Principal Analysts,

eMarketer, Inc.

Key Digital Trends for 2011

Sponsored by:

Presented By:

Noah Elkin

Debra Aho Williamson

David Hallerman

D E C E M B E R 1 6 2 0 1 0

N E W Y O R K NY

7 Trends for 2011

Trend 1: Apps Invade All Platforms

Trend 2: Content Consumption Convergence

Trend 3: Location, Location, Location

Trend 4: Social Gets Its Share of Marketing Dollars

Trend 5: Real-Time Bidding

Trend 6: Targeting Audiences vs. Content

Trend 7: Online Privacy Debate Heats Up

Trend #1

Apps Invade All Platforms

Noah Elkin

Principal Analyst, eMarketer, Inc.

@noahelkin

We’re accustomed to using apps on mobile devices

Source: Distimo, Dec 2010

Next phase in evolution: apps go everywhere — mobile, desktop, TV

Trend #2

Content Consumption Convergence

Consumers engage seamlessly with content across multiple platforms

Twitter: #eMwebinar

Exploit unique characteristics each platform offers…

Source: Rhythm NewMedia, “Q3 2010 Mobile Video Advertising Report”

…and pay close attention to the way devices and context increase the appeal of advertising

Trend #3

Location, Location, Location

Social networks are increasingly the conduit for mobile communication

Mobile social network usage will more than double between 2010 and 2015

Twitter: #eMwebinar

Location-based services have surged but aren’t yet mainstream

Checking in motivated by prospect of value exchange: obtaining useful information and finding deals

Marketer spending around location is starting to ramp up

Trend #4

Social Gets Its Share of Marketing Dollars

Debra Aho Williamson

Principal Analyst, eMarketer, Inc.

@DebraWilliamson

Social media is no longer an add-on for marketers

Usage of social media tools is still growing. 80% of companies with 100+ employees will use social media marketing in 2011.

Budgets are increasing. Marketers are shifting funds into social media and away from other types of marketing.

Integration is key. Although some companies have created separate social media departments, the more common trend is to integrate it across company functions.

The need for ROI is critical. Without it, future spending increases may be curtailed.

Twitter: #eMwebinar

Four out of five marketers will utilize social media tools in 2011

Changing consumer usage patterns make social media a must

Facebook is still growing. It’s a top site around the world and the fourth largest in the US (comScore).

Worldwide usage is rising. Six out of 10 frequent internet users worldwide have a social network profile (UM).

Brand interactions are increasing. Coupons, deals and discounts are encouraging consumers to engage with marketers.

More than 8 in 10 companies plan spending increases next year

Twitter: #eMwebinar

However, not every industry has adopted social media at the same rate—and some never will

Among those that do use social media, usage rates are approaching the level of email marketing

As marketers funnel more funds toward social media, spending on traditional forms of advertising is falling

Businesses are divided on who should manage social media

Only 6% have a dedicated group

Marketer perspectives: Intel and GM

“Intel has been an early adopter in social media, but we haven’t funded it as well as many of us would like. Social media is not free. We don’t want to tap into our paid media budget. We want to separate those two while driving deeper integration between paid and social media.”

—eMarketer interview with Kathleen Malone, Senior Manager and Social Media Strategist

“The brand teams have never budgeted their own line items [for social media marketing]. Now, marketing rightfully is becoming more involved in the planning and budgeting, and also the strategic side of it. The brands are now baking social into their overall marketing budget.”

—eMarketer interview with Christopher Barger, Global Director of Social Media

Although budgets are rising, the ROI question is still not answered

Trend #5

Real-Time Bidding

David Hallerman

Principal Analyst, eMarketer, Inc.

@DHallerman

Display advertising will be an even bigger source of spending growth than search

When marketers buy ads using real-time bidding, they bid on impressions based on:

The specific site The location of the ad on the site The number of impressions desired Any potential cookie data for segmentation

Helps marketers buy audience instead of inventory

Helps publishers sell lesser inventory at higher prices

Targeting typically demographic and psychographic (less so behavioral, so sidesteps many privacy issues)

What real-time bidding (RTB) means for marketers looking to buy display ads

Twitter: #eMwebinar

Demand side platforms (DSPs) and advertising exchanges: two key elements of the RTB ecosystem (ad networks, too)

Trend #6

Targeting Audiences vs. Content

Battle about targeting tactics is, in many ways, a battle between ad networks and publishers about data

Who owns the data? (gets into privacy issues)

Which method is more effective? (marketers in middle)

Which data targets best? (demographic goes two ways)

Is the audience equally receptive to message anywhere?

