© 2010 IBM Corporation

November 24, 2010

HorizonWatch: Top Ten Digital Marketing Trends For 2011

Contacts: Bill Chamberlin, Principal Social Insights Analyst, Market Insights

© 2010 IBM Corporation2

Traditional vs. Digital Marketing: Traditional is still important, but there are new capabilities to leverage

© 2010 IBM Corporation

Top Trends in Digital Marketing For 2011

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1.Marketing Budgets Will Continue to Shift Towards Online2.Social Media Marketing Is Maturing (Slowly)

• Important new capabilities: Social Listening Research, Influencer Marketing, Community Marketing, Social Gaming and Career Paths/Education

3.Mobile Marketing Poised To Take Off• Important new capabilities: Location Based Services, Event-Based Marketing, Mobile Social, Mobile Apps,

Mobile Games, and Mobile Messaging

4.Personalized Marketing Customizes Messages To Individual5.Social Video As A Marketing Tool Gains Momentum6.Search Engine Optimization Gets More Complex7.Marketing Analytics Helps Make Sense Of All The Noise8.Real Time Web Assistance Connects Buyer With Expert9.Online Privacy Concerns Continue 10.Digital Marketing Optimization Emerges As A Priority

Source: Bill Chamberlin, IBM Market Insights via HorizonWatching

© 2010 IBM Corporation

1. Marketing Budgets Will Continue To Shift Towards Online

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“Traditional media spending has declined by 43% this year, and the category of digital marketing has grown by 53%. These shifts were expected and our forecast accuracy from earlier this year was excellent. Now, the question for marketing and marketing-operations executives is: How do we adjust our execution and processes to adapt?“

- IDC, September 2010

“B2B interactive marketing spending will climb to nearly $4.8 billion in 2014 as interactive channels continue to grab a larger share of the marketing pie.“

- Forrester, March 2010

2011 Marketing Budget Investment Plans – Digital and Inbound Tactics

© 2010 IBM Corporation

1. Marketing Budgets Will Continue to Shift Towards Online

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For More Information• IDC Survey Shows Sales and Marketing Budgets Will Rise in 2010 Link • Growbiz/Zoomerang: SMB Marketing Practices Link • Econsultancy: Marketing Budgets Link

Marketing leaders are moving budgets to mirror where the customers and prospects are - online.  Online channels can reach a very targeted audience, are lower cost, and are becoming more measurable.  As a result we should expect the continued decline in the use of traditional media

Drivers • Digital technology and innovation.• Recession has put pressure on budgets• Digital channels generally less costly than

traditional

Inhibitors/Challenges• IT support for new marketing channels • Marketing processes support old channels

Implications• Marketers should focus on creating online

customer interactions• Marketing leaders should consider developing

a central team to manage the emerging digital strategy.

• Education and training will be required. • What new opportunities exist for firms to

connect with empowered consumers/customers?

“The top five budget areas that SMBs plan to increase in their 2011 marketing budgets are: website, e-mail, direct mail, social media and print advertising.“ -

- Joint survey by GrowBiz Media and Zoomerang, 2010 Link

• “ 70% of responding companies are planning to increase their budgets for off-site social media, such as Facebook and Twitter.”

• “More than half of companies are planning to increase their budgets for mobile marketing.”

• “The marketing channels where companies are most likely to be decreasing investment are print media and radio.”

- Marketing Budgets 2010, Econsultancy study Link

© 2010 IBM Corporation

2. Social Media Marketing Is Maturing (Slowly)

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Source: Altimeter Group (link)

What Is Your Organization’s Social Media Maturity Level?

“Despite the tremendous hype and even some pockets of success, our recent survey shows that social media marketing is still at an early stage. To ensure they don't fall behind the curve, interactive marketers should set their plans now. This includes a long-term social media marketing strategy, dedicated resources, budgets, policies, and training“

- Forrester, October 2010 (link)

© 2010 IBM Corporation

2. Enterprise Social Media Marketing Capabilities Are Maturing (Slowly)

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For More Information• Marketing Sherpa: ROAD Map to Social Marketing Maturity

Link • Forrester: Benchmarking Social Marketing Plans For 2011 Link• Video: Gartner – Business Gets Social (link)• Altimeter, Nov 2010 (link)• Dachis Group: The 2010 Social Business Landscape (link)

Enterprise marketing is being transformed by social media. By the end of 2011, marketers will have shifted from one-off experiments to fully integrated social media marketing plans.

