FT SPECIAL REPORT Digital and Social Media Marketing

Wednesday April 24 2013 www.ft.com/reports | twitter.com/ftreports

Advertisers Inside » Television holds its own Latest devices make viewing look for ways increasingly interactive Page 2 to follow Rush to find the next big thing Launching products requires exquisite consumers timing Page 3

Data industry scrutinised Ever-growing online outlets offer marketers Consumer groups more varied points of contact and fresh forms worry about the use of information of doing business, reports Emily Steel Page 4

he year was 1994. Jonathan exhausted, having put in countless “It’s the calm in the eye of the hur- right time, whether those ads appear to figure out how to pitch to consum- Nelson, then 27, was huddled all-nighters to make the technologies ricane,” says Mr Nelson. “You know on the web, a mobile phone, a bill- ers on the matchbox-sized screens. On FT Live » round a computer in the San work. The excitement in the room the winds around you are swirling, board, in store or on television. “Back in 2000, banner ads were the Francisco offices of HotWired was palpable as the site went and the times are changing.” Despite the ability to measure each big thing. That is where the money FT Digital Media as a team prepared to push live, ushering in a vast digital trans- The pace of change is both exhila- click that an ad generates, marketers would go, and click through rates Tthe button on the world’s first website formation that continues to upend rating and exhausting. Advertisers still are challenged to understand how were the focus. Now, a lot of that Conference featuring both original content and today’s $518bn advertising and media are sifting through a proliferation of digital ads, especially those on social stuff is being done by machines,” says ads. industries. data and technologies that are making media, translate into a change in Bob Lord, global chief executive of Takes Bright pink cables were strung Fast forward two decades. Mr Nel- a reality of the promise of targeting perception of their brand or sales of Publicis’ Razorfish digital advertising place in through the ceiling to his offices on son now works as chief executive of the right ad to the right person at the their product. group. London, the floor above, providing internet digital at Omnicom, one of the world’s Meanwhile, marketers are also fig- “Where we are growing the most in access to his hot digital marketing largest advertising and communica- uring out how to crack the code on a our business is the next generation of 25-26 start-up Organic. The ad agency, tions companies. While marketers new era of crafting digital stories. The story telling.” April. which he had founded the year before, have shifted nearly a fifth of their ‘Marketers are challenged rise of social media, combined with a Indeed, the obituary for the televi- had designed half of the then tech- budgets to digital outlets and largely to understand how digital surge of internet-connected televi- sion ad industry was written years Sign up savvy, now rudimentary, banner believe in the value of online advertis- sions and digital video viewing, are ago but the rise of social media, cou- or follow advertisements featured on the origi- ing, crucial challenges remain that ads translate into a change providing a new creative palette pled with the development of new it live at: nal HotWired site for marketers, will shape the next generation of for commercials. The explosion of technologies, is granting the $205bn including telecom company AT&T media, when the divide between in perception of their brand’ smartphones is leaving media compa- www.ft-live.com/ and carmaker Volvo. The team was digital and traditional is blurred. nies and advertisers alike struggling Continued on Page 2 digitalmedia 2 ★ FINANCIAL TIMES WEDNESDAY APRIL 24 2013 Digital and Social Media Marketing Keyword-driven system requires refinement Struggle to stay

Because the response to Search’s share of overall launched this year, though local search source and user behaviour across on top of a Future of search search advertising can be online advertising has been few in the industry doubt ahead of specialist local different devices, says Mr measured precisely and slipping, though at a very that such a move is far off. sites and directories. Sterling. One of the most Richard Waters sees advertisers can track when slow pace. From 56 per cent “If they decided to switch A second source of data valuable bodies of data that fresh challenges to consumers go on to make in 2009, it will fall to 50 per it on in a big way, they having an impact on search has yet to be fully applied moveable feast purchases, it has come to be cent by 2017, forecasts IDC. have tremendous distribu- comes from mobile devices. to refining search advertis- Google’s dominance seen as an unrivalled form However, the biggest tion. Overnight, it would be Adding information about ing involves individual of online direct-response shifts in search functions a big threat to Google’s location can help advertis- users’ purchasing histories. marketing. But other forms are only just starting to be dominance,” says Mr ers target more precisely. The prospect of combin- companies, where there Search remains the undis- of advertising play a part felt. They involve the com- Weide. Mobile searches often hap- ing data about a person’s People may not be a financial puted king of online adver- earlier in the process. bination of new types pen when people are close past purchases with signals upside but, first and tising and Google the undis- “People are getting more of data with traditional to a decision about a pur- about their future intent April Dembosky foremost, is about being puted king of search. But sophisticated about where keyword search to produce chase, making them more has advertisers salivating, discovers an industry part of a mission.” the monolithic keyword- search fits in,” says Ben more refined forms of tar- ‘What once looked valuable, says Mr Wood. according to analysts. While cash salary may driven system that has Wood, UK and Emea head geting. like a targeted form If mobile search prices Were a company like desperate for talent be 20-30 per cent lower in come to dominate the at iProspect, the digital “Keywords are certainly a have been