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Society of Digital Agencies (SoDA) 2011 Digital Marketing Outlook

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Over 600 marketers, agencies, technologists and digital industry insiders have weighed in. Leading digital agencies have provided thought-provoking articles and case studies. And a 14-person panel comprised of guest contributors and notable CMO advisors have provided their insights. The result: an invaluable planning resource for marketers and agencies in 2011.

The 2011 Digital Marketing Outlook (DMO) study, conducted by SoDA and its research partner, AnswerLab, revealed significant information regarding budgets, hiring strategies and what marketers value the most. For example the study discovered that 80% of marketers plan to increase the volume of digital projects in 2011 with 43% planning to decrease traditional paid media investments.

Over 600 marketers, agencies, technologists and digital industry insiders have weighed in. Leading digital agencies have provided thought-provoking articles and case studies. And a 14-person panel comprised of guest contributors and notable CMO advisors have provided their insights. The result: an invaluable planning resource for marketers and agencies in 2011.

The 2011 Digital Marketing Outlook (DMO) study, conducted by SoDA and its research partner, AnswerLab, revealed significant information regarding budgets, hiring strategies and what marketers value the most. For example the study discovered that 80% of marketers plan to increase the volume of digital projects in 2011 with 43% planning to decrease traditional paid media investments.

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Society of Digital Agencies (SoDA) 2011 Digital Marketing Outlook

  1. 1. 2011 digital marketing outlook 1
  2. 2. foreword By: Angele Beausoleil DMO Editor-in-Chief VP Strategy and Innovation, Dare SoDA’s 2011 Digital Marketing Outlook report embraces intersections, from where marketing meets technology to how CMOs and agencies are ushering in the era of integrated marketing communications. This year’s report is a collection of insights and story and knowledge sharing from agency, marketing, and academic thought leaders from around the globe. We hope it will inspire you, validate your thinking, and fuel action. Across six sections, our editors offer up key insights, visuals, and case studies with wow factor, designed to make you a rockstar at your next management presentation. Our interview-style “SoDA Chats” explore why brands can’t keep their promise, and how to observe humans in their natural, albeit virtual, habitats. And we look at why courage and innovation are required to transform a city. What’s on the CMO mind and in their budgets for 2011? From our extensive Digital Marketing Outlook (DMO) Survey conducted by our research partner AnswerLab, we find digital marketing at the crossroads of today’s consumers and brands. In an ironic twist, senior marketing executives now turn to the web to find information about trends, their consumers, and even their own brands. Radically transformed by technology, today’s consumer has a voracious appetite for information. Our Digital Consumer section shows the benefits of listening to and engaging online audiences and understanding their comfort with digital intimacy. We also revisit Marshall McLuhan’s prophetic prose and provide a job description for the digital CMO. Google TV is among the game changers redefining brand experiences. Our Modern Brand section explores what we can learn from agile development processes and what the new agency model really looks like. We discuss why sharing is key to the modern brand and how experiential marketing is driven by art and story. The Emerging Technology & Trends section provides an insider’s view of how close we are to a Minority Report world, where wearable digital technology is not just a fashion trend, and where location-based social networks (LoSos) intersect our physical and virtual identities. We make the argument that 2011 is the year for mobile and that Google Instant is the answer to SEO. As the Social Media Revolution unfolds, there are winners and losers. Mashing up peer-based marketing with games is a killer combo, but Twitter and Foursquare are headed for the virtual graveyard (alongside eBay). We also explore how the Internet imitates real life and why rewards are vital, and we’ve thrown in a few valuable tips on marketing in Facebook. Travel with us to Japan, China, Brazil—and back to North America—in our Innovation, Culture & Courage section. We make the case for embracing failure and investing in data visualization, while preparing you to become the ideal client of the future. And we look at how one courageous city’s decision to ban advertising has paid off in increased prosperity. Enjoy! 2
  3. 3. contents Foreword 2 by Angele Beausoleil, DMO Editor-in Chief and DMO Section Editor; VP Strategy and Innovation, Dare DMO Team & Guest Contributors 7 DMO Advisory Board 10 1 Digital Marketing Outlook Survey 14 Digital Marketing Outlook Survey DMO Key Findings 20 Contains Tables/Charts, Analysis of Survey Results, and Participant Quotes DMO Detailed Findings 42 Contains Tables/Charts and Detailed Analysis of Survey Results 2 Digital in the Physical World of Retail 71 by Guthrie Dolin, DMO Section Editor; Principal, Digital Consumer Director of Strategy, Odopod Pervasive Customer Experience and How Digitally 74 Focused CMOs Are Leading Our Revolution by Justin Wilden, Solutions Director, IE Media An Evolution in Car Sales: How Online Configuration 78 Technology May Change the Face of Dealerships as We Know Them by DJ Edgerton, CEO, Zemoga Designing Digital Intimacy 80 by Dr. Daniel Coffeen, Brand and Digital Strategist Digital Consumers Aren’t Just Regular Consumers 83 with Keyboards by Brian Chiger, Digital Strategist, AgencyNet Case Study: General Pants Co. Online Store 85 and Campaigns by Stephen Foxworthy, Strategy Director, Reactive SoDA Chat with Robert Kozinets, Professor of Marketing 87 at York University’s Schulich School of Business in Toronto, Canada
  4. 4. 3 Brands @ Play: Mastering the Art & Science of 92 Engagement Design Modern Brand by Sean MacPhedran, DMO Section Editor; Director, Creative Strategy, Fuel Industries Not Your Brand, Theirs! 95 by Andy Williams, Strategist, Resn The Revolution Will Be Televised: Google TV, the Death of 97 Digital as We Know It, and the Rebirth of the Big Idea by Joshua Baze, Director, Insights & Planning, Colossal Squid Industries and Matt Ballek, Digital Strategist/Optimization Specialist, Colossal Squid Industries Do You Really Need a Digital Agency? 101 by Tony Quin, CEO and Founder, IQ Why Modern Brands Need Artful Content Strategy to 103 Thrive Online by Ami Walsh, Senior Content Strategist, Enlighten The Future of Online Retail 105 by Stephen Foxworthy, Strategy Director, Reactive Case Study: Smoking Not Our Future’s—Kanvas 107 by Andy Williams, Strategist, Resn Case Study: El Tiempo Celebrates Its Past by Embracing 109 the Future by Alejandro Gomez, President, Zemoga SoDA Chat with Dr. Ginger Grant, Managing Partner of Creativity in 111 Business Canada Inc. and Adjunct Professor—Innovation at Mount Royal University 4 From Owned Media to Earned Media: Working with 117 the Crowd Social Media by Sara Williams, DMO Section Editor; Head of Content, Made by Many The Next Big Trend in Social Media Is Social Rewards 119 by Jennifer Van Grove, Social Media Reporter, Mashable Why Twitter and Foursquare Are Dying 121 by Andreas Roell, Chairman and CEO, Geary Group Pulling the Trigger to Purchase: Insights on Marketing 123 to Avid Gamers by Ken Martin, Chief Creative Officer, BLITZ Online and Offline, It’s All Real-Life Communication 127 by Irina Sheveleva, Editor, Grape Focusing Your Facebook Strategy: 10 Tips Toward 129 Better Status Updates by Victor Piñeiro, Strategist, Big Spaceship Case Study: Thierry Mugler/Starvibes 132 by Benjamin Laugel, CEO/Creative Director, Soleil Noir Case Study: Emma Watson Digital Strategy 134 by Rob Salmon, Director of Communications, Great Fridays Case Study: GuitarHero.com: Global Franchise Hub 136 and Community by Ken Martin, Chief Creative Officer, BLITZ
