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The Digital Reality

May 2008CRMHanoi

Software & Ad Market

2007 Online Ad Market = $34B6% of total Ad Market

2009 Online Ad Market = $52B8% of total Ad Market

Online Ads

2009: $52BOnline Ads

$34B

Sources: -Market Sizes: Microsoft & Universal McCann- Online Market Sizes: Oppenheimer & Co. Inc., June 2007 (sources include Universal McCann, Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers )

Slide 2 | © Microsoft Corporation 2007

Source: Source: PricewaterhouseCoopers (PwC) and Wilkofsky Gruen Associates, "Global Entertainment and Media Outlook: 2007-2011," June 20, 2007

2007 Internet Spend

Everything will be Digital

“Over time, all ad money will go through a digital ad platform.

All media goes digital; all advertising goes digital." Steve Ballmer, CEO Microsoft

“In 3-5 years all advertising will be interactive!”Kevin Roberts, Global CEO Saatchi & Saatchi


“Every physical process will be transformed to digital, mobile, virtual, personal!”Carly Fiorina, former Chairman & CEO of Hewlett-Packard

Source: Various, incl. AdAge Aug 2007

•A few examples of changing media


Future Shape of Advertising


The Consumer is in Control


The Consumer is in (Remote) Control


WE are

| © Microsoft Corporation 2007

Youth Media Consumption

Source: JP Young Adults 2002-05


Courtesy MTV

Circuits of Cool Microsoft/MTV Global Youth Study

2007

Internet – Most Loved Technology

What do you think of these?


Source: Microsoft-MTV Circuits of Cool Research 2007 conducted by OTX

Which Technologies Serve Which Roles?



Young People Identify Synergies as Well as Unique Features When Explaining the Role of Devices

1 Relaxes Relaxes Learn Things Fills Time Fills Time Feel

Connected Fills Time

2 Fills Time Fills Time Fills Time Feel Connected

Feel Connected

Helps Me Feel Safe Relaxes

3 Gives Me Energy

Learn Things Relaxes Relaxes Relaxes Sense of

FreedomProblem Solving

Most Common Role of Device



Internet is Everyday Life 61 Percent Agree That Going Online is One of the First Things They Do When

They Come Home From School Or Work

62%68% 62% 61%

68%69%69%70%

58% 58% 57%57%

53%56%56% 52%



Searches

Recommended by Sites I Trust

Friends via IM

Friends via E-mail

TV

Magazines

Newspapers

Radio

What is the Source of Their Links?Primarily Searches, Trusted Sites and Friends via IM and E-mail

79%

0% 10% 20% 30% 40% 50% 60% 70% 80%

49%

45%

43%

31%

27%

20%

13%

Source of Links



Number of Friends/Contacts in Digital Communication

94 Mobile Numbers

78 IM Buddy List

84 Contacts on Social Network



IM Buddies Global Average = 78

136 109115135

97 96 9396

86 8188



The Blurring of Communication and Entertainment – Communication Tools Are Used to Share Content

Gossip 62%

Films/Music/TV 52%

Links to Websites 50%

Music Files 49%

What’s on TV Right Now 47%

Clips/Photos I’ve Found 46%

Clips/Photos 44%

IM E-mail

Work/School 46%

Links to Web Sites 36%

Clips/Photos I’ve Found 30%

Clips/Photos 30%

Music Files 27%

Films/Music/TV 26%

What’s on TV Right Now 16%



A typical 21 year old...

Thanks to www.martinlindstrom.com

...has played 5.000 hours of video games


...exchanged 250.000 emails, instant and SMS messages...


...10.000 hours of mobile phone usage...


...and has spent 3.500 hours of time online...


Channels

1,7 5,4

Today, the gaming industry is double the

size of the movie industry.


Gamers mainly play during prime time TV. Next to gaming, the

internet is the preferred medium,

followed by television.


“Halo 3 generated $170 million in sales

“The incredibles” reeled in $70 million

(Both in one weekend) .


Everquest has 2.2 million members

(spending 28 hours per week).


Animal crossing gets 5.000 new

users a day.


86 million adults are currently playing computer games.

Source: Businessweek, October 2006 & Thanks to www.martinlindstrom.com

Life of a 12-24 Will never read a newspaper but attracted to some magazines

Will never own a land-line phone (and maybe not a watch)

Will not watch television on someone else’s schedule much longer

Trust unknown peers more than experts

For first time willing (2005) to pay for digital content. Never before.

