Embed Size (px)
Citation preview
1
Craig Dempster
Addressability At Scale
2
Agenda
Introduction to Merkle
Digital marketing trends
Competitive advantage through addressability at scale
Digital addressability
The digital platforms
Competitive advantage and the new competencies needed
3
Company Overview
• Bronze Stevie Award “Business to Business Marketing
Campaign of the Year- Business Services” „13
• Ad Age A-List: “Agency to Watch in 2012”
• Largest privately-held agency in U.S., Ad Age ‟12
• 6th Largest CRM/Direct Marketing Agency, Ad Age ‟12
• Recognized by SmartCEO Magazine as a Future 50
Company „11
• NCDM Awards ‟04, ‟05, ‟06, ‟09, ‟10, „11
• Recognized by Forrester ‟03, „06, ‟07 &‟10
• Multiple MAXI Award Winner ‟10 ‟11 „13
• Multiple DMA Innovation Award Winner „10
Distinctive experience Extraordinary expertise
Sustained 25% growth since 1989 Awarded and recognized
Re
ve
nu
e in
mill
ion
s
• Privately held by current management since 1988
• 150+ world class clients
• Manage over 140 marketing databases
• Manage over 3.7 billion 1st party customer records
• Inform over $10 billion marketing decisions annually
• 2,000+ Employees
• 250+ advanced degreed statisticians
• 300+ dedicated digital media professionals
• 650+ marketing technology professionals
• 100+ creative professionals
$148
$180
$211 $223
$255
$303 $320
$365
$50
$100
$150
$200
$250
$300
$350
$400
2006 2007 2008 2009 2010 2011 2012 2013E
4
Our Clients
5
We are a Customer Relationship Marketing Agency
POS Phone Site Mobile TV Radio Display Print Social Mail Email Search
Integrating diverse capabilities
Through optimizing customer touchpoints
Life sciences Nonprofit | | |
Increased customer value Improved customer experience Improved marketing ROI | |
CRM Outcomes
Integrating diverse capabilities
Management
consulting
Marketing
technology
Experience creation &
digital media
Data &
analytics | | |
Utilizing industry experience to drive strategy
Delivered across multiple engagement types Consulting | Marketing services | Agency of record
Life sciences Retail banking &
Consumer finance
Travel Media &
entertainment High-tech Nonprofit
Insurance & wealth
management | | | | | Retail |
6
We have a services organization that
optimizes Audience performance
We develop, integrate and manage
Audience Management systems.
Consulting
Analytics
Marketing
Technology Provider
Connected Recognition (cR)
Marketing Database
Attribution & Insights
Interactive Marketing Hub
Decision Management
Digital
Agency
Search
Digital Media
Social
Site & Mobile
Creative & UX
Technology Agency
Architecture Assessments
Roadmap & Blueprints
Digital Readiness UX Audits
Attribution
Media Mix
Targeting
Our engagement
7
Agenda
Introduction to Merkle
Digital marketing trends
Competitive advantage through addressability at scale
Digital addressability
The digital platforms
Competitive advantage and the new competencies needed
8
Setting some context
Today
Focus on the “what” as in…
Tomorrow
Focus on the “how” as in…
How do you
capitalize on the
opportunity?
What’s going on and
how is it creating an
opportunity?
