Addressability At Scale. Craig Dempster

Transcription

1 Addressability At Scale Craig Dempster 1

2 Agenda Introduction to Merkle Digital marketing trends Competitive advantage through addressability at scale Digital addressability The digital platforms Competitive advantage and the new competencies needed 2

3 Revenue in millions Company Overview Distinctive experience Privately held by current management since world class clients Manage over 140 marketing databases Manage over 3.7 billion 1 st party customer records Inform over $10 billion marketing decisions annually Sustained 25% growth since 1989 Extraordinary expertise 2,000+ Employees 250+ advanced degreed statisticians 300+ dedicated digital media professionals 650+ marketing technology professionals 100+ creative professionals Awarded and recognized $400 $350 $300 $250 $200 $150 $100 $50 $365 $320 $303 $255 $223 $211 $180 $ E Bronze Stevie Award Business to Business Marketing Campaign of the Year- Business Services 13 Ad Age A-List: Agency to Watch in 2012 Largest privately-held agency in U.S., Ad Age 12 6th Largest CRM/Direct Marketing Agency, Ad Age 12 Recognized by SmartCEO Magazine as a Future 50 Company 11 NCDM Awards 04, 05, 06, 09, 10, 11 Recognized by Forrester 03, 06, 07 & 10 Multiple MAXI Award Winner Multiple DMA Innovation Award Winner 10 3

4 4 Our Clients

5 We are a Customer Relationship Marketing Agency Increased customer value Integrating CRM diverse Outcomes capabilities Improved marketing ROI Through optimizing customer touchpoints Improved customer experience POS Phone Site Mobile TV Radio Display Print Social Mail Search Integrating diverse capabilities Management consulting Data & analytics Marketing technology Experience creation & digital media Insurance & wealth management Utilizing industry experience to drive strategy Retail High-tech Retail banking & Consumer finance Nonprofit Travel Media & Life sciences entertainment Life sciences Nonprofit Delivered across multiple engagement types Consulting Marketing services Agency of record 5

6 Our engagement Architecture Assessments Roadmap & Blueprints Digital Readiness UX Audits Marketing Technology Provider We develop, integrate and manage Audience Management systems. Connected Recognition (cr) Marketing Database Attribution & Insights Interactive Marketing Hub Decision Management Consulting Technology Agency Analytics Digital Agency We have a services organization that optimizes Audience performance Search Digital Media Social Site & Mobile Creative & UX Attribution Media Mix Targeting 6

7 Agenda Introduction to Merkle Digital marketing trends Competitive advantage through addressability at scale Digital addressability The digital platforms Competitive advantage and the new competencies needed 7

8 Setting some context Today Focus on the what as in Tomorrow Focus on the how as in What s going on and how is it creating an opportunity? How do you capitalize on the opportunity? 8

9 The Age of the (Addressable) Consumer Macro-trends are changing the landscape Addressability at scale Social networks at scale Mobility at scale And consumers are changing And marketers are responding by Shift in media consumption patterns Putting the customer at the center of business strategy Changing consumer purchase behaviors Mass consumer to consumer engagement The Always Addressable Customer Focusing on big data and its ability to drive value Embracing digital media and channels to enhance customer experience 9

10 Migration of the consumer from offline to digital Hours TV 3.8 to 3.1 Radio 1.6 to 1.4 Print 0.7 to 0.4 Consumer hours spent per day on non-digital channels are decreasing, while use of digital channels are steadily increasing Social media 0.1 to 1.1 Digital content 1.7 to

11 Advertising Budgets Are Shifting Survey on the amount marketers will increase/decrease their budgeting in these forms of advertisement Mobile Advertising 69% 20% Social Media Advertising 70% 29% Video Advertising 64% 24% Rich Media Advertising 23% 50% Standard Display Advertising 19% 48% Connected TV / IPTV 13% 20% Increase Stay about the same Decrease Don t use 11

12 12 Social and Mobile trends Always connected

13 The Rapidly Growing Digital Advertising Market Current and projected market share from % 7.3% 23.4% 6.7% 7.1% 0.5 % 6.3% 6.6% 0.6% Internet Outdoor Cinema 39.9% 40.0% Radio Television Magazines Newspapers 9.4% 7.3% 20.3% 15.9%

