized, radically expanding the dimensions of competition and dramatically increasing the importance of distribution channels and the overall “experience” of content access. The list of recent digital product innovations within the media industry seems endless. It encompasses multiple new access platforms, ancillary or “exclusive” premium content options, user-generated or participatory content development, sharing, commentary, other social features, and on and on. A more subtle but equally interesting evolution is happening within the hardware and networking industries that typically support content delivery. Digital TVs are becoming “smart,” adding Internet connectivity and their own application platforms. Network providers are delivering increasingly integrated digital services with new, digitally enabled functionality (set TV recordings from your smartphone, view caller ID on your TV, manage call routing and voicemail settings from your PC, etc.). Add in a host of innovative new hardware options (Roku, Boxee, Slingbox, Apple TV, Xbox 360) and service providers (Netflix, Skype, Google TV), and you have a full-on battle for control of the digital home. More established providers of “traditional” products and services cannot help but be affected by this domestic, digital landscape and the new consumer behaviors it generates. Home security and automation providers must inevitably develop new strategies and products to compete within the increasingly networked home. (ADT’s Pulse product is a good, early example of this trend.) Consumer electronics manufacturers may find ways to embed digital “smarts” in appliances beyond TVs. Even supposedly staid utility companies may get in on the act, with more efficient and convenient controls, monitoring and service solutions.3 3 See for example: M2M and Embedded Strategies, Juniper Networks, May 2011, page 81-85.
  • 54. 54 For service providers outside the home, digital enhancements are becoming just as commonplace — and perhaps even more important. The ability to conduct secure online banking or day trading from our smartphones is something many of us already take for granted. (Can you even imagine opening a new checking account that didn’t offer free online bill pay? We can’t.) Travel providers, from airlines to cruise lines, are scrambling to provide ever-more convenient digital applications for booking, trip management and customer service — both during and after travel. Even brick-and-mortar service providers are finding ways to integrate digital add-ons within their core experiences, whether it’s providing access to a vastly extended assortment (JCPenney’s in-store kiosks) or free, premium digital content (Starbucks’ “Digital Network”) while on-premises. The lesson behind all these examples is the need to view digital as an arena for fundamental product innovation, not just marketing communications. Rapid technology change continues to open up vast, uncharted whitespace for products and services yet to be invented. And as new and established players across multiple industries continue to extend their offerings into the digital realm, the consumer’s digital ecosystem becomes an ever-richer environment within which to innovate. 3. Entirely new businesses This brings us to the third major digitally driven growth opportunity: the development of entirely new business lines. Although it’s still early days, we’re seeing more and more companies in “traditional” industries using digital to launch new businesses and ventures that are adjacent (or even outside) their core comfort zones. An even greater number of companies now maintain digital innovation skunkworks, with a mission to identify and pursue promising opportunities outside the umbrella of the main organizational structure and brand. Just a few examples should help paint the picture. GameStop, the leading physical retailer of video games, made a splash this summer when it announced its move into online streaming of console games — clearly a hedge against declining physical retail sales of a fundamentally digital product. It’s a move that requires fundamentally different capabilities and processes from the core retail business, and will likely benefit if managed separately from store operations. Additionally, GameStop maintains a vibrant portfolio of digital properties, including Kongregate.com and GameInformer.com, which could form the seeds of future all-digital ventures. Now is the time to ignite a new round of digital innovation within your organization. Beyond the Banner — Unleashing the Power of Digital to Drive Topline Growth