rising, however, Amazon to make this data the tech world compared industry over the past dec- marketing agency. That has signifier of intent but there of advertising it may not entirely be available to others, allow- with advertising, the stock ade is facing a sea change, led to greater awareness of are so many different because advertisers have ing it to be combined with The Silicon Valley talent options, if the person waits according to advertising the value of other forms of signals now,” says Rebecca looks like a blunt reassessed their value. other sources of informa- war is spilling over on to the four years until they industry experts. advertising, from television Lieb, an analyst at instrument now’ Google this year combined tion to create new targeting Madison Avenue. vest, make the overall The result will be a more advertisements to social Altimeter, a research group. its PC and mobile search possibilities, “it would be Advertising-backed package higher, Ms Rich sophisticated system that media, he says. As a result, she adds, advertising services, ending incredibly powerful”, says technology companies such says. responds to a wider range The shift to mobile has “what once looked like a An indication of Face- the pricing division Ms Lieb. as Google and Facebook The work environment of signals, where companies brought a direct challenge highly targeted form of book’s potential to disrupt between them. Such an advertising net- are not just looking for the plays its part. Tech start- other than Google are likely to the importance of search advertising looks like a the search market can be The move has inevitably work, while long rumoured, best engineers and ups have pioneered flat to play an influential role. in the online world. blunt instrument now.” seen in its influence in local brought complaints that the has yet to see the light designers to design a leadership, open plan Keyword search has been “A lot of traffic is going Foremost among the new search, argues Greg Ster- company set out deliber- of day. Like Facebook, mobile app – they want the offices, beer and Red Bull- in a transition that has to mobile devices – and a types of data is the informa- ling, an analyst at Opus ately to force mobile adver- though, Amazon looks best technical and strategic stocked fridges that have brought reassessment of its lot of that is in apps, which tion that comes from the Research. He points to data tising rates higher. Most poised to move in on a thinkers in advertising too. become a signature of importance. One reason has are unsearchable,” notes social media world. Face- from online measurement brand owners are content market that has effectively Creative and digital Silicon Valley offices. been the greater refinement Karsten Weide, vice-presi- book did not announce body ComScore showing with the changes, which been built and owned by marketing agencies in New There, people in their mid- that has come to measuring dent of media and enter- any new forms of advertis- that, thanks to its large have resulted in a simpler Google, with far-reaching York are not simply twenties with a few years the effectiveness of differ- tainment at researchers ing to accompany the scale, the social network is system that makes it easier implications for online competing with each other experience can get senior ent forms of advertising. IDC. revised “graph search” it second only to Google as a to buy campaigns and track advertising. to recruit the next positions with serious generation of talent. Now responsibility. In the ad they must fend off the world, young people have technology giants in the to earn their stripes and Valley and their promises move up through the of stock options, free food ranks, while opportunities and the opportunity to to move beyond middle change the world. management are limited. Watching “The agency industry “It’s as much people has done a bad job over escaping agencies as the past decade of keeping joining something new,” the industry appealing to says Mr Wieser. top-tier talent,” says Brian Executives at Aegis Wieser, analyst with the Media are taking a leaf television no Pivotal Research Group. from the Valley playbook. The technical landscape They are trying to flatten in marketing is changing the hierarchy so that rapidly, creating a young people have more dramatic rise in demand opportunities. They now longer rates as among agencies for people include social media-style with digital skills. software that allows Competition for people greater collaboration and with a specialisation in search advertising was passive pastime high about four years ago, then it was social media ‘We talk about marketing, notes Nigel people, we don’t Morris, chief executive of Aegis Media, Americas and talk about Emea. A year ago, consumers’ Media Broadcasters find ways to make everyone was chasing app developers. Now the hot Nigel Morris viewing increasingly interactive, writes commodity is people who can build sophisticated Andrew Edgecliffe-Johnson user experiences. the leadership is trying to It is rare to find people be more transparent so who understand the people feel more motivated. hat can the second In November, Nielsen bought Social- technical side and the Even the way they pitch screen do for the first? Guide, a social media analytics group, broader strategic thinking their business to young Television was once a and in February Twitter bought of the marketing world – college students thinking “lean-back” experience, Bluefin Labs, which analyses social people who can move from about which industry to go passively consumed TV chatter. television to mobile, yet into is changing. Wfrom the comfort of the couch, but the “Twitter is an amazing complement connect different media to “I wouldn’t use the word proliferation of laptops, smartphones to live television viewing,” Ali the goals of the advertiser. ‘advertising’,” says Mr and tablets is making media multi- Rowghani, Twitter chief operating “We have people who are Morris. “We talk about tasking the norm. officer, said in announcing the deal. good at digital strategy but people, we don’t talk about As viewers’ eyes flick from the set TV networks seem to agree. “The they see everything from a consumers.” in the corner to the device in their reality of the second screen is that digital perspective,” says