9
The Always
Addressable
Customer
And marketers are
responding by
And consumers
are changing
Mass consumer to
consumer engagement
Changing consumer
purchase behaviors
Shift in media
consumption patterns
Focusing on big data and
its ability to drive value
Embracing digital media
and channels to enhance
customer experience
Putting the customer at the
center of business strategy
Social networks
at scale
Macro-trends are changing the landscape
The Age of the (Addressable) Consumer
Mobility at
scale
Addressability at
scale
10
Migration of the consumer from offline to digital
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
7.0——
6.5 —
6.0——
5.5 —
5.0——
4.5 —
4.0——
3.5 —
3.0——
2.5 —
2.0——
1.5 —
1.0 ——
0.5 —
2008-2013
Social media 0.1 to 1.1
Digital content 1.7 to 2.4
Consumer hours spent
per day on non-digital channels are decreasing,
while use of digital channels
are steadily increasing
Hours
2008-2013
TV 3.8 to 3.1
Radio 1.6 to 1.4
Print 0.7 to 0.4
11
Advertising Budgets Are Shifting
Mobile Advertising
Increase Stay about the same Decrease Don‟t use
69% 20%
70% 29%
64% 24%
23% 50%
19% 48%
13% 20%
Social Media Advertising
Video Advertising
Rich Media Advertising
Standard Display Advertising
Connected TV / IPTV
Survey on the amount marketers will increase/decrease
their budgeting in these forms of advertisement
12
Social and Mobile trends – Always connected
13
The Rapidly Growing Digital Advertising Market
Current and projected market share from 2011-2015
Internet
Outdoor
Cinema
Radio
Television
Magazines
Newspapers
7.3%
2011 2015
20.3% 15.9%
9.4%
7.3%
39.9%
40.0%
7.1%
6.6%
6.7%
6.3%
16.1%
23.4%
0.5
% 0.6%
14
Digitization is creating massive amounts of data being used in
digital marketing
“There were 5 exabytes (5 million terabytes) of information created
between the dawn of civilization through 2003 but that much
information is now created every 2 days, and the pace is increasing.”
- Eric Schmidt
247 billion e-mail messages
are sent each day
29.8 billion ads served by
Google each day
30 billion pieces of content
shared on
Facebook every
day
400,000 bid requests per
second processed
on the AppNexus
ad platform
Merkle manages over
3 petabytes of marketing data,
increasing by approximately
10TB/month”
Storage for one client includes
8,824,526,619 page views (to
be exact) and over 24
terabytes in a single database
15
Programmatic media has already taken over 50% share in the
US digital media market with RTB the fastest growing area
76%
62%
47% 36%
27% 21% 17%
13%
18%
25%
29%
32% 32%
31%
11% 19%
28% 34%
41% 47% 52%
100%
80%
60%
40%
20%
0% 2011 2012 2013 2014 2015 2016 2017
US: Programmatic Share (% of Digital media transactions)
RTB Non-RTB Non-Programmatic Source: Magna Global
Overall Digital Media Marketplace - $61B by 2017
$8B in RTB media by 2017 growing at 59% CAGR
$8B in “Custom Audience” by 2017
Over half of all digital media today is bought programmatically
16
Agenda
Introduction to Merkle
Digital marketing trends
Competitive advantage through addressability at scale
Digital addressability
The digital platforms
Competitive advantage and the new competencies needed
17
The opportunity, framework and competencies
Identity
Management
Addressability
Optimization
Audience
Management
Platforms
Utilization Targeting Personalization Organization Measurement Tech Stack
The CCRM Framework
The New Platform Marketer Competencies
Addressability at Scale
Media Planning Channel Planning
Targeting & Personalization
Enterprise segmentation, which includes value and lifecycle
dimensions, forms the foundation of CCF
What data,
systems, tools
and
technologies
will be
necessary?
How do we
organize and
what
capabilities
and business
processes
will be
necessary?
Infr
astr
uctu
re
Measurement & Attribution
Budget Allocation
Experience Delivery
Financial Management
Customer Strategy
Integrated targeting and customization across media and channels
are optimized at the segment and individual level
Measurement and attribution at the segment level then drives
macro-level media and channel budgeting allocation
This creates a complete optimized customer experience that drives
increased LTV, efficiencies and shareholder value
Segmentation
Value Planning O
rganiz
atio
n
18
Addressability at scale (AAS)
Addressability At Scale Addressability at scale (AAS) is the application of data and
analytics to drive to highly efficient individual level targeting and
personalization at massive scale.
