ad tech london sept 2009

The Future of DigitalDelivering high performing digital

marketing & advertisingTim SutherSVP, Multichannel Marketing [email protected]

http://www.linkedin.com/in/timsutherhttp://twitter.com/timsuther

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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%

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The differentiated value of customers

30% of customers deliver the majority of profits

50% Add nothing

20% Cost companies money

SAS

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A look at “who” at world class brandsCadillac

AllstateHershey

American Express

PersonicX Consumer Segments PersonicX Consumer Segments


UV

Inde

xU

V In

dex

UV

Inde

xU

V In

dex

Source: Acxiom comScore (July 2009)

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…and at leading publishers

MSN96 MM UV’s

AOL70 MM UV’s

eBay56 MM UV’s

Yahoo148 MM UV’s



UV

Inde

xU

V In

dex

UV

Inde

xU

V In

dex

Source: Acxiom comScore (July 2009)

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Like a box of chocolates…

• With most media, you never know whoyou’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

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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

The Concentration MultiplierDriving much higher ROMI

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The Concentration MultiplierConcentrating on the most valuable “who’s”

1. Identify customer value

2. Invest proportionally

3. Find/recognize & engage accordingly

4. Measure acquired value

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Concentrate ad spend to drive valueTypical payoff of 3-5x revenue/ad €

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Concentrator Multiplier ROI illustrationConcentration Traditional Variance

Campaign CostImpression Volume 10,000,000 10,000,000Cost per Thousand € 5.00 € 2.50

Total Campaign Cost € 50,000 € 25,000 (€ 25,000)

Revenue GeneratedRevenue/conversion € 20 € 10Clickthrough Rate 0.15% 0.10%Latent/viewthrough revenue 50% 50%

Revenue from clickthrough € 300,000 € 100,000Total Revenue € 450,000 € 150,000 € 300,000

ContributionFrom clickthrough € 250,000 € 75,000

Total Contribution € 400,000 € 125,000 € 275,000

Revenue per Ad DollarFrom clickthrough € 6.00 € 4.00

Total Revenue/Ad Dollar € 9.00 € 6.00

PremiseConcentrating 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)

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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.

The Marketing CascadeHarvesting the interrelated & overlapping effects of media

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The overlapping & interrelated effects of media

McKinsey/BAIcomScore

Display Viewthrough Effect

eHarmony/Dynamic Logic

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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

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Select:Most Profitable

Demographic: Most Profitable

Illustration only

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Target: Television

3245K Cash & Careers Digital TV households:Current customers: 548K Top prospects: 798K Lower value non-customers: 1863K

Illustration only

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Assess & Recalibrate: Online Search

comScore Top Search Terms Category: “Banking”

• Bank of America Online Banking• Bank of America• Washington Mutual• WAMU• Citi• Commercebankonline• Commerceonlinebanking.com• Commercebank.com• USBank• US Bank Internet Banking

Illustration only

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Assess & Recalibrate: Site Traffic

comScoreSite TrafficSegment Metrix

• Bank of America UV Index 189• Citi UV Index 177• WAMU UV Index 164• HSBC UV Index 134• Chase.com UV Index 117

Illustration only

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Relevance View Index

Assess & Recalibrate: Conversion

280 270

75 70

Cash & Careers EstablishedElite

Percentage of Visitors to Landing Page

Percentage of Visitors to Confirmation Page

Illustration only

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Integrate: TV plus Online Display Ads

Current customers: 548K Top prospects: 798K

Lower value non-customers: 1863K

8MM daily online display impressions available for this specific cluster

Illustration only

Drive Acquisition

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Integrate: TV plus Online Display Ads and Social

Count %Avg

NetworksAvg

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

Illustration only

54K “wide netters” for this specific cluster

Drive Acquisition

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Integrate: TV plus Email, Mobile and Direct Mail

Illustration only

Drive Customer Value

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The Marketing Cascade in practice…

4x “orders per thousand”– Connecting print & digital

3x applications; 5x online revenue; same head count– Connecting call center & digital

2x online bookings– Connecting outbound & website

7.5x website spend– Connecting mobile & email

17x response– Connecting TV & offline

$200M revenue / $4.5MOpEx savings – Connecting call center & digital

$100M/yr EBIT impact– Multichannel connection

9-figure/yr revenue impact– Multichannel connection

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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.

10 Easy Money ideas

Remarketing generates $4–10 revenue per ad dollar at other clients

53% of shopping carts abandon. Remarket based on specific site behavior / lifestage

Retarget site visitors that do not convert

Personalized site experiences drive 4–15X ROI

Test content with Impact Site.Implement View tags to measure conversion funnel progress by lifestage

Improve the site experience

The bottom three deciles can likely be eliminated without impacting conversions

Build / implement predictive models to screen out low value leads providedConsider a test with ACXM CoReg services and / or e-list rental

If receiving third-party leads, implement lead scoring

72% of GOOG CTR is organic. A proper audit enables more free traffic

Identify opportunities to improve organic visibility, & possibly reduce paid expense

Do an organic search audit

This is the highest performing email application at another client

Email a branded transcript back to site visitors. Include buttons to “buy” or to “subscribe” to other services

If chat available on their site, offer to send a branded transcript of the chat

2X website conversions achieved at another client

Following the digital footprints to recalibrate outbound marketing

Connect Web analytics with outbound messaging

$2M / year cost displacement & $200M / yr influenced revenue at another client

Identify high-volume drivers of calls –requests for info, small cross sales, etc.

Examine call center patterns to identify content for future emails

Integrated with Impact. Likely halo effectAvg. mobile purchaser has higher income & spends 2X as a Web-only buyer

Test mobile as a lifecycle messaging tool

Match against 500M socially active individuals (~60-70% of any email list)

Use existing email addresses to recognize socially active customers & prospects

Recognize & connect with social influencers

3-5X revenue / ad dollar at other clientsExisting customers respond 17X to prospects to digital TV ads

Concentrate ad impressions on visitors most likely to be valuable, loyal, etc.

Test Collaborative Targeting & Relevance with Internet properties. Then follow up with television

The BenefitHow & WhyThe Idea

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Marketing/Advertising in the Reset Economy

• 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)

Lessons from leaders…

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What could have been

Portable Music

owned

but couldn’t become

On-Demand Info

owned


Movie Inventory

owned


It’s not enough…A great customer baseA great productA great strategyA great team

Darwin always wins.

Will you?

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The global interactive marketing services company

Thank you.

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ad tech london sept 2009

Business