What’s the value of premium sites? (context vs. reach)

A bottom line question: What’s most useful for ads, community or content? (publishers can do both)

On one side, classic content targeting On the other side, only audiences matter

In 2010, four types of targeting used by 50% or more:

• Demographic

• Behavioral

• Channel

• Contextual

Twitter: #eMwebinar

Audience segmentation and targeting key factors driving the move to digital marketing

Audience targeting for display part of larger, holistic online advertising

Trend #7

Online Privacy Debate Heats Up

7 key factors driving the debate about digital privacy

① Consumer concern about being tracked

② Advertiser-publisher need to monetize

③ Combining online with offline data

④ Rapid growth of Facebook’s ad system

⑤ Rise of check-ins, location-based services

⑥ EU’s focus on stricter privacy protection

⑦ Consumer choice vs. marketer goals Twitter: #eMwebinar

Behavioral targeting: The more people know, the less they seem to like it

Marketers’ own concerns about privacy limit spending on behavioral targeting

Regulation: More people trust the government than advertisers (but most don’t trust either entity)

Privacy concerns (or not) among half of social network users

Source: Marist Institute, July 2010

Confidential 2010 Unica, An IBM Company.

Unica’s Definition of Interactive MarketingUnica’s Definition of Interactive Marketing

Engaging each customer and prospect in a cross-channel dialog that builds upon their past and current behavior

43

Confidential 2010 Unica, An IBM Company.

Survey Results:“Are you doing ‘interactive marketing?’”Survey Results:“Are you doing ‘interactive marketing?’”

44

7%

49%

15%

7%

15%

7%

Currently do this across all channels

Currently do this across some channels, but not others

Don’t currently do this but plan to in the next 12 nonths

Don’t currently do this but plan to in the future more than 12 months from now

Don’t currently do this and have no plans at this time

Don’t know what my company is doing or planning to do in this area

From Unica’s global survey of senior marketers, launched October 2010

Confidential 2010 Unica, An IBM Company.

Survey Results:“What makes interactive marketing hard?”Survey Results:“What makes interactive marketing hard?”

45

53%

41%

39%

36%

36%

30%

20%

14%

13%

9%

Organizational structure, corporate culture orinternal processes are not conducive

Existing systems and data are too disparate

Lack appropriate in-house skills

Lack of budget

Difficulty working with internal IT

Uncertain ROI

Lack of support from upper management/Lack of an executive sponsor

Cost is too high

Unfamiliar with the concept of “interactive marketing”

Interactive marketing is not appropriate for our business

From Unica’s global survey of senior marketers, launched October 2010

Confidential 2010 Unica, An IBM Company.

Unica’s Interactive Marketing Technology FrameworkUnica’s Interactive Marketing Technology Framework

Facilitates collaboration and cross-channel planning, design, execution, and measurement.

Integrated Marketing Operations

Awareness Decisioning Execution

Plans & Budgets

People & Processes

Data & Assets

Measurement & Performance

Web Analytics

Predictive Analytics

Visual Exploration

Event Detection

Segmentation

Offer Management

Real-Time Targeting

Interaction History

Contact Optimization

Email

Inbound Integration

Lead Routing & Monitoring

Distributed Marketing

Search Optimization

46

Confidential 2010 Unica, An IBM Company.

Unica, an IBM CompanyUnica, an IBM Company

100% focused on marketing

Over 1,500 customers worldwide

Market leadingcross-channel

campaign management

Solutions available both

OnDemand and Enterprise

47

Privacy concerns (or not) among half of social network users

Source: Marist Institute, July 2010

7 Trends for 2011

Trend 1: Apps Invade All Platforms

Trend 2: Content Consumption Convergence

Trend 3: Location, Location, Location

Trend 4: Social Gets Its Share of Marketing Dollars

Trend 5: Real-Time Bidding

Trend 6: Targeting Audiences vs. Content

Trend 7: Online Privacy Debate Heats Up

Twitter hashtag: #eMwebinar

Sponsored by:

Key Digital Trends for 2011

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To learn about eMarketer Total Access please visit www.emarketer.com/productsor contact us: (800) 405-0844 ben@emarketer.com

Principal Analysts, eMarketer, Inc.

Presented by: Noah Elkin,Debra Aho Williamson and David Hallerman