Drivers • New technologies have spawned social sites,

networks, and marketing channels• Community based marketing can increase loyalty and

convert customers into brand advocates.

Inhibitors/Challenges• Need social efforts to be fully integrated with the

overall marketing plan• Risk Management• Measurement systemsImplications• Social media has created new types of influencers.

Need to identify and form relationships with online influencers.

• Social Media manager profession requires definition, education, and career paths.

• Centralized implementation required for company wide social media tools, standards, policies and practices

• A new set of marketing capabilities are emerging, including Social Listening Research, Influencer Marketing, Community Marketing, and Social Gaming.  These new capabilities will require new marketing marketing professional Career Paths and Education tailored to the new social media marketing realities. 

Altimeter, Nov 2010 (link)

“To optimize investments, competencies, and outcome, it is essential that enterprises establish a shared understanding of social technologies and trends, coordinate strategies and initiatives, and leverage investments.“

- Gartner, 2010 (Link)

© 2010 IBM Corporation

Social Networking Has Turned Online Communities Into Marketing Engines

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Smart marketers are realizing the social technologies like discussion forums and blogs can easily bring people together around a topic of interest. And once that community has been formed and is nurtured, it can become source of tremendous value to a brand.

“Support focused communities will evolve to touch marketing, sales, channel partners, CRM systems, and even become a thriving platform in the next few years”.

- Jeremiah Owyang, Altimeter Group (link)

For More Information• Wikipedia: Community Marketing• Altimeter:

Social CRM: The New Rules of Relationship Management • Dachis Group: Creating Customer Communities• Community 101 Deck 1, Deck 2, Deck 3, Deck 4• Web Strategy by Jeremiah Owyang Link • Forrester: “Organizing For B2B Tech Community Marketing ”• Forbes: Secrets of Engaging Customer in Online Communities

Secrets To Building Online Communites1. “Keep the Community Relatively Small”2. “Be Transparent”3. “Facilitation – Train Your Community Managers” - Diane Hessan, CEO of Communispace (link)

© 2010 IBM Corporation

Leading Social Media Strategists Are Actively Developing Influencer Programs

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For More Information• Wikipedia Article Influencer Marketing • WOMMA: Influencer Marketing Handbook • Ant’s Eye View: Influencer Programs:• Forrester: Three Ways To Create An Advocacy Program• Zuberance: Advocates vs. Influencers• Zuberance / WOMMA: Turning Facebook Fans into Brand Advocates• Deloitte: A New Breed of Brand Advocates• Book: Influencer Marketing by Duncan Brown and Nick Hayes

“Influencer marketing is powerful. It harnesses natural conversations to create trusted recommendations that provide tangible results“

- Sept 29 Tweet by @WOMMA

“Key decision-makers in all major markets operate within communities of influencers. These 'ecosystems' are full of important individuals, whose impact on purchasing decisions is both pivotal and misunderstood.“

- Influencer Marketing by Duncan Brown and Nick Hayes ( Link )

There are certain individuals and organizations that drive most of the discussion around the topics that matter to your brand. It is important to reach and form relationships with these influencers who have the potential to build…or tear down your brand name

© 2010 IBM Corporation

Social Gaming Will Become A Part Of Many Social Media Marketing Strategies

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For More Information• Bloomberg BusinessWeek: Zynga Tops Electronic Arts as Social Games Spread

Link• Nielsen: What Americans Do Online: Social Media And Games Dominate Activity

Link • Mashable: The Future of Gaming: 5 Social Predictions: Link • IBM Center for Social Software Link• TechCrunch: Social Gaming: Where We’ve Been, and Where We’re Headed (link)

“Zynga Game Network Inc.’s estimated worth surpassed Electronic Arts Inc.’s stock-market value, a sign of the ascendance of social-networking entertainment at the expense of traditional video games.“

- Bloomberg Business, Oct 2010 (link)

Social Gaming may not be for every brand, but this is an important trend in marketing. Playing online games is favorite past time for many people. Marketers have the opportunity to reach people through games in ways they have never been able to before