Other agencies still find hand, how do television companies – broadcasters are already on board,” Mr Morris. that young people see the and their advertisers – turn a poten- PwC’s report concluded. A second “There are relatively few prospect of working with tial distraction into a tool for deeper screen is a second opportunity to sell people who have a strong big brands such as Coca engagement? advertising and networks increasingly enough understanding of Cola, Wells Fargo, or Apple The scale of the distraction is cite social media buzz as part of their all the different emerging as more important and impressive. A survey by Time pitch to brands. their votes for its Video Music Awards may be what persuades a baseball fan Casting shot: opportunities in digital, exciting, says Ms Rich. Warner’s Medialab found that 52 per Time Warner’s Turner Broadcasting and CBS recently staged a to download the MLB.com At Bat app, Charlotte Letitia with a broad enough Don Scales, the chief cent of people with both a television System recently boasted, for example, “TweetWeek”, with stars – and even whereas HBO's Game of Thrones app Crosby of the brand and business executive of iCrossing, a and a laptop habitually multitasked that Conan O’Brien’s late-night com- set designers – live-tweeting shows can inform fans exactly where Aegon reality TV series, understanding in order to digital marketing agency, while watching TV. Add a smart- edy show on TBS generated 20 per from NCIS to the venerable The Price the Conqueror landed in Westeros or ‘Geordie Shore’, provide the strategic says this gives promising phone and a tablet and the figure cent more social media comments per is Right. distinguish Tysane Frey from Tytos which has 7m context under that.” talent an opportunity to rises to 65 per cent. episode than those of his peers. Philip Bourchier O’Ferrall, senior Brax. followers The advertising and develop their own voice Some of those screens are being To demonstrate that those commen- vice president of Viacom International Not all shows generate such obses- Getty marketing world must better than a tech used for emails, texts and content tators were not ignoring the show, Media Networks, says the Geordie sive interest and some caveats are contend with the shifting company with a singular unrelated to what viewers are watch- TBS used biometric monitoring to Shore cast’s combined 7m social worth remembering. In many mar- cultural values of the focus. “You can create ing. Yet much of the growth is in show that people using Facebook, media followers have helped build the kets, tablets remain relatively rare younger, millennial your own personal brand social media discussions of TV shows Twitter or GetGlue while watching MTV UK show’s TV audience. “I have and audiences of different ages generation. The Mad Men quickly, as opposed to and digital content designed to deepen TV were 1.3 times more engaged than no interest, frankly, in just growing respond differently to social media. appeal of working in start-ups where personal engagement with programmes. those watching without social media the successes of Twitter and Face- Nielsen’s SocialGuide found that an advertising has narrowed branding for the most part PwC found that “social TV” activity sites or apps. book,” he points out: “My number one 8.4 per cent increase in Twitter vol- among younger people, is limited to the CEO.” on Facebook, Twitter and Google Such figures suggest that social role . . . is to drive TV ratings.” ume correlated to a 1 per cent rise in who are increasingly The company tries to nearly tripled in the second quarter of media can heighten viewers’ interest To do so, he says, VIMN has started ratings for new shows among viewers interested in joining a keep up with Silicon 2012 from a year earlier. This year’s without much effort on programmers’ to look differently at the “story arcs” aged 18 to 34. For 35 to 49-year-olds, company with a bold Valley, where campaigns NCAA basketball tournament simi- part, but TV executives are putting of its shows to make sure each one however, it took a 14-per-cent jump in mission statement. are prototyped every two larly generated 16.3m social media increasing resources into social mar- has enough “digital media peaks”, tweets to produce the same 1 per cent “In the past, advertising weeks and changes can be comments, an increase of 112 per cent keting and digital content to deepen which will drive social chatter or ratings bump. was sexy, it was the cool seen in real time. over 2012, Turner Sports reported. engagement further. direct viewers online for additional SocialGuide’s finding that 32m peo- thing to do,” says Jana “You can bring these Audiences’ appetite for digital alter- MTV has invited viewers to tweet content. ple tweeted about TV last year in the Rich, managing director at kids in and can pump natives to shouting at the screen has When a Geordie Shore cast member US – just 10 per cent of the population Russell Reynolds them full of Red Bull all spawned several second-screen appli- gets a tattoo the scene may last just – sets social TV into perspective. Associates, a recruiting day, but if the CEO doesn’t cations and analytics companies and 30 seconds on TV but a tweet from the The average American still spends firm. “Now there’s a whole know their name and some prominent deals. Viggle, which A scene may last just 30 star can direct fans to 30 minutes of about five hours a day glued to other option that is quite doesn’t say ‘hi’ to them offers loyalty rewards to fans who seconds on TV but a tweet extra footage. TV, which suggests that the first different that speaks to and doesn’t know the “check into” shows, bought GetGlue, Such second-screen content needs to screen has staying power but, the same group of people. things they’re working on a social TV app developer with 3m from a star can direct fans offer the audience value, Mr O’Ferrall as viewers lean in to social and Many younger folks and congratulate them on users who have checked into, rated or adds, but the definition of value con- digital media, broadcasters and adver- are making choices to a good job, then they’re reviewed 500m shows. to an extra 30 minutes tent varies between genres. Statistics tisers can ill afford to lean back. join high-growth, exciting going to get disenchanted.”

