1. Integrated Marketing Communications
A Vision for the Future
April 15, 2010

2. WHAT IS THE FUTURE OF MARKETING
COMMUNICATIONS?
• The MarCom industry has evolved over the past 50 years,
reacting to changes in several areas:
- Technology (new media channels)
SITUATION
- Clients (new business realities and demands)
- Consumers (new attitudes and behaviours)
• Pace of technological and societal changes will accelerate
CHALLENGES • Disruptions to the traditional MarCom industry spells
potential risks, but also opportunities
• What future developments will affect the industry and how
will it look in 10 years?
KEY QUESTIONS
• Which developments can advertisers capitalize on and
how?

3. AGENDA
• Understanding the Past
• Evaluating the Present Landscape
• Vision for the Future

4. HISTORICALLY, MARCOM HAS NOT BEEN A
VERY ATTRACTIVE INDUSTRY
BUYERS - MID SUPPLIERS - HIGH COMPETITION - HIGH
• Clients primarily used • Few media outlets • Many small
advertising agencies to increased power of each undifferentiated firms
purchase media spots supplier competed with each other
- Significant portion of - 3 major cable networks - Players were regional
broadcast budgets spent - Local radio stations and - Creative was considered
on “upfronts” news papers an add-on
- Low switching costs • Increasing number of
• Each media outlet had a
• Two recessions over this captive audience players emerged due to
period impacted client‟s - Fewer media outlets the low barriers to entry
marketing budgets allowed for greater - Ogilvy and Maher (1964)
- Beginning of 1960 and penetration - Saatchi and Saatchi
1970 - Everyone was watching (1970)
the same nightly news • Limited media spots
• Lack of tools to measure show, sitcom etc. increased competition
impact of advertisements between existing players
led to a focus on • Power shifting away from
“creativity” rather than traditional media holders • No real threat of
performance (print) to new media substitutes for
holders (cable television) professional quality
- From local papers to advertising
Sources: Media In Recession: Broadcast Stumbles, Cable NBC
Capitalizes On Interactive Platforms, Advertising History
Timeline, Economywatch, Marketing and Regulation

5. FOUR MAJOR SHOCKS CAUSED A SHIFT IN
THE TRADITIONAL MARCOM MODELS
Globalization Consolidation Compensation Media

6. 1. GLOBALIZATION - BRANDS AND AD
CAMPAIGNS BECAME GLOBAL
GLOBALIZATION TRENDS EFFECT ON INDUSTRY
• Multinational corporations now account • Multinational companies are more
for over 33% of world output and 66% of prevalent and powerful around the
world trade globe
• Brands have gone global • Agencies went global in order to meet
- China experienced 15% rise in the needs of their global customers
foreign advertising in 2009 while - TBWA has 258 offices in 77 countries
other regions flattened with 12,000 employees
• Global firms are looking for ad agencies • Ad agencies coordinate branding
who can create and execute their brand across countries
campaigns around the globe - TBWA manages the Absolut Vodka
account in 48 countries, Adidas in 65
countries and Nissan in 58 countries
Sources: The Theory and Experience of Globalization, TBWA At a Glance, Consumer Brands Buck
Trend in Ad Spending

7. 2. CONSOLIDATION – SIX MEDIA
CONGLOMERATES DOMINATE INDUSTRY
REASONS FOR CONSOLIDATION EFFECT ON INDUSTRY
• “All agencies are three phone calls • Conglomerates protected agencies with
away from disaster“ – Clients jumped strong brand names from financial
firms often distress in the event of account losses
• A diversified portfolio of marketing • Media conglomerates own ad agencies,
companies shelters media PR firms, branding houses, digital
conglomerates somewhat from agencies etc. to provide insularity
economic cycles against recession (Sir Martin Sorrell)
• Individual firms usually can not provide • Conglomerates such as WPP, which
services for two rival companies such owns multiple ad agencies can provide
as General Mills and P&G services to competing clients through
different agencies
• Large accounts such as Samsung and • Conglomerates can bid for huge
Vodafone are becoming consolidated consolidated accounts that require
advertising, branding & PR services
Sources: Tungate, Mark. “Adland: A Global History of Advertising”