Drivers • Social Networking / Facebook• Consoles Being Connected to the Internet• Gaming Is A Top Entertainment Choice

Inhibitors/Challenges• Business Models (play for free vs.

subscription)• Campaign Measurement Needs To Mature

Implications• Expect A Trend Toward Niche Gaming• Opportunity For Branding Virtual Goods• Opportunity For Combining of Mobile and

Social and the potential impact on Retail.

http://www.appdata.com/

“The virtual goods market may reach $3.6 billion in 3years.“ - - Atul Bagga - Analyst, ThinkEquity LLC, Oct 2010 (link)

© 2010 IBM Corporation

Online Gaming Now Ranks Second Behind Social Networks In Terms Of Share Of U.S. Internet Time

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© 2010 IBM Corporation

3. Mobile Marketing is Poised To Take Off

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“Consumers are relying on their mobile phones for more than talking and texting these days. They are using them for everything from reading and writing emails to watching the news, trading stocks, and booking hotel rooms. Brands seeking a persistent presence with their customers must have a strategy to engage with their customers via mobile phones.” - Forrester, Sept. 2010 (link)

“61% Of Carriers See Mobile Coupons As The Dominant Form Of Mobile Marketing By 2015” - MobileSQUARED, Nov 2010 (link)

© 2010 IBM Corporation

3. Mobile Marketing Is Poised To Take Off

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For More Information• Wikipedia: Mobile Marketing Link • Mobile Marketing Association: Link• Econsultancy: Marketing Budgets 2010 study (link)• Borrell Associates,, Oct 2010 (link) • Dachis Group: Time for Mobile Experimentation (link)

“59 percent of mobile consumers plan to use their mobile phone for holiday shopping and planning holiday celebrations, not including making phone calls” - Mobile Marketing Association, Nov. 2010 (Link)

Look for mobile email, websites and applications to become more viable channels in which to conduct marketing.  The combination of new devices, faster networks and new location-aware technology, will fuel this steady march toward greater significance.  Some key mobile marketing trends to watch in 2011 include Location Based Services, Mobile Apps, Mobile Gaming, Event-Based Mobile Marketing, and Augmented Reality based marketing campaigns.

Drivers • Growth/popularity of smartphones and tablets • Mobile apps, browsers, and search are all improving• Growth of location based apps• Faster networks (4G arrives)

Inhibitors/Challenges• Integrating mobile into the overall marketing strategy.• Mobile marketing analytics

Implications• The mobile Web is quickly becoming one of the most

effective marketing platforms and will see significant growth due to major enhancements over the next year. Advances in device and carrier detection, including specific device, provider, and location are giving marketers a whole new dimension in targeting

• As mobile shopping grows, more research is needed to understand how are consumers using their mobile devices for product research and decisions

Mobile Proximity Marketing In U.S. to Reach $750M By 2011 And Nearly $6B By 2015” - Borrell Associates,, Oct 2010 (link)

“More than half of companies are planning to increase their budgets for mobile marketing.” - Marketing Budgets 2010, Econsultancy study (link)

© 2010 IBM Corporation

4. Personalized Marketing Capabilities Improve.

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Unica: The State of Marketing 2010 (link)

Expect more personalization capability to be embedded in websites in 2011 as analytic engines integrate data from other digital channels, including social media marketing, mobile marketing, and email marketing.

© 2010 IBM Corporation

4. Personalized Marketing Capabilities Improve. More Marketers Customize Website Messages To Individuals.

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For More Information• Wikipedia: Personalized Marketing• Coremetrics:

Build Lift and Loyalty With Personalizd Product Recommendations• Unica Webinar: Achieving Interactive Marketing Success

“Marketers are focused on making their communications more timely and relevant to recipients. To do that, they need to build communications around the interests and preferences of each individual customer or prospect. “

- Unica, Sept. 2010 (link)

Marketers will present personalized sites to these customers by organizing information and prioritizing it based on the individual's liking.  Products and services offered on those pages will be pre-configured. “Anonymous” visitors to websites will get customized messages based on referring URL, search terms, geo-location and other insights

Drivers • Consumers are now interacting via numerous

channels, generating transaction and behaviorial data.