14 Digitization is creating massive amounts of data being used in digital marketing There were 5 exabytes (5 million terabytes) of information created between the dawn of civilization through 2003 but that much information is now created every 2 days, and the pace is increasing. - Eric Schmidt 247 billion messages are sent each day 30 billion pieces of content shared on Facebook every day 29.8 billion ads served by Google each day 400,000 bid requests per second processed on the AppNexus ad platform Merkle manages over 3 petabytes of marketing data, increasing by approximately 10TB/month Storage for one client includes 8,824,526,619 page views (to be exact) and over 24 terabytes in a single database 14

15 Programmatic media has already taken over 50% share in the US digital media market with RTB the fastest growing area US: Programmatic Share (% of Digital media transactions) 100% 80% 60% 40% 20% 0% 21% 17% 27% Overall Digital Media Marketplace 36% - $61B by % 62% 31% Over 76% half of all digital media today is bought programmatically 32% 32% 29% $8B in RTB media 25% by 2017 growing at 59% CAGR 18% 47% 52% $8B in Custom Audience by 41% % 34% 28% 19% 11% RTB Non-RTB Non-Programmatic Source: Magna Global 15

16 Agenda Introduction to Merkle Digital marketing trends Competitive advantage through addressability at scale Digital addressability The digital platforms Competitive advantage and the new competencies needed 16

17 Infrastructure The opportunity, framework and competencies Addressability at Scale The CCRM Framework Enterprise segmentation, which includes value and lifecycle dimensions, forms the foundation of CCF Customer Strategy Segmentation Value Planning Measurement and attribution at the segment level then drives macro-level media and channel budgeting allocation What data, systems, tools and technologies will be necessary? Experience Delivery Media Planning Channel Planning Targeting & Personalization This creates a complete optimized customer experience that drives increased LTV, efficiencies and shareholder value Organization How do we organize and what capabilities and business processes will be necessary? Financial Management Measurement & Attribution Budget Allocation Integrated targeting and customization across media and channels are optimized at the segment and individual level The New Platform Marketer Competencies Identity Management Addressability Optimization Audience Management Platforms Organization Targeting Personalization Measurement Tech Stack Utilization 17

18 Addressability at scale (AAS) Addressability At Scale Addressability at scale (AAS) is the application of data and analytics to drive to highly efficient individual level targeting and personalization at massive scale. Targeting and personalization at massive scale Enterprises able to exploit AAS create sustainable competitive advantage that can lead to market leading financial performance 18

19 The evolving role of the audience platform in AAS The AAS 1.0 Platform The AAS 2.0 Platform Contenders: (B2B) Engagement tools: Saturation mail Target direct mail Catalogs Shared mail Packaging of comprehensive tools Platform Supplied Tools: NCOA DSF LACS 3rd Party Execution tools: Unica Group 1 PostalSoft Pitney Bowes Atterian Engagement tools: Display Search (RSLA) Social Media Packaging of comprehensive tools Platform Supplied Tools: RSLA Custom Audiences Tailored Audiences DART 3rd Party Execution tools: Buddy Media Bluekai MediaMath Turn App Nexus Marin Data Management: 1 st party and 3 rd party Data Integration Analytics: Insights, targeting, measurement Data Management: 1 st party and 3 rd party Data Integration Analytics: Insights, targeting, measurement 19

20 Infrastructure ccrm and Addressability = Competitive Advantage Enterprise segmentation, which includes value and lifecycle dimensions, forms the foundation of CCF Value Customer Strategy Segmentation Planning Measurement and attribution at the segment level then drives macro-level media and channel budgeting allocation What data, systems, tools and technologies will be necessary? Experience Delivery Media Planning Channel Planning Targeting & Personalization This creates a complete optimized customer experience that drives increased LTV, efficiencies and shareholder value Organization How do we organize and what capabilities and business processes will be necessary? Financial Management Measurement & Attribution Budget Allocation Integrated targeting and customization across media and channels are optimized at the segment and individual level Connected CRM lead to competitive advantage during the first addressability at scale AAS 1.0 opportunity and will lead to competitive advantage in AAS 2.0 AAS 1.0 AAS ??? 20

21 Where most of the market is today Awareness Consideration Adverse selection is a big problem in nonaddressable media people I don t want are the one s I get to respond Unqualified Leads & Waste Remarketing This results in lack of quality and scale of the remarketing pool Inability to use addressability to engage high value leads in a relevant experience drives down conversion of those that are quality Conversion As a result, marketers cannot scale budgets due to inefficiencies above in the funnel, thus, the targeting dilemma Customer Remarketing Unknown High-value customer Mid-value customer Low-value customer 21

