bruce biegel january 8, 2015 senior managing...
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2015 Annual Outlook: What Financial Services Marketers Can Expect in Direct and Digital Marketing
Bruce Biegel Senior Managing Director
January 8, 2015
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2014 The Trends : What Happened, What Didn’t?
Global Perspective: Marketing and Advertising Around the World
Outlook 2015
2014 Recap: The Numbers
U.S. GDP started bad and wound up good—nasty weather led to some turbulence but then a nice ride almost to the end
Congress did not do bad things (or much of anything)—they were too busy playing politics
And there was something about more digital advertising…
The Year That Was…
Traditional Media Did Not Stagnate, But No Real Catalysts To Drive Growth
2014 U.S. “Measured Media” Spending: $124.4BB
Newspapers: $16.9BB
3.3%
-7.5%
Television: $68.5BB
Magazines: $15.1BB
Outdoor: $7.2BB
Radio: $15.9BB
Cinema: $0.7BB
Source: Winterberry Group analysis of multiple sourcesNote: Arrows reflect percentage change in spend, by channel, from 2013 levels
2.7%
1.2% 0.5%
2.2%
1.0%
2014 U.S. “Direct & Digital” Spending: $146.1BB
Source: Winterberry Group analysis of multiple sources Note: Arrows reflect percentage change in spend, by channel, from 2013 levels; Insert Media includes FSIs and statement inserts; Display and search reflect spending on desktop and mobile
Teleservices: $41.5BB
Direct Mail: $45.2BB
Search: $24.2BB 17.0%
6.2% Other: $3.4BB
9.0%
Digital Kept Taking Share (of New Money and Old), And Direct Outperformed Expectations
1.0%
Insert Media: $0.8BB
Display: $23.4BB 32.0%
Other Digital: $5.5BB
19.6%
(Includes Mobile & Desktop)
(Includes Mobile & Desktop) 2.7%
1.0% Email: $2.1BB 3.0%
In Digital, It Was About Social, Mobile, Video and… Data
27.0% Social Technology
and Services¹: $3.0BB
3.0% Lead Gen &
Affiliate Services:
$2.1BB
2014 U.S. Digital Advertising Spending: $55.2BB
Other Mobile2 : $.4BB
24.1%
Email: $2.1BB 3.0%
29.4%
Source: Winterberry Group analysis of multiple sources Note: Arrows reflect percentage change in spend, by channel, from 2013 levels ¹Excludes social display and social search spend 2Excludes mobile display and mobile search spend
Search: $24.2BB 17.0%
Display: $23.4BB 32.0%
(Includes Mobile & Desktop)
(Includes Mobile & Desktop)
2014 The Trends : What Happened, What Didn’t?
Global Perspective: Marketing and Advertising Around the World
Outlook 2015
2014 Recap: The Numbers
And they did—volumes were down, though not as much as predicted and spend was up due to higher postage and package costs
Retention mail continued its systemic shift to email
Yet direct mail kept its share in acquisition marketing: • It can be integrated with digital channels
(mobile, behavioral triggers) • It is targetable, predictable & measureable
True or False: Postal Hikes Threatened Mail
True Still in process
False
Programmatic display (banners, video, mobile, social) advertising exploded in 2014 • Rising from 24% of all digital
display spending ($4.24BB) to $10.06BB
• Captured 45% of all display spending
And along with the growth of programmatic exchange based buying came a significant increase in the use of digital data
True or False: Programmatic Approaches Continued To Expand
Source: eMarketer and Winterberry Group analysis
increase
True Still in process
False
Facebook and Twitter Custom and Tailored Audiences options leveraging CRM data to target (or suppress) engagement on social platforms report extremely high lift • Social targeting soars • Social attribution matters • Social IDs for audience
recognition gives social sites a targeting advantage (we know what you did last summer…)
True or False: Social Targeting with CRM Data Went Mainstream
True Still in process
False
Marketers focused on aggregating data assets in 2014, often investing in DMP technology. • DMP spending grows to ~$350M
from single digits 4 years ago • Expected to continue rising at a
CAGR of 13.9% through 2017 • Activating the data across
channels is still a challenge • Internet of Things (IoT) generates
more behavioral and interaction data than is actionable
True or False: Online and Offline Data Continued to Merge
Source: Winterberry Group analysis of various sources
True Still in process
False
Native advertising came on in full force in 2014, with spending reaching $3.2BB
Its about owned driving earned and leveraging paid to get out the word • Still early • Good content is hard • Deceptive advertising is still a
risk
True or False: Content Came of Age
True Still in process
False
Traditional campaign management platforms and email service providers rebranded as customer journey mapping platforms, and executed across mail, email and display environments
DSPs evolved to support marketing execution across media channels (display, social, search) and formats (mobile, video, native)
What’s next?