Little interest in the source of information and most information aggregated.

Community at the center of Internet experience

Think not interested in advertising or affected by brand, but wrong.

Everything will move to mobile

Less interested in television than any generation before

Want to move content freely from platform to platform with no restrictions

Want to be heard (user generated)

Use IM. Think e-mail is for their parents

The Impact of the Internet--Year Six Report, 2007

Surveying the Digital Future—The World Internet Project USC Annenberg School--Center for the Digital Future

“Surveying the Digital Future” A Project of Center for the Digital Future-USC Annenberg School, 2007

lean back

lean forward

out & about

scheduled demand participate

tv

print search

pvr iptv

out of home mobile internet

events

social media

…and new hybrids emerging every month

gaming

podcasts

youtube

Video ipodMobile gamesradio

virtual world

cinema

QR codesPOS

newsletter

LBM

sms voting

blogs

rss

No more Mass Media?


Source: Europe: Screen Digest 2005, Japan: Wikipedia May 2006, US: US Federal Comms Commission, 2004

JapanJapan USUS FranceFrance GermanyGermanyUKUK

Number of TV ChannelsNumber of TV Channels

16861686

416416246246

9393

71097109

TV Channel ProliferationThe End of Mass Media

The End of Mass Media

Source: NAB (1965 – 1986); Nielsen (2000)

34%34%

24%24%

13%13%9%9%


Multi-tasking

Source: MindShare, November 2005


Print Global Trends

1994199419941994 1995199519951995 1996199619961996 1997199719971997 1998199819981998 1999199919991999 2000200020002000 2001200120012001 2002200220022002

100100100100105105105105110110110110115115115115120120120120125125125125130130130130135135135135140140140140

1993199319931993


1995

USD

bill

ions

con

stan

t pric

es19

95 U

SD b

illio

ns c

onst

ant p

rices


Source: eMarketer, JULY 12, 2007

-- Newspapers Losing Ad Dollars to Internet –

“Among 55 of the leading national US advertisers,

newspaper ad spending fell 14.3%

in 2006, while Internet ad spending grew 17.8%.”

Wachovia Equity Research Analysis,

“I don't know anybody under 30 who has ever looked at a

classified advertisement in a newspaper. With broadband

they do more and more transactions online.

Rupert Murdoch

World Internet Usage

418 million users in Asia

321 million users in Europe

19 million users in Middle East

18 million users in

Oceania/Australia

33 million users in Africa

109 million users in Latin

America/Caribbean

Over 1 billion users in Asia : 36%

232 million users in North

America

Source: www.internetworldstats.com, Jun 2007


Source: www.internetworldstats.com, July 2007


Exploding Online Users in APAC

Source: www.internetworldstats.com, Jun 2007


Exploding Online Users in APAC

Exploding Online Population in Asia



Exploding Online Penetration in Asia



Regional Reach (vs. TV)

Source: Synovate Young Asians 2005, Hong Kong, Singapore, Korea & Taiwan


Regional Reach (vs. Print)

Source: Synovate PAX 2005/06 (Q2 ’05-Q1 ’06)% Av. Issue Readership,


Singapore Reach (vs. Print)

Source: MCS Audited Publications as at October 2006 ; * Bulk Distribution MSN Internal Data Dec 06, audited by PriceWaterhouseCoopers


Source: Universal McCann, power to the People, global Sruvey, Sep 07


Asia’s active Blogsphere

Blogging in Asia

• Almost half of the online Asian community have a blog (45%)*

• Why do Asians blog?*– Keep in touch - 53 % blog to stay close with

friends and family– Self Expression - 50% started their blogs to voice

strongly held opinions

• 48% of young Asians say reading blogs is their favorite online activity **

*Blogging Asia: A Windows Live Report, 2006.**Synovate Young Asian Survey, 2006.


Blogging in Southeast Asia

•25% view other people's blog

• 17% comment on other's blog

• 11% have a own blog

• 8% uploaded video

• 1% or less of visitors to UGC sites upload content (2% Wikipedia; <1% You-Tube)

• 10% or less leave comments

• 90% are happy to sit back & be entertained by the storytellers


Source: MTV Music Matters Reseach, April 2007 (Synovate)

Who’s Online?

