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Booz Allen Hamilton — Always On Alumni Webinar (April 2008)
35 slides from Booz Allen Hamilton's conference presentation, Apr 10, 2008
Slide 1: Always On: Advertising, Marketing, and Media in an Era of Consumer Control
Always On On:: Advertising, Marketing, and Media in an Era of Consumer Control Christopher Vollmer April 10, 2008 Leader, US Media and Entertainment Alumni Webinar Booz Allen Hamilton
Slide 2: Always On first in a branded S+B series
““Always Always On On”” first in a branded S+B series: Future of Business with McGraw Hill Advertising & Marketing Energy Manufacturing Mergers & Acquisitions Always On: Advertising, Energy Shift: Marketing, and Media in an Game-Changing Options Era of Consumer Control for Fueling the Future by Chri
Slide 3: Today's Focus: How Advertising, Marketing and Media Are Being Redefined
Today ’s Focus: How Advertising, Marketing Today’s And Media Are Being Redefined New opportunities for growth and market leadership across the marketing and media ecosystem Marketing more measurable, targeted and “two-way/ interactive” than ever before Many new platforms to entertain and engag
Slide 4: Media Markets Continue To Fragment
Media Markets Continue To Fragment # of UK Programs with Audiences of 15MM+ 1999 2004 2007 153 4 0 Average TV Channels Per Household (US) 1985 1995 2006 19 41 104 Source: BARB/Starcom; Booz Allen, Nielsen
Slide 5: Consumers Shifting Media Usage Towards More Interactivity And User Control
Consumers Shifting Media Usage Towards More Interactivity And User Control U.S. Growth of Time Spent with % of Time Spent with Media per Day Consumer Media: 2001 and 2006 (2007) (hours per year) 13.9 14.7 13.4 12.5 11.7 100% Video Music -19% 9% 9% 9% 7% 7% Games Broadcast Television -13% 14% 14% E-m
Slide 6: Online: More Time On Smaller Sites
Online: More Time On Smaller Sites Share of Traffic by Size of Site ~45% of Traffic 35% 100% Share of Page Views 6% 1% 3% 8% 44% 3% Site +10MM 5MM- 1MM- 500K- 100K- 25K- 0-25K Total Traffic 10MM 5MM 1MM 500K 100K Unique Visitors Note: (1) Sites covered by comScore Source: Web Server Survey – Netcraf
Slide 7: Digital Platforms Reaching Critical Mass
Digital Platforms Reaching Critical Mass U.S. Digital Media Households by Platform (2006, 2008E) Household Penetration 83% 64% 58% 44% 20% 120 2006 2008 97 100 88 Millions of Households 80 75 70 62 60 55 51 46 40 24 20 15 0 Mobile Phone Homes Digital TV Homes Broadband Homes Game Console Homes DVR H
Slide 8: The Always On World
The ““Always Always On On”” World 1. Proliferation of alternative media platforms that are at critical mass 2. Boundaries blurring between above- and below-the-line media 3. Advertising evolving from commercials to experiences 4. Intensifying focus on measurement of business impact 5. “Arms race” fo
Slide 9: New Advertising Playbook Emerging: Relevance, Interactivity, and Accountability
New Advertising Playbook Emerging: Relevance, Interactivity, and Accountability Branded Digital Viral Interactive Event Marketing/ Communities Online Video TV Sponsorships Reduced Role of Traditional Media in Marketing Mix from 40% to 33% (’03-’06) US sales increased during the same period by 7%
Slide 10: Marketing Dollars Shifting To Focus On Measurability And Engagement
Marketing Dollars Shifting To Focus On Measurability And Engagement Marketing Mix Growth 04-06 - 2004 vs. 2006 - $612 BN $688 BN Public Relations 10.0% Event Marketing 8.5% 4% 4% Other 2.0% Below the Consumer Promotion/ 19% 22% Incentives 8.0% Line Marketing 6.0% 23% 26% Trade Promotion/ Slotting Al
Slide 11: Major Players Transforming Their Marketing
Major Players Transforming Their Marketing Change the Redesign Marketing the Marketing Organization Mix New media/marketing New metrics (IAG) roles at Corporate – Slashed measured media recruited new sr. talent by 22% -- 2006-07 Intergrated communications Shifted ~20% of media planning app
Slide 12: Many Brand Advertisers Have Yet To Move Significant Spending Online