8. 3. NEW PAYMENT MODELS – CLIENTS
DEMANDED “SKIN IN THE GAME”
MODELS OF IMPLICATIONS
PAYMENT
Commission • Used to be the dominant model where agencies got paid 15%
commission on all media purchased
• If the campaign is good, the agency profits as the company
purchases more media
• Commission-based model moved to advertisers paying for
Fees specific services
• Fees were based on the number of hours clocked on account
• Every fee account paid its own way
• With commission systems, firms spent resources doing creative
for companies who didn’t purchase a lot of media space and
would end up losing money
• Ad firms don‟t have as much incentive to convince firms to
purchase excess media
Pay for • P&G has started basing a portion of agency compensation on
Performance performance in the form of sales and market share gains
• Agencies now had “skin in the game” for their strategies to be
taken more seriously by companies who were sceptical when
presented with cutting edge ideas by their agencies
• The internet made it easier to track success of digital ads
Sources: Pay for Performance for Cokes Ad Agency, Brand architecture: Creating clarity or organizing chaos?, The fee good
factor?, P&G’s Ending Billable Hours Forces Grey to Show Chip Ads Work , Ogilvy on Advertising

9. 4. MEDIA – CAMPAIGNS MUST CONSIDER
MEDIA AS PART OF THE STRATEGY
CHANGES TO IMPLICATIONS
MEDIA
More media • The number of media outlets and channels exploded after the
choices 1970‟s
• More niche TV, radio and print programming available for ads
• Advances in technology created new media options including
blogs, podcasts, online advertising and mobile advertising
Media dollars • Online advertising will grow to more than $50 billion to make up
shifted 25% of all media consumption by 2011
• Recent studies predict companies will shift $65 billion in
traditional ad spending to spending on their websites, social
marketing and online
Media influences • Many advertising campaigns now created with specific media
the campaign choices in mind
• The “Only in a Woman’s World” Frito-Lay campaign was created
specifically for online social media channels instead of online
media being just one channel in a larger campaign
Sources: The TV Gravy Train is Done!, Economic Woes Mean TV Ad Pullback, Media Shift, A $65 Billion Advertising Shift?

10. AGENDA
• Understanding the Past
• Evaluating the Present Landscape
• Vision for the Future

11. THE CURRENT MARCOM INDUSTRY HAS
BECOME MORE UNATTRACTIVE
BUYERS - HIGH SUPPLIERS - MID COMPETITION - HIGH
• Effectiveness measures • Media fragmentation • Consolidated companies
and tied compensation are reduces power of any one compete with each other
the norm; increases media supplier and independents
pressure to perform - 1000’s of cable channels - P&G shift from Saatchi
- Large supply of media and Saatchi to
• Shifting budgets from ads & spots via internet Wieden+Kennedy
media to lower-revenue - End users are using • Lower costs of tools and
marketing tactics multiple devices to access media = low entry barriers
- Pepsi rejecting Super information - More content from semi-
Bowl TV ads for Refresh professionals and user
Project “cause marketing” • Power shifting away from generated content
traditional media holders
• Squeezing margins on (broadcast TV) to new • Media holders work direct
media buying media holders (online with clients
platforms) - Conde Nast Media Group
• End users resisting clutter, works directly with
- From NBC to Google
interruption and mass- advertisers on magazine
marketing targeting campaigns
- Ad avoidance technology
- Demanding higher level • Substitutes for media
of ad relevance intermediaries with open
exchanges and auctions
- Google TV Ads allows
Sources: AdBrands.Net, How Media Choices are Changing Online Advertising (Bradley and Bartlett)
What Happened to Creative Advertising?, The End of Advertising as We Know It
anyone to buy media