  5. 5. Case Study: Chrome Fastball—Race Across the Internet 138 by Petter Westlund, Creative Director, B-Reel Case Study: SAP Friend Network Optimizer 140 by Sandhya Suryam, Client Partner, Dare Case Study: It Isn’t Lonely at the Top: What the Most 142 “Liked” Brands Are Doing on Facebook by Victor Piñeiro, Strategist, Big Spaceship 5 Next Generation Mobile Applications 147 Emerging Technology by Charles Duncan Jr., DMO Section Editor; Director of Technology, IQ & Trends Mobile Is a New Medium, Not Just an Extension of 149 Your Website by Brian Jeremy, Director of Technology, Exopolis Local, Social, and Brand Transcendence 151 by Richard Cruz, Digital Strategist, AgencyNet Mobile Apps for the B2B Marketer: It’s Not Just Fun and Games 153 by Kirsten Corbell, Account Director, Strategy & Planning Group, Fullhouse Interactive Wearable Digital Signage—The Modern Day Sandwich Board 155 by Jim Vaughn, Digital Strategy and Partner Development Manager, Fullhouse Interactive The Marketing Implications of Google Instant 157 by Geary Interactive How Lean and Agile Processes Can Deliver Killer Results 159 by Stuart Eccles, Founding Partner, Made by Many Mobile “Super App” Experiences: From Brand Extension 161 to Engaging Customers by Tyler Lessard, Vice President, Global Alliances and Developer Relations, Research in Motion (RIM) Case Study: The Wilderness Downtown 164 by Nicole Muniz, Producer, B-Reel Case Study: SoBe Reskin Yourself 166 by Anna Edwards, Associate Copywriter, Firstborn Case Study: DonQ Rum 168 by Guthrie Dolin, DMO Section Editor; Principal, Director of Strategy, Odopod 6 Innovate or Perish 172 Innovation, Culture by Angele Beausoleil, DMO Editor-in-Chief and DMO Section Editor; & Courage VP Strategy and Innovation, Dare China: An Exploration of Digital Diversity 174 by Mark St. Andrew, Editor, Cream Seeing Rich Visualization through the Data Forest 176 by Alejandro Gomez, President, Zemoga Client of the Future: In Six Easy Lessons 178 by Andre Matarazzo, CCO, Gringo Adopting the Kaizen Approach to Marketing 182 by Stephen Foxworthy, Strategy Director, Reactive Innovation from the Inside Out 184 by Dave Snyder, Associate Creative Director, Firstborn Case Study: Shrek 4 Happy Meal 187 by Glenn Bakie, Director, Client Services, Fuel Industries
  6. 6. Case Study: The Pepsi Refresh Project 189 by Kate Watts, Group Engagement Director, HUGE SoDA Chat with Marc Gobé, President, Emotional Branding LLC 191 Closing Digital Manifest Destiny; The Time for Building 193 a New Marketing Infrastructure Is Here by Chad Ciesil, DMO Chairperson, SoDA Board of Directors; CEO, Gravity Federation Sponsors 195 The Society of Digital Agencies 198 SoDA Memebership 2011 199
  7. 7. DMO Team & guest contributors DMO/Content Development Chad Ciesil DMO Chairperson, SoDA Board of Directors; CEO, Gravity Federation As founder of Gravity Federation, Chad (@chadciesil) leads an alliance of creators from a range of disciplines to fundamentally realign clients’ infrastructures, communication channels, content and brand relationships to navigate the new frontier after the digital revolution. Prior to Gravity Federation, Chad spent seven years at Whittmanhart serving as president and a leader in strategy, marketing and client services to build the agency’s national reputation as well as drive significant growth across multiple offices. Through forums like SoDA, Chad has had great fun being a speaker, writer and contributor to the national dialogue around the marketing revolution driven by digital. Currently, he resides in Charlottesville, Virginia, with his wife, son and two dogs who resist the pull of gravity on a daily basis. Angele Beausoleil DMO Editor-in-Chief and DMO Section Editor Innovation, Culture & Courage; VP Strategy and Innovation, Dare Angele Beausoleil is a graduate of Canada’s first multimedia degree program from Ryerson University and a self-described “tradigital” marketer. A multi-award-winning designer, marketer, and entrepreneur, Angele wrote a design blog, developed the world’s first Internet hockey pool, worked with Disney Interactive on preschool products, and launched an animated mobile series in Japan—all before the dawn of the new millennium. She has the pleasure of working with clients like McDonald’s, Gap Inc., Best Buy/Future Shop, SAP Business Objects, Bell, Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games (VANOC), and Sony Ericsson. 7
  8. 8. Guthrie Dolin DMO Digital Consumer Section Editor; Principal, Director of Strategy, Odopod Guthrie Dolin (@gee3) is a seasoned creative executive, an entrepreneur, and a connector of dots. He has founded two award-winning agencies and partnered to launch numerous enterprises. Currently, Guthrie is a Principal, and Director of Brand and Strategy at Odopod, a full-service digital agency that develops innovative experiences for top consumer brands. Sean MacPhedran DMO Modern Brand Section Editor; Director, Creative Strategy, Fuel Industries Sean MacPhedran is Director of Creative Strategy at Fuel Industries, and he has created engagement programs for brands including MTV, Entourage, Family Guy, Microsoft, and McDonald’s. Prior to Fuel, Sean lived in a motel in the Mojave Desert, launching people into space. Sara Williams DMO Social Media Section Editor; Head of Content, Made by Many A lover of words and a teller of stories, Sara Williams worked as a journalist, copywriter, and blogger before joining Made by Many to help develop the agency’s content offering. Sara writes a lot about international issues and the social development/social media crossover: how emerging technologies and corresponding cultural shifts can create lasting social change. Charles Duncan Jr. DMO Emerging Technology & Trends Section Editor; Director of Technology, IQ As Director of Technology, Charles Duncan, Jr. (@sirchauncy) leads the strategic direction of IQ’s Development and Analytics services. Charles has over 13 years of experience leading the development of award-winning work across the globe for brands such as Nike, Xbox, and Gap. His passion with the intersection between technology and creativity has resulted in innovative experiences across mobile, desktop, and digital signage. As a thought-leader, Charles has spoken at industry conferences such as Adobe Max and Microsoft Mix. Guest Contributors Dr. Daniel Coffeen Brand and Digital Strategist Daniel Coffeen has a PhD in Rhetoric from UC Berkeley. He served as adjunct faculty at UC Berkeley and the San Francisco Art Institute for over 10 years teaching courses in critical theory. He has written extensively about the relationship between new media and cinema, and he blogs about brand and digital issues. In addition, Daniel was a founder of the multi-award-winning ArtandCulture.com. He works as a brand and digital strategist in San Francisco. Robert Kozinets Professor of Marketing at York University Robert Kozinets is a Professor of Marketing at York University’s Schulich School of Business in Toronto, Canada. In the past, Robert was faculty at Northwestern University’s Kellogg School of Management and the University of Wisconsin-Madison’s School of Business. An anthropologist by training, Robert also has extensive consulting experience. 8
