2012 Sector Trends - JEGI

jegi.com

2012 Sector Trends - JEGI

www.jegi.com

Since 1987

2012 Sector Trends

2012 JEGI Media & Technology Conference

Time Warner Center, New York City

January 19, 2012


2012 Sector Trends

B2B Marketing Solutions

Richard Mead, Managing Director, JEGI

2


Reports of Death of B2B Greatly Exaggerated

http://www.youtube.com/watch?v=4vuW6tQ0218

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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

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4


$40.0

$35.0

$30.0

$25.0

$20.0

$15.0

$10.0

$5.0

-

$30.9 $30.6

Source: VSS Communications Industry Forecast 2011-2015

B2B Marketing Solutions – Key Trend #1

B2B Marketing Solutions Spending

($billions)

$27.2 $27.2

$28.5

$30.2 $31.9

$34.1

$36.0

2007 2008 2009 2010 2011 2012 2013 2014 2015

Live & Virtual Events E-Media

B2B Magazines B2B Outsourced Custom Publishing

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5


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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B2B Marketing Solutions – Key Trend #2

Providing One-Stop Sourcing for B2B Marketing Solutions

Global

Sellers

Content

Research

Events

Lead Gen

eCommerce

Custom

Marketing

Global

Buyers

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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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8


B2B Marketing Solutions – Key Trend #2

An Integrated Approach from Northstar Travel

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B2B Marketing Solutions – Key Trend #3

The B2B Marketing Solutions E-volution Requires Initiative,

Innovation, and Investment

Control the Community,

Control the Game

More Relevance,

More Reward

New B2B Holistic Platforms

Attractive B2B

Investment Opportunities

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B2B Marketing Solutions – Key Trend #3

Count Down To Attractive Valuation Implications

for B2B Investors

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B2B Marketing Solutions – Key Trend #3

A New Dawn for B2B Marketing Solutions and Their Investors

Hello Tolman

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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

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$25

$20

$15

$10

$5

$7.1

$7.6

$8.0

$9.9

$12.3

$14.8

$16.1

$19.8

$23.9

2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: eMarketer, 2011. Forrester Research, 2011

+$6.8 bn

Online Display Market Growing Well

U.S. Online Display Spending

($billions)

+85% over 3

years

$6.8 billion net

new spend

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Big 5 Control the Market

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2009

Spending

2012E

Spending

Growth in U.S. Online Display Spending

2009-2012E ($billions)

+$6.8

+$4.8

Online Display Top 5 Online

Display

Source: eMarketer, 2011

+$2.0

"Everyone

Else" Online

Display

$8.0 $3.1 $4.9

$14.8 $7.9 $6.9

“Everyone Else” Fighting for 30% of Growth

Share of Net New Display Spending

30%

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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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Share of Time Spent vs. Advertising Spending, U.S. 2010

50%

40%

30%

20%

10%

0%

8%

27%

16%

11%

43% 43%

25%

19%

8%

0.5%

Print Radio TV Internet Mobile

Source: Kleiner Perkins; eMarketer, March 2011

Time Spent Ad Spend

All Media is Not Created Equal

+$6.8

Biggest Red Herring

Growth in U.S. Online Display Spending

2009-2012E ($billions)

+$10.7

Online Display Television

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Online Display Not a Compelling Experience

Magazine Ad Standard Website Ad

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

Classic Funnel Marketing 101

Audience Targeting Down The Purchase Funnel

Awareness

Consideration

Preference

Purchase

Retention

Interest data

Demographic

(age, gender)

Psychographic

(mindset, propensity)

Social

(connections, influence)

Contextual

(relevant, content)

Intent Data

Shopping

Search retargeting

Remarketing

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But Data Value Varies ... By A Lot

On the Internet, nobody knows you’re a dog

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Female

Urban Renter

With Children

HH Income: $20,000 - $29,000

Source: Major online data aggregator

Most Online Consumer Data is of Limited Effectiveness

Profile of Tolman Geffs

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Consumer Data

1,900+ multi-channel retailers

Across all channels

8+ billion transactions

SKU Level

Data

More Effective Data Originates With Merchants

I-Behavior

+Aggregation

+Segmentation

+Modeling

+Insights

Predictive

Audience

Modeling

» »

