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January 19, 2012 www.jegi.com
Since 1987
2012 Sector Trends
2012 JEGI Media & Technology Conference
Time Warner Center, New York City
2
2012 Sector Trends
B2B Marketing Solutions
Richard Mead, Managing Director, JEGI
3
Reports of Death of B2B Greatly Exaggerated
3
http://www.youtube.com/watch?v=4vuW6tQ0218
4
B2B Marketing Solutions – Key Trend #1
The Growing Importance of B2B Marketing
Solutions Companies
Extensive Market Knowledge
Efficient, Customized Marketing Channels
Integrated Work-Flow Solutions
Stronger Partnerships with B2B Customers
4
5
$30.9 $30.6
$27.2 $27.2 $28.5
$30.2 $31.9
$34.1 $36.0
-
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
2007 2008 2009 2010 2011 2012 2013 2014 2015
Live & Virtual Events E-Media
B2B Magazines B2B Outsourced Custom Publishing
Source: VSS Communications Industry Forecast 2011-2015
B2B Marketing Solutions – Key Trend #1
B2B Marketing Solutions Spending
($billions)
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6
B2B Marketing Solutions – Key Trend #2
Combining Internet Functionality with Legacy
Marketing Channels
Engage a Broader Community
Deliver Valuable Content
Generate Qualified Real Leads
Increase Measureable Marketing ROI
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7
Global Buyers
B2B Marketing Solutions – Key Trend #2
Providing One-Stop Sourcing for B2B Marketing Solutions
Global Sellers
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Content
Research
Events
Lead Gen
eCommerce
Custom Marketing
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Penton’s Product-to-Sales Ecosystem
B2B Marketing Solutions – Key Trend #2
B2B Marketing Solutions Companies Are Repositioning For A
New Golden Age
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B2B Marketing Solutions – Key Trend #2
An Integrated Approach from Northstar Travel
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Control the Community, Control the Game
More Relevance, More Reward
New B2B Holistic Platforms
Attractive B2B Investment Opportunities
The B2B Marketing Solutions E-volution Requires Initiative,
Innovation, and Investment
B2B Marketing Solutions – Key Trend #3
10
11
Count Down To Attractive Valuation Implications
for B2B Investors
B2B Marketing Solutions – Key Trend #3
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Hello Tolman
A New Dawn for B2B Marketing Solutions and Their Investors
B2B Marketing Solutions – Key Trend #3
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2012 Sector Trends
Online Display Advertising
Tolman Geffs, Co-President, JEGI
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Online Display Advertising – Key Trend #1
Online Display Advertising has Changed Fundamentally –
Most Players In Back Seat
Display Driving Forward
Big 5 Grabbing 70% of New Growth
“Everyone Else” Fighting for 30% of Market Growth
14
15
$7.1 $7.6
$8.0
$9.9
$12.3
$14.8 $16.1
$19.8
$23.9
$5
$10
$15
$20
$25
2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: eMarketer, 2011. Forrester Research, 2011
+$6.8 bn
+85% over 3 years
$6.8 billion net new spend
Online Display Market Growing Well
U.S. Online Display Spending
($billions)
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Big 5 Control the Market
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Growth in U.S. Online Display Spending
2009-2012E ($billions)
Online Display Top 5 OnlineDisplay
"EveryoneElse" Online
Display
+$6.8
+$4.8
+$2.0
Source: eMarketer, 2011
2009 Spending
2012E Spending
$8.0 $3.1 $4.9
$14.8 $7.9 $6.9
Share of Net New Display Spending
30%
“Everyone Else” Fighting for 30% of Growth
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Online Display Advertising – Key Trend #2
It’s No Wonder. Online Display Advertising – Today –
is NOT a Great Brand Advertising Medium
Biggest Red Herring – % Viewing Time v. % Ad Spend
Web Not a Great Brand Advertising Medium
Big 5 Offer Massive Reach and Efficiency
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Online Display Television
+$6.8
+$10.7
8%
16%
43%
25%
8%
27%
11%
43%
19%
0.5% 0%
10%
20%
30%
40%
50%
Print Radio TV Internet Mobile
Time Spent Ad Spend
Source: Kleiner Perkins; eMarketer, March 2011
Share of Time Spent vs. Advertising Spending, U.S. 2010 Growth in U.S. Online Display Spending
2009-2012E ($billions)
Biggest Red Herring
All Media is Not Created Equal
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Online Display Not a Compelling Experience
Magazine Ad Standard Website Ad
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Web loses something….