  9. 9. Dr. Ginger Grant Managing Partner of Creativity in Business Canada Inc. and Adjunct Professor—Innovation at Mount Royal University Ginger Grant is the Managing Partner of Creativity in Business Canada Inc. and an Adjunct Professor—Innovation at Mount Royal University. She is the only Canadian in the teacher/trainer group for the famed Stanford Business School “Creativity in Business” program. Author of Re-Visioning the Way We Work, her latest book Finding Your Creative Core was published in April 2009. Jennifer Van Grove Social Media Reporter, Mashable Jennifer Van Grove is a Social Media Reporter with Mashable. She covers web news, start-ups, industry trends, and she writes about the implications of social sites for users and businesses. Jennifer has been featured in the San Diego Union Tribune and San Diego Magazine, participated as a guest expert on news programs such as BBC America and CNN Live, and is frequently quoted by local and national media outlets for tech-related news stories. Mark St. Andrew Editor, Cream Mark St. Andrew is the Editor and Curator of Cream (www.creamglobal.com), an online marketing resource that houses the best examples of marcomms innovation across different media channels around the world. Marc Gobé President, Emotional Branding LLC Designer, photographer, filmmaker, respected author, and sought-after public speaker, Marc Gobé focuses on connecting brands emotionally with people in a positive way. As President of Emotional Branding LLC, an experimental think tank, Marc and his daughter Gwenaelle Gobé, Creative Director, offer insight into the trends that move. Research Partner Design Agency answerlab.com struckaxiom.com Production SoDA Staff Steve Wages, Executive Director Paul Lewis, Director of Operations Kendyll Picard, Communications Coordinator societyofdigitalagencies.org Natalie Certo, Marketing Liaison 9
  10. 10. DMO Advisory Board It is an honor to have such a distinguished group as part of this year’s report. We thank them for their valuable contributions, support, and insights. DMO Advisory Board Members Ann Lewnes Senior Vice President, Global Marketing Adobe Systems Incorporated Jeff Jarrett Global Director, Digital Marketing Kimberly-Clark Jim Mollica Vice President, Digital Marketing and Creative MTVN, Kids and Family Kelly Semrau Senior Vice President, Global Corporate Affairs, Communications and Sustainability S.C. Johnson & Son Victor Mehren Senior Marketing Director Wm Wrigley Jr. Company Patrice Dermody Vice President, Media, Digital and Social Networking Sears Holdings Corporation Jon Vanhala Senior Vice President, Digital & New Business Development Island Def Jam Music Group Scott McLaren Global Digital Marketing, CRM and Web Operations General Motors 10
  11. 11. Bios DMO Advisory Board Ann Lewnes Senior Vice President, Global Marketing Adobe Systems Incorporated As Senior Vice President of Global Marketing, Ann Lewnes is responsible for Adobe’s corporate brand and integrated marketing efforts worldwide. She drives the company’s corporate positioning, branding and identity, public relations, marketing campaigns, field marketing, and education segment marketing to ensure strong connections with customers and constituents. Prior to joining Adobe in November 2006, Ann served as Vice President of Sales and Marketing at Intel Corporation. Ann holds a bachelor’s degree in international relations and journalism from Lehigh University. She serves on the boards of the Advertising Council and the Adobe Foundation. Adobe revolutionizes how the world engages with ideas and information—anytime, anywhere, and through any medium. For more information, visit www.adobe.com. Jeff Jarrett Global Director, Digital Marketing Kimberly-Clark As Global Director of Digital Marketing for Kimberly-Clark, Jeff Jarrett oversees the Digital Center of Excellence, responsible for driving digital strategy, thought leadership, and best practices across the enterprise. In his role, Jeff works closely with Kimberly-Clark brands and business units globally to drive mission critical digital initiatives and create best-in-class commercial programs. Known for his expertise in digital marketing, CRM, and strategic planning, Jeff brings 20 years of experience building brands and customer relationships for some of the most successful companies in the world. His work experience includes leadership roles at several large agency networks in North America and Europe including Sapient Interactive, Grey, Leo Burnett, and Euro, where he led the digital and integrated marketing practice. 11
  12. 12. Jim Mollica Vice President, Digital Marketing and Creative MTVN, Kids and Family Jim Mollica serves as Vice President of Digital Marketing and Creative for MTV Networks Kids and Family Group where his responsibilities include extending Nickelodeon’s entertainment experiences to all digital platforms and creating innovative interactions for the company and its advertisers. Prior to his work at MTVN, Jim was the Global Director of New Media for the Walt Disney Company. He has held a variety of marketing and advertising management positions with Nissan North America/Infiniti and Internet start-ups. In addition to his client-side work, Jim has managed agency relationships with AOL, Heinz, and PNC. Kelly Semrau Senior Vice President, Global Corporate Affairs, Communication and Sustainability S.C. Johnson & Son Kelly Semrau is Senior Vice President of Global Corporate Affairs, Communication and Sustainability for SC Johnson, bringing to the role more than 20 years of experience. Kelly leads all global corporate affairs for the company including public affairs, media relations, government relations, community leadership and philanthropy, sustainability, and NGO engagement. In addition, Kelly also served as Director of Public Affairs and Press Secretary to the U.S. Secretary of Agriculture during President George H. Bush’s administration, as well as Director of Public Affairs and Press Secretary to the U.S. Trade Representative during President Ronald Reagan’s administration. She was also Press Secretary to Congressman Joe McDade of Pennsylvania. Kelly earned her bachelor’s degree in journalism from Bradley University. Victor Mehren Senior Marketing Director Wm Wrigley Jr. Company As a Senior Marketing Director at Wrigley, Victor Mehren oversees all aspects of marketing on the Orbit, Eclipse, Juicy Fruit, Doublemint, and Big Red Brands. He has also held various consumer marketing and sales leadership positions during his nine years at Wrigley including overseeing the launch of the 5 Brand and Director of National Customer Marketing. Prior to joining Wrigley, Victor had over nine years of CPG experience at Imagicast, Inc., PowerBar, and E&J Gallo in sales and marketing positions. He has an MBA from the University of Chicago Booth School of Business and a BS from Eastern Illinois University. 12
  13. 13. Patrice (Pat) Dermody Vice President, Media Digital and Social Networking Sears Holdings Corporation Having begun her career at DDB Worldwide, Pat Dermody worked her way up through the traditional media track working on beverages, packaged goods, and quick service restaurants. Pat spent time in New York doing program development and global syndication working for clients such as Xerox, and then she shifted to account management running the Hasbro business. After a short while at the Leo Burnett Company, Pat brought both her expertise and passion to Sears Holdings. Having successfully made the transition from agency to client, as Vice President of Media, Digital and Social Networking, Pat pushes her agencies to do their best work, and she tries hard to make sure that the best people always want to work on her business. Jon Vanhala Senior Vice President, Digital & New Business Development Island Def Jam Music Group Jon Vanhala is Senior Vice President of Digital and New Business Development at Island Def Jam Music Group (IDJ) directing all digital strategy, e-commerce, digital marketing, and new business initiatives. IDJ is one of the world’s largest record companies with a rich and diverse roster of artists that spans from Kanye West, Justin Bieber, and Rihanna to Bon