12. THERE ARE THREE INTENSIFYING SHOCKS
Backlash Technology Fragmentation

13. 1. BACKLASH
CONSUMERS FIND LESS VALUE ADS
SIGNAL ON THE HORIZON SHOCK ASK FIRST ADVERTISING
• Consumers are becoming • More than 50% of cable TV • Retailers and advertisers
increasingly resistant to all subscribers will own a DVR will require “permission” to
forms of advertising • 95% are angry over email access consumers‟ lives
spam and pop-up ads
• Consumers are more • 90% of people trust • Advertisers need to
cynical recommendations of their leverage the tribe and
peer network; 56% trust regain their trust
advertising “completely” or
“somewhat”
• Devices such as TiVo and • Social networking sites, • Content will have to be
popup blockers enable such as YouTube, served highly personalized to
users to access ad-free up to 12 billion users appeal to consumers
content
• Web 2.0: internet users • 77% of internet users read • Extending the „Unwritten
have more opportunity for some form of Web Log Contract‟ by providing
online interaction (blog) consumer incentives
Sources: Allen, Chris, Thomas O’Guinn, and Richard J. Semenik, “Advertising and Integrated Brand Promotions”,
Telegraph, “Americans spend most time on the internet”, Business Insider: “YouTube’s staggering growth continues”
Social Media, Web 2.0 and Internet Stats, Media and Money

14. 2. TECHNOLOGY
NEW CHANNELS FOR COLLECTING DATA
NEW WAY TO TALK TO
SIGNAL ON THE HORIZON SHOCK
CUSTOMERS
• Television, internet and • New technology has • Mobile access to internet
phones have become enhanced the old channels allows 24/7 access to
primary methods of with new ways advertisers consumers
advertising to consumers to reach consumers • Geo-targeting enable
- Smart phones expected promotions when and
to capture 37% of the where it is relevant
worldwide cell phone • Digitized content can be
market tailored to user and
- More devices are GPS- environmental changes
enabled
- Sales of Netbooks and
tablets expected to grow
at an annual rate of
28.5%
• Advertisers have yet to • Development in Ambient • Smarter, more efficient
capitalize on new Intelligence signals the means of communicating
communications evolution of technology and identifying consumer
opportunities that is sensitive and needs
responsive to our presence
and needs
Sources: Cnet news, “Smartphone Share of Cell Phones Set to Soar”, “Netbooks and tablets see strongest
growth in 2010”, Emerging Communications, 4 New Opportunities in Ad Targeting

15. 3. FRAGMENTATION
CONTENT IS BECOMING MORE PERSONAL
MICROSEGMENTS AND
SIGNAL ON THE HORIZON SHOCK
MICROVERSIONS
• Customers segmented • Consumers have more • Customers will be
based on demographics, opportunity to customize individually targeted
psychographics, their content
purchasing behavior - e.g. iGoogle
• Products are becoming • Technology is becoming • Content will be highly
more tailored to meet target more adept at identifying personalized to appeal to
segment needs YOU consumers
- e.g. GoogleAds
• Global market provides • Broadcasting • Multiple product and ad
consumers with access to advertisements are versions can be used to
more products and becoming increasingly address many more target
services affordable and easy to segments
access

16. AGENDA
• Understanding the Past
• Evaluating the Present Landscape
• Vision for the Future

17. THE BESPOKE ADVANTAGE

18. THE BESPOKE ADVANTAGE

19. THE BESPOKE ADVANTAGE

20. INTRODUCING BESPOKE ADVERTISING
The most personalized promotional agency
Bespoke Advertising offers mid to large sized advertisers the opportunity
to target and respond to the individual needs and purchasing habits of all
consumers, derive accurate consumer insights and market research, while
engaging consumers with personalized and programmable content.

