Speed Summary: FT 2013 Special Report on Digital and Social Media Marketing

Here’s a speed summary of the just-published Financial Times 2013 special report on Digital & Social Media Marketing (PDF (FT subscribers only)).

It’s a long report, published in tandem with today’s FT Digital Media conference in London, but we’ve summarised it down to key bullet points for you.  And if that’s too long, here’s the one word summary.

Television.

From ‘second screen’ TV experiences on tablets that boost TV advertising effectiveness to ‘addressable advertising’ (personalised and hyper targeted TV ads delivered digitally) and the shrinking of TV ad slots to fit digital attention spans, the FT paints the future of Digital & Social Media Marketing with television, not instead of it.

So standing atop the $205bn TV advertising mountain is the smartest place to be in digital and social media marketing right now; this makes sense – the secret to success has always been, and always will be, to stand next to the money.

Advertisers look for ways to follow consumers Emily Steel

• The big change in digital marketing is not that marketers have shifted nearly a fifth of their budgets to digital outlets, but that the divide between digital and traditional media is so blurred it may soon disappear.
• Rather than threaten the $205bn television ad business, digital promises to grow it, by helping advertisers understand the messages that will best resonate with a target audience, target the right ad to the right person at the right time, and make it easy for people to share those messages with their social networks, catapulting the brand to the centre of digital chatter.
• Whilst social media has now found its place in the world of digitally enhanced marketing as a strategic insight and targeting tool, mobile media has yet to find its niche; mobile is expected to capture more than 20 per cent of media consumption in the next five years, yet it receives only a minuscule portion of total advertising revenues, and a glut of mobile advertising inventory is causing mobile ad rates to plummet

Media: Watching television no longer rates as passive pastime Andrew Edgecliffe-Johnson

• The average American still spends about five hours a day glued to TV; the smart money in digital is being invested in making TV advertising better
• TV is not dead, it is just evolving into a two screen experience, the TV display and a tablet or smartphone.  “Lean-back” TV experiences, passively consumed from the comfort of the couch, are giving way to “lean-in” TV experiences, where viewers multitask viewing and interacting on smartphones and tablets
•  A survey by Time Warner’s Medialab found that 65 per cent habitually multitask with a digital device while watching TV. Much of this activity is in social media discussions of TV shows (tripled in the last 12 months), stimulated by TV networks to sell TV advertising space by showing their content is more engaging
• “I have no interest, frankly, in just growing the successes of Twitter and Facebook,”  says Philip Bourchier O’Ferrall, senior vice-president of Viacom International Media Networks: “My number one role … is to drive TV ratings.” To this Nielsen’s SocialGuide found that an 8.4 per cent increase in Twitter volume correlated to a 1 per cent rise in ratings for new shows among viewers aged 18 to 34. But for 35- to 49-year-olds, however, it took a 14 per cent jump in tweets to produce the same 1 per cent ratings bump.
• The rise of second screening is spawning a new generation of specialist second-screen agencies, creating content, data and tools to support the new twin-screen TV advertising industry. Viggle offers loyalty rewards to fans who “check into” shows, GetGlue, a social TV app developer has 3m users who have checked into, rated or reviewed 500m shows, and Bluefin Labs and SocialGuide, purchased by Twitter and TV metrics giant Nielsen respectively, analyse social TV chatter.

Online video: Web of creativity means greater opportunities to boost sales Matthew Garrahan

• The big idea is “addressable advertising“, a fancy name for online ad targeting, and the big opportunity is to turn TV advertising into addressable advertising, using personal data to get the right ad in front of the right person. DirecTV and Dish Network, two satellite operators, and Hulu are already with online addressable TV advertising
• As TV and video consumption moves online, there has been an explosion of professional content to wrap advertising around.  Rapidly expanding audiences are only doing so much to ease the downward trend of advertising CPM (cost per thousand impressions) rates. Down 15% from 2011, eMarketer expects video CPMs to fall a further 30% from  $45 in 2010 to $31.20 in the next four years.
• With more much more content funded only by a little more advertising money (up from $4bn in 2013 to $8bn by 2016), the future will belong to content producers who can produce premium quality original content that consistently attract eyeballs

Networking apps: Agencies scramble to find the next big thing Tim Bradshaw

• Advertisers should focus on trends that lie behind technology, not the technology itself – whether geeky and gimmicky Google Glass or popular networking apps (video, image, chat and data sharing).
• It may be better for advertisers to use Instagram-style posters with comment-style tag-lines in traditional media than to run an Instagram campaign.  Likewise it may be better to shorten TV ads, from the 30-second sport to a 6-second Vine-length video than to run a campaign on Vine itself. “Five seconds is the right length” for a TV ad today say TV ad man Trevor Beattie
• The challenge is to make advertising fit new media expectations set by trends digital; this means becoming masters of short, snappy visual content.
• The opportunity to create trans-media advertising adapted to digital trends.  For example, advertising content from Starbucks, Nike, MTV and Forever 21 is created to be sharable on networking apps such as Instagram. Meanwhile, leave Google Glass to the geeks.

