Outlook 2014: Data-Driven Marketing in an Omnichannel World
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Bruce Biegel presented on marketing trends for 2014 at the DMA Annual Conference. The key trends are the rise of omnichannel customer engagement and programmatic marketing. Omnichannel marketing aims to provide a seamless customer experience across channels driven by business objectives rather than just tactics. This requires data, technology, and an infrastructure focused on customer engagement and interactions. Programmatic marketing uses data and technology to automate media buying and audience targeting across channels. Overall, marketers are shifting to more customer-centric strategies and looking to integrate legacy systems to manage interactions driven by data.
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Outlook 2014: Data-Driven Marketing in an Omnichannel World
- 2. About Winterberry Group • Corporate Strategy p gy • Marketing System Engineering • M&A Due Diligence Support • Market Intelligence • Investment Banking through Investment Banking, through
- 3. The Trends 2013 Primary Themes for 2013‐2014: Pi Th f • Omnichannel Customer Engagement • The Rise of Programmatic Marketing Our First Look at 2014
- 4. Here They Go Again And It’s Bad for the U.S. Economy (and us t ) A d It’ B d f th U S E ( d too) Sources: Business Insider
- 6. Digital Captures New Budgets, Money from Print; Traditional Direct Slightly Down 2013E U.S. “Direct & Digital” Spending: $132.5BB 22.7% 18.9% Other Digital: $5.4BB Insert Media: ‐5.0% $0.8BB Display: $17.6BB Other: $3.2BB $3 2BB 3.2% (Includes Mobile & Desktop) (Includes Mobile & Desktop) 4.4% 10.1% Search: $19 6BB $19.6BB Direct Mail: $44.8BB (Includes Mobile & Desktop) Source: Winterberry Group analysis of multiple sources Note: Arrows reflect percentage change in spend, by channel, from 2012 levels; Insert Media includes FSIs and statement inserts; Display and search reflect spending on desktop and mobile Teleservices: $41.1BB 1.0% ‐0.9%
- 7. Its Really, Really The Year of Mobile Devices 2013E U.S. Digital Advertising Spending: $42.7BB S i l T h l Social Technology and Services¹: 32.1% $2.8BB Oh Other 29.6% Mobile2 : $.35BB Email: 11.1% $2.0BB 18.9% Display: $17.6BB Lead Gen & Affiliate Services: $0.3BB 7.0% 15.6% (Includes Mobile & Desktop) Search: $19.6BB 10.1% (Includes Mobile & Desktop) Source: Winterberry Group analysis of multiple sources Note: Arrows reflect expected percentage change in spend, by channel, from 2012 levels ¹Excludes social display and social search spend 2Excludes mobile display and mobile search spend
- 8. Direct Mail Flat: It’s About USPS; And Mobile U.S. Direct Mail Marketing Spend ($BB) • Wherefore Art Thou O Postal Reform Act? The PMG needs your help – exigent rate hike requested to “help” save the USPS $43.8 • Catalog mailers facing a 5.9% increase – volume has to come out to make the math (analytics) work $45.2 $45.2 2009 2010 2011 2012 2013E $44.8 $ $40.0 Credit Card mailers return, Telecoms • Credit Card mailers return, Telecoms up as competition increases, and standard class (ad mail) grows while first class decline continues $44.9 $20.0 • QR Codes and Augmented Reality adoption and interaction accelerates across the mobile landscape across the mobile landscape Source: Winterberry Group, Oct. 2013 $0.0 Direct Mail CAGR .57%
- 9. Search: Accounts for ~46% of Digital Spend; Mobile Drives New Growth • Spending overall rises with nearly all of the gain coming l ll f th i i from the doubling of mobile search • Desktop searching declines for the first time as consumers engage more deeply on mobile engage more deeply on mobile devices • Tablet CTRs are rising (62% over last year) and the cost‐per‐click is higher than on desktops CAGR measured from 2009-2013E Source: Winterberry Group, Oct. 2013 U.S. Search Marketing Spend, 2009‐2013E ($BB) $19.6 $ $14.6 $15.6 $16.9 $17.8 $0.7 $2.2 $4.4 $14.6 $15.6 $15 6 $16.2 $16 2 $15.6 $15 6 $15.3 $ 2009 2010 2011 2012 2013E Desktop search Search S h CAGR Mobile search 7.64%
- 10. Display: Expected to Rise to $17.6BB, Driven by Improved Audience (Re)Targeting U.S. Display Marketing Spend, 2009‐2013E ($BB) • Focus on audience targeting, primarily through programmatic RTB primarily through programmatic RTB solutions with retargeting and 3rd party digital data • RTB is expected to account for $3.34BB in spending in 2013, a 73.9% rise, reflecting 20% of all display media transacted display media transacted • Rich media and video format spending growing by an expected 21.7% from 2012 to 2014, banners decline by 3% $17.6 $14.8 $12.3 $12 3 $8.4 $8.4 2009 CAGR measured from 2009-2013E, Source: Winterberry Group, Oct. 2013 * Includes social display, video, rich media and banner ad formats, as well as ad sponsorships Sources: IDC, eMarketer, ComScore $9.9 $9.9 2010 $1.9 $0.6 $11.8 2011 Desktop display Display CAGR $3.8 $13.0 $13.8 $13 8 2012 2013E Mobile display 20.3%