Source: PAX Q3,05-Q2,06 (10 markets ex Tokyo; among top Management Sample)


Average Hours of Media Exposure per Day - Asia

Source: Synovate Asia Bus Jun/Jul 2007, 15-64 years


Average Hours of Media Exposure per Day – Asia

- Aged 25-34 -




- Top/Middle Management -

Source: Synovate Asia Bus Jun/Jul 2007, Top/Middle Management



- University Degree and above -

Source: Synovate Asia Bus Jun/Jul 2007, University Degree and above


Internet is Top Information Source – Asia

- Medium best described by Statement (%) -



Internet is Helps People learn things – Asia




Internet is the Medium of Choice – Singapore- Medium best described by Statement (%) -



Internet is the most helpful Medium for Product/Service Information

Source: Synovate Young Asians Nov 2006


Media usage by time of day - Aged 15-64 source – Singapore

<----------- Work hours ---------->

%

6am - 9am 9am - Noon Noon - 2pm 2pm - 6pm 6pm - 9pm 9 pm -

MidnightMidnight -

6am

67

Time of the day using different media

• During work hours, the Internet is the most used media most of the time

• In the evenings, the Internet is the second most consumed media after TV

• Usage of the Internet is rather even throughout the day

Market: SingaporeUniverse (Sample): Total population aged 15-64 – 2,557,606 (1,028) Source: Synovate AsiaBUS Survey June 2007

Share of Advertising Expenditure - Singapore


Source: GroupM Forecasts, December 2006

2007 Internet Ad Spend (% of total)

2007 Internet Spend


But Consumers are still way ahead….


Growth rate: years to reach a quarter of the US population

Digital Dominance

PrintPrint

Digital TV

Analogue radio

Cinema

OutdoorMobile

Digital radio

Games

Internet

Analogue TV

Source: ISOBAR


Internet for B-2-B?


Online Marketing Basics

1. How to start the Planning Process?

2. Metrics to measure Success?

3. How to buy?




– It all starts with the right Brief

– Different Types of Campaigns

> Direct Response> Rich Media


Rich Media Ad Units generate higher CTRs

Source: DoubleClick, based on aggregated data from 136 large US DART for Advertiser clients, more than 30b impressions, Q1, 2006


Rich Media Ads – raise Purchase Intent

Source: Dynamic Logic MarketNorms, based on benchmark analysis, of 2,000-plus campaigns, Q1 2006


Rich Media Ads – trigger Action




– It all starts with the right Brief

– Different Types of Campaigns

> Direct Response> Online Ad Effectiveness Studies

> Branding> Online Ad Effectiveness Studies


MDAS Exposure increases Branding


Source: MSN, Online Ad Effectiveness – Aggregated European Average - 200 Euro Campaigns

Effective Media Channels for Building Brand Equity


Source: ANA Member Survey, Aug 2007

Online Branding Explosion


Rich Media in Southeast Asia


Rich Media – The Future




2. Metrics to measure Success

3. How to buy


Online Marketing Basics2. Metrics to measure Success– Direct Response> Ad Impressions> CPM (Cost Per Mille)

> Reach > Unique Users (Uus)> Cost per Eyeball

> Share of Voice (SOV)> Frequency> Filters> Ad Interaction (for Rich Media)> Replay Rate (RPR)> View Through Rate (VTR)

> Click-Through Rate (CTR)> Cost Per Click (CPC)

> Post Click/View Analysis> Download Rate / Viral Rate> Clickstream

> Conversion Rate (CVR)> Cost per Conversion> Sales Lift

> Customer Acquisition Cost (CAC)/Cost Per Acquisition (CPA)

> Customer Lifetime Value

In Addition:

– Branding> Brand Awareness> Message Association> Brand Recall> Brand Favourability> Purchase Intent

> Brand Exposure Duration (BXD)


Brand Exposure Duration

Challenge

• The new Marketing needs to not only to attract, but also engage & excite

• Reach & Frequency are not catering to measure the quality of Engagement & Excitement

Solution

• New metric: BXD

• BXD is the length of time an individual is exposed to a given advertisement

• BXD = Views × Percent of Segment Viewed × Segment Length


Brand Exposure Duration - Examples

• BMW advertising strategy, termed “BMW Minutes”, focuses on maximizing the exposure of the BMW brand to their target audience

BMW Films (6m downloads x 7min = 42m minutes)

• MTV Singapore: 2 TVCs (60sec) = US$0.40 Cost per Minute of BXD

• MDAS: Singaporeans spend combined an average of 7,784 years of BXD on our network Media-Plans & Post-Campaign Reports give directional Evidence for Planning