Contributors » Advertisers look for ways to follow consumers Emily Steel US Media and Marketing Correspondent Continued from Page 1 determine the videos, for critiques on the iPhone5 tion of budgets that market- companies that have long wildly popular among con- lars will follow. These vast graphics, pictures and other as Tim Cook, Apple’s ers spent on social media. dominated the industry. sumers but have yet to changes are transforming Andrew Edgecliffe-Johnson business a new lease on life. content that they create. chief executive, announced Now, with an audience of Google faces a wave of new develop sustainable ad mod- the type of people who rule Media Editor “I don’t want you to think The goal: to understand the its launch. Copywriters more than 1bn, the social competition for ad dollars els. Mobile media is the advertising business. that television is going to messages that will best res- instantly worked the com- network sees itself as being in the $48bn search adver- expected to capture more The 1960s era of three-mar- Tim Bradshaw lose here,” says Laura onate with a target audi- ments into a series of part of mass media. tising business, from play- than 20 per cent of media tini lunches and “creatives” April Dembosky Desmond, global chief exec- ence and make it easy for acclaimed print, digital and That puts it in direct com- ers ranging from Facebook consumption in the next who ruled the advertising San Francisco Correspondents utive officer of Publicis’ people to share those television ads that Samsung petition with television, to Amazon. five years, but just a minus- world depicted in the Mad Starcom MediaVest Group, messages with their social credits with helping to where marketers still spend Some new media are cule portion of total adver- Men television show is no Richard Waters whose clients include networks, catapulting the boost its market share. the largest portion of their tising revenues. more. It is being replaced West Coast Editor Procter & Gamble, Samsung brand to the centre of dig- Marketing executives say ad dollars. A glut of advertising with employees armed with and Walmart. “Screens that ital chatter. that, without doubt, social “The biggest challenge is inventory is flooding the data and schooled in tech- Robert Budden can allow more relevant “In the last 50 years, we media have emerged as a making sure that we do not market at the same time as nology. Marketers and Chief Media Correspondent messaging, based on more have been working in black crucial and valuable new have a conversation that is On FT.com » marketers raise questions advertising agencies strug- personalised data will win.” and white,” says Mr Lord. tool for understanding con- solely focused on a social over the value of mobile gle to compete with tech Robert Cookson Marketers develop sophis- “What technology does is it sumer sentiment and com- media budget, but that we ads. As a result, ad rates companies to recruit the Digital Media Correspondent ticated systems to target brings you new talent and municating with customers. actually are having the Interactive are plummeting, causing next generation of talent. television commercials to it brings you into colour.” What they are still seek- right conversations at the concern for publishers. Indeed, the change has Matthew Garrahan particular consumers based Samsung worked with ing to understand is exactly right levels as Facebook graphic and video Sleek Hollywood studios only just begun. According Los Angeles Correspondent on who is likely to be inter- Networked Insights, a where social media should as a brand-building plat- Digital and have emerged to produce to Omnicom’s Mr Nelson: ested in their product. social media analytics com- fit into their broader ad form,” says Carolyn high-quality online video “You are seeing the indus- Aban Contractor Think dog food ads for dog pany, to help design its budgets, where television Everson, Facebook’s vice- Social Media content for a generation of try really shift fast right Commissioning Editor owners and nappy ads for much-talked-about cam- and print still compete for president of global market- Marketing viewers who are just as now, the budgets are parents of a newborn. paign for its Galaxy S III valuable resources. ing solutions. likely to watch content moving really quickly For advertising, contact: James Advertisers increasingly Android mobile phone. Previously, Facebook The quick rise of new dig- online as they are on televi- to digital. But we’ve Aylott: +44 (0)20 7873 3392; tap into the proliferation of A Networked Insights focused its sales pitch on ital ad players increases the sion. Questions loom over only just scratched the email: [email protected] social media data to help team followed social media the small but growing por- competition for some of the www.ft.com/dsm whether the advertising dol- surface.” FINANCIAL TIMES WEDNESDAY APRIL 24 2013 ★ 3 Digital and Social Media Marketing Agencies scramble to find the next big thing

Networking apps Innovative ideas can offer rich rewards but launching products also requires exquisite timing, reports Tim Bradshaw

t was a typically polished confer- blogs, and Fox, which made a six-sec- ence presentation by Google – ond trailer for its film The Wolverine. until its sci-fi goggles came out. “It’s analogous to Twitter,” says Mr Ending a session at a marketing Calladine of Vine’s enforced brevity. association event on its latest “When it came along people said you Imobile advertising products, Google couldn’t do anything in 140 charac- showed a video of Project Glass, its ters. But people are.” experimental wearable technology In March, British agency veteran that places a camera and tiny screen Trevor Beattie became the latest inside a pair of spectacles. adman to declare “the death of the “It was so random,” said one 30-second TV ad”, this time because it attendee of the event. “We were all was “too long”. “Five seconds is the pretty confused by it.” right length,” he told the Advertising Google Glass is a technically Week conference in London, noting impressive achievement yet, in the that brands using YouTube’s skipp- wrong context, it risks looking like a able pre-roll ads have only that long gimmick. What goes for Google goes to grab viewers’ attention before they for the rest of the marketing world. move on. “People know within two Although agencies often attempt it, seconds if they like something.” leaping on the “next big thing” does Mindshare’s Mr Johnston says that, not always bring long-term value. while the likes of Vine have seen “We don’t hunt for new things, just “some limited interest” from his cli- for the sake of jumping on the ‘shiny ents: “Most are still struggling to new thing’ bandwagon,” says Babs work out the new six-second format.” Rangaiah, Unilever’s vice-president Yet mastering short, snappy content