Jovi, The Killers, Mariah Carey, and many others. IDJ is a wholly owned business unit of Universal Music Group (UMG). A former working musician, songwriter, and bandleader, Jon attended Columbia College in Chicago for Arts Entertainment Media Management and Millikin University in Decatur for Music Performance. He served on the Advisory Board of the IAJE (International Association For Jazz Education) from 1997 to 2006, is active in arts education, and is on the Advisory Board of Blue Haze, a San Francisco-based app development shop. Scott McLaren Global Digital Marketing, CRM and Web Operations General Motors Scott McLaren is a graduate from The University of Michigan. He began his career with General Motors in 1988 and has spent the majority of his career with Saturn where he developed a passion for the customer and marketing. He believes strongly in a brand delivering on it’s brand promise to a consumer and is a big believer in utilizing digital marketing to do so. He has a passion for measurable media and the convergence taking place within current marketing and advertising. He has served in several roles within Saturn and GM including vehicle launch roles, traditional advertising roles, media roles and digital marketing. His current role is Director of Global Digital Marketing, CRM and Web Operations, General Motors. 13
  14. 14. Digital Marketing Outlook Survey 14
  15. 15. DMO survey Introduction Respondents Key Findings Detailed Findings • 2011 Digital Plans • Measurement + Performance • Tools + Technologies • Getting Smart 15
  16. 16. introduction ABOUT SODA AND ANSWERLAB COLLABORATION ON THE 2011 DMO The Society of Digital Agencies (SoDA) selected AnswerLab to be its trusted research partner to deliver insights from the hundreds of brand marketers, agencies, and technologists surveyed for the 2011 Digital Marketing Outlook (DMO). SoDA required a third-party firm known for research integrity, deep experience with executive-level surveys, and rigorous reporting practices. The SoDA and AnswerLab teams collaborated closely to craft a questionnaire that would shed light on digital marketers’ priorities for 2011. SoDA provided access to executives from major global brands, representatives from traditional and digital agencies, and digital vendors and service providers who participated in the survey. AnswerLab executed the survey online and delivered all of the research findings that support the 2011 DMO. ABOUT ANSWERLAB AnswerLab delivers customer insights that help the world’s leading brands build outstanding digital products and services. The company focuses exclusively on user experience research to understand what people see, do, think, and feel when using websites, mobile applications, and other digital products. AnswerLab’s clients depend on its recommendations about product concepts, features, design, and messaging to create more engaging customer experiences that drive results. Global market leaders select AnswerLab as their user experience research partner, including Amazon.com, PayPal, Walmart, Honda, ING DIRECT, FedEx, Genentech, eBay, Salesforce.com, ESPN, Amgen, Intuit, and Harley Davidson. For more information about AnswerLab, please visit www.answerlab.com. ABOUT THE 2011 DIGITAL MARKETING OUTLOOK SURVEY AnswerLab conducted an online survey among 667 participants representing 199 brand marketers, 235 agency representatives, and 233 technologists and other roles in the digital space. Survey participants were recruited from an online business panel and through SoDA outreach to its member agencies, partners, blogs, promotions, and other media. The survey was conducted from late August through mid-October 2010. 16
  17. 17. Respondents Respondent Overview Organization Type 3% 9% Which of the following best describes the organization you work for? 10% 35% Respondents were split roughly evenly between 12% the three target groups: agencies, brand marketers, and technologists/other roles. 15 % % 15 Organization Type (n=667) 35% Advertising agency 10% Other 15% B2C brand marketing 9% Freelance or consultant 15% B2B brand marketing 3% Digital publisher 12% Vendor/service provider 3% 3% 9% 9% Respondent Overview 10% 0 1 % 35%5% 3 Brand Marketers3% 12%2% 1 11% 16 15 15 % % % Which of the following best describes your organization’s 2marketing efforts? 6% % 18 % 15 15 Which of the following best describes your title? 17% 7% - Two-thirds of brand marketer respondents had titles in the range of CMO to director. 1 - Brand marketer respondents come from companies with9an average marketing budget of more than $800k. % 7% 1 5% 9% 10% 6% 9% 3% 3% 11% 16 16 11% % % % % % % 18 18 26 26 17% 7%7% 9%9% 17% 19 19 % % 7%7% 14 14 % % 5% 5% 9% 9% 10% 10% 6% 9% 6% 9% Title (n=199) 28 Marketing Budget (n=199) % 26% C-level executive 6% Director of marketing 18% Less than $100,000 7% $3,000,001 - $5M 19% Manager of marketing 5% Director of channel 9% $101,000 - $250,000 43% 7% $5,000,001 - $7.5M services and operations 3% Individual contributor 14% $250,001 - $750,000 16% $7,500,001 - $1B 19% VP of marketing 1% Manager of market research 9% $750,001 - $1.5M 2% More than $1B 11% Other 9% $1,500,001 - $3M 10% VP of channel % 28 17 2 28%8% 43% % 43
  18. 18. Respondents Brand Marketers Type Of Marketing 3% 3% 11% 11% 16 16 % % % % % % 18 18 26 26 Which of the following ranges includes your 7% 28% 7% 9%9% 17% 17% organization’s annual budget for marketing activities 19 19 43% (in US dollars)? % % 7%7% 14 14 % % 5% 5% 9% 9% 10% 10% 6% 6% 9% 9% While the largest portion of brand marketer % respondents market a mix of products and 28 services, more than one-quarter market only products or only services. Type of Marketing (n=199) 43% We market a mix of products and services 28% We primarily market products 28% We primarily market services 1% Other 28%8% 2 43% % 43 Agencies 3% 7% % 16 6% % % 17 Type of Agency and Annual Revenue % 28 28 Which of the following best describes21%type of advertising agency that you work for? the 63 23% Which of the following ranges includes your organization’s % annual revenues (in US dollars)? 17% 3% 3% 7% 7% % % 16 16 6% 6% 17 17 % % 21% 21% 63 63 23% % 23 26%6% 2 % % 17% 17% 5% 6% Type of Agency (n=235) 11% Annual Revenue (n=235) 63% Digital or interactive agency 17% Less than $1M 6% $100M - $499.9M 21% Traditional agency 26% $1M - $4,999,999 3% $500M - $1B 16% Other 5% 17% $5M - $9,999,999 63% 1% More than $1B 23% $10M 1 $99.9M - 7% I’m not sure 5% 6% 5% 6% 18 11%1% 1
  19. 19. Respondents Global Business Reach By Continent 5% 6% From which continent do the majority of your business 11% revenues come? While nearly two-thirds (63%) of respondents’ 15% 63% businesses focus on North America, 6% have revenues coming from multiple continents. Revenue Location 63% North America 6% Global* 15% Europe 5% South America 11% Asia-Pacific 1% Africa *Less than half of our revenues come from any one continent. Global Business Reach By Segment From which continent do the majority of your business revenues come? % 54 Brand Marketers Agencies Technologists/Other Revenue Location (n=199) (n=235) (n=233) North America 66% 15% 60% 62% Europe 12% 15% 18% Asia-Pacific 9% 4% 13% 12% 26% South America 2% 9% 2% Africa 1% 1% 1% Global* 11% 3% 5% *Less than half of our revenues come from any one continent. 30 % 46% 19 3% % 21
  20. 20. DMO Key Findings key finding Changing Consumer Behavior Drives Marketers to Increase Digital Investment 1 20
