digital marketing now: 7 strategies for surviving the downturn

eMarketer PresentsDigital Marketing Now:

Seven Strategies for Surviving the DownturnSeven Strategies for Surviving the Downturn

David IankelevichVice President, Sales

January 15, 2009

Today’s Agenda

• Who is eMarketer

• Economic impact on media spending

• Internet spending

• Seven strategies

eMarketer Sees and Analyzes Information from Multiple Sources

Media Spending Growth in the USDate 2008 2009

Barclays Capital Dec 2008 -5 0% -10 0%Barclays Capital Dec. 2008 5.0% 10.0%GroupM Dec. 2008 0.3% -3.2%BMO Capital Oct. 2008 -1.1% -1.9%pCiti Investment Nov. 2008 -1.8% -3.6%eMarketer Nov. 2008 -1.0% -3.7%Collins Stewart Nov. 2008 0.5% -2.0%UBS Oct. 2008 2.5% -6.0%Morgan Stanley Oct. 2008 -2.1% -5.0%Myers Publishing Oct. 2008 -1.3% -4.0%Wachovia Oct. 2008 -0.8% -0.8%ZenithOptimedia Dec. 2008 -3.8% -6.2%

What are marketersWhat are marketersseeing for theirseeing for their

traditional media budgets?g

48% will cut59% will cut85% will cut48% will cutM k ti Sh S t 2008

59% will cutE il S t 2008

85% will cutM k ti P f O t 2008—MarketingSherpa, Sept. 2008

(n = 400 large companies)—Epsilon, Sept. 2008

(n = 175 CMOs and senior marketers)—MarketingProfs, Oct. 2008

(n = 600 marketers)

US online ad spending growth for 2008

16.9%16.0%

Barclays (Oct '08)

Collins Stewart (Nov '08)

16.0%13.8%

13.0%

GroupM (Dec '08)

Myers (Oct '08)

BMO Capital (Oct '08)

12.0%11.6%

11 5%

p ( )

MAGNA (Oct '08)

ThinkPanmure (Oct '08)

11.5%11.4%11.3%

Morgan Stanley (Oct '08)

Citi (Nov '08)

eMarketer (Nov '08)

10.4%Borrell Assoc. (Nov '08)

Source: eMarketer, Dec, 2008

US online ad spending growth for2009

14.8%14.1%

13 5%

Jupiter (Dec '08)

Barclays (Oct '08)

M (O t '08)

???13.5%

13.0%10 0%

13.5%Myers (Oct '08)

MAGNA (Oct '08)

BMO (Oct '08)

Collins Stewart (Nov '08) 10.0%10.0%

9.7%8 9%

Collins Stewart (Nov 08)

Wachovia (Oct '08)


eMarketer (Nov '08) 8.9%7.2%

5.8%5.0%

eMarketer (Nov 08)

Borrell (Nov '08)

Citi (Nov '08)

GroupM (Dec '08) ???5.0%3.0%

p ( )

ThinkPanmure (Oct '08)


???

US online ad spending growth for2009

13.5%13 5%

Myers (Oct '08)

MAGNA (Oct '08) 13.5%

10 0%13.0%

MAGNA (Oct '08)

BMO (Oct '08)

C lli St t (N '08) 10.0%10.0%

9 7%

Collins Stewart (Nov '08)

Wachovia (Oct '08)

9.7%8.9%


eMarketer (Nov '08)

7.2%Borrell (Nov '08)


% of marketers planning to increase their online ad budget – despite the recession 55% of global marketing execs

26%Forrester (Spring '08)

g pN = 333plan to cut spending on traditional

media in order to fund increased72%Advertiser Perceptions (May '08) N = 1,811

media in order to fund increasedonline efforts

63%

31%MarketingSherpa (Sep '08) N = 400

63%

62%

Epsilon* (Sept '08)

MarketingProfs (Oct '08)

N = 175

N = 600 62%MarketingProfs (Oct 08)

*63% of (175) CMOs said they had increased their online budgets in the past year

N 600

Seven Strategies for Surviving the Downturn

1. Get with the Accountability program2 K d i h2. Keep doing search3. Don’t ignore the power of branding online4. Stay close to the customer5. Engender Trust

“This is the age of accountabilityfor the marketing profession5. Engender Trust

6. Engage with online video7 Test test test

for the marketing profession.--Robert Liodice, Association of National Advertisers, 7. Test, test, test, ,CEO