• Consumers want content that is personalized to them.

Inhibitors/Challenges• Integrating offline as well as online customer

behavior • Need to build and retain complete profile data• Privacy issues

Implications• Need to understand individual’s prior interactions

and transactions across all channels, in order to provide the best offer or communication.

• Harvest information via marketing analytics in order to build messaging plans that can be tailored to interests and preferences of each individual.

“Personalized product recommendations are proven to consistently increase sales, conversion rates, average order value and customer retention“

- Coremetrics, Oct 2010 (link)

Unica: From Web Analytics to Customer Analytics: Making Web Data Personal (link)

© 2010 IBM Corporation

5. Social & Mobile Video Gains Momentum As A Marketing Tool

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“How can designers create these special moments--this magic? And not just "viral video" magic, but that everyday life magic of the emotional connection that bonds people with your brand. Can we conceive of the complete story and lead people down a path of creating smiles? “- Fast Company “Coca-Cola's New Video Proves Brand Happiness Can Be Viral”,Jan 2010 Link

Coca-Cola Happiness Machine (link)

“70% of global online consumers watch online video. More than half of global online consumers watch online video in the workplace.”

– Nielsen, Aug 2010 Link

© 2010 IBM Corporation

Facebook has emerged as an important channel for the distribution of videos

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comScore August 2010(link)

Facebook now ranks second in the U.S.

© 2010 IBM Corporation

5. Social & Mobile Video Gains Momentum As A Marketing Tool

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For More Information• Nielsen: The Global State of Video Consumption Link• comScore: August 2010 U.S. Online Video Rankings Link • Forrester (link)• TubeMogul: Promising Numbers From Facebook Video Advertising.

Link • Mashable: How the Fashion Industry is Embracing Social Media

Link• Mashable: 5 Tips for Using Video to Grow Your Business in 2010

Link

“One-third of online consumers in the US regularly watch user-generated videos on sites like YouTube“ - Forrester, Sept, 2010 (link)

Distributing video via your social networks is a powerful way to imprint your images into the memory of your customers and prospects.  Video strengthens the relationships you have with existing customers and it helps prospects get to know you better.  So in 2011, there will be a focus among digital marketing professionals to understand how to make the best use of Video Marketing within Social Media Marketing Strategies and Programs.

Drivers • Youtube consistently ranks in top 3 most popular

websites• Consumers want video, and often engage more readily

with video content than written content

Inhibitors/Challenges• Video production is often seen as expensive (but it

does not have to be)Implications• Incorporating video elements into your website can

increase your Google page rank and natural search results

• For research: What impact will pervasive video and connectivity have on customers?

• Just like any other form a communication, video marketing should be well thought out. It has to serve a purpose, should be aligned with the audience as well as authentic and informative.

“Mobile Video: is already used by 11% of global online consumers: penetration is highest in Asia-Pacific and among consumers in their late 20s“ - Nielsen, Aug 2010 Link

“178 million U.S. Internet users watched online video content in August for an average of 14.3 hours per viewer“ - comScore, Sept, 2010 (ink )

© 2010 IBM Corporation

6. Search Engine Optimization Gets Complex

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Source: searchenginejournal

© 2010 IBM Corporation

6. Search Engine Optimization Gets Complex

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For More Information• Wikipedia: Search Engine Optimization • Search Engine Watch: Search Engine Ratings & Stats

Link • SEMPO Annual State of Search Survey (link)• ATG, Inc., October 2010 (link)• Forrester, June 2010 (link)• EfficientFrontier, Oct 2010 (link)

“Search engine marketing will grow to $31 billion by 2014“ - Forrester, June 2010 (link)

Search marketing is getting more complex as new technology and new capabilities are emerging.

Drivers • Social Networking sites like Facebook and Twitter • Mobile search grows…will become a big part of search• Localization provides new opportunities for paid search

Inhibitors/Challenges• Country / Region Specific Search Engines• Google search still ‘king’ (and will remain so), but

consumers are increasingly using social search engines • Purchasing the right keywords is of critical importance• Consumers want search to be simple, immediate, and

relevant.