22 Addressability at Scale The AAS 2.0 Opportunity Awareness Digital targeting optimization Consideration Leverage data and analytics to target and maximize spend on high-value prospects in the addressable universe Unqualified Leads & Waste Remarketing Prospect Remarketing Leverage addressability to create highly efficient and relevant remarketing experiences Channel optimization Conversion Extension of addressability into channel personalization to drive increased conversion Customer Remarketing Auto Property Multi-line Audience 1 Audience 2 Audience 3 Customer Remarketing Effective utilization of addressability for reengagement and maximization of existing customers 22 Unknown High-value customer Mid-value customer Low-value customer

23 Competitive advantage through AAS 2009 vs Available Addressable Impressions: +400% Addressable Media Spend: +300% Cost Per Lead: % Targetable Re-Marketing Pool +500% % Personalized Interactions +300% Cost-Per-Conversion: -40% Average LTV per Customer: +60% 23

24 Here is what AAS means to one of our clients YEAR 1 YEAR 2 YEAR 3 YEARS 4+5 NPV of Revenue Impact AAS Acquisition $39MM $104MM $170MM $382MM 1%-3% increase in customer acquisition over 5 years Increased response/conversion from digital media efficiency by connecting Anonymous Data to CRM data for better targeting, measurement and segmentation Increased effectiveness of remarketing and personalization (offer/package) in Search, Display, Site and $15MM $43MM $73MM $206MM AAS Customer Remarketing Roughly 1bp (~31k subs) reduction in Voluntary Churn YoY over next 5 years Combine Customer service, Billing contacts with customer data to improve churn rates $24MM $61MM $97MM $176MM 24

25 Agenda Introduction to Merkle Digital marketing trends Competitive advantage through addressability at scale Digital addressability The digital platforms Competitive advantage and the new competencies needed 25

26 Addressability Addressability uses customer data (anonymous or identified) to increase the targetability and personalization of marketing impressions and experiences The Addressability Spectrum Identification: Anonymous Partially Identified Identified Knowledge: Unknown Some Knowledge Well Known 26 Channels & Media: Digital Traditional DR

27 Level of identification Anonymous Partial ID Full ID Addressability Addressability uses customer data (anonymous or identified) data to increase the targetability and relevance of marketing impressions and experiences The Addressability Spectrum The consumer clicks on an online ad, which conveys their city through the IP address. Location Interest in product Low Medium High 27 Level of knowledge

28 Level of identification Anonymous Partial ID Full ID Addressability Addressability uses customer data (anonymous or identified) data to increase the targetability and relevance of marketing impressions and experiences The Addressability Spectrum The consumer submits their address, which helps point the way to data about them that is elsewhere online. Location Interest in product Public online activity Low Medium High 28 Level of knowledge

29 Level of identification Anonymous Partial ID Full ID Addressability Addressability uses customer data (anonymous or identified) data to increase the targetability and relevance of marketing impressions and experiences The Addressability Spectrum Location Interest in product Public online activity Real name Highest value The consumer logs into Facebook, providing an exact name and identity. Low Medium High 29 Level of knowledge

30 Level of identification Anonymous Partial ID Full ID Addressability Addressability uses customer data (anonymous or identified) data to increase the targetability and relevance of marketing impressions and experiences The Addressability Spectrum The consumer reads a story on a news site, which logs their IP address. Region Interest in topic Low Medium High 30 Level of knowledge

31 Level of identification Anonymous Partial ID Full ID Addressability Addressability uses customer data (anonymous or identified) data to increase the targetability and relevance of marketing impressions and experiences The Addressability Spectrum The consumer s IP is crossreferenced with publicly available data, showing the general location where they live. Region Interest in topic Specific location Low Medium High 31 Level of knowledge

32 Level of identification Anonymous Partial ID Full ID Addressability Addressability uses customer data (anonymous or identified) data to increase the targetability and relevance of marketing impressions and experiences The Addressability Spectrum High value Later, the same IP is logged at a shopping site. Linking the news story, location, and retailer allows a targeted ad to be served to the consumer. Region Interest in topic Specific location Interest in specific product Low Medium High 32 Level of knowledge

33 Level of identification Anonymous Partial ID Full ID Addressability Addressability uses customer data (anonymous or identified) data to increase the targetability and relevance of marketing impressions and experiences The Addressability Spectrum Valuable Location Most Valuable Ad interest Name Location Additional online data Low Value Ad interest Valuable Location Additional online data Ad interest Region Interest in topic Region Interest in topic Specific location Region Interest in topic Interest in specific product Specific location Low Medium High 33 Level of knowledge