21. BESPOKE ADVERTISING‟S VALUE PROPOSITION:
Offering consumers the most personalized promotional experience
For anyone who needs to market anything to anybody else, Bespoke Advertising
provides the ability to target individual customers in the most personal and
meaningful ways
1
ASK FIRST ADVERTISING Personal Advertising Management Platform (PAMP)
2
NEW WAY TO TALK TO
Open Media Exchange Platform (OMEP)
CUSTOMERS
3
MICROSEGMENTS AND
Individual Advertising Delivery Services (I-ADS)
MICROVERSIONS

22. 1. PERSONAL ADVERTISING MANAGEMENT
PLATFORM
• The most jaded consumers can now actively manage the kinds of advertisements they
wish to receive across all of their media platforms using the online PAMP tool
• In addition to receiving the most personally relevant promotional information, users also
receive discounts and incentives from advertisers to encourage them to close the sale
Personal Advertising Management Platform:
Jesse has just broken She logs onto PAMP Monica and Joe are They log onto PAMP
up with her boyfriend to explicitly remove expecting their first to request diaper
all movie trailers for child samples and blog
romantic comedies articles about
from her TV viewing newborns
for the next 2 weeks

23. 2. ONLINE MEDIA EXCHANGE PLATFORM
• Advertisers are able to purchase media time across all channels targeted to individual
viewer preferences through the OMEP
• Bespoke Advertising enables clients to use several micro-versions of an ad execution to
appeal to specific groups of target customers
Online Media Exchange Platform:
• Knowing that Jesse does not • Everyday, Johnson & Johnson
want to see romantic comedies, purchases the rights to access
Overture Films purchases 10 of OMEP’s samples request list
her TV media spots to promote • From reading Monica and Joe’s
its upcoming horror film, The request, Johnson and Johnson
Crazies sends a basket of baby goods to
• Inferring that she just endured a their home along with coupons
break-up, the micro-versioned valid for the next six months
ad features scenes of a vengeful
girlfriend

24. 3. INDIVIDUAL ADVERTISING DELIVERY
SERVICES
• Active users of PAMP are provided with RFID tags encoded with their advertising profile
to ensure that their preferences are incorporated with outdoor and signage ads
• Non-users of PAMP are individually targeted based on facial and body recognition
software installed at the signage‟s site
• Advertisers are able to purchase signage spots only when they know they can deliver
targeted messages at “captive sites”
Individual Advertising Delivery Services:
Danielle is a PAMP user and lists
cosmetics as one of her advertising
preferences.
She carries her Bespoke RFID tag with
her while shopping and has consented
to receiving makeup recommendations
while in public washrooms.
Cosmetic makers bid for the
opportunity to promote their products
to customers such as Danielle and pay
per impression to interact with her.

25. BESPOKE‟S BUSINESS MODEL CONSISTS OF
SEVERAL REINFORCING ELEMENTS
Value Proposition Consumer Segments Relationship Mgmt Key Activities Comp. Advantage
Personalized Advertisers Advertisers: • Developing strategy Early mover and
Promotions • Most appropriate • Account mgmt and creative content ongoing innovator
for those generating and creative for advertisers;
Advertisers: product knowledge teams to develop particularly micro- • Patent protection
The ability to target and interest to media strategy / versioned ad on devices and
individuals in the customers who have content executions software
most relevant already identified • Online platform to • Designing devices,
manner needs enable active software and • Relationships with
media purchasing algorithms to enable advertisers
Consumers: Consumers: • Algorithms to media purchase at
The ability to receive • Particularly valued allow automatic individual level (e.g. • A large installed
relevant marketing by jaded customers media purchasing TV top-set boxes) base of consumers
communications sick of clutter • Purchasing media who have opted
Consumers: time and parsing into our network
• Online PAMP into individual and specified their
• PAMP RFID tags packets ad preferences
Costs Revenues
• Media time purchases • Media purchases from advertisers
• Labour for account managers, creative staff, algorithm • Upfront fees for creative work
programming staff • Pay per impact as micro-versioned messages are
• Component and assembly costs to create devices to delivered
enable parsing of media and data collection

26. WHAT DOES THIS OPPORTUNITY LOOK LIKE
IN 2020?
• Capitalize on a $1.1 billion industry in 2020 by linking Loyalty Programs with
Out-of-Home Advertising
Loyalty Programs Out-of-Home Advertising Advertising Spend
314.7 million active 200K Out-of-Home $1.1 B net advertising
loyalty memberships Advertisements spend