True or False: Campaign Management Platforms Evolved to Support Omnichannel
True Still in process
False
2,904 deals were reported in the marketing, media and tech segments in 2014, equaling more than $126.1BB in aggregate value
• Data—LiveRamp, BlueKai, DLX,
Adometry, Convertro • Agency—Sapient, non Publi-com • Ad Tech—X+1, BrightRoll,
Conversant • Alibaba
True or False: Consolidation, Significant IPOs and More Digital Stacks
True Still in process
False
Source: Petsky Prunier 2014 Marketing Deal Overview Release
2014 The Trends : What Happened, What Didn’t?
Global Perspective: Marketing and Advertising Around the World
Outlook 2015
2014 Recap: The Numbers
2014 The Trends : What Happened, What Didn’t?
Global Perspective: Marketing and Advertising Around the World
Outlook 2015
2014 Recap: The Numbers
All Signs Point to a Strong 2015…
• Economic expansion continues, GDP growth expected at 3% in 2015
• Job creation will continue to surge (unemployment to remain below 6%); wage increases to follow
• Low oil prices = more cash to spend
And, total ad spend will be higher than ever—
surpassing the pre-crash U.S. peak.
All Signs Point to a Strong 2015… But
There are several inhibitors, raising red flags:
• No Olympics, World Cup or any global sports events
• Off year for elections (Less DC entertainment)
• Financial market nervousness about interest rates, global growth, geo-political meltdown, deflation, etc.
• The Bull has had a long run (70+ months). Is it tired?
Email Rolls; Direct Mail Performs
• Email spend, slow but steady rise • Marketers continue adopting email-centric approach
to customer journey mapping, campaign management • Email list building and opt-in across devices increases
in priority (value) as they are the key to cross-channel audience recognition—and therefore targeting, attribution, etc.
• No postal rate increase in early 2015 but volumes rise, prompting slight increase in overall spend
• Acquisition mail remains strong (retention continues to decline)
• Digital to offline retargeting (sending direct mail as a result of digital action) increases
Direct mail
Search and Display Continue to Grow; New Spend Driven by Mobile Opportunities
• Search growth rates slow substantially though new spending is fueled by mobile
• Mobile, geo-location and tracking opportunities (beacons, etc.) continue to fuel new, real-time, relevant search marketing efforts Search
• Display (banners, video, social, mobile, etc.) spend to surpass search for first time
• Growth drivers: mobile and social targeting, video, native, programmatic—all similar to 2014—except maybe some TV share shift… Display
Measured Media Up Again—But Not in Line with GDP Growth
2015E U.S. “Measured Media” Spending: $126.3BB
Newspapers: $16.4BB
3.1%
-2.8%
Television: $70.6BB
Magazines: $15.0BB
Outdoor: $7.4BB
Radio: $16.2BB
Cinema: $0.7BB
Source: Winterberry Group analysis of multiple sourcesNote: Arrows reflect expected percentage change in spend, by channel, from 2014 levels
2.5%
1.53%
1.9%
-1.1%
1.0%
2015E U.S. “Direct & Digital” Spending: $156.8BB
Source: Winterberry Group analysis of multiple sources Note: Arrows reflect percentage change in spend, by channel, from 2014 levels; Insert Media includes FSIs and statement inserts; Display and search reflect spending on desktop and mobile
Teleservices: $42.6BB
Direct Mail: $45.7BB
Search: $26.9BB 11.1%
2.7% Other: $3.5BB
7.3%
Data-Driven Efforts Accelerate; Display UpBig—Driven By Programmatic Approaches
2.7%
Insert Media: $0.8BB
Display: $28.3BB 21.1%
Other Digital: $6.7BB
21.8%
(Includes Mobile & Desktop)
(Includes Mobile & Desktop) 1.0%
1.0% Email: $2.3BB 9.7%
Mobile and Social Fuel Most Digital Growth
31.5% Social Technology
and Services¹: $3.9BB
3.8% Lead Gen &
Affiliate Services:
$2.2BB
2015E U.S. Digital Advertising Spending: $64.2BB
Other Mobile2 : $.6BB
37.3%
Email: $2.3BB
16.3%
Source: Winterberry Group analysis of multiple sources Note: Arrows reflect expected percentage change in spend, by channel, from 2014 levels ¹Excludes social display and social search spend 2Excludes mobile display and mobile search spend
Search: $26.9BB 11.1%
Display: $28.3BB 21.1%
(Includes Mobile & Desktop)
(Includes Mobile & Desktop)