Need to break down the dataNeed to break down the data silos

• Search – Display adsO li Offli di• Online – Offline media

• Online – Offline channels“When the going gets tough, information gives comfort you are on the right track”gives comfort you are on the right track

- - David Lowden, chief executive, Taylor Nelson Sofres,


1. Get with the Accountability program2 K d i S h2. Keep doing Search3. Don’t ignore the power of Branding online4. Stay close to the Customer5. Engender Trust5. Engender Trust6. Engage with online Video7 Test Test Test7. Test, Test, Test


1. Get with the Accountability program2 K d i S h2. Keep doing Search3. Don’t ignore the power of Branding online“As the ad industry braces for a d i d 4. Stay close to the Customer5. Engender Trust

deep recession, someone needs to notify the search advertising 5. Engender Trust6. Engage with online Video7 Test Test Test

y gbusiness.”7. Test, Test, Test--Mike Shields, MediaWeek, 10/15/08


1. Get with the Accountability program2 K d i S h2. Keep doing Search3. Don’t ignore the power of Branding online“As the ad industry braces for a d i d “You can track every cent and 4. Stay close to the Customer5. Engender Trust

deep recession, someone needs to notify the search advertising

yevery click. Search is comfort food for marketers ”5. Engender Trust

6. Engage with online Video7 Test Test Test

y gbusiness.”food for marketers.

--Even Andrews, Forrester Research7. Test, Test, Test--Mike Shields, MediaWeek, 10/15/08,

Search Ad Spending Growth for

200924.0%

23 0%

Magna

Oppenheimer & Co Inc

2009

23.0%

17.3%

21.0%

Oppenheimer & Co. Inc.

BMO Capital Markets

JP Morgan 17.3%

14.9%

14.0%

JP Morgan

eMarketer

Citi Investment Research

13.7%

13.0%

Borrell

Collins Stewart

13.0%ThisPanmure

Search is ROI on steroids:

Search is ROI on steroids:

Search engine optimization (SEO) was rated as the best-performing onlinerated as the best performing online advertising tactic by 57% of online marketers per MarketingSherpa (2007)marketers, per MarketingSherpa (2007)

#3. Anti-Search: Don’t Ignore the Power of Branding Online

Awareness/BrandingCustomer RelationshipManagement Attitudes,

Interest

CONSUMERPost-sales support Pre-purchase

InformationGathering Fulfillment

support

Gat e gSale/Purchase

#3. Anti-Search: Don’t Ignore the Power of Branding Online

Awareness/BrandingCustomer RelationshipManagement Attitudes,

Interest

CONSUMERPost-sales support

Marketing opportunityhere to influence online

Pre-purchaseInformationGathering Fulfillment

supporte e o ue ce o eshoppers – whether or

not they choose to use a Gat e gSale/Purchase

ysearch engine

$25 B OnlineAd Market in 2008% Lift In Conversion Rate When DisplayAd Market in 2008

Awareness% Lift In Conversion Rate When Display

Ads Are Combined With Search:

InterestSearch =

45% ofdollarsDesire

Source: Atlas Digital Marketing Insight, 2008Consumers exposed to both search

and display ads were 56% moreAction

and display ads were 56% morelikely to purchase an Alltel phone, vs.th h j t li k d h d

Source: eMarketer, Nov, 2008those who just clicked on a search ad

Stay close to the Customer

“M b i ill“Many businesses will turn to the Web to stay in t h ithtouch with consumers during a difficult financial li t Thi i i tclimate. This is going to

be a lifeline.”

--Adam Sarner, analyst, Gartner

77%77%Teens on social networks in 2008 (eMarketer) 77%Teens on social networks in 2008 (eMarketer) 77%

T i l t k i 2009 81%T i l t k i 2009 81%Teens on social networks in 2009 (eMarketer) 81%Teens on social networks in 2009 (eMarketer) 81%

Affluent (L I tit t M h 2008) 60%Affluent (L I tit t M h 2008) 60%Affluent (Luxury Institute, March, 2008) 60%Affluent (Luxury Institute, March, 2008) 60%

Look, Listen,, ,Lounge & Learn

A Learn how consumers talk about yourA. Learn how consumers talk about your product or service category• Notice what words and language they useg g y

B. Learn about real or perceived problems with d t t iyour product or customer service

• e.g., Dell’s lesson learned

C. Unleash the wisdom of the customer!

Look, Listen,Lounge & Learn

A Learn how consumers talk about your“[With our customer service wiki] endA. Learn how consumers talk about your product or service category• Notice what words and language they use