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Big Display Guys Offer Massive Reach and Efficiency
At Least the Big 5 Deliver TV-like Reach and Efficiency
(For a Sub-par Ad Experience)
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Online Display Advertising – Key Trend #3
Online Display Advertising – Tomorrow – will be a
Much Smarter Brand Advertising Medium
Web Awash in User Data; Most of Little to No Value
Smarter Data Lies Closer to Publishers & Merchants
M&A Will Focus on Effective Data Management
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Source: Forrester Research
Interest data
Demographic (age, gender)
Psychographic (mindset, propensity)
Social (connections, influence)
Contextual (relevant, content)
Intent Data
Shopping
Search retargeting
Remarketing
Classic Funnel Marketing 101
Audience Targeting Down The Purchase Funnel
Awareness
Retention
Consideration
Preference
Purchase
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On the Internet, nobody knows you’re a dog
But Data Value Varies ... By A Lot
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25
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Source: Major online data aggregator
Most Online Consumer Data is of Limited Effectiveness
Profile of Tolman Geffs
Female
Urban Renter
With Children
HH Income: $20,000 - $29,000
26
Multi-Channel
Predictive Audience Modeling
I-Behavior
+Aggregation
+Segmentation
+Modeling
+Insights
SKU Level Data
» » » »
Consumer Data
1,900+ multi-channel retailers
Across all channels
8+ billion transactions
Catalog
Online
Mobile
Direct Mail
Retail
Most Effective Data Approach is Publishers Leveraging Own
Data and Supplementing With Third-Party Data
More Effective Data Originates With Merchants
26
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Data
Delivery
Management
Consumer Platform
Expect More M&A Focused on “First Party” Data
27
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2012 Sector Trends
Integrated Marketing Services
David Clark, Managing Director, JEGI
29
Integrated Marketing Services – Key Trend #1
Publishers Rapidly Expanding Their Marketing
Services Footprint
Powerful Marketing Assets + Skills
Leverage Content, Audience, Relationships
Deliver Integrated Marketing Solutions
29
30
-
$20
$40
$60
$80
$100
$120
2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: VSS Communications Industry Forecast 2011-2015 Forrester US Interactive Marketing Forecast, 2011
Note: BTL excludes direct marketing and B2B promotion Print includes newspapers, magazines, B2B media and directories
2011
2011 BTL
= $83.4
2011
Interactive
= $34.5
2011 Print
= $60.4
BTL And Interactive Are Attractive Sources of Growth
Print Ad Spend vs. Below-the-line & Interactive Spend
($billions)
30
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Publishers Building Marketing Platforms
Deep Expertise in Database Marketing, Content
Development, Tablet Media and Consumer Apps
32
Integrated Marketing Services – Key Trend #2
Brands Operate as Multi-Media/Multi-Channel Publishers
Build and Maintain 24/7 Digital Presence
Compelling and Personalized Content
Direct Access to Consumers and Content
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+$300 million in social media M&A
Foundation for new, direct social/promotional marketing
Brands Pushing into Social
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Brands Pushing on Content
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Brands Pushing on Content
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Source: CapIQ
14% revenue growth rate
200 acquisitions / investments in 2011
Social, digital direct and best in-class development
Unique global perspective and influence
Agencies Still Dominant
36
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Integrated Marketing Services – Key Trend #3
CMO Now Focused on Enterprise Marketing Technology
Data-Driven Marketing = “Big Data”
CRM and Marketing Tech Rushing to the Cloud
Tech Expanding into Digital Brand Solutions
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Marketing Technology M&A
38
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$11 billion marketing tech deals in 2010-11
$26.1 billion cash on hand
Rapidly expanding integration and API partner networks
Formidable New Competition
39
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2012 Sector Trends
Direct-to-Consumer
Scott Peters, Co-President, JEGI
41
Direct-to-Consumer – Key Trend #1
Revolution: Brands Must Engage Their Customers Directly
Distribution Walls Have Come Down
New Skills Required to Succeed
Most Investment is Below the Line
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Direct-to-Consumer –
Brands Must Engage Their Customers Directly
The Retail Model is Evolving
42
Nike
Retailers
Catalogs
Nike stores
Online Retailers
Nike.com
Direct sales – most profitable store front
Primary brand connection to consumers
Most important point of contact with a customer
Phase 1 Phase 2 Phase 3 Phase 4
43
Why Nike wins?