for global media innovation. will become only more important as Unilever identifies trends and com- media consumption goes mobile. Chat panies “that we feel have potential for apps such as Whatsapp, Line, WeChat the longer term”, he says. These are and Snapchat are gaining huge follow- companies such as Jawbone’s health- ings on smartphones, with hundreds monitoring devices and the “Quanti- of millions of users between them. fied Self” movement for self-monitor- Some of these are starting to allow ing, and content “curation” apps such brands to join what have largely been as Flipboard. “Within that, companies private conversations between will come and go, there will be some friends. Starbucks and Nike are consolidation, there will be some win- among the early adopters of WeChat. ners and many that will lose.” Unilever’s Mr Rangaiah says such Labour-intensive campaigns incor- apps are “clearly generating traction porating buzzy new apps, such as in various markets and hitting scale Foursquare in 2009, may give brands a among younger users”. shot of good public relations for “So, we’re interested, but we’ll have appearing innovative. In hindsight, to work with them to create a model however, the costs probably outweigh for marketers because there doesn’t the benefits. Even Pinterest, last seem to be one yet,” he says. year’s hot startup, has seen its The makers of Whatsapp have said momentum falter. they are generally opposed to adver- “Within the social space it’s very more than 100m. A handful of brands, than words through imagery,” says catchphrases are making a resur- Geek chic: Sergey Brin, tising and some brands are concerned hard for newcomers to break the including Starbucks, Nike, MTV and Justin Cooke, chief marketing officer gence, embedded in photos on Pinter- Google co-founder, wears its that people may not expect to be social monopolies held by Facebook Forever 21, have attracted more than at the fashion retailer Topshop, who est or Instagram. “I love images with experimental Project Glass Getty interrupted by brands in private mes- and Twitter,” says Norm Johnston, 1m followers on Instagram, while doz- believes that Instagram and Pinterest quotes from great authors and leaders saging apps. Mr Calladine suggests global digital leader at Mindshare, a ens more – mainly retailers, fashion are “scratching the surface – we are and I see that as a big trend combin- that in spite of a few marketers exper- WPP media agency. labels and media companies – have at the beginning of their capabilities”. ing the two,” says Mr Cooke. imenting with Snapchat such activity “Both have done a good job in hundreds of thousands of fans. Dan Calladine, head of media As marketers scramble to find the is more likely to be for the PR value. acquiring, adding to, or augmenting Instagram highlights the rise of futures at Carat, part of the Dentsu Instagram of video, Twitter’s app for So, if the lure of the gimmick their experiences to the detriment of images in social networking, an area Aegis Network, has noticed that many six-second clips, Vine, has proven an ‘Within the social space it’s remains alive and well, will brands Foursquare and Pinterest.” where brands have a natural advan- brands’ posters and in-public stunts early contender, topping the iPhone soon be vying for the ultimate in geek At the same time, early adopters of tage, with access to professional pho- are being created in Instagram- US app charts in April, three months hard for newcomers to chic, Google Glass? Mr Johnston says photo-sharing app Instagram have tographers and celebrity endorsers. friendly square formats. “It’s a won- after its launch. Mr Calladine says the there is a limit to just how geeky been handsomely rewarded. Within a “I think increasingly – and arguably derful way to get your brand personal- app has attracted interest from clients break the monopolies held brands want to be, suggesting it is year, the Facebook-owned app has since the beginning of time – people ity across,” he says of Instagram. such as Adidas, who sent out new by Facebook and Twitter’ “arguably ahead of its time. It’s an seen its audience grow from 30m to find they can express so much more Brands are finding that slogans and shoes to Vine users who run sneaker imperfect glimpse into the future”. Web of creativity means greater opportunities to boost sales

digital advertising. “What ming available, advertisers Online video will emerge is the idea of are struggling to catch up. addressable advertising.” In CPMs – the cost per thou- Growth of platforms other words, advertising sand impressions, a key and content changes that is targeted specifically advertising metric for the to the particular viewer sector – are under pressure. the nature of the based on available data. BrightRoll, a digital video game, writes DirecTV and Dish Network, advertising company, says two satellite operators, are online video CPMs in 2012 Matthew Garrahan already experimenting with were down by as much as targeted TV ads. 15 per cent on 2011. CPMs, Online video can person- says eMarketer, will fall There is a new kid on the alise ads – some sites, such from $45 in 2010 to $31.20 by block in the advertising as Hulu, allow viewers to 2014, where they are pro- world, with online video choose ads which are more jected to stay flat until 2017. evolving rapidly and audi- relevant to them before Is this decline bad news ences on the rise. Forget viewing. But, until they per- for the producers and dis- about skateboarding cats fect the art of online ad tar- tributors of online video? and the amateur, user-gen- geting, the digital video sec- “The people making the erated videos that used to tor has a potential problem shows are seeing more dominate YouTube: these to grapple with. The sheer users and [the number of days the internet is full number of platforms, pro- users] is growing exponen- of slick, professionally-pro- ducers, publishers and pro- tially,” says Dan Mosher, duced programming that grammes out there mean an general manager of would not look out of place abundance of advertising BrightRoll Exchange, the on prime time television. inventory is available for video advertising exchange. Whether it’s Vuguru’s brands looking to reach par- This, he says, will offset comedy Little Women, Big ticular audiences. the decline in CPMs Cars, which attracted big YouTube has bankrolled because the number of peo- audiences on AOL, Burning more than 100 channels ple watching online video is Love, from Ben Stiller’s Red from companies, including growing faster than those Hour Films, airing exclu- Vice Media and Machinima, rates are falling. “This is sively on Yahoo, or any of to create original content; about the overall industry the new YouTube channels other operators, such as growing. Advertisers aren’t packed with professionally- Maker Studios, which is