[With our customer service wiki] end users create the value themselves

d k th l f th dg g y

B. Learn about real or perceived problems with d t t i

and seek the value of other end users like themselves.”

your product or customer service• e.g., Dell’s lesson learned--Brad Smith, CEO, Intuit


Look, Listen,Lounge & Learn

A Learn how consumers talk about your“[With our customer service wiki] endA. Learn how consumers talk about your product or service category• Notice what words and language they use

[With our customer service wiki] end users create the value themselves

d k th l f th d

“40% of TurboTax users’ questions are answered by other customers, g g y

B. Learn about real or perceived problems with d t t i

and seek the value of other end users like themselves.”

yand at a higher rate of accuracy.”

your product or customer service• e.g., Dell’s lesson learned--Brad Smith, CEO, Intuit--Brad Smith, CEO, Intuit


Runners send videos images andRunners send videos, images andsongs to their friends, engage

in irt al contests and arrangedin virtual contests and arrangedfor real meetups

40% of visitors become t t Nik ’ hconverts to Nike’s shoes.

How do you create trust for your brand?

• Make your product and customer service as good as they can beg y

• Emphasize listening over loud-speaking

• Adapt your digital marketing messages to be more real more conversational lessmore real – more conversational, less “marketing-speak”

• Allow for customer ratings and reviews

• Read Reviews

• Top products converted at a 49%Top products converted at a 49%higher clip

• Average order size increased 40%

• Read Reviews

154 million Americans = 80% of Internet users

167.5 million = 87% of Internet users

Versus watching TV, onlineVersus watching TV, online video viewers are 25% more

d i TV dengaged in TV content and 47% more engaged in the ads47% more engaged in the ads.

--Simmons 2008Simmons, 2008

US online video ad spending,in millionsin millions

US online video ad spending,in millions

$4,600.0

in millions$3,000.0+44.9%

Growth

$850$1,250

$1,8502.5%

Growth

$324$587

$850

2007 2008 2009 2010 2011 2012 2013Source: eMarketer, November, 2008

US online video ad spending,in millionsin millions

Gilbane Group: 50% of U.S. firms say US online video ad spending,in millions

$4,600.0they’re using online video, and 46%rate it “very effective” (June ‘08)in millions

$3,000.0+44.9% Growth

y ( )

Broadband video ads allow for

$850$1,250

$1,8502.5%

Growthgreater measurability,

t t bilit d$324$587

$850target-ability andshare-ability!

2007 2008 2009 2010 2011 2012 2013Source: eMarketer, November, 2008

share ability!

Are marketersmissing the bus?#7 Test Test Test!!!missing the bus?

59% claimed the biggest

#7. Test, Test, Test!!!

Only 24% of U.S. marketers id th i fi t b


the biggest obstacle to

using consider their firms to be

“digitally savvy”.consider their firms to be

“digitally savvy”.digital media was l k fAmong B2B marketers,

only 31% have begun to Among B2B marketers, only 31% have begun to

“lack of experience”“Iterate. “A lot of this stuff (blogs online videoy % g

use Web 2.0 tactics like blogs, social networks and

y % guse Web 2.0 tactics like

blogs, social networks and Don’t pontificate.”

Rishad Tobaccowala

A lot of this stuff (blogs, online video, etc) you just have to try!”

--Michael Metz Senior DirectorSource: Booz Allen Hamilton and ANA, 2007; survey among 184 ANA-member marketers

g ,podcasts to engage buyers


--Rishad TobaccowalaChief Innovation Officer, Publicis Group

Michael Metz, Senior Director, Web Marketing and Strategy Cisco











“lack of experience”“Iterate. y % g




Rishad TobaccowalaSource: Booz Allen Hamilton and ANA, 2007; survey among 184 ANA-member marketers














“lack of experience”“Iterate. “A lot of this stuff (blogs online video“Trying is the first step y % g




Rishad Tobaccowala

A lot of this stuff (blogs, online video, etc) you just have to try!”

--Michael Metz Senior Directortowards failure.”

Source: Booz Allen Hamilton and ANA, 2007; survey among 184 ANA-member marketers




Michael Metz, Senior Director, Web Marketing and Strategy Cisco

For more information about eMarketer or f f th lid l t tfor a copy of these slides, please contact:

David lankelevichVice President

[email protected]

digital marketing now: 7 strategies for surviving the downturn

Business

test7 test test

online marketers

test ceo

online budgets

online video6

power of branding online

search ad spending growth

marketers marketers