Consistent branding and access across channels
Offline support to ensure retail partners are happy
Fair and consistent multichannel pricing strategy
Nike.com offers a unique value proposition
• Product personalization
• Unique content
• Social media integration
Direct-to-Consumer –
Brands Must Engage Their Customers Directly
Comprehensive, Multi-channel Retail Approach Wins
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Marketing
How are customers finding my site?
How do I drive more traffic from search and channel partners?
How does my brand leverage social media to drive sales?
Role of digital agency remains critical
Increasing pressure on CMOs to understand the full multi-channel marketing mix
Direct-to-Consumer –
Brands Must Engage Their Customers Directly
Online Marketing Channels Require New Skills
44
Source: Outbrain
Breakdown of Known External Traffic Sources
Search 41%
Content Sites 31% Portal 17%
Social 11%
45
Major eCommerce Platforms
Direct-to-Consumer –
Brands Must Engage Their Customers Directly
eCommerce Technology Decisions Become Mission Critical
45
eCommerce Capabilities Required
Online and offline transactions
Multi-channel pricing and promotion
Supply chain management
Multi-channel marketing integration
CRM integration
46
Direct-to-Consumer – Key Trend #2
Social Media is Becoming a Primary
Communication Medium for Brands
Your Customers are Now Your “Friends”
Unprecedented Amount of New Data – But How Do You Make Sense of It?
Social Must Closely Coordinate With Other Channels
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Direct-to-Consumer – Key Trend #2
Social Media is Becoming a Primary Point
of Connection with Customers
47
Nike.com
• Social media is shifting from experimentation to core
• Nike.com has 5,534,790 “likes”
• 32,522 talking about this article…
Uses
• Branding
• Consumer Engagement
• Market Research
• Competitive Intelligence
• eCommerce & more
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Direct-to-Consumer – Key Trend #2
Consumers Expect Engagement from Every
Marketing Channel
Out of Home
Magazines & Newspapers
Catalog & Direct Mail
Social Media and Mobile
Engagement TV & Radio
Online Advertising
Website
In-Store
Mobile
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Direct-to-Consumer – Key Trend #2
Rise of the Social Media Data Analytics Providers
50
Direct-to-Consumer – Key Trend #3
New Technologies are Continuing to Drive
Better ROI on Marketing Spend
Audiences Can Be Reached in Entirely New Ways
Data and Analytics Present New Insights
Media Optimization Dashboard Coming Soon
50
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Direct-to-Consumer – Key Trend #3
Online Ad Targeting Continues to Change the Game
Selective audience aggregation via traditional media is no longer a competitive barrier
Ad networks now provide “context” to impressions
Incremental online ad inventory carries little to no expense
Online advertising CPMs hammering offline CPM value proposition
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Direct-to-Consumer – Key Trend #3
New Technologies are Driving
Better ROI on Marketing Spend
SEO / SEM Display
Social Customer Experience
52
53
Direct-to-Consumer – Key Trend #3
Data Driven Insights Change the Game
Real-time behavioral targeting changes value proposition to advertisers
Explosion in real-time data sources is providing analytics firms with a distinct competitive advantage over static media
Social media providing layer of unprecedented (and available) personal data
The definition of ROI is evolving
• Branding impressions
• Lead generation
• Contextual adjacency with key influencers
• Etc.
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Direct-to-Consumer – Key Trend #3
ROI Optimization Dashboard
Online and offline media reinforce each other
Each channel is finding its own ROI center of gravity
Experimentation in online and offline advertising correlations in process
The holy grail in advertising has yet to be found
• ROI Optimization Dashboard for all online and offline media spend
• Keep an eye on Donovan Data System’s Media Ocean
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Growing importance of B2B Media in efficient business marketing and sales
Combining Internet functionality with legacy marketing channels to drive revenue
B2B revolution requires management and money
B2B Marketing Solutions – Richard Mead
Publishes expanding marketing services footprint
Brands are now multi-media/channel publishers
CMO focused on enterprise marketing technology
Integrated Marketing Services – David Clark
Online display growth concentrated in Big 5
Constrained by weak ad formats
But data getting smarter for publishers and merchants
Online Display Advertising – Tolman Geffs
Direct-To-Consumer – Scott Peters
In Closing ...
55
Brand’s direct-to-consumer strategy will be the primary focus of marketing activity
Social media will impact all aspects of the brand/consumer relationship
Cross-media marketing optimization is coming…
Since 1987
January 19, 2012 www.jegi.com
150 East 52nd Street 18th Floor
New York, NY 10022
Phone: (212) 754-0710
Fax: (212) 754-0337
2012 Sector Trends