- 11. Social: Social Tech & Services Spend is Expected to Reach $2.8BB in 2013 Expected to Reach $2 8BB in 2013 • 68% of CMOs say they are underprepared to deal with the to deal with the impact of social media—yet 82% plan to continue increasing investment in social media technology social media technology Spending on Social Media Tech and Related Services ($BB) $2.8 $2.1 $2 1 • Mobile devices fast becoming the platforms of choice for social interaction i t ti $1.6 • Social sites focus on easing on‐ boarding of advertisers, campaign management and measurement $0.7 • Data driven social targeting beginning g to challenge search for ROI 2009 Source: IBM CMO Survey; BIA/Kelsey; eMarketer; Nielsen Wire; Bizo, Pew Research CAGR measured from 2009-2013E, Source: Winterberry Group, Oct. 2013 $0.9 2010 2011 Social Tech/Services CAGR 2012 41.4% 2013E
- 12. Mobile: Total Spending to Reach $8.5BB, Up From $4.4BB in 2012 From $4 4BB in 2012 • Fastest growing channel—spending nearly doubles YOY—reflecting marketing’s attempt to keep pace with consumer engagement with email, social and shopping • M‐Commerce is booming: transactions on mobile devices are expected to reach $41.6BB in 2013, p , growing 68% over last year • Mobile targeting and measurement handicapped by a lack of unique handicapped by a lack of unique identifiers (UIDs), a variety of solutions are on the horizon Mobile Marketing Spend Breakdown, 2011‐2013E ($BB) Breakdown 2011‐2013E ($BB) $8.5 $0.4 $3.8 $4.4 $0.3 $1.9 $ $1.6 $4.4 $0.3 $0.6 $0.7 $2.2 2011 2012 Mobile search Mobile display Mobile CAGR CAGR measured from 2011-2013E, Source: Winterberry Group, Oct. 2013 Source: eMarketer 2013E Other mobile 130.5%
- 13. E‐mail: Steady Growth; Driven by Cost‐ Effective, Targeted Marketing Channel Effective Targeted Marketing Channel • Mobile design is key—half of all emails are opened on a mobile device emails are opened on a mobile device • Marketers begin to mature with respect to audience segmentation for email—seek more sophisticated email seek more sophisticated analytics capabilities to improve use of the channel U.S. Email Marketing Spend, 2009‐2013E ($BB) E ( BB) $2.0 $2.0 $1.8 $1.6 $ $1.4 $1.0 $1.2 • More robust email lists presents opportunity to link to CRM and other customer engagement approaches • Consolidation and new releases provide enhanced cross‐platform capabilities CAGR measured from 2009-2013E, Source: Winterberry Group, Oct. 2013 Source: Epsilon, Return Path $0.0 $0 0 2009 2010 Email CAGR 2011 2012 13.6% 3 2013E
- 14. The Trends 2013 Primary Themes for 2013‐2014: Pi Th f • Omnichannel Customer Engagement • The Rise of Programmatic Marketing Our First Look at 2014
- 18. But What Really Makes It Different? Driven by Driven by enterprise business objectives—not tactical marketing requirements Made possible Made possible only by recent advances in data, technology and media delivery Aimed at driving Aimed at driving informed customer engagement
- 20. Not Surprisingly, Interest in Omnichannel is Surging Across All Verticals 83% of panelists said their company would likely invest in “omnichannel” approaches in the near future the near f t re 92% agree there is “real value” to be gained from pursuing an omnichannel approach to customer engagement Source: IAB‐Winterberry Group White Paper, Omnichannel Audience Engagement, June 2013
- 21. What's Required for Successful Adoption? Customer Analytics & Multiplatform Attribution Rich Content—Optimized for Context & Strategic Intent Operational Infrastructure Geared to the Needs of Customer Engagement Cross‐Platform, Audience‐Driven Media Placements Integration of Deeply Engaging—Yet Effectively I t ti f D l E i Y t Eff ti l “Disconnected”—Media Elevation of the Omnichannel Strategist as a Senior Elevation of the “Omnichannel Strategist” as a Senior Role
- 22. The Trends 2013 Primary Themes for 2013‐2014: Pi Th f • Omnichannel Customer Engagement • The Rise of Programmatic Marketing Our First Look at 2014
- 26. Complexity that the Ad Tech Market Set Out to Solve • Massive investments in the development of media Massive investments in the development of media and marketing automation followed • Harnessing of “Big CRM” and online behavioral data would be deployed to identify and message unique individuals with relevant content and offers • Decisioning engines and machine driven analytics engines and machine‐driven analytics moved beyond “trigger” marketing and into biddable auctions and optimization models
- 28. To Date, the Programmatic Value Proposition Has Been Closely Linked to Auction Has Been Closely Linked to “Auction” What does “programmatic” mean to you? Machine‐driven Automation Real‐time Bidding (RTB) Auction‐based approach to media buying A ti b d h t di b i 0% 20% 40% 60% Percent of panelists who mentioned each in their “top 3” WG and IAB “Programmatic Everywhere” white paper, Nov 2013; survey N=263