2. Metrics to measure Success

3. How to buy


3. Online Marketing Basics

3. How to buy – Rate Card– Types of Buys> CPM Buys> Position Buys> Daily, Weekly, Monthly

> Environments> Packages> Sponsorships

> Email / Alerts List Rentals

> Applications> Messenger Bot> Messenger Game

> Partner Modules

– Formats> GIF (animated)> JPG> Flash

> Animated> Interaction

> Rich Media> Video Ads> Expanding Banners

> HTML Emails> Themepacks

– Customized Solutions


Agenda

• What do people do online?

• Beyond the browser

Page 95 |

What do people do online?

• Creating

• Collaborating

• Playing

• Sharing:– Opinions– Life– Photos– Etc.

Page 96 |

People create

• Mentos in Coke

Page 97 |

People create

• Consumer following the trend

Page 98 |

People create

• Mentos jumping on the occasion:– Free media exposure of $10 Million– Sales +15%

Page 99 |

People create

• And Coca Cola was first skeptical...

"We would hope people wantto drink [Diet Coke] morethan try experiments with it.”

"craziness with Mentos doesn't fitwith the brand personality of Diet Coke.”

Coca-Cola spokeswoman

Page 100 |

People create

• But Coca Cola later followed the idea

Page 101 |

People create

• And even other brands try to get some attention

Page 102 |

People create

• A new book cover

Page 103 |

People create

• For some brands to win fame during Superbowl

Page 104 |

People create

• And for some brands – just to make fun of them.

Page 105 |

People create

• And sometimes just to send a message to the family

Page 106 |

People create

• Dove made a great viral film with very positive impact on Internet

Page 107 |

People create

• But than they tried to “engage” consumers with a very bad ad

Page 108 |

People create

• What can we learn from Dove’s mistakes:– You need to be more CREATIVE:

> you can’t force people to watch your commercial, they choose to do it– You need to respect the consumers:

> if you ask them to create something for you, reward them well– Don’t be afraid of conversation:

> people want to give their opinion, if you don’t give a chance, they will just get angrier

Page 109 |

People create

• Sometimes it’s not intended

Page 110 |

People create

Page 111 |

People create

Page 112 |

• People Play

Page 113 |

|

People play

People share opinion

Consumers are to post 2 billion comments on the Internet by the end of 2005.

Consumers are 50% more likely to be influenced by WOM recommendationsfrom their peers than by radio/TV ads.

“2005 Consumer-Generated Media and Engagement Study”, Intelliseek 2005

Page 116 |

People share opinion

• Sometimes opinion about brands...

Page 117 |

People share opinions

• + 5 million reviews

• + 10 million trips/week checked

Page 118 |

People sharing

• Brands asking to cast their vote

Page 119 |

People sharing their lives

• Every day 75.000 blogs created

• Blogs are becoming vlogs, photoblogs, podcasts,...

Page 120 |

People share

• And brands blog

Page 121 |

People share

• Brands blog to create hype...

Page 122 |

People share

• And whether you like it or not people talk about you!

Page 123 |

People share

• ...photos

• Already more than 320 million photos posted on flickr.com

Page 124 |

People share

• Engaging with brands

Page 125 |

People share

• Brands asking people to take photo’s and share

Page 126 |

People collaborate

• German Harry Potter fans didn’t wantto wait 4 months for the translationof latest edition.They translated it collaborativelyonline in 48 hours.

www.harry-auf-deutsch.de

Page 127 |

People collaborate

• Nike: longest ever chain of football players

Page 128 |

People collaborate

Page 129 |

|

People collaborate

People collaborate

|

People collaborate

In game advertising

2D dynamic imagery

Client logo

2D dynamic imagery

2D Imagery

Desperate Housewives Screenshots

Embed Transported 2 example

Full motion ads

Counting impressions

Elements of a remarkable online experiences

• Interactivity (Rich media experience)

• Communities / Word of mouth (Influencers to refer friends, pass along, )

• Engagement (Perform actions as well as browsing )

• Repeat visits ( Collect contact info )

THANK YOU

Geert Desager

Tel: +65 9654 6305

[email protected]


c r m day 2 online

Business

ceo microsoft

online ad market

courtesy mtv

hours of time

total ad market

youth media consumption

software ad market online

digital ad platform