  21. 21. 6% 11% DMO Key Findings % 6 Marketers Plan to Increase Digital Work 15 3% Plans for Digital Projects: 2011 Compared to 2010 are you projecting an increase or decrease in the amount of digital projects your organization will undertake in 2011? - In total, 80% of marketers plan to increase the volume of digital projects in 2011. - Only 5% are planning a decrease in their digital work in the next year. % 54 15% 4% 26% Plans for Digital Projects: 2011 54% Slight increase 4% Slight decrease 26% Significant increase 1% Significant decrease 15% Same amount “Nearly every metric we use to measure online behavior—things like time spent online, money spent online, etc.—is projected 30 to grow at a tremendous rate. And as more people take their traditionally PC-bound experiences mobile via smartphones and % tablets, these numbers will grow even faster. “Digital” is where the eyeballs and the money are headed. Adobe made a right- hand turn decision several years ago to double-down on digital. Nearly 75% of our marketing is now digital.” – Ann Lewnes, Senior Vice President, Global Marketing Adobe Systems Incorporated 46% 3% “If built and used correctly a sound digital strategy allows a marketer to “fish where the fish are”—it is truly the only medium that allows one to map marketing to consumer behavior in a measurable way. It can constantly be tested and refined all the time. % If used and monitored for efficiencies in targeting, digital production, etc. a digital strategy/work should increase year over year 21 in double-digit percentages with no incremental investment.” – Scott McLaren, Global Digital Marketing, CRM and Web Operations, General Motors 21
  22. 22. DMO Key Findings Consumer Behavior Drives Changing Investment What is the primary reason that your marketing investments are changing? (select all that apply) Reasons for Brand Marketers Agencies Technologists/Other Changing Investment Changing consumer behavior 57% 77% 77% 64% 64% Competitive forces 29% 29% 28% Organizational efficiencies 24% 20% 25% Top-down directive 17% 9% 12% None of the above* 6% 6% 10% Other 2% 5% 4% I’m not sure 1% 3% 5% *Our marketing investments are not changing. “Considering the overwhelming data that supports consumers engaging with brands more than ever through digital touchpoints, it is very surprising to see 69% of marketers suggesting a similar or small increase to their digital marketing efforts. Does this reflect the need to further validate spending through better digital ROI models, media buying agency influence or simply disinterest or fear of changing their own marketing planning habits? I certainly hope it’s a desire to explore new ROI models—the ones that truly match communication program and/or marketing campaign objectives to outcomes. If it’s media agency influence or fear of change, we as digital and integrated agencies must continue to invest heavily in educating our clients on more effective strategies to reach and engage their consumers.” – Angele Beausoleil, DMO Editor-in-Chief, VP Strategy and Innovation, Dare 22
  23. 23. DMO Key Findings key finding Digital Investment Planned in Six Areas 2 23
  24. 24. DMO Key Findings Digital Investment Plans Trend toward Creating Experiences In which of the following, if any, does your organization plan to invest in 2011? (select all that apply) - Marketers plan to invest resources in, on average, 5.5 digital technologies/tools in 2011. - Top areas include social networks/applications, brand experiences, and digital infrastructure—blogger outreach and games are lower priorities. Planned Investments Brand Marketers Agencies Technologists/Other in Digital Social networks/applications 69% 77% 76% Digital brand experiences 67% 71% 58% Digital Infrastructure 70% 61% 64% Mobile 51% 70% 56% Search optimization 60% 59% 57% Email marketing 70% 47% 60% Digital advertising 61% 56% 52% Viral/social media campaigns 43% 52% 46% Blogger outreach 35% 44% 40% Games 18% 35% 26% Other 2% 4% 6% None of the above 2% 3% 3% “As the pace of digital change continues to increase, digital infrastructure in all forms (IT, organizational structure, culture, process, talent, etc) will become even more critical. It will either provide a path to or barrier from opportunity in the days to come. For those not looking at infrastructure holistically today, those barriers will grow and the opportunity to leverage the other items on this list will be limited with every day that passes. The time for real change in your marketing organization’s foundation is here.” – Chad Ciesil, DMO Chairperson, SoDA Board of Directors; CEO, Gravity Federation “We have made some major investments over the past years in digital infrastructure. Our company is all about digital brand experiences so we invested in this area early. We are also seeing great returns from increased investments in email marketing and digital advertising. Most recently, we are concentrating on building out our customer database, SEO and upgrading our social media infrastructure. We will continue to invest in optimizing our website/e-commerce infrastructure as well as our social networking infrastructure.” – Ann Lewnes, Senior Vice President, Global Marketing Adobe Systems Incorporated 24
  25. 25. DMO Key Findings “Connecting all the data together in a relevant way tells the story of the “path of the consumer.” I would also argue that because digital is so measurable and accountable analyzing the data can many times get over complicated. It is really important to identify the desired business objectives, the key indicators of success along the path of the consumer and measure those. Far too often a team focuses on several different “cuts” of the data looking for insight when it should only be 5 or 6 relevant things.” – Scott McLaren, Global Digital Marketing, CRM and Web Operations, General Motors 25
  26. 26. DMO Key Findings key finding Marketers’ Own Corporate Sites Still Considered Most Important Digital Media Channel—Social Is 3 a Close Second 26
  27. 27. DMO Key Findings Marketers Focus on Own Site Still a First Priority, but Social Is a Close Second Which of the following digital media channels, if any, will you or your organization use in 2011? (select all that apply) - Overall, 95% of respondents plan to use some form of social media in 2011. Planned Investments Brand Marketers Agencies Technologists/Other in Digital Facebook 76% 96% 87% Twitter 69% 89% 79% Corporate website/microsite 80% 81% 74% Consumer website/microsite 63% 81% 66% Blogs 57% 75% 65% Mobile application 46% 72% 52% Mobile web 42% 73% 55% Other social networking site 29% 40% 36% Digital screen/environment 21% 44% 32% Foursquare 17% 49% 28% Other location-based service 9% 35% 18% MySpace 5% 9% 6% Orkut 3% 7% 2% Other 4% 2% 4% None of the above 1% 0% 0% “Our website is still our most important digital media channel, with over 300 million unique visitors per month. Study after study shows it is the number one place our customers consult before purchase. That’s why our digital strategy (email, display, etc.) to date has hinged upon bringing our customers to our site. In a couple of years, more people will be using mobile devices to access the Web than PCs. We recently optimized Adobe.com for mobile devices and are starting to experiment more with mobile media. Social has become incredibly important to us. You need to go where people are as well as bring them to you and so we’ve made some major investments in social media. Measuring all this has become quite challenging but we have done some fantastic work in the past year to better understand the effectiveness of each element of our mix, using both econometric modeling as well as customer tracking studies.” – Ann Lewnes, Senior Vice President, Global Marketing Adobe Systems Incorporated 27