hitting the kind of scale in made content, the quality of backed by, among others, digital video that they are original online video is the actor Robert Downey Jr The number of used to in TV.” Advertising beginning to compare and media executive Elisa- people watching spending will continue to favourably with TV. beth Murdoch, have created move from TV to online The question for produc- a network of online video online video is platforms, he adds. “We’re ers of this content and the stars. growing faster than already seeing that and it platforms that distribute it These companies have will continue to happen.” is whether advertising dol- built vast online audiences ad rates are falling His confidence is echoed lars will follow viewers but, with all the program- by Larry Tanz, chief execu- moving from TV to online. tive of Vuguru, one of the Analysts say it will, eventu- most prolific producers of ally. Total advertising on programming for the web. digital video is forecast to The company makes shows almost double from about for distribution on a range $4bn in 2013 to $8bn by 2016, of platforms, including according to eMarketer, the Hulu, AOL and Yahoo, research company. which is airing Vuguru’s TV will continue to be the puppet comedy, The Fuzz, primary home of video “There’s been a big advertising, with revenues increase in volume [of view- projected to rise from $66bn ers] and there are also more in 2013 to $73bn. Despite the advertisers,” he says. fragmentation of audiences The bigger issue for the and time-shifting viewers sector is that it is so young, who use DVRs to watch Mr Tanz adds: brands are programmes when they not used to buying advertis- choose – and skip the ads – ing time in the way they TV will “continue to domi- buy airtime on TV. nate spending”, says the That will change. “This is eMarketer report. a great time to be a content “These two worlds – owner and creator because online video advertising now you have distribution and television advertising – platforms that are trying to are going to collide,” says increase their inventory by Tracey Scheppach, execu- increasing their audiences,” tive vice-president of inno- he says. “They need pre- vation at VivaKi, a division mium and original content of Publicis specialising in Screen saver: Ben Stiller’s ‘Burning Love’ airs on Yahoo Getty to do that.” 4 ★ FINANCIAL TIMES WEDNESDAY APRIL 24 2013 Digital and Social Media Marketing Facebook measures up for marketers Data industry scrutinised Social network The site is moving closer over profiling to advertisers and developing tools to show it can deliver customers for their products, vulnerable populations, Privacy such as children or people writes Emily Steel with mental health issues. Consumer groups “I am concerned that the are worried about rich profiles being created about consumers can be arolyn Everson is in the how information on used to harm them at work midst of a marathon week. them is being used, and in their financial lives,” It started at Facebook’s said Julie Brill, a commis- headquarters in Menlo says Emily Steel sioner with the US Federal Park, California, with a day- Trade Commission, in Clong meeting for its council of some of December. “I’m equally con- the world’s most powerful advertising During the important back- cerned that consumers are executives followed by a 20-hour day to-school and holiday shop- unaware of this data collec- on the launch of Facebook Home, the ping seasons, a US national tion and use activity or the social network’s new “super app” for department store chain companies that engage in it, Android smartphones. wanted to steal customers and so have very little Facebook’s vice-president of global from the competition. opportunity to exercise any marketing then found herself flying The retailer sought help current rights they may through Montclair, New Jersey, New from Acxiom, the global have to opt out, access or York and London, evangelising Face- consumer data broker that correct this data.” book’s advertising business. The collects information about Prompted by concerns week, which included a stop in Aus- more than 700m people about a data industry that tin, Texas, for the wedding of another across the world and sells long has operated in the Facebook executive, mirrors the that information to more dark, lawmakers and regu- whirlwind of the past year, during than 7,000 clients. Tapping lators across the globe are which she has circled the globe on a credit card transaction stepping up their scrutiny mission to listen to marketers’ needs data, primary research, geo- of the business. and convince them of the value of graphic information and In the US, for instance, advertisements on the social network. other demographic details, the Federal Trade Commis- “The business is in a fundamentally the companies designed a sion in December launched different position today compared to a targeted marketing push an investigation into nine year ago,” she says, which has noth- around Acxiom’s new Audi- data brokers, including ing to do with going public but rather ence Propensity models. Acxiom and Datalogix. The a focus on building services to appeal Conversations between Facebook Global mission: “It is generally accepted that Face- promotions such as a recent campaign The system does not sim- effort followed similar que- to both advertisers and Facebook and marketers have shifted from Carolyn Everson, book does have an impact,” says in Brazil for Seda hair products. ply track a consumer’s past ries raised by US lawmak- users. “We’re on a journey, and we social media speak about the number Facebook’s vice- Jonathan Nelson, chief executive of Unilever designed a campaign with but analyses a broad set of ers. The Obama administra- always say we are 1 per cent done.” of fans a brand has, executives say, to president of global digital at Omnicom. “What we’re mobile ads featuring a soap opera datapoints to predict what tion last year unveiled a The bubble around Facebook’s ini- measuring the actual business results. marketing, wants struggling to figure out is the exact actress. The company credits the cam- individuals are likely to do. Consumer Privacy Bill of tial public offering started to deflate “They were talking in a language that to build services impact and how that fits into the paign with boosting market share. The result: a 50 per cent lift Rights to create greater pro- last spring when major marketers media buyers and marketers didn’t that appeal to overall media mix.” “The challenges and opportunities in average purchases and tections for consumers and questioned the value of advertising on really want to speak to them in,” says users and Laura Desmond, global CEO of of online advertising...