Implications• Advertising on Facebook and soon-to-be advertising on

Twitter to have an impact• The best search strategies start with a sound

understanding of how and where customers perform their searches

• Integrate your search strategy into your overall marketing strategy, covering all marketing channels.

• Marketers should be out in front of the emerging mobile search developing mobile-friendly searchable websites, services and payment capabilities.

“Early Facebook advertising results indicate that this channel will add significant, successful scale to digital marketing campaigns“ - EfficientFrontier, Oct 2010 (link)

ATG, Inc., October 2010 (link)

© 2010 IBM Corporation

7. Marketing Analytics Helps Make Sense From All That Noise

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“Predictive analytics allows us to leverage unsolicited and unbiased customer feedback and strategically improve our business. We now can also monitor competitor and industry websites, including blogs and news feeds, and other publicly available textual information to maintain a current view and better understand how the public perceives our competition” - Nino Ninov, vice president of strategic research and analysis at Rosetta Stone (link)

“Predictive analytics software allows us to uncover greater insight into our membership and identify areas of opportunity to increase our satisfaction levels. Increasing awareness of our products and services, and also creating new offerings that meet our members' changing needs and behaviors has lead to better service and member understanding, and more strategic decision making.“ - Alan Payne, manager of member research and development at Navy Federal Credit Union (link)

© 2010 IBM Corporation

7. Marketing Analytics Helps Make Sense From All That Noise

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For More Information• MIT Sloan Management Review: Analytics - The New Path To Value• Unica Webinar: Top 5 Ways to Leverage Web Data for Predictive Analytics • Forrester Blogs : Predictive Analytics• IBM Webinar: Optimization through New Intelligence: Marketing Analytics • IBM Business Analytics website

“Top-performing companies are three times more likely than lower performers to be sophisticated users of analytics, and are two times more likely to say that their analytics use is a competitive differentiator.“

- MIT Sloan Management Review (link)

The explosion of social conversations across the many online channels is providing marketers with a never ending stream of incoming data.  The challenge for marketing professionals is to turn all that data into insights and then develop strategies/actions based on those insights. 

Drivers • Lots of data. Need to cut through all the noise.• Need insights that can help drive decisions• Driver three

Inhibitors/Challenges• Lots of data. Need to cut through all the noise• Integrating data from all sources (web, search, video,

mobile, and social conversations).• Analytic tools tend to be too complex, requiring

specialized resources.• How can marketers swiftly put predictive models in

action, so they deliver value rather than simply being an intellectual exercise?

Implications• Trend is towards easy to use analytic applications that

can monitor changes in consumer, constituent and employee attitudes, uncover deeper insights, and then predict key factors that will drive future customer acquisition and retention campaigns.

“Success with business analytics requires more than the data and algorithms. It requires a company culture committed to using information for breakthrough ideas and operations.“

- IBM Website (link)

© 2010 IBM Corporation

8. Real Time Web Assistance Connecting Buyer With Subject Matter Experts

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Today

Product Subject Matter Expert

Customer visits website, then chats with contact center to get answers to questions. For questions that contact center can’t answer, a product specialist calls the customer back at a later time

Contact Center

Customer

Trend 1

Contact Center locates and connects Product Subject Matter expert into the chat room where questions are answered immediately

Contact Center Chat Specialist

Customer

Trend 2

Customer

Product Subject Matter Expert

Product Subject Matter Expert

Customer uses company expert locator system on website and connects with subject matter expert via online community and/or social network sites (e.g. Twitter)

© 2010 IBM Corporation

8. Real Time Web Assistance Connecting Buyer With Subject Matter Experts

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For More Information• Forrester Blogs: Online Customer Service • Forrester: Making Proactive Chat Work • Fretail Technology Review, October 2009 (link)

“44% of online consumers say that having questions answered by a live person while in the middle of an online purchase is one of the most important features a Web site can offer“

- Forrester, June 2010 (link)

Your online customer has an “I want it now” mind set and they expecting to find answers to their questions when they visit your website. Real-time chat services have become popular in the past few years to meet this need.

Drivers • Customers expect real-time service / answers to their

questions…and on different channels.