Multi-Channel

Catalog

Direct Mail

Retail

Email

Online

Mobile

Most Effective Data Approach is Publishers Leveraging Own

Data and Supplementing With Third-Party Data

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Data

Delivery

Expect More M&A Focused on “First Party” Data

Management

Consumer Platform

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2012 Sector Trends

Integrated Marketing Services

David Clark, Managing Director, JEGI

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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

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$120

$100

$80

$60

$40

$20

-

2007 2008 2009 2010 2011 2012 2013 2014 2015

Note: BTL excludes direct marketing and B2B promotion

Print includes newspapers, magazines, B2B media and directories

BTL And Interactive Are Attractive Sources of Growth

Print Ad Spend vs. Below-the-line & Interactive Spend

($billions)

2011

2011 BTL

= $83.4

2011

Interactive

= $34.5

2011 Print

= $60.4

Source: VSS Communications Industry Forecast 2011-2015

Forrester US Interactive Marketing Forecast, 2011

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Publishers Building Marketing Platforms

Deep Expertise in Database Marketing, Content

Development, Tablet Media and Consumer Apps

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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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Brands Pushing into Social

+$300 million in social media M&A

Foundation for new, direct

social/promotional marketing

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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

Agencies Still Dominant

200 acquisitions / investments in 2011

Social, digital direct and best in-class

development

Unique global perspective and influence

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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

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Formidable New Competition

$11 billion marketing tech deals

in 2010-11

$26.1 billion cash on hand

Rapidly expanding integration

and API partner networks

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2012 Sector Trends

Direct-to-Consumer

Scott Peters, Co-President, JEGI

40


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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Nike

Phase 1 2 3 4

Direct-to-Consumer –

Brands Must Engage Their Customers Directly

The Retail Model is Evolving

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

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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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Source: Outbrain

Direct-to-Consumer –

Brands Must Engage Their Customers Directly

Online Marketing Channels Require New Skills

Breakdown of Known External

Traffic Sources

Social 11%

Portal 17%

Search 41%

Content Sites 31%

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

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Direct-to-Consumer –

Brands Must Engage Their Customers Directly

eCommerce Technology Decisions Become Mission Critical

eCommerce Capabilities Required

Online and offline transactions

Multi-channel pricing and promotion

Major eCommerce Platforms

Supply chain management

Multi-channel marketing integration

CRM integration

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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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Nike.com

Uses

Direct-to-Consumer – Key Trend #2

Social Media is Becoming a Primary Point

of Connection with Customers

• Social media is shifting from

experimentation to core

• Nike.com has 5,534,790 “likes”

• 32,522 talking about this article…

• Branding

• Consumer Engagement

• Market Research

• Competitive Intelligence

• eCommerce & more

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Online

Advertising

Direct-to-Consumer – Key Trend #2

Consumers Expect Engagement from Every

Marketing Channel

Mobile

Catalog &

Direct Mail

Website

Social Media

and Mobile

Engagement

In-Store

Out of Home

Magazines &

Newspapers

TV & Radio

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Direct-to-Consumer – Key Trend #2

Rise of the Social Media Data Analytics Providers

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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

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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

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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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B2B Marketing Solutions – Richard Mead

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

Integrated Marketing Services – David Clark

Publishes expanding marketing services footprint

Brands are now multi-media/channel publishers

CMO focused on enterprise marketing technology

Online display growth concentrated in Big 5

Constrained by weak ad formats

In Closing ...

Online Display Advertising – Tolman Geffs

But data getting smarter for publishers and

merchants

Direct-To-Consumer – Scott Peters

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…

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www.jegi.com

Since 1987

2012 Sector Trends

150 East 52 nd Street 18th Floor

New York, NY 10022

Phone: (212) 754-0710

Fax: (212) 754-0337

January 19, 2012

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