Big Picture Perspectives on Consumers and Marketing in an Always-on, Digital World

Big Picture Perspective on Consumers and Marketers in an Always-on, Digital World

July 14, 2014

Presented by Geoffrey RamseyChairman, Co-Founder @geofframsey

§ How are consumers spending their time and money in a digital world?

§ How are marketers reaching those connected consumers?

§ Where are the marketing and media dollars going?

Agenda

@geofframsey

©2014 eMarketer Inc.

Consumers are spending more time and money online

5 hours 46 minutes 47% of daily media time

$449B US B2C ecommerce sales

©2014 eMarketer Inc.Source: eMarketer, Dec 2013/April 2014

A closer look at where digital time is going… versus television


2 hours 51 minutes, or 23% of daily

media time spent on mobile devices

2 hours 12 minutes, or

18% of daily media time spent on

desktops/laptopsSource: eMarketer, April, 2014

>4 hours 28 minutes, or 37% of daily

media time spent with television

+

With mobile: being online has become a persistent, anywhere state

Mobile users check their phones 100X

dailySource: Mobile Posse and Phoenix Marketing International, 2013


Smartphones & tablets have reached critical mass in the U.S. (millions of users)

Source: eMarketer, March 2014

163.9M users

51.4% of population

147.2M users

46.2% of population

% of population on smartphones, by age group (2014)

TotalUnder 11

12 - 1718 - 2425 - 3435 - 4445 - 5455 - 64

65+0% 40% 80%

19.9%53.8%

61.7%77.8%78.8%79.1%

55.1%4.8%

51.4%

Source: eMarketer, 2014

51.4%

In 2017, two-thirds of the U.S. population are on smartphones

TotalUnder 11

12 - 1718 - 2425 - 3435 - 4445 - 5455 - 64

65+0% 50% 100%

29.5%81.4%

90.3%92.9%94.4%95.2%

76.5%6.8%

66.9%


64%

Smartphone Users 51% of

populationDigital

Video Viewers 61% of population

©2013 eMarketer Inc.Source: eMarketer 2014

Social Users 54% of population

Tablet Users 46% of population

The U.S. landscape for digital activities (penetration within total population)

Smart TV Users

16% of population

Smart

% of population watching digital video, by type of content


0%

10%

20%

30%

40%

50%

60%

70%

Any TV Shows Movies

33%

45%

61%

Source: eMarketer, June, 2014

% of population watching digital video, by type of content


77%of tablet users are watching video on

their tablets1/2of smartphone

users are watching

video on their phones

Accounts for only

3.2 minutes per day,

versus 5.1 hours

of traditional TV

!

—Nielsen, 2014

113 million, or 36% of the U.S. population, are now regularly using

some form of connected TV

Who sits around and just watches TV anymore?

86% of U.S. smartphone owners say they use their devices while watching TV, and nearly half do so daily–Nielsen, 2014

At the same time, social network activity is going mobile, and vice versa

73%of social network

users access social media on

their phones !

––eMarketer

>70%of time spent

with social media happens on

phones !

––comScore

Mobile shopping, buying and commerce are exploding

eMarketer, April, 2014

2014 2018

2.3X

M-commerce Retail Sales(% of total ecommerce) $197 B

30%$84 B

19%

Researching products has largely become a digital experience


Desktop Phone/Tablet

II. How Are Marketers Reaching the

Connected Consumer?

It’s a struggle to keep on top of the data

43% “Poorly

Integrated”

46% “Improving”

Complex attribution and measurement models remain a work in progress


64%: Marketers using last-touch and/or first-touch metrics

22%: Marketers using cross-channel attribution approaches

Source: The CMO Club/Visual IQ, Jan 2014; Webmarketing123, Nov 2013

END GOAL: harvest cross-screen identities by tapping into the streams of data emanating from Mobile, Video & Social activity across platforms and devices

The antidote to fragmentation is a unified view of the consumer!



Smart use of data––across devices––is the only way to

keep up with rising consumer expectations, especially

with mobile.

A majority of marketers plan to increase their spending on Content Marketing

71%

74% of marketers worldwide said they would increase their content marketing

dollars !

—Econsultancy, 2014

Content Marketing is a challenge…

With Content Marketing, the bar for quality is very high…

NATIVE advertising???

“Marketing should be as

compelling and engaging as the

content you would see from your family and

friends.”

