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Ad Tech London Sept 2009


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High Performance Marketing & Advertising in the Reset Economy

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Ad Tech London Sept 2009

  1. 1. The Future of Digital Delivering high performing digital  marketing & advertising Tim Suther SVP, Multichannel Marketing Services 001-630-944-0416
  2. 2. Living next to the train tracks $112 billion of advertising is wasted each year in the US alone $4 trillion excess brand valuation 22% of consumers feel advertising is credible…compared to 45% for talk shows 42% of consumer media consumption is online 7% of disposable income is now saved – was 0% 2
  3. 3. The differentiated value of customers 30% of customers deliver the majority of profits 50% Add nothing 20% Cost companies money SAS 3
  4. 4. A look at “who” at world class brands Cadillac American Express UV Index UV Index PersonicX Consumer Segments PersonicX Consumer Segments Hershey Allstate UV Index UV Index PersonicX Consumer Segments PersonicX Consumer Segments 4 Source: Acxiom comScore (July 2009)
  5. 5. …and at leading publishers MSN Yahoo 96 MM UV’s 148 MM UV’s UV Index UV Index PersonicX Consumer Segments PersonicX Consumer Segments eBay AOL 56 MM UV’s 70 MM UV’s UV Index UV Index PersonicX Consumer Segments PersonicX Consumer Segments 5 Source: Acxiom comScore (July 2009)
  6. 6. Like a box of chocolates… • With most media, you never know who you’re gonna get. • Knowing who determines: – How much to invest…if anything – What to say…without guessing • Most firms… – Over-invest in low value relationships – Under-invest in high value relationships 6
  7. 7. Avoid the illusion of science • Acquisition metrics, in isolation, create… – “leaky buckets,” “zombies” & the “quiet types” • Incorporate “acquired value” metrics – Longevity of relationship – Upsell/cross-sell potential – Influence – Service costs • Key takeaway: measure customer value per ad dollar – Value beyond the click & initial transaction 7
  8. 8. The Concentration  Multiplier Driving much higher ROMI
  9. 9. The Concentration Multiplier Concentrating on the most valuable “who’s” 1. Identify customer value 2. Invest proportionally 3. Find/recognize & engage accordingly 4. Measure acquired value 9
  10. 10. Concentrate ad spend to drive value Typical payoff of 3-5x revenue/ad € 10
  11. 11. Concentrator Multiplier ROI illustration Concentration Traditional Variance Campaign Cost Impression Volume 10,000,000 10,000,000 Cost per Thousand € 5.00 € 2.50 Total Campaign Cost € 50,000 € 25,000 (€ 25,000) Revenue Generated Revenue/conversion € 20 € 10 Clickthrough Rate 0.15% 0.10% Latent/viewthrough revenue 50% 50% Revenue from clickthrough € 300,000 € 100,000 Total Revenue € 450,000 € 150,000 € 300,000 Contribution From clickthrough € 250,000 € 75,000 Total Contribution € 400,000 € 125,000 € 275,000 Revenue per Ad Dollar From clickthrough € 6.00 € 4.00 Total Revenue/Ad Dollar € 9.00 € 6.00 Premise Concentrating impressions on high value visitors… >Enables higher financial return (because of focus on more valuable visitors) >Enables higher CTRs (because creative can be versioned) Even if visitors don't click, advertisers will generate significant online/offline lift (halo/viewthrough effect) 11
  12. 12. Sound obvious? “… too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.“ Western Union memo on potential for the telephone, 1876. 12
  13. 13. The Marketing  Cascade Harvesting the interrelated & overlapping effects of media
  14. 14. The overlapping & interrelated effects of media Display Viewthrough Effect comScore McKinsey/BAI eHarmony/Dynamic Logic 14
  15. 15. Understanding these effects is critical to ROMI • Significant arbitrage opportunity – 47% of advertising is wasted • Understanding specific cause & effect is essential • A multichannel marketing database plays a crucial role 15
  16. 16. Select: Most Profitable Demographic: Most Profitable 16 Illustration only
  17. 17. Target: Television 3245K Cash & Careers Digital TV households: Current customers: 548K Top prospects: 798K Lower value non-customers: 1863K 17 Illustration only
  18. 18. Assess & Recalibrate: Online Search comScore Top Search Terms Category: “Banking” • Bank of America Online Banking • Bank of America • Washington Mutual • WAMU • Citi • Commercebankonline • • • USBank • US Bank Internet Banking 18 Illustration only
  19. 19. Assess & Recalibrate: Site Traffic comScore Site Traffic Segment Metrix • Bank of America UV Index 189 • Citi UV Index 177 • WAMU UV Index 164 • HSBC UV Index 134 • UV Index 117 19 Illustration only