  28. 28. DMO Key Findings “It’s really easy for marketers to get lost in the marketing world fishbowl we all live in. In our world mobile is the talk of the town. But in the real world brands are still worrying about stuff that we consider old news, like their corporate website and getting a page up on Facebook. Most brand executives are still trying to get buy-in for the shift to digital, let alone trying to get dollars for mobile apps, coupons, tag readers and the like. The truth is that a brand’s dot.com still remains a very important piece of the digital puzzle and many of those sites are just not ready for prime-time. However, just getting the funding to move a corporate or consumer dot.com into the 21st century can require a corporate act of congress so we have to be sensitive to their struggles. The bottom line is that brands need to get the basics in place before they dive into all the new opportunities. Job one is developing a strategy that prioritizes which tactics in the digital toolbox to invest in, when. It always amazes me that despite the complexity of connecting with the digital consumer throughout the sales cycle, brands often have not done the strategy work that sets out the roadmap.” – Tony Quin, SoDA Board Member, CEO, IQ “Integration is critical—across channels as well as between online and offline. Just as critical is the way it is done. Assets should be leveraged, the message needs to be the same, yet the consumer experience and objective needs to be tailored to the particular medium. This is achieved best when online and offline are considered and detailed out in a singular creative brief for a messaging campaign. I am also not surprised mobile applications/web rank 6th. I don’t believe a true paradigm shift has occurred that frames mobile as an experience on any “un-tethered” device and continues to be thought of as simply cell phones and smart phones. The same strong discipline needs to be applied to this area as is currently applied to corporate sites.” – Scott McLaren, Global Digital Marketing, CRM and Web Operations, General Motors 28
  29. 29. DMO Key Findings key finding 67% of Marketers Are 4 Increasing Investment to Focus on Unpaid/Earned Media 29
  30. 30. % 54 DMO Key Findings 15% Marketers Plan to Increase Investment in Unpaid/Earned Media 4% 26% Change in Investments: Unpaid/Earned Media How do you expect your investments to change this year in regard to unpaid/earned media? 30 % 46% 3% % 21 Change in Investments: Unpaid/Earned Media 46% Somewhat increasing 30% Staying the same 21% Significantly increasing 3% Somewhat decreasing 1% Significantly decreasing “Unpaid media provides real opportunities to impact how consumers experience a brand. The upside stems from the role of the brand messenger, and its potential to drive awareness. Consumers are more likely to tune into messages from friends, 36% family, colleagues, or social networks. Moreover, they may be more likely to trust these messengers than the brand itself. The downside is the potential loss of control over the brand’s message and its volume. Overexposure, particularly of off- 62% brand messages, is a risk to consider.” – Amy Buckner, Managing Partner and Founder, AnswerLab “Over the past few years we have experimented and learned a lot. While not everything has been a success, along the way we have produced some hard working branded content for Orbit and Juicy Fruit that has driven consumer engagement levels with these brands. We have learned that generating earned media comes from the right combination of strategic clarity, consistency of brand story and highly disruptive creative. But if you can only have one, it’s always about the creative. In other mediums, average copy can at least deliver average returns...in the digital world, the creative has to work harder to rise above the clutter and gain traction.” – Victor Mehren, Sr. Marketing Director, Wm Wrigley Jr. Company 30
  31. 31. DMO Key Findings Planned Investment Changes: By Segment How do you expect your investments to change in 2011? - Plans to increase investment in paid digital media is consistent across respondents, though technologists/other roles lag slightly behind agencies and brand marketers. - While the majority of respondents plan to maintain levels of spending on paid traditional media, a steadfast 14% of brand marketers and agencies plan increased investment. - Agencies lead the charge toward growing investment for unpaid/earned media: 76% plan an increase. Planned Investment: Brand Marketers Agencies Technologists/Other Paid Digital Media Significantly decreasing 4% 2% 3% Somewhat decreasing 4% 3% 6% Staying the same 34% 30% 42% Somewhat increasing 50% 52% 41% Significantly increasing 8% 14% 9% Planned Investment: Brand Marketers Agencies Technologists/Other Paid Traditional Media Significantly decreasing 11% 8% 15% Somewhat decreasing 32% 29% 19% Staying the same 44% 50% 58% Somewhat increasing 12% 12% 6% Significantly increasing 2% 2% 1% Planned Investment: Brand Marketers Agencies Technologists/Other Unpaid/Earned Media Significantly decreasing 2% 0% 1% Somewhat decreasing 3% 1% 4% Staying the same 34% 23% 32% Somewhat increasing 46% 52% 41% Significantly increasing 15% 24% 22% 31
  32. 32. DMO Key Findings key finding Hiring for Social Media Marketing Professionals Tops the List 5 32
  33. 33. DMO Key Findings Social Media Strategy Is the HOT Skill Set Marketers Are Hiring This Year Which of the following digital marketing skill sets, if any, will you look to acquire in 2011? (select all that apply) Brand Marketers Agencies Technologists/Other Headcount Growth: Hire Social media marketing 31% 50% 34% Website design & dev. 18% 52% 32% Research & strategic planning 27% 42% 32% Digital advertising creative dev. 16% 55% 29% Social community site mgmt. 19% 49% 32% Digital brand mgmt./measurement 24% 50% 23% Social media monitoring 22% 39% 22% Blog writing & editing 19% 36% 25% Mobile application dev. 13% 37% 25% Video production 11% 24% 14% Website hosting & maintenance 10% 13% 11% Other 3% 4% 3% None of the above 2% 2% 1% “Brands and agencies are working increasingly hard at knitting new campaigns, products and services into an already crowded digital ecosystem. We’re seeing a lot of agencies create roles around social media and propagation. By far, the greatest successes come when the social media role is integrated into the creative, planning and production processes. Those charged with social media activity need to really know the thing they are promoting and the audience they are conversing with. Social media isn’t a fix that can be developed in isolation and bolted on. It’s a process that involves finding and priming an audience and using its needs and wants to shape a better campaign, product or service.” – Sara Williams, DMO Section Editor, Head of Content, Made by Many “It is critical for companies to understand the growth and development of social media and its impact on business and consumers. As a family company committed to our consumer families we must be forward thinking and understand how consumers function. Armed with that knowledge, marketing and communication efforts can be channeled directly to the consumer giving them the messages and information they need.” – Kelly M. Semrau, Senior Vice President of Global Corporate Affairs, Communication & Sustainability at SC Johnson. 33