Think of mobile as the Swiss Army Knife of marketing

Pocket-sized Omnichannel

Marketing Device

Location Services

Mobile Social

Mobile Commerce

Mobile Payments

In-Store Mapping

Email

Coupon Delivery

Text Notifications

Mobile Apps

Mobile Search

Watch for increased use of mobile location-based data

30 - 40%

41% of worldwide firms collected location-based data about consumers in 2013, but 23% plan to start

––EIU, 2013

31% of global companies (and 39% of agencies) are using location-based targeting

––Econsultancy and Responsys, 2013

Local mobile ad spend will rise from 40% of total US mobile ad spend in 2013 to 52% by 2018

––BIA Kelsey, Nov, 2013

Location Services

I. Ecommerce TrendsIII. Where are the media

dollars flowing?

Total media will see a resurgence in growth this year

1.1%

But if you strip out digital & mobile, growth is only:

2016: Mobile ad spending overtakes the desktop

Get ready for two key inflection points


Source: eMarketer, March 2014*share of U.S. media dollars

!

2018: Digital ad spending (37%) overtakes TV (36%)*

$51BMeanwhile, we reach another milestone this year:


Total spending on US digital advertising

Source: eMarketer, June 2014

Digital will continue growing at double-digit rates

“[P&G is] getting close to 30% of spending being in… the digital, social and mobile spaces.”––Jon Moeller, CFO, Procter & Gamble

66%Digital spending is highly concentrated among a handful of companies (two-thirds of dollars go to nine companies)



Desktop spending will dip 1.2% in 2014

Look out for the shift happening within the digital ad spending mix

Mobile spending will increase by 83%

Source: eMarketer, March 2014©2014 eMarketer Inc.

Desktopocalypse???

Are we reaching the “End of Days” for our desktop-centric ad ecosystem???

Look at desktop vs. mobile ad spending trends

In 2016, mobile will surpass the desktop by 16%


By 2018, mobile = 71% of the digital pie


Desktop = 29%

Mobile ad spending is on a tear

12.5X

Comparative Estimates

US mobile spending growth is driven by both display and search

87% Display82% Search

% of Advertising Revenue that Will Come from Mobile in 2014

68% 84%37%

––eMarketer, 2014

Digital video ad spending is also ramping fast


2X

Where the digital video dollars are going

Mobile video ad spending will grow faster than any other channel

In absolute dollars, TV trumps digital video in annual ad spending increases


TV $s

$6.8BTotal Spending on US Social Network Advertising



= 71% of social media $s

Ad buying is increasingly automated

64%©2014 eMarketer Inc.

Source: MAGNA GLOBAL, Oct 2013

Share of US digital display ads that could be purchased

programmatically in 2014

RTB, as a subset of programmatic, will also expand rapidly

Sources: eMarketer, 2014

US Real-Time Bidding Display Ad Spending (in billions)

22% of

display spend

30% of

display spend


Source: MAGNA GLOBAL, Oct 2013

Programmatic… still a work-in-progress

Only 12% of senior agency buyers trust it to properly or accurately execute their orders

––Strata, 2014

Over 60% don’t feel the industry has an

accurate and unified definition of it

––Strata, 2014

1/2 of marketers don’t understand it well enough to buy and execute campaigns with it

––ANA and Forrester, 2014

% of respondents

Programmatic Approaches that US ExecutiveMarketers Currently Use vs. Plan to Use*, Sep 2013

Audience segmentation79%

91%

Utilization of auction-based approaches to media buying (e.g.,through a real-time bidding platform)

79%86%

Insight development63%

88%

Automation of back-end processes59%

86%

Automation of "premium" digital media buying processes59%

79%

Content optimization47%

69%

Automation of traditional media buying processes (e.g.,purchasing print advertising)

22%44%

Currently Next 2 years

Note: *in the next 2 yearsSource: Winterberry Group and the Interactive Advertising Bureau (IAB),"Programmatic Everywhere? Data, Technology and the Future of AudienceEngagement," Nov 4, 2013165667 www.eMarketer.com

Watch for programmatic buying to extend rapidly to premium inventory


Programmatic will migrate quickly to video and mobile


Are you prepared for the transformation?

agree that marketing is undergoing a revolution84%––Adobe, 2014 (survey among 1,004 US marketers)

expect digital and mobile to transform their businesses over the next 5 years…

78%

––Accenture, 2014 (survey among 600 global executives)

21% think they’ll be able to reap…yet onlythe benefits

… and speaking of change…

of marketers expect their role to change within the next year (and 81% within the next 3 years)

64%

––Adobe, 2014 (survey among 1,004 US marketers)

Geoffrey Ramsey Chairman, Co-Founder [email protected] @geofframsey

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