27. BESPOKE‟S APPROACH TO ADVERTISING IS
THE WAY OF THE FUTURE
INDUSTRY SHOCK BESPOKE PHILOSOPHY BESPOKE OFFERING
Personal Advertising
BACKLASH ASK FIRST ADVERTISING Management Platform
(PAMP)
Open Media Exchange
INCREASING PACE OF NEW WAY TO TALK TO Platform
TECHNOLOGY CUSTOMERS (OMEP)
Individual Advertising
MICROSEGMENTS AND Delivery Services
FRAGMENTATION
MICROVERSIONS (I-ADS)

28. APPENDICES AND SOURCES

29. LOYALTY PROGRAMS USA
Total Memberships (in Billions)
• 8.2% average loyalty program
membership growth between 2000-2008 Assuming 4.8% growth
– U.S. GDP grew by 4.8% over the same 2.5
period
2.08
2.0
• 65% of memberships in 2006 and 2008
were active
– Active means that memberships were 1.5
used in the past 12 months
1.0 0.79
– Estimated active membership forecast
in 2020 is based on:
- Avg membership growth: 3 Billion 0.5
- Avg GDP growth: 2.08 Billion
0.0
2008 2012 2016 2020
If memberships increase at the same rate as GDP (4.8%) there will
be 2.08 billion active loyalty program memberships in 2020
Sources: The 2009 COLLOQUY Loyalty Marketing Census
World Bank, World Development Indicators

30. LOYALTY PROGRAMS CANADA
Total Memberships (in Millions)
• Canadians are enrolled in more loyalty Assuming 8.8% growth
programs than Americans 350.0
• Canadians are more active loyalty 314.7
program members than Americans 300.0
• 86% of memberships in 2008 were active 250.0
– Active means the memberships were
used in the past 12 months 200.0
150.0
• 9.2 active memberships per Canadian 113.6
household
100.0
– 6.2 active memberships per American
household 50.0
0.0
2008 2012 2016 2020
If memberships increase at the same rate as GDP (8.8%) there will
be 314.7 million active loyalty program memberships in 2020
Sources: The 2009 COLLOQUY Loyalty Marketing Census
World Bank, World Development Indicators

31. OUT-OF-HOME ADVERTISING INVENTORY
Canadian Out Of Home Inventory
• 6.4% average OOH media growth Growth (in 000s)
between 2004-2008
– Traditional OOH growth: -1.7%
250
– Non-traditional OOH growth: 17.3% 200
200
• Traditional OOH media (static signs, etc.)
are being replaced by non-traditional
media (electronic, interactive, etc.) 150
– Traditional inventory forecast to drop
from 47K to 36K in 2020 100
95
• The number of OOH ads will exceed 200K
in 2020 50
– Assuming 6.4% average growth
0
2008 2012 2016 2020
Canada OOH market inventory expected to double by 2020 with a
transition to non-traditional media
Sources: Out-of-Home Marketing Association of Canada

32. OUT-OF-HOME ADVERTISING SPEND
OOH Net Advertising Volume
• Canada OOH marketing spend expected
in $MM CAD
to accelerate in the next decade 1,200 1,107
• 8% growth in average OOH advertising 1,000
spend between 1999-2008
800
• OOH marketing spend increased from
$243 to $463 MM CAD from 1999-2008
600
463
400
200
0
2008 2012 2016 2020
Out-of-Home Advertising will be a $1 Billion industry in 2020
Sources: CDMC Media Digest 2009/2010