  34. 34. DMO Key Findings 30 % Social Media 46% Strategy Is the HOT Skill Set Marketers Are Hiring This Year 3% Dedicated Social Media Resource 21 % Does your organization have a role or resource dedicated to social media? (n=634)* *Question triggered only for respondents who indicated that their organizations plan to use social media tools/technologies in 2011. 36% 62% Dedicated Social Media Resource 62% Yes 36% No 2% I’m not sure “We view social media as vital and a highly effective channel to foster conversation with our customers, communities and other key audiences. We use social media to both get the word out about company and product news and as an important listening post for customer feedback and behavior. We actively cultivate and participate in the passionate social communities which have developed around our products and brands. A dedicated social media team, along with individual Adobe employees (from C-level executives to employees in the field) contribute to our social communities with fresh content and news on a regular basis. According to Mashable, Adobe is one of the top 4 employers for social media professionals, something we’re pretty proud of. Adobe leverages both “established” social networks such as Twitter and Facebook—and actively experiments with up-and-coming social networks like Gowalla—to reach a “social universe” of more than 1.5 million members. % With the integration of Omniture technology, we’re also able to look beyond just social audience size—followers, friends, 54 updates and tweets—to measure the impact our social media activities have on concrete business goals including product trials, customer sentiment and revenue. Using social media in marketing is not just a box you check to say “we did that.” It’s a vital and valuable tool in digital marketing.” 15% – Ann Lewnes, Senior Vice President, Global Marketing, Adobe Systems Incorporated “Social has caused a true convergence of PR, marketing and customer messaging. The marketing aspect needs to be well 4% thought out and objective based. The PR aspect of it has to be in house and “owned.” It is the true voice of the brand and 26% consumer brand promise.” – Scott McLaren, Global Digital Marketing, CRM and Web Operations, General Motors 34
  35. 35. DMO Key Findings key finding 6 Marketers Embrace Importance of “Engagement” Metrics over Traditional Site Metrics 35
  36. 36. DMO Key Findings Marketers Determine Performance Using Several Metrics Key Metrics for Determining Performance Please rate the importance of the following advertising performance metrics for you (or your clients): *Metrics reflect respondent ratings of 6 or 7 on a 1-7 scale where 7 = Extremely important. - Brand and product awareness, leads, and web analytics—”engagement” metrics—have surpassed traditional metrics like page views and CPM for measuring performance. - On average, marketers rated 3.6 metrics as important for evaluating ad performance. Key Metrics for Determining Performance from All Survey Respondents Branding or product awareness 61% Lead generation activity 60% Web analytics 58% Time on site 44% Immediate ROI calculated from tracked sales 51% Click-through rate 38% Page views 34% CPM 20% “Marketers are becoming sophisticated analysts and are demanding more from the quantifiable metrics that the web has offered for the past 16 years. Incorporating the rich value of qualitative data is critical to establishing and further understanding the new Return on Engagement (ROE) model. An effective success measurement of any and all web-based activities should combine the quantifiable data of # of unique visitors, duration, pages, etc with behaviourial data such as most pages viewed, downloads, comments, etc.” – Angele Beausoleil, DMO Editor-in-Chief, VP Strategy and Innovation, Dare “We are big into measurement. We are fortunate to be able to have access to all the latest online marketing optimization technology because of our acquisition of Omniture last year. And, boy, do we take advantage of that. One of the biggest metrics we track and emphasize is product trials driven through Adobe.com and our other sites. We know that there’s a significant positive correlation between product trial and product purchase on our sites. So we put quite a bit of effort into reducing barriers to trial and driving trial-to-purchase. We are also very focused on site-to-store conversion, i.e., how many people who come to our site actually purchase something. I’m a bit of a nut when it comes to measurement and dashboarding. I just think it’s amazing what we can do today!” – Ann Lewnes, Senior Vice President, Global Marketing, Adobe Systems Incorporated “The most important site performance metrics to me are time on the site, path of consumer on the site, links in and out of the site and conversions/sales. They truly tell the engagement or online relationship you have or have not created with the customer. It is a measure of whether an online strategy/content/tools is delivering relevant messages and appropriate consumer interactions.” – Scott McLaren, Global Digital Marketing, CRM and Web Operations, General Motors 36
  37. 37. DMO Key Findings key finding Influence of Blogs 7 Growing for Understanding Target Behavior 37
  38. 38. DMO Key Findings For Customer Intelligence, In-House Research Still Reigns How do you learn about your customers’ online profiles and behavior? (select all that apply) While marketers continue to look to in-house research for information about customers’ online profiles and behavior, blogs are growing in influence, especially at agencies. Sources for Customer Brand Marketers Agencies Technologists/Other Behavior In-house research division 52% 53% 44% Blogs 32% 54% 45% Industry analyst report 31% 49% 33% Digital research company 30% 44% 36% Digital mktg. agency partner 38% 37% 31% Traditional research company 30% 29% 16% Online panel 20% 26% 12% Traditional ad agency partner 20% 19% 14% Research community 16% 19% 11% Other 3% 5% 8% None of the above 8% 4% 12% “Blogs have grown up from being a basic self-publishing tool into a critical business communications vehicle. Blogs truly offer an open line of communication with your existing and potential customers as well as employees, and offer you 24/7 access to consumer research. Unlike other marketing communication methods (like e-newsletters, banner ads or your corporate website), blogs allow your customers to have a voice: the comment feature allows them to learn more about your business, ask questions, share reviews and interact with each other. They are the hard working “underdog” for building brand ambassadors from within and outside your organization. So, what is your blog strategy for 2011?” – Angele Beausoleil, DMO Editor-in-Chief, VP Strategy and Innovation, Dare 38
  39. 39. DMO Key Findings key finding Digital Agencies Too Low on List as Trends Source for Marketers 8 39
  40. 40. DMO Key Findings Traditional Print Media and Blogs Inform Marketers How do you learn about emerging digital marketing technology and trends? (select all that apply) Marketers rely on a number of sources for emerging technologies and trends for digital: industry publications and marketing blogs are the most popular. Sources for Emerging Brand Marketers Agencies Technologists/Other Technologies and Trends Industry publications 69% 83% 77% Marketing blogs 61% 83% 76% Marketing peers 56% 65% 64% Conferences 58% 60% 56% Industry analysts reports 50% 62% 56% Digital agency partners 42% 63% 43% Top-selling books 24% 24% 24% Other 4% 5% 5% None of the above 3% 0% 1% “Marketers looking to their digital agency partners last as compared other channels is an indication of the shear amount of emerging technologies being created as well as the diversity of sources creating them. Marketers no longer need to wait on their agency to get an education on what’s new and possible. It’s not enough for agencies to simply be knowledgeable of the trends, they need to strive to be owners of innovation while developing solutions for their client’s business problems. As a partner, agencies should think of themselves as trusted thought-leaders whom marketers trust for strategic information. Agencies need multi-tiered communication strategies for sharing work and ideas. These strategies need to range from daily messaging through social channels as well as messaging through quarterly newsletters and annual marketing projections for the next year. Unless agencies can play a role in the sharing of new ideas they can’t be considered for the execution of ideas.” – Charles Duncan, DMO Section Editor, Director of Technology, IQ “For digital agency partners to move up this list they need to gain a stronger voice/direct relationship with the marketer/client. I believe these numbers may be skewed a bit as many of the creative ideas relative to emerging trends and technology are still born out of a creative idea and in many cases presented by a traditional creative agency of record. Often times without the digital agency getting a voice in the process. It is my belief that true digital agencies start with the business objective, then the best technology or medium to achieve that objective and then finally the creative presentation. This is a shift to the traditional creative process. The more prominence or further “up-stream” a digital agency can be included will increase the ability to inform and enhance a creative idea. I also think digital agencies should push their ability to facilitate and generate dialogue within their clients’ organizations through a formalized blog or ideation process that pushes thinking relative to digital marketing and its ability to map to consumer behavior.” – Scott McLaren, Global Digital Marketing, CRM and Web Operations, General Motors 40