Enterprises able to exploit AAS create sustainable competitive
advantage that can lead to market leading financial
performance
Targeting and
personalization
at massive scale
19
Engagement tools:
• Saturation mail
• Target direct mail
• Catalogs
• Shared mail
Platform Supplied
Tools:
• NCOA
• DSF
• LACS
Platform Supplied
Tools:
• RSLA
• Custom Audiences
• Tailored Audiences
• DART
Engagement tools:
• Display
• Search (RSLA)
• Social Media
3rd Party Execution
tools:
• Unica
• Group 1
• PostalSoft
• Pitney Bowes
• Atterian
3rd Party Execution
tools:
• Buddy Media
• Bluekai
• MediaMath
• Turn
• App Nexus
• Marin
The evolving role of the audience platform in AAS
Data Management: 1st party and 3rd party
Data Integration
Analytics: Insights, targeting, measurement
The AAS 1.0 Platform
Data Management: 1st party and 3rd party
Data Integration
Analytics: Insights, targeting, measurement
The AAS 2.0 Platform
Packaging of comprehensive tools Packaging of comprehensive tools
(B2B)
Contenders:
20
Media Planning Channel Planning
Targeting & Personalization
Enterprise segmentation, which includes value and lifecycle dimensions,
forms the foundation of CCF
What data,
systems,
tools and
technologies
will be
necessary?
How do we
organize and
what
capabilities
and business
processes will
be necessary?
Infr
astr
uctu
re
Measurement & Attribution
Budget Allocation
Experience Delivery
Financial Management
Customer Strategy
Integrated targeting and customization across media and channels are
optimized at the segment and individual level
Measurement and attribution at the segment level then drives macro-level
media and channel budgeting allocation
This creates a complete optimized customer experience that drives
increased LTV, efficiencies and shareholder value
Segmentation
Value Planning
Org
aniz
atio
n
cCRM and Addressability = Competitive Advantage
Connected CRM lead to competitive advantage during the first addressability at
scale AAS 1.0 opportunity and will lead to competitive advantage in AAS 2.0
AAS 1.0 AAS 2.0
1995 2005 2013
???
21
Awareness
Consideration
Remarketing
Conversion
Unqualified Leads & Waste
Inability to use addressability to engage high
value leads in a relevant experience drives
down conversion of those that are quality
Adverse selection is a big problem in non-
addressable media – ―people I don’t want
are the one’s I get to respond‖
As a result, marketers cannot scale budgets
due to inefficiencies above in the funnel, thus,
the ―targeting dilemma‖
Unknown High-value customer Mid-value customer Low-value customer
Where most of the market is today
Customer Remarketing
This results in lack of quality and scale of the
remarketing pool
22
The AAS 2.0 Opportunity
Unknown High-value customer Mid-value customer Low-value customer
Audience 1
Auto
Property
Multi-line
Audience 2 Audience 3
Leverage data and analytics to target and
maximize spend on high-value prospects in the
addressable universe
Digital targeting optimization
Leverage addressability to create highly
efficient and relevant remarketing experiences
Prospect Remarketing
Extension of addressability into channel
personalization to drive increased conversion
Channel optimization
Customer Remarketing
Effective utilization of addressability for re-
engagement and maximization of existing
customers
Awareness
Consideration
Remarketing
Conversion
Customer Remarketing
Unqualified Leads & Waste
Addressability at Scale
23
Competitive advantage through AAS
2009 vs. 2013
Available Addressable Impressions: +400%
Addressable Media Spend: +300%
Cost Per Lead: -30-40%
Targetable Re-Marketing Pool +500%
Cost-Per-Conversion: -40%
Average LTV per Customer: +60%
% Personalized Interactions +300%
24
• 1%-3% increase in customer acquisition over 5 years
• Increased response/conversion from digital media efficiency by connecting
Anonymous Data to CRM data for better targeting, measurement and segmentation
• Increased effectiveness of remarketing and personalization (offer/package) in Search,
Display, Site and Email
$15MM $43MM $73MM $206MM
Here is what AAS means to one of our clients
$39MM $104MM $170MM $382MM NPV of Revenue Impact
• Roughly 1bp (~31k subs) reduction in Voluntary Churn YoY over next 5 years
• Combine Customer service, Billing contacts with customer data to improve churn
rates
$24MM $61MM $97MM $176MM
YEAR 1 YEAR 2 YEAR 3 YEARS 4+5
AAS Acquisition
AAS Customer
Remarketing
25
Agenda
Introduction to Merkle
Digital marketing trends
Competitive advantage through addressability at scale
Digital addressability
The digital platforms
Competitive advantage and the new competencies needed
26
Addressability
The Addressability Spectrum
Anonymous Partially Identified Identified Identification:
Unknown Some Knowledge Well Known Knowledge:
Addressability uses customer data (anonymous or identified) to increase the target-
ability and personalization of marketing impressions and experiences
Channels &
Media:
Digital Traditional DR
27
The consumer clicks on
an online ad, which
conveys their city through
the IP address.