Inhibitors/Challenges• Strong unified communications systems needed• Expertise Locator systems are in their infancy

Implications• Proactive chat invitations might annoy some customers• Users want to be able to receive real-time support and

have multiple options to contact a company• Expert locator systems need to be built to enable linking

customers with in-house subject matter experts.• Leading edge companies will test ways of linking high value

customers up to subject matter experts when those customers have questions while visiting company websites.

• Leading companies will find ways to integrate Twitter and real-time chat services to provide seamless customer service experience.

“64% of consumers who have engaged with an agent through a Chat session said they would rather use this channel than speak with an agent on the phone“

- Fretail Technology Review, October 2009 (link)

© 2010 IBM Corporation

9. Privacy Issues Continue

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“ 88% of parents and 85% of teens – want online companies to get their opt in before the companies use their personal information for marketing”

- Common Sense Media, August 2010 (link)

- Lawyers.com Survey, October 2010 (link)

© 2010 IBM Corporation

9. Online Privacy Concerns Continue

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For More Information• Forrester Blog Post: Facebook, Privacy & Lawmakers: What Should

Marketers Do? Link • Jeremiah Owyang: Matrix: Challenges of the Social Technology

Industry Link • Common Sense Media: Online Privacy: What Does It Mean To Parents

and Kids? Link• Lawyers.com Social Networking Survey Press Release Link• WSJ – Facebook in Privacy Breach Link

“As more individuals share information the greater the risk that this content can cause harm by malicious parties. Furthermore the more brands use this data to do accurate marketing, the fear of ‘big brother’ will increase”.

- Jeremiah Owyang, July 2010 (link)

Sharing information on websites and social networks have benefits, but they also make our personal information very public. Marketers need to guard personal information carefully in order to maintain trust.

Drivers • Social Networking, which is exploding, is all about

sharing information to friends on the Internet• Anything posted on the Internet can get copied,

pasted, forwarded, search and viewed by unintended audiences

• Consumers are demanding that website content and online experience be customized and personalized to their wants and needs.

Inhibitors/Challenges• Terms of Service information tends to be lengthy and

complex to read / understand. • Marketers need personal information in order to

provide personalized content that consumers want to experience.

Implications• Even when you believe your information is protected,

nothing is as private as you might think • Government regulation will occur if the marketing

industry does not take privacy seriously•

Credit: Common Sense Media (link)

“ 88% of parents and 85% of teens – want online companies to get their opt in before the companies use their personal information for marketing” - Common Sense Media, August 2010 (link)

© 2010 IBM Corporation

10. Digital Marketing Optimization Emerges as a Priority

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Altimeter, Nov 2010 (link)

“Many businesses now realize they’ve lost intellectual control over a seemingly galactic number of social media projects and that there is too much duplication, inconsistency, and poor coordination between them. As a result, organizations are seeking ways to consolidate, optimize, and bring focus to their social media efforts”.

- Dachis Group: Sept 2010 (link)

© 2010 IBM Corporation

Digital Marketing Optimization Emerges As A Priority. 

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For More Information• Mashable: HOW TO: Optimize Your Social Media Marketing Strategy (link) • Dachis Group: Introducing The Social Business Unit (link) and The 2010 Social

Business Landscape (link) • Forrester: Optimizing Social Media in B2B Marketing and Product Management (

link)

The past few years we have seen new ‘islands’ of digital marketing capabilities emerge within marketing.  For most companies these ‘islands’ are not well integrated into an overall cohesive marketing strategy. 

Drivers • New channels, • New technologies• Experimental projects

Inhibitors/Challenges• Lack of corporate wide social media policies• Lack of skills • Integration of digital strategy with traditional

strategyImplications• :Large enterprises need to centralize the

development of corporate wide social media, processes, tools, and professions.

• In 2011 expect to see a focus from marketing leaders to focus on optimizing and integrating these separate initiatives into an overall umbrella marketing strategy.

“Successful community marketing requires more than setting up group pages on LinkedIn or posting videos to YouTube”. - Laura Ramos, Forrester Research (link)

Overall Strategy Digital Execution

In 2011 social “strategists will start to infuse the most trusted conversations of prospects and customers back to the corporate website closer to the point of purchase or during customer support.” - Jeremiah Owyang, Altimeter Group,Nov 2010 (link)

Link and

Optimize

© 2010 IBM Corporation

Thank You!

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