  41. 41. Additional Insight Jeff Jarrett, Global Director Digital Marketing, Kimberly-Clark The survey provides a great lens into strategic priorities across the digital landscape. Several themes jump out: 1. Increasing investments in social and earned media are forcing new planning models and organizational structures to manage these investments properly. Clients are experimenting with various models but haven’t yet cracked the code. 2. Digital measurement, especially in social media and mobile, will drive future investment shifts. While engagement metrics are getting better, it is still an area ripe for development. 3. Clients are increasingly hungry for digital thought leadership—this is both an opportunity and a warning to digital agencies to start leading strategically, or clients will find it elsewhere. Patrice Dermody, Vice President, Media, Digital and Social Networking, Sears Holdings Corporation The forces at work in the digital marketplace are the result of shifting consumer dynamics, a still fragile economy, and the movement of both traditional and digital agencies to a different center. The same is true for marketers—some of whom have moved from being wary of digital, to knowing they need to do something in the space, to understanding that digital technology is changing almost everything that they have ever known about how to reach and motivate their target prospects. It is no surprise that the majority of marketers are planning to increase their investment in digital, especially as they get more and more comfortable with online video. What marketers haven’t admitted to yet, is that they still harbor hopes of digital and social being able to lower the cost of their overall marketing investments. This is the reason why 67% plan to increase their investment in the social and unpaid channels. Veteran marketers, held hostage for years by the broadcast content creators, hold on to the hope that digital media (not necessarily digital technology) can be a more efficient way to target their best customers, finally reducing their dependence on mass media. 41
  42. 42. Detailed Findings detailed 201 findings 1 42
  43. 43. Detailed Findings Digital as a Portion of Marketing 3% 7% % 16 6% 17 % Budget: By Segment 21% 3% 6 23% 26% What percentage of your overall 2010 marketing budget is invested in digital channels? 17% - Fully 47% of agencies spend at least half of their budget on digital. - For brand marketers, the proportion is significantly less—only 26% of respondents in this group spend half or more of their marketing budget on digital. Digital as a Portion of Brand Marketers Agencies Technologists/Other Marketing Budget 5% 0 – 9% 20% 12% 12% 6% 10 – 19% 20% 16% 11 12% % 20 – 29% 16% 11% 11% 15% 63% 30 – 39% 10% 10% 8% 40 – 49% 8% 4% 6% 50 – 59% 5% 7% 7% 60% or more 21% 40% 44% Marketers Plan To Increase Digital Work % Plans for Digital 54 Projects: 2011 15% 4% Compared to 2010, are you projecting an increase or 26% decrease in the amount of digital projects your organization will undertake in 2011? Plans for Digital Projects: 2011 - In total, 80% of marketers plan to increase the volume 54% Slight increase 4% Slight decrease of digital projects in 2011. 26% Significant increase 1% Significant decrease - Only 5% are planning a decrease in their digital work 15% Same amount in the next year. 30 % 43 46% 3%
  44. 44. Detailed Findings Planned Change in Digital: By Segment Compared to 2010, are you projecting an increase or decrease in the amount of digital projects your organization will undertake in 2011? Fully 86% of agencies, 83% of technologists/other roles, and 71% of brand marketers are looking to grow their number of digital projects for 2011. Technologists/ Digital as a Portion of Marketing Budget Brand Marketers Agencies Other We are projecting a significant decrease 3% 0% 0% We are projecting a slight decrease 7% 3% 3% We are projecting roughly the same amount 20% 10% 15% We are projecting a slight increase 55% 58% 49% We are projecting a significant increase 16% 28% 34% 44
  45. 45. Detailed Findings % % 54 54 Digital Headcount Growth Will Continue through 2011 15% 15% In 2010, how has your organization’s headcount changed in the areas that support digital marketing 4% 4% 26% 26% and/or communications initiatives? Thinking about 2011, how do you expect your organization’s headcount to change in the areas that support digital marketing and/or communications initiatives? 8% 8% % % 30 30 34% 34% 57% 57% % % 68 68 Headcount: 2010 Plans for Headcount: 2011 57% Increase 68% Increase 34% Stayed the same 30% Stayed the same 8% Decrease 1% Decrease % % 26 26 % % 72 72 45
  46. 46. Detailed Findings Changes in Digital Headcount: By Segment In 2010, how has your organization’s headcount changed in the areas that support digital marketing and/or communications initiatives? Thinking about 2011, how do you expect your organization’s headcount to change in the areas that support digital marketing and/or communications initiatives? Agencies, in particular, saw headcount supporting digital efforts grow in 2010 and expect the growth to continue. Changes in Brand Marketers Agencies Technologists/Other Headcount: 2010 Decreased 11% 6% 8% Stayed the same 47% 19% 39% Increased 42% 75% 53% Changes in Brand Marketers Agencies Technologists/Other Headcount: 2011 Plans Decreased 4% 0% 0% Stayed the same 43% 13% 37% Increased 54% 86% 63% 46
  47. 47. Detailed Findings Social Media Strategy Is the HOT Skill Set Marketers Are Hiring This Year Which of the following digital marketing skill sets, if any, will you look to acquire in 2011? (select all that apply) Headcount Growth: Hire Brand Marketers Agencies Technologists/Other Social media marketing 31% 50% 34% Website design & dev. 18% 52% 32% Research & strategic planning 27% 42% 32% Digital advertising creative dev. 16% 55% 29% Social community site mgmt. 19% 49% 32% Digital brand mgmt./measurement 24% 50% 23% Social media monitoring 22% 39% 22% Blog writing & editing 19% 36% 25% Mobile application dev. 13% 37% 25% Video production 11% 24% 14% Website hosting & maintenance 10% 13% 11% Other 3% 4% 3% None of the above 2% 2% 1% 47
  48. 48. Detailed Findings Marketers Plan to Outsource Mobile Resources Which of the following digital marketing skill sets, if any, will you look to acquire in 2011? Rather than hire full-time headcount, marketers will look outside of their organizations for mobile–focused, video production, and site hosting roles. Headcount Growth: Outsource Brand Marketers Agencies Technologists/Other Mobile application dev. 20% 38% 26% Video production 21% 37% 26% Website hosting & maintenance 18% 38% 24% Social media monitoring 15% 23% 18% Blog writing & editing 16% 22% 15% Website design & development 21% 15% 13% Digital adv. creative dev. 19% 7% 13% Social community site mgmt. 8% 14% 13% Digital brand mgmt./measurement 9% 9% 14% Social media marketing 10% 7% 10% Research & strategic planning 7% 6% 9% Other 0% 2% 2% None of the above 1% 1% 1% 48

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