Addressability
Addressability uses customer data (anonymous or identified) data to increase the
targetability and relevance of marketing impressions and experiences
Le
ve
l o
f id
en
tifica
tio
n
An
on
ym
ous
Pa
rtia
l ID
F
ull
ID
Low Medium High
Level of knowledge
The Addressability Spectrum
Interest in
product
Location
28
Addressability
Addressability uses customer data (anonymous or identified) data to increase the
targetability and relevance of marketing impressions and experiences
Le
ve
l o
f id
en
tifica
tio
n
An
on
ym
ous
Pa
rtia
l ID
F
ull
ID
Low Medium High
Level of knowledge
The Addressability Spectrum
The consumer submits
their email address, which
helps point the way to
data about them that is
elsewhere online.
Interest in
product
Location
Public online activity
29
Addressability
Addressability uses customer data (anonymous or identified) data to increase the
targetability and relevance of marketing impressions and experiences
Le
ve
l o
f id
en
tifica
tio
n
An
on
ym
ous
Pa
rtia
l ID
F
ull
ID
Low Medium High
Level of knowledge
The Addressability Spectrum
Highest value
The consumer logs into
Facebook, providing an
exact name and identity.
Interest in
product
Location
Public online activity
Real
name
30
Addressability
Addressability uses customer data (anonymous or identified) data to increase the
targetability and relevance of marketing impressions and experiences
Le
ve
l o
f id
en
tifica
tio
n
An
on
ym
ous
Pa
rtia
l ID
F
ull
ID
Low Medium High
Level of knowledge
The Addressability Spectrum
The consumer reads a story
on a news site, which logs
their IP address.
Interest in
topic
Region
31
Addressability
Addressability uses customer data (anonymous or identified) data to increase the
targetability and relevance of marketing impressions and experiences
Le
ve
l o
f id
en
tifica
tio
n
An
on
ym
ous
Pa
rtia
l ID
F
ull
ID
Low Medium High
Level of knowledge
The Addressability Spectrum
The consumer‟s IP is cross-
referenced with publicly available
data, showing the general
location where they live.
Interest in
topic
Region
Specific
location
32
Addressability
Addressability uses customer data (anonymous or identified) data to increase the
targetability and relevance of marketing impressions and experiences
Le
ve
l o
f id
en
tifica
tio
n
An
on
ym
ous
Pa
rtia
l ID
F
ull
ID
Low Medium High
Level of knowledge
The Addressability Spectrum
High value
Later, the same IP is logged at a
shopping site. Linking the news story,
location, and retailer allows a targeted
ad to be served to the consumer.
Interest in
topic
Region
Specific
location
Interest in
specific
product
33
Addressability
Addressability uses customer data (anonymous or identified) data to increase the
targetability and relevance of marketing impressions and experiences
Le
ve
l o
f id
en
tifica
tio
n
An
on
ym
ous
Pa
rtia
l ID
F
ull
ID
Low Medium High
Level of knowledge
The Addressability Spectrum
Valuable
Low Value
Most
Valuable
Valuable
Ad
interest
Location
Ad interest
Location
Additional online data
Ad interest
Location
Additional online data
Name
Interest in
topic
Region
Interest in
topic
Region Specific
location
Interest in
topic
Region
Specific
location
Interest in
specific product
34
Agenda
Introduction to Merkle
Digital marketing trends
Competitive advantage through addressability at scale
Digital addressability
The digital platforms
Competitive advantage and the new competencies needed
35
Addressability at scale ecosystem
Consumer Speed, Relevance,
Convenience
Marketer Access to high value customers
and prospects
Platforms Enable the ecosystem by
facilitating addressability scale.