  20. 20. Assess & Recalibrate: Conversion Relevance View Index 280 270 75 70 Cash & Careers Established Elite Percentage of Visitors to Landing Page Percentage of Visitors to Confirmation Page 20 Illustration only
  21. 21. Integrate: TV plus Online Display Ads Drive Acquisition 8MM daily online display impressions available for this specific cluster Current customers: 548K Top prospects: 798K Lower value non-customers: 1863K 21 Illustration only
  22. 22. Integrate: TV plus Online Display Ads and Social Drive Acquisition 54K “wide netters” for this specific cluster Avg Avg Count % Networks Friends Wide Netters 54252 10% 6.0 122 Selectively Social 53704 10% 2.0 38 Social Placeholders 52608 10% 5.5 3 Getting Started 191252 35% 2.0 0 Undeclared 191800 35% 0.0 0 22 Illustration only
  23. 23. Integrate: TV plus Email, Mobile and Direct Mail Drive Customer Value 23 Illustration only
  24. 24. The Marketing Cascade in practice… 4x “orders per thousand” $200M revenue / $4.5M – Connecting print & digital OpEx savings 3x applications; 5x online – Connecting call center & digital revenue; same head count $100M/yr EBIT impact – Connecting call center & digital – Multichannel connection 2x online bookings 9-figure/yr revenue impact – Connecting outbound & website – Multichannel connection 7.5x website spend – Connecting mobile & email 17x response – Connecting TV & offline 24
  25. 25. This is obvious also, right? "We don't like their sound, and guitar music is on the way out.“ Decca Recording Co. rejecting the Beatles, 1962. 25
  26. 26. 10 Easy Money ideas The Idea How & Why The Benefit Test Collaborative Targeting & Relevance Concentrate ad impressions on visitors 3-5X revenue / ad dollar at other clients with Internet properties. Then follow up most likely to be valuable, loyal, etc. Existing customers respond 17X to with television prospects to digital TV ads Recognize & connect with social Use existing email addresses to Match against 500M socially active influencers recognize socially active customers & individuals (~60-70% of any email list) prospects Test mobile as a lifecycle messaging tool Avg. mobile purchaser has higher income Integrated with Impact. Likely halo effect & spends 2X as a Web-only buyer Examine call center patterns to identify Identify high-volume drivers of calls – $2M / year cost displacement & $200M / content for future emails requests for info, small cross sales, etc. yr influenced revenue at another client Connect Web analytics with outbound Following the digital footprints to 2X website conversions achieved at messaging recalibrate outbound marketing another client If chat available on their site, offer to send Email a branded transcript back to site This is the highest performing email a branded transcript of the chat visitors. Include buttons to “buy” or to application at another client “subscribe” to other services Do an organic search audit Identify opportunities to improve organic 72% of GOOG CTR is organic. A proper visibility, & possibly reduce paid expense audit enables more free traffic If receiving third-party leads, implement Build / implement predictive models to The bottom three deciles can likely be lead scoring screen out low value leads provided eliminated without impacting conversions Consider a test with ACXM CoReg services and / or e-list rental Improve the site experience Test content with Impact Site. Personalized site experiences drive Implement View tags to measure 4–15X ROI conversion funnel progress by lifestage Retarget site visitors that do not convert 53% of shopping carts abandon. Remarketing generates $4–10 revenue Remarket based on specific site per ad dollar at other clients behavior / lifestage
  27. 27. Marketing/Advertising in the Reset Economy Lessons from leaders… • Concentrate on the most valuable who’s Concentration Multiplier • Arbitrage your media Leverage the Marketing Cascade • Harvest the confluence of insight & media Engage, don’t just target • Take the “easy money” Swallowing Atlantic Ocean not advisable • Connect & leverage institutional memory (multi-channel database is essential) 27
  28. 28. What could have been owned Portable Music but couldn’t become It’s not enough… A great customer base owned A great product On-Demand Info A great strategy but couldn’t A great team become owned Darwin always wins. Movie Inventory Will you? but couldn’t become 28
  29. 29. Thank you. The global interactive marketing services company /acxiomcorp /companies/acxiom /acxiom /user/AcxiomCorporation /Acxiom 29