33. SOURCES
• Media In Recession: Broadcast Stumbles, Cable Capitalizes On Interactive Platforms
– http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=95021
• Advertising History Timeline
– http://adage.com/century/timeline/index.html
• Economywatch
– http://www.economywatch.com/marketing/marketing-industry.html
• Marketing and regulation
– http://www.teara.govt.nz/en/advertising/6
• Advertising Industry Structure
– http://www.adbrands.net/agencies_index_basics.htm
• How Media Choices are Changing Online Advertising (Bradley and Bartlett); HBS
• What Happened to Creative Advertising?
– http://www.washingtonpost.com/wp-dyn/content/article/2006/09/19/AR2006091901628_2.html
• The End of Advertising as We Know It
– http://www-935.ibm.com/services/us/gbs/bus/pdf/ibv-g510-7869-01-advertising.pdf

34. SOURCES
• Chris, Thomas O‟Guinn, and Richard J. Semenik, “Advertising and Integrated Brand Promotions”
Cengage Learning, Ohio, 2009.
• Americans spend most time on the internet
– http://www.telegraph.co.uk/news/1940196/Americans-spend-most-time-on-the-internet.html
• YouTube‟s staggering growth continues
– http://www.businessinsider.com/chart-of-the-day-youtube-vs-its-competitors-2010-1
• Social Media, Web 2.0 and Internet Stats
– http://thefuturebuzz.com/2009/01/12/social-media-web-20-internet-numbers-stats/
• Media and Money
– http://mediaandmoney.wordpress.com/2009/07/17/nielsen-survey-shows-consumers-attitudes-
toward-trust-value-and-engagement-of-advertising/
• Cnet news, “Smartphone Share of Cell Phones Set to Soar”,
– http://news.cnet.com/8301-1035_3-10415577-94.html
• Netbooks and tablets see strongest growth in 2010
– http://www.netbookchoice.com/2010/04/07/netbooks-and-tablets-to-see-strongest-growth-in-2010/
• Emerging Communications
– http://www.emergingcommunication.com/
• 4 New Opportunities in Ad Targeting
– http://www.imediaconnection.com/content/22194.imc

35. SOURCES
• The Theory and Experience of Globalization
– http://www.infed.org/biblio/globalization.htm
• TBWA At A Glance
– http://www.tbwa.com/index.php/ataglance
• Consumer Brands Buck Trend in Ad Spending
– http://www.ft.com/cms/s/0/95f075b8-4011-11df-8d23-00144feabdc0.html?ftcamp=rss
• Tungate, Mark. “Adland: A Global History in Advertising” Kogan Page, Philadelphia, 2007.
• Pay for Performance for Coke‟s Ad Agency
– http://trendsupdates.com/pay-for-performance-for-coke%E2%80%99s-ad-agency/
• Brand architecture: Creating clarity or organizing chaos?
– http://www.b2bbranddebate.com/?tag=procter-gamble
• The fee good factor?
– http://www.thehindubusinessline.com/catalyst/2004/10/28/stories/2004102800090100.htm
• P&G‟s Ending Billable Hours Forces Grey to Show Chip Ads Work
– http://www.bloomberg.com/apps/news?pid=20601085&sid=aXI1vGkX3dyo
• Ogilvy, David. “Ogilvy on Advertising” Vintage Books, New York, 1985.

36. SOURCES
• The TV Gravy Train is Done!
– http://evolutionofcommunication.com/blog/tag/media-planning/
• Economic Woes Mean TV Ad Pullback, Media Shift
– http://www.mediapost.com/publications/index.cfm?fa=Articles.showArticle&art_aid=74678
• A $65 Billion Advertising Shift?
– http:www.forbes.com/2009/07/21/advertising-marketing-business-media-stratigos.html
• The 2009 COLLOQUY Loyalty Marketing Census
– http://www.customerthink.com/paper/census_talk_the_big_sort_the_2009_colloquy_loyalty_marketi
ng_census_2009
• World Bank, World Development Indicators
– http:////www.google.com/publicdata?ds=wb
wdi&met=ny_gdp_mktp_cd&idim=country:USA&dl=en&hl=en&q=us+gdp
• Out-of-Home Marketing Association of Canada
– http://www.omaccanada.ca/en/research/facts_stats/media_trends/default.omac
• CDMC Media Digest 2009/2010
– http://www.cmdc.ca/init_digest.asp