Many Brand Advertisers Have Yet To Move Significant Spending Online Online as % of Domestic Advertising 18% 17% By Major Category (2006) 14% 14% 14% 13% 8% 8% 7% Avg. 7% 4% 4% 4% 4% 4% 4% 4% 3% 2% 2% 2% 1% 1% Travel Apparel Home Furnishings Pharma Computers Toys Government Entertainment Auto Telco R
Slide 13: More Education, Better Metrics Required
More Education, Better Metrics Required Perceived Barriers to Online Spending Lack of experience/education 59% with new media platforms 81% Lack of senior organizational support 51% at the advertisers and agencies 79% Metrics are not comparable to 44% traditional media 74% Insufficient ability to 62
Slide 14: The Ecosystem Is At An Inflection Point
The Ecosystem Is At An Inflection Point Online Is No Longer Experimental – It’s Part Of The Media Mix Massive Audience Fragmentation: More Choices than Ever for Consumers and Advertisers Search and Ad Networks Have Been Key Growth Drivers Video and Social Networks Lots of Usage but Undermone
Slide 15: Marketers Get It: They Need to Catch Up To Where The Consumer Is
Marketers Get It: They Need to Catch Up To Where The Consumer Is Decrease Spending Increase Spending Digital Mobile Two-way PR Events Direct Mail TV One-way Print Out of Home Radio -100% -80% -60% -40% -20% 0% 20% 40% 60% 80% 100% % of Respondents Source: Marketing & Media Ecosystem 2010 survey and
Slide 16: More Ecosystem Complexity Expected
More Ecosystem Complexity Expected Impact of the Changing Media Landscape Dramatically changes inventory availability and inventory management 67% Increases the need for supply chain management capabilities in media companies 67% Increases the need for new partnerships 66% across the value chain Sig
Slide 17: And The Challenges of Always On Go Well Beyond The Media Mix
And The Challenges of ““Always Always On On”” Go Well Beyond The Media Mix Greater Potential Marketers Need for Insight, Multiple New Skills Measurement Key Challenges For Marketers With “Always On” Planning, Buying Other Constituents Cycles More Require Education Dynamic – Need (e.g., Sales, Retail
Slide 18: They Need Help to Move Even Faster
They Need Help to Move Even Faster Marketer View of the Ecosystem 70% 62% 60% 57% 52% 50% % of Responses 40% 30% 26% 20% 10% 0% Inability to measure Creative, strategic Partnerships with Marketers believe the effectiveness is and media buying Media companies their organizations a barrier capabilitie
Slide 19: Marketer Expectations Are Changing
Marketer Expectations Are Changing Marketers Believe the Following Capabilities Which Direct Partnerships Will Be Will Become More Important by 2010 More Important in the Future? 100% Consumer Insights 82% 53% of media respondents 90% expect to do more business 80% directly with marketers Behavioral
Slide 20: More Marketer Education Is Critical
More Marketer Education Is Critical Need for the Ad Sales Team to Educate Marketers and Agencies 100% 87% 80% % of Respondents 60% 40% 20% 13% 0% Very Important/ Not Important Important 70 % of Media Co’s Will Expand Their Co’s Education Capabilities By 2010 Source: Marketing & Media Ecosystem 2010
Slide 21: Digital Redefining Media Company DNA
Digital Redefining Media Company ““DNA” DNA” Media Services Offered Today 100% 90% 84% 80% 70% 70% % of Respondents 60% 56% 50% 45% 40% 40% 30% 20% 10% 0% Contextual Behavioral Performance E-mail Lead Targeting Targeting Marketing Marketing Generation Source: Marketing & Media Ecosystem 2010 survey
Slide 22: Media Metrics Moving Beyond Reach
Media Metrics Moving Beyond Reach Metrics Currently Tracked Reach 94% Engagement 62% Action 57% ROI 54% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% % of Respondents Source: Marketing & Media Ecosystem 2010 survey and Booz Allen Hamilton analysis
Slide 23: Media Offering a Broader Range of Services
Media Offering a Broader Range of Services Media Ad Sales Team Provides the Following Services: Campaign development and Idea generation 88% Target creative to the right audience 88% Creative development 79% Custom content 76% Cross platform integration and execution 72% Exclusive content 70% Consum
Slide 24: Media's Response: More Agency-like Services