- 30. …Yet More Marketers Are Coming to Realize Substantial Benefits of Driving Efficiency… Substantial Benefits of Driving Efficiency My organization is interested in programmatic because of the ability to… f y Effi i l V l Efficiently Value & Transact Digital Media Improve Operational Efficiency Target consumers across digital media T t di it l di 0% 20% 40% Percent of panelists who mentioned each in their “top 3” WG and IAB “Programmatic Everywhere” white paper, Nov 2013; survey N=263 60%
- 31. So Programmatic Approaches Are Becoming A Real Priority Has your organization pursued a programmatic approach to the following use cases? Are you likely to do so within two years? 85% 81% 64% Audience Insight Development A dience Insight De elopment In two years Today In two years Today 58% Automation of Back‐end Processes WG and IAB “Programmatic Everywhere” white paper, Nov 2013; survey N=263
- 33. Resulting in “Programmatic” as a Foundation for Sophisticated Data‐Driven Marketing Cookies will recede as the fundamental programmatic “control point” as the mobile device assumes a central role as the audience touchpoint audience touchpoint The programmatic approach is growing addressable to all media types paid, owned and earned types—paid, owned and earned Data is the “fuel” that powers audience‐centered programmatic efforts, heightening its importance and value efforts heightening its importance and value Which will lead to a major wave of innovation focused re‐ engineering and optimization of business processes and engineering and optimization of business processes and organizational design And the complex ecosystem of Ad Tech vendors will evolve into a p y set of programmatic “stacks”
- 34. The Trends 2013 Primary Themes for 2013‐2014: Pi Th f • Omnichannel Customer Engagement • The Rise of Programmatic Marketing Our First Look at 2014
- 35. 2014 Will Balance Increased Activity With Increased Scrutiny • The economy will continue to recover— fueling higher GDP recover fueling higher GDP growth—and as a result marketing budgets will expand • Increasing utilization of digital data for customer engagement and Washington getting to “normal”, will combine to re‐focus attention on the combine to re focus attention on the regulatory agenda • Scrutiny will be most acute in the first half of the year, prior to the midterm elections
- 39. 7 for ‘14: Content ‐ The King of Relationships 1 60% of Corporations are doing content marketing – they will finally define it in 2014 Mobile content marketing strategies will lead the way instore to see the ROI Director of Content becomes a marketing j g job Source: Jayson DeMers, Forbes
- 40. 7 for ‘14: Social Everywhere 2 Social interactions on mobile devices continue to increase Social targeting on Facebook, g g Twitter, Instagram outperform branded sites - and is very measureable No one can make a decision without crowd sourcing opinions p
- 41. 7 for ‘14: The Continuing Evolution of Loyalty 3 From points to engagement, loyalty programs begin to add new incentives (currencies) – whether social causes, health or lifestyle rewards Loyalty goes mobile, so you CAN take it with you–carry it or wear it! The question: When does q loyalty start?
- 42. 7 for ‘14: TV and Video Platforms Evolve 4 “Second screen” tablet adoption combines with “smart” smart connected TVs and game consoles—fueling cross platform video advertising id d i i Programmatic delivery and g y viewing data propels growth in this key channel for consumer engagement t TV’s connected to the Internet expected to reach 759MM by TV’ t d t th I t t t dt h 759MM b 2018, up from 307MM for 26.4% market share (Digital TV Research)
- 43. 7 for ‘14: Cycle Times Shrink 5 Consumer expectation: “I want it now now” Marketer expectation: “I need to respond/react faster” Reality: Campaign and interaction cycle times from planning to execution continue to shrink – pressuring suppliers to be more agile - from development to delivery
- 44. 7 for ‘14: Data Utilization Accelerates 6 Programmatic display, omnichannel demand, drive demand digital data use cases Databases become more sophisticated repositories of online and offline data Technologies to activate the data mature along with the talent to use it BIG DATA STAYS BIG….
- 45. 7 for ‘14: Consolidation, IPOs and Digital Stacks 7 2013 has seen lower deal volume (-16% YOY) but increased value - up 36%, led by a few blockbuster deals Valuation remains high driven by IPO comps Will a return to more normal valuation bring more PE players back to a market dominated by cash heavy strategic buyers? Source: PPLLC data on enterprise software M&A transactions 2009-2013