9.7%
2015 Trends: Is Social All That?
What we think is TRUE • Social sites and their apps rule • Social is delivered more often across more mobile devices • Social sites have tons of data (behavioral and other) • Social IDs eat cookies—social recognition and audience
extension a priority in 2015 BUT what else? • Transaction data is more predictive, so social commerce is an
imperative • Social effectiveness is…still to be proven (attribution required
across the journey) 2015 is the year that this gets sorted out
2015 Trends: It’s About The Beacons
It’s here now • It’s about in-store, location and recognition to drive
engagement/activation • It’s about behavioral data collection; not just targeting • It’s about leveraging data later, or “post beaconing” • 2014 tests lead to 2015 adoption: retail, finance, OOH; Macy’s,
Lord & Taylor, Barclays, Miami airport, entertainment centers (Levi’s Stadium, theaters)
However • It’s still early; roll-outs to accelerate; consumer adoption (opt-
in, new use cases, more retargeting) to grow significantly • It will be about direct sales/marketing before branding—will it
take share from promo spend or is it taking new money?
2015 Trends: Programmatic & Addressable TV
It’s all that • Set-top-box (STB) plus connected TV (apps, OTT) data
integrated with offline and online/behavioral data for deeper consumer insights
• Consistent messaging (offer management and targeting) across platforms (devices) possible at greater scale
• Audience buying—but not RTB—use cases take hold But, it’s not scalable yet • Buying processes still being sorted out; pricing still in process • Data availability and use case development not set However • Major brands in CPG, retail and finance are investing
2015 Trends: Big Data, the Internet of Things (IoT) and My Refrigerator is Talking to My Car!
¹A Strategist’s Guide to the Internet of Things, Frank Burkitt, 2014
It’s happening • 50 billion devices—sensors, beacons and computing
devices—will be connected to the Internet within 5 years¹ • The “Internet of Things” is reaching a tipping point in the
collection, management and deployment of data for marketing and sales uses cases
However • It’s not just about social • There’s still no easy way to parse (what to keep and what
to toss) that much data • We’re not quite there yet—but there’s no lack of money or
talent trying to solve the issues . Check back in 2016—on your wearable
2015 Trends: Campaign Orchestration / Execution Continues Omnichannel Expansion
¹A Strategist’s Guide to the Internet of Things, Frank Burkitt, 2014
What’s happened • It’s about touchpoint management (and attribution) • Customer journey maps are integrated into the campaign
platform across channels • Data architecture and integration are critical • Email is the preferred hub; mobile/social deployment is required • DMPs are an extension of traditional marketing databases for
enhanced data collection and audience insights What’s next • ESP platforms mature in 2015, offer enhanced channel support,
better integration of data, easier user interface • Verticals and segments (enterprise, mid-market and SMB) get
attention
2015 Trends: It’s the Year of Attribution and Measurement (or one of those years…) Today’s requirements • Accurate, data-driven, cross-environment measurement
and attribution, which can solve for “bad actors” and optimize spend—justifying investment with ROI
• Tools that are fast (real-time) and easy to implement (and don’t use budget already allocated)
Questions to be sorted • What channels should we move to? Not enough time (or
money) to test them all • How do we optimize? • Should I do this in-house? Or out? • What about fraud and bots and viewability (oh my!)
2015 Trends: Still More M&A Activity
What’s happened • 2014 saw tremendous deal volume and value • Ad tech and related IPOs—up then down What’s next • Big cliff of investible funds • Demand high for companies with first-party and compiled data • “Stacks” expand toward owning the entire audience insight,
management, engagement and measurement continuum; tech companies with early adoption will be integrated
• Companies that IPO’d in 2013/2014 use their cash and stock, become buyers to drive scale
• Valuation/multiples likely to remain high in 1H15
¹Pestky Prunier, Deal Notes, January 2015
2015 Trends in Fin Serv Marketing: Enter the “Marketing Compliance Office” What’s happening • Regulatory environment is tough and becoming
increasingly complex • Marketing and compliance are integrating
• Compliance requires view into operations, supply chain and marketing tech functions; marketing requires understanding of regulations on products, compliance management systems
What’s next • Emergence of the “Marketing Compliance Office” • Teams staffed with marketing professionals cross-
trained in compliance-focused product development and innovation
2015 Trends in Fin Serv Marketing: Enhanced Targeting for Regulated Data Online What’s happening • Facebook Custom Audiences and other solutions are
enabling individual targeting—to known users—online • Digital marketing offers lower-cost alternatives to
traditional media (vs. mass media and direct mail) while still offering compelling creative and rich formats
What’s next • Financial services marketers begin leveraging digital
pre-screening for lending, custom digital collateral and personalized, interactive experiences—delivering the reliability of offline with the flexibility and efficiency of online
Bruce A. Biegel Senior Managing Director [email protected] 212-842-6030
www.winterberrygroup.com @WinterberryGrp
Questions?