Media ’s Response: More Agency Media’s -like Services Agency-like Media Perspectives Vis-à-vis Agencies Our company provides agency like 91% services to clients today We are rethinking relationships we have 65% with the advertising agencies The development of agency-like services by media companies
Slide 25: Media Strengthening Consumer Insights
Media Strengthening Consumer Insights Media Companies Will Deliver Cutting Edge Consumer Consumer Insights by 2010 Insights Require… 100% 90% Ability to track 78% 77% behavioral patterns 80% 70% % of Respondents Ability to tie media 76% 60% behaviors to sales 50% 40% Open channels for listening to c
Slide 26: Using Insights To Create Differentiation
Using Insights To Create Differentiation Respondents Agree… Providing strong consumer insights to 87% marketers creates a competitive advantage Media companies need to have more granular data on their consumers to avoid 77% commoditization of their ad inventory Providing aggregated consumer data to
Slide 27: Media Do See a Key Role for Agencies
Media Do See a Key Role for Agencies Responsibility For Each Of These Functions Lies With… 80% 76% 72% 69% 70% 60% 56% 52% % of Respondents 50% 40% 32% 33% 30% 25% 25% 20% 16% 17% 12% 10% 0% Creative Creative Communications Media Behavioral Consumer Production Development Planning Planning Targeting
Slide 28: Agencies Working To Catch-up With Marketers' Requirements And Needs
Agencies Working To Catch -up With Catch-up Marketers Marketers’’ Requirements And Needs Environment Facing Advertising Agencies Higher Bar, New Requirements … … And Significant Needs Campaign integration Many options for advertisers and Deeper digital consumers know-how Advertising key to d
Slide 29: Established Agencies Pursuing Different Strategies to Reinvent Their Businesses
Established Agencies Pursuing Different Strategies to Reinvent Their Businesses Size ‘07 = €6.2B Size ‘07 = €4.6B Big bet on marketing “Industrializing” creative services for multiple platforms 24/7 Real Media adding Building, lower-cost off- expertise in targeting, shore creative capabiliti
Slide 30: While Other Agency Models Emerge In Parallel
While Other Agency Models Emerge In Parallel Communications planning agency Holistic approach to media strategy Plays integrator role for Marketers Focus on integrated media ideas, rooted in digital Heritage in building business solutions (e.g., user interface for X-Box) Melds creative w
Slide 31: Leadership agenda for Marketers becoming more clear
Leadership agenda for Marketers becoming more clear Marketing As Higher proportion of spend in two-way media: Conversation online, mobile, events, PR, relationship marketing Insight into Greater focus on behavioral profiles of target Foresight consumers and processes to move in “real-time” Media
Slide 32: Some Media Players Moving Beyond Advertising To Marketing – Example: Meredith
Some Media Players Moving Beyond Advertising To Marketing – Example: Meredith Media Supplier Solution Provider Advertising Brand Building Impressions; Lead Generation; Awareness Calls to Action Transactional Strategic Platform-centric Discipline-neutral (TV, print) (email, digital, print, TV) Vendor
Slide 33: UK Highlights What Can Happen When The Agenda Shifts To Always On
UK Highlights What Can Happen When The Agenda Shifts To ““Always Always On On”” Online Share of Total Advertising Learnings from the UK (2002-2007E) 18% Marketers shifting 16% spending from traditional UK 14% media (TV, print) 12% Canada Marketers working 10% directly with online media 8% USA pa
Slide 34: Where To Learn More About Always On
Where To Learn More About ““Always Always On On”” And Booz Allen ’s Related Work Allen’s Go to www.BusinessFuture.com www. Buy the book at Amazon.com, Barnesandnoble.com and as of April 17 at bookstores everywhere Download our Marketing and Media Ecosystem 2010 study with the ANA, IAB and 4As
Slide 35: Thank You for Attending the Always On Webinar
Thank You for Attending the ““Always Always On On”” Webinar Christopher Vollmer April 10, 2008 Leader, US Media and Entertainment Alumni Webinar Booz Allen Hamilton
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