[revolve a more than tripling of pledged to work with Con- the site. It wasn’t that they dismissed Colin Sutton, director of social media advertisers Starcom MediaVest Group, whose around] the speed of change and inno- return on investment in the gress to develop more the value of communicating with con- for advertising company Omnicom’s Getty clients include Procter & Gamble, vation,” says Debbie Weinstein, Uni- campaign. robust privacy legislation. sumers on the site, which largely was OMD media buying firm. “They Samsung and Walmart, adds: “When lever’s vice-president of global media. “Modelling in the past No laws in the US require free, but rather they didn’t know needed to talk the language – not of you try to have the old systems of the “We are confident that the degree of was elementary,” says Tim that data brokers maintain whether buying ads would spur sales. money – but of marketing.” past measure what Facebook is doing collaboration we have with them puts Suther, Acxiom’s chief mar- the privacy of individual’s The most prominent was General While some questions linger, mar- with consumers and brands, it doesn’t us in a good place to be able to keting and strategy officer. data unless they are used Motors, which announced it would keters are changing their tune and work. What Facebook is doing is a capitalise on this ever-changing land- “This development is game for credit, employment, stop buying ads because of questions are expected to spend more than model buster. Brands and measure- scape, and shape what we are able to changing.” insurance, housing or simi- over what returns the ads generated. $5.6bn on Facebook advertising this ment are catching up.” do with them.” The holy grail for market- lar purposes. Facebook has spent the past year year, up more than 31 per cent from Take Unilever, maker of Dove Ms Everson, a former ad sales exec- ers has long been to show Some data brokers are working closely with major advertis- $4.3bn in 2012, according to eMar- soaps, Ben & Jerry’s ice cream and utive at Microsoft and MTV, says she the right ad to the right per- attempting to fend off regu- ers to develop new advertising prod- keter, the digital media analyst. On Vaseline, which has boosted its Face- aims to continue to build mobile busi- son at the right time, lation by making their oper- ucts, including ads that feature more mobile alone, Facebook is expected to book spending in the past year. Keith ness and convince marketers to think whether they are on the prominently in the news feed as well earn $1.5bn this year, more than three Weed, chief marketing officer, is a about Facebook on the same scale as web, mobile phones, digital as on mobile devices. It launched a times the $471m it earned in 2012. member of Facebook’s client council, television, where marketers spend the billboards, in stores or on series of measurement and data initia- Even General Motors recently where he has provided feedback on majority of their ad dollars to reach television. A proliferation of ‘I am concerned tives that let marketers more pre- announced it would return to buying marketing initiatives, advocated new massive audiences. data about the individuals – the rich profiles cisely target ads based on parameters ads on Facebook by testing the site’s products and gained early access to “The pivot from just being a social from credit card transac- such as actual shopping patterns and new targeting and measurement offer- new capabilities. The developments media conversation to actually being tions and other finances to created about then measure whether people who see ings for a mobile ad campaign promot- have helped Unilever understand how an indispensable media partner,” she social media activity, online their ad end up buying the product. ing its Chevrolet Sonic sedan. ads on the site lift sales, spurring big says: “That is my mission here.” searches and political lean- consumers can be ings – coupled with cutting- used to harm them’ edge analytic and targeting technologies makes that dream possible today. ations less opaque. Acxiom On Facebook, for recently said it was in the instance, a marketer can process of building a new Canny advertisers target your mobile phone buy ads targeted at people system that would reveal to who spend three times consumers what it knows more than the national about them. Acxiom said it average on children’s cereal was “not on the radar now” cent of the US population, are traded like stocks. Real- campaigns, something that One of the biggest trends based on purchase informa- for people to be able to com- Smartphones mobile ad spending has time bidding, which now was unheard of a few years this year will be the rise of tion from Datalogix, a data pletely delete their profiles. become the fastest growing accounts for about a fifth of ago. Tesco, the supermarket immersive, “rich media” company. Marketers then Facebook said other data As devices become among all media categories. online display ads, is espe- group, used BlisMedia to ads on mobile, says Mr can tap the data to figure companies are required to more sophisticated, In the UK, at the leading cially powerful on mobile. target ads at people within Malachard. out whether or not people build similar systems to sell edge of the trend, mobile “On mobile, there’s an a mile of competitors’ Until recently, mobiles who saw the ad end up data as part of its new ad marketers upgrade advertisement expenditure awful lot more information stores. have mostly been vehicles visiting the store and buy- targeting initiatives. their pitches, reveals more than doubled in 2012 about the user. It knows Royal Bank of Scotland for search and display ing the advertised product. Privacy advocates worry to more than £500m. This where you are and it knows used a combination of advertisements. Other futuristic visions, that the developments are Robert Cookson accounted for a tenth of all more about things that location and demographic The rollout of ultra-fast such as a Verizon patent not enough. “The fact of the digital advertising. you’ve done than perhaps data to advertise its spon- 4G mobile broadband across application that describes a matter is, yes, this is too Publishers, for their part, your PC does,” says Mr sorship of the Six Nations the world is expected to fuel television that can listen in little, too late,” says Jeff It knows your most inti- grapple with the speed at Jonas. rugby championship only to this shift to bandwidth- on people’s conversations to Chester, executive director mate details, from your which visitors to their sites “So, therefore, it’s very males aged 20 to 24 who hungry interactive ads, select personalised ads, are of the Center for Digital online browsing habits to are shifting from desktop attractive to advertisers were in certain places, such which are able to make the not beyond the scope of Democracy, which is con- where you live, work and computers to mobile because of that richness of as four and five-star