34 Agenda Introduction to Merkle Digital marketing trends Competitive advantage through addressability at scale Digital addressability The digital platforms Competitive advantage and the new competencies needed 34

35 Addressability at scale ecosystem Platforms Enable the ecosystem by facilitating addressability scale. Consumer Speed, Relevance, Convenience Marketer Access to high value customers and prospects $ Publishers Monetization of their audiences 35

36 Automation Addressability is reaching new levels of sophistication and scale due to the rise of the Audience Platform An Audience Platform is a technology that enables automated, realtime delivery of targeted, personalized experiences to individuals (known and anonymous) at scale utilizing first party data Audience Platforms Publishers Marketer 1 st Party Data Automation 1 st Party Data First Party Data 36

37 Evolving Platform Marketplace Audiences aggregated by content Audiences aggregates by scaling niche content Audience aggregated by audience data Audience aggregated using known relationships Differentiation created by Media Skills Differentiation Created by Optimization Differentiation Created by Technology Differentiation Created by Data Integration and Analytics 37

38 Addressable Media Targeting Targeting Direct Match RTB Intent Based Targeting Segment Based 38

39 One great example of this is the rapid evolution of addressability in digital media Digital & Social Media Evolution CRM Data Driven Anonymous Individual Anonymous and Individual Level of insight Place Place Place Contextual Real-Time Bid (RTB) CRM Targeted RTB How many people visit site, and their profile Cookie & Third Party data on unknown individuals Addition of data repository including all media and CRM data Targeting Based on inferred match between audience & publisher Anonymous user behaviors Retargeting Anonymous user behaviors tied to CRM data 1 st party data targeting (name and address) Optimization Publisher performance Anonymous cookie data Performance by customer 1 st & 3 rd Party Cookie Device ID Known individual Platforms & Format PC Banners PC Display & Video Channel specific Cross Media/Cross Device PC Mobile Tablet 39

40 But this is not just about display media search is evolving very quickly as well Search Evolution Audience Driven Location/Device/Time Location/Device/Time Level of insight Keyword Keyword Keyword Universal Platform Differentiated by Device Integrated Media and Site Targeting How many people are searching and for what terminology Increased options controlled by the search engines for delivery Use of Remarketing programs in search and display to customize Targeting Based on exact keyword search behavior with not personalization Anonymous by device type and carrier Geography, day of week and time functions Audience profile data from prior site visitation Unique experiences based on user profiles Optimization Match type and keyword Extended match types Device Targeting for Mobile Location specific ads and costs Performance by customer Segment Value Intent Formats Pure text only Site Links Video Ads Image/Logo ads Click to Call Video Form Extensions Product Price Ads Maps/Location Extensions 40

41 41 Innovation in the platforms is picking up significant speed and volume

42 Some of these platforms are creating addressability beyond the domain of their own native platforms Audience Platform already at scale on network Soon we will see audience extension off network at massive scale Third Party Inventory (exchange, ad network, etc.) 42 But these will become closed networks forcing the advertiser to answer how to create a single customer view using first party identity management

43 43 4 3

44 Publishers are leveraging first party data and creating audience extension (networks) that allow that first party data targeting to scale Reach Amazon customers on Amazon owned and operated sites and on other high quality websites with Amazon Advertising Platform. Using the same personalization engine that drives advertising on Amazon.com, AAP offers more options to extend the reach of your campaign, without compromising the quality of your audience 44

45 The evolution extends beyond targeting with new formats and richer experiences across devices Then Now 45

46 Agenda Introduction to Merkle Digital marketing trends Competitive advantage through addressability at scale Digital addressability The digital platforms Competitive advantage and the new competencies needed 46

47 47 This pay off will only come through new competencies

48 To take advantage of the opportunity, new competencies will be needed The Platform Marketer embodies the collective competencies needed to successfully exploit addressability at scale Marketing technologist Audience platform expert Programmatic media buyer Addressability expert Consumer experience designer Consumer privacy & preference advocate Decision science P.H.D. Measurement and attribution expert Multi-channel program strategist Segment portfolio manager Chief Customer Economist 48

49 Summary Addressability at scale has and will create competitive advantage ccrm is a framework to be used to take advantage of Addressability at scale Massive budgets are already being shifted to take advantage of this opportunity The new addressable platforms will require new competencies 49