Publishers Monetization of their audiences
$
36
Addressability is reaching new levels of sophistication and
scale due to the rise of the Audience Platform
An Audience Platform is a technology that enables automated, real-
time delivery of targeted, personalized experiences to individuals
(known and anonymous) at scale utilizing first party data
Publishers
First
Party Data
Au
tom
ation
1st Party
Data
Au
tom
atio
n
1st Party
Data
Audience
Platforms
Marketer
37
Evolving Platform Marketplace
Audiences
aggregates by
scaling niche
content
Audience
aggregated by
audience data
Audiences
aggregated by
content
Differentiation created
by Media Skills Differentiation Created
by Optimization
Differentiation Created
by Technology
Audience
aggregated
using known
relationships
Differentiation Created
by Data Integration and
Analytics
2005-2009 2009-2012 2013+ 1995-2005
38
Addressable Media Targeting
Direct Match RTB Intent Based
Targeting Segment Based
Targeting
39
Contextual Real-Time Bid
(RTB)
CRM Targeted
RTB How many people visit site, and
their profile
Cookie & Third Party data on
unknown individuals
Addition of data repository including
all media and CRM data
Targeting • Based on inferred match
between audience &
publisher
• Anonymous user behaviors
• Retargeting
• Anonymous user behaviors
tied to CRM data
• 1st party data targeting
(name and address)
Optimization • Publisher performance • Anonymous cookie data Performance by customer
• 1st & 3rd Party Cookie
• Device ID
• Known individual
Place
Anonymous and Individual
CRM Data Driven
Place
Anonymous Individual
Place Level of insight
Digital & Social Media Evolution 2008 - 2013
Platforms &
Format
• PC
• Banners
• PC
• Display & Video
• Channel specific
• Cross Media/Cross Device
• PC
• Mobile
• Tablet
One great example of this is the rapid evolution of addressability
in digital media
40
But this is not just about display media – search is evolving very
quickly as well
Universal Platform Differentiated by
Device
Integrated Media and
Site Targeting
How many people are searching
and for what terminology
Increased options controlled by the
search engines for delivery
Use of Remarketing programs in
search and display to customize
Targeting • Based on exact keyword
search behavior with not
personalization
• Anonymous by device type
and carrier
• Geography, day of week and
time functions
• Audience profile data from
prior site visitation
• Unique experiences based on
user profiles
Optimization • Match type and keyword • Extended match types
• Device Targeting for Mobile
• Location specific ads and
costs
Performance by customer
• Segment
• Value
• Intent
Keyword
Audience Driven
Keyword
Location/Device/Time
Keyword Level of insight
Search Evolution 2010 - 2013
Formats • Pure text only • Site Links
• Video Ads
• Image/Logo ads
• Click to Call
• Video
• Form Extensions
• Product Price Ads
• Maps/Location Extensions
Location/Device/Time
41
Innovation in the platforms is picking up significant speed and
volume
42
Some of these platforms are creating addressability beyond
the domain of their own native platforms
Audience Platform
already at scale on network
Third Party Inventory
(exchange, ad network, etc.)
Soon we will see audience extension off network at
massive scale
But these will become closed networks forcing the advertiser to answer how to create a single customer view using first party identity
management
43 43
44
Publishers are leveraging first party data and creating audience
extension (networks) that allow that first party data targeting to scale
“Reach Amazon customers on Amazon owned and
operated sites and on other high quality websites
with Amazon Advertising Platform. Using the same
personalization engine that drives advertising on
Amazon.com, AAP offers more options to extend the
reach of your campaign, without compromising the
quality of your audience”
45
The evolution extends beyond targeting with new formats and
richer experiences across devices
Then
Now
46
Agenda
Introduction to Merkle
Digital marketing trends
Competitive advantage through addressability at scale
Digital addressability
The digital platforms
Competitive advantage and the new competencies needed
47
This pay off will only come through new competencies
48
To take advantage of the opportunity, new competencies will be
needed
• Marketing technologist
• Audience platform expert
• Programmatic media buyer
• Addressability expert
• Consumer experience designer
• Consumer privacy & preference advocate
• Decision science P.H.D.
• Measurement and attribution expert
• Multi-channel program strategist
• Segment portfolio manager
• Chief Customer Economist
The Platform Marketer embodies the collective
competencies needed to successfully exploit addressability
at scale
49
Summary
Addressability at
scale has and will
create competitive
advantage
cCRM is a
framework to be
used to take
advantage of
Addressability at
scale
The new
addressable
platforms will
require new
competencies
Massive budgets
are already being
shifted to take
advantage of this
opportunity