Privacy: Data industry scrutinised over profiling Emily Steel

• Global data brokers such as Acxiom and Datalogix are coming under scrutiny from authorities as they amass consumer data and use it to improve marketing ROI
• Axciom, that collects information about more than 700m people across the world and sells that information to more than 7,000 clients, uses credit card transaction data, primary research, geographic information and other demographic details to improve as targeting and can triple the return on investment of ad campaigns, and boost targeted consumer spending by 50%
• Facebook has integrated Datalogix data into its ad offer, allowing brands to buy ads targeted at people based on their spending habits, for example, people who spend three times more than the national average on children’s cereal. Advertisers can then can tap the Datalogix data to figure out whether or not people who saw the ad end up visiting the store and buying the advertised product.
• Although lawmakers may sympathise with consumer privacy advocates who fear a world where the tracking, collection and selling of personal information creates a so-called “database of ruin” of past financial, sexual, and medical follies/woes, they is a conflict of interests. Politicians deploy the same tracking, analytics, personalisation and targeting technologies as corporations in their election campaigns.

Future of search: Keyword-driven system requires refinement Richard Waters

• Although Google search remains the undisputed king of online advertising, traditional keyword-driven search advertising is set to evolve, with Facebook and Amazon poised to move in
• The future of search is hyper-targeted advertising based not only on search terms, but Amazon / credit card purchase data, Facebook personal data, and mobile location data.

Smartphones: Canny advertisers target your mobile phone Robert Cookson

• After a slow start, mobile advertising is taking off; in the UK, mobile advertising spend more than doubled in 2012 to more than £500m, and in the US, mobile ad spending has become the fastest growing among all media categories as smartphone ownership surged past 50%.
• Nevertheless mobile advertising only represents less than 3 per cent of total ad spend across all media, and currently there is more mobile ad space available than advertising to fill it, resulting in average ad rates (cost per thousand impressions) slumping to well below $1.
• One of the reasons for the slow ramping of mobile advertising is that it has been stuck in a search and display ad rut, serving canned text, static images or dumb videos.  The opportunity is to reinvent mobile advertising with immersive rich-media interactive features. Nuance, a US company that develops speech recognition technology, this month launched a product that allows advertisers to create ads that respond to a user’s voice. And Blismedia recently bought up ad space on smartphones near ad agency offices with an interactive ad that used the gesture control functionality of handsets
• The future potential of mobile advertising lies not only in getting the right message to the right person at the right place at the right time, but in improving the advertising experience.

Real-time marketing: Instant response requires cultural change by brand owners Rob Budden

• The future of marketing is agile marketing, responsive and reactive creative that responds in real time to events with interesting content.  This means creating creative in minutes, not months. Coca-cola has committed to doing doing 30 per cent of its marketing in an agile way.
• In agile marketing, time is everything; similar creative placed just hours apart can have vastly different results.  Mondelez (makers of Oreos cookies) and Motel 6 were both quick to create content around this year’s Super Bowl power cut, and both with similar content.  Mondelez took minutes, Motel 6 took hours.  Mondelez’ content was shared more than 15,000 times, Motel 6 less than 30 times.
• Agile marketing requires a mind-shift from brands, brands can no longer get away with telling consumers they are interesting when they want to tell them, they have to be interesting when consumers want to listen

People: Struggle to stay on top of a moveable feast April Dembosky

• A talent war is raging between advertising agencies and tech companies, both are looking for technical talent and marketing strategists – ideally in the same person.
• But what’s required in terms of technical talent and strategic planning is a fast-moving moveable feast, understanding the role of search in the marketing mix used to be key, then it was social media, then apps, and now user experience.
• The talent war is making recruitment difficult, especially for ad agencies who find the allure of the ad exec lifestyle waning. Young talent want to be part of the change, not the old guard, and have a mission to change the world, whilst working in a flat non-hierarchical organisation (with share options).
• Ad agencies are having to adapt and reposition themselves by abandoning the language and corporate paraphernalia of traditional advertising; Aegis media have gone so far as to jettison the terms ‘advertising’ and ‘consumers’

Social network: Facebook measures up for marketers Emily Steel

• Facebook has spent the last year reinventing itself to become more attractive to advertisers and to transform itself from “just being a social media conversation… to being an indispensable media partner”. Ads are now far more prominent in users’ newsfeeds, especially on mobile devices, targeting is better, and advertising metrics have been improved.
• And it looks like it is working; a year after announcing that it would stop announced it would stop buying Facebook ads because of questions over what returns the ads generated, General Motors is back testing Facebook’s new targeting and measurement offerings for a mobile ad campaign promoting its Chevrolet Sonic sedan.
• Developments in Facebook ads have helped Unilever understand how Facebook ads lift sales, spurring big promotions such as a recent campaign in Brazil for Seda hair products. Unilever designed a campaign with mobile ads featuring a soap opera actress. The company credits the campaign with boosting market share.
• Overall, advertisers are expected to spend more than $5.6bn on Facebook advertising this year, up more than 31 per cent from $4.3bn in 2012, according to eMarketer. On mobile alone, Facebook is expected to earn $1.5bn this year, more than three times the $471m it earned in 2012.