hotels most of the touchscreen fea- what is technologically pos- ducting research into the play – and it demands your devices, says Rob Jonas, an information.” and airports. tures of mobile. sible today. invasion of privacy tied to attention wherever you go. executive at PubMatic, an To illustrate the power of Kevin McGovern, BlisMedia Not everyone is con- Innovations in mobile But questions over digital online financial marketing, Marketers could hardly ad sales platform for pub- mobile advertising, London- vinced that location-based advertising are cropping up privacy threaten to prevent children, mobile, social net- have dreamt up a better lishers. based ad technology group BlisMedia’s sales director, targeting is mobile’s biggest almost every month. that future from becoming works and the pharmaceuti- medium for advertising The problem for publish- BlisMedia recently inviting viewers to call the strength. Nuance, a US company a reality. cal industries. than the smartphone. ers is that demand from launched a showpiece cam- company by touching the “I’d say what makes that develops speech recog- Consumer privacy advo- “Businesses have per- Yet, even as people spend advertisers for mobile ad paign targeted exclusively screen. mobile different is first and nition technology, this cates fear a world where fected a model that allows an increasing amount of inventory has lagged at potential clients. “It was incredible,” says foremost the personal month launched a product such personal information for the millisecond-by-milli- time glued to their smart- behind the huge increase in The company identified Kevin McGovern, chief nature of the device,” says that allows advertisers to creates a so-called “data- second collection of data to phones and tablets, mobile available space, causing the precise co-ordinates of operating officer at Blis- Victor Malachard, chief create ads that respond to a base of ruin”, where indi- create individual profiles on represents less than 3 per average CPMs (cost per the offices of big agencies Media. executive of Adfonic, a plat- user’s voice. viduals’ secrets about sensi- global consumers.” cent of total ad spend thousand impressions) to such as WPP, and targeted “We started running the form for buying ads on Gone are the days when tive topics such as medical Lawmakers may fall vic- across all media in most fall well below $1. any mobile phone it could campaign at 9am on a Mon- mobiles. advertising was limited to conditions, sexual history tim to a conflict of interest, major markets. But that is In an attempt to boost detect at those locations day morning and by 11 “If you’re engaging with a static images or dumb and financial details would meanwhile, when develop- starting to change as their revenues, a small but with interactive banner ads. o’clock the phone was ring- person through a smart- videos. be mined and used against ing stronger privacy protec- brands wake up to the increasing number of pub- The ads, which showed a ing with people asking, phone or a tablet, you’re Tomorrow’s ads will not them. Imagine not being tions. Increasingly, politi- unique opportunities of the lishers are allowing media soapy screen, were expand- ‘how did you do this, how going to have that person’s only be personalised, based able to obtain health insur- cians deploy the same medium for immersive, buyers to place ads on their able and allowed viewers to does it work?’” attention far more than if on where you are and what ance, a mortgage or a job tracking, analytics, person- highly-personalised ads. mobile sites in real time, “clean” away the soap bub- Brands have started to you were engaging with sites you visit, but they will based on those details. They alisation and targeting tech- As smartphone ownership using exchanges where bles with their finger. spend up to £100,000 a go them through desktop or also be able to ask you worry about corporations nologies as corporations in last year surged past 50 per individual ad impressions Behind the bubbles stood on location-based mobile television or print.” questions, too. that use the data to prey on their election campaigns. Instant response requires cultural change by brand owners

all this noise and at a frac- ies, had assembled a team casted entities rather than says that Coca Cola has vignettes and tailoring a agencies and brands invest quickly requires cultural Real-time marketing tion of the cost. of creatives with the remit participative,” he says. “It’s committed to doing 30 per final version based on live heavily in data collection change at brand owners, Oreo, a popular cookie of responding quickly to always been a pre-placed cent of its marketing in an user feedback. and analysis systems so say advertising executives. Need for speed and brand, was quick to capital- events. piece of thinking. But the agile way, which means “It means making more they can track – and react – Often this will mean having relevance overtake ise on an unexpected elec- It was important that it rules pretty much change taking more risks and doing pieces of copy than you to user behaviour in real- to clear creative campaigns tricity blackout shortly into got its creative message when you get into online more of it in real-time. need to, but it’s the right time. within minutes rather than traditional models of the second half of the game. right. But, in the world of and an always-on environ- “We are starting to see a thing to do to make media- On the launch of EE, the months. advertising, reports Within minutes of the social media, speed and rel- ment. It’s almost the oppo- lot of brands and businesses spend work that much mobile phone network of “When people look back power failure, the company evance is key, say advertis- site of where campaigns being able to take social harder,” says Mr Plant. T-Mobile and Orange, MEC at the success of that Oreo Rob Budden had released a simple image ing executives. have been.” data to personalise in a The shift to digital adver- tracked data from more moment it was not just that into the Twittersphere of an A separate tweet by Motel In the online world, says real-time way for the indi- tising and the growing need than 20 sources in real-time, the agency was set up ready illuminated Oreo cookie on 6, the hotel chain, made 16 Mr Burdon, brands cannot vidual,” he says. “It will be to respond to live consumer examining information to go, but it had the client The Super Bowl, climax of a black background with hours after the Oreo mes- really get away with telling inevitable for every brand feedback has already seen such as footfall, search with them so it could be 100 the American football sea- the caption: “You can still sage, read: “Next Year’s consumers they are inter- to start thinking this way.” behaviour and user clicks per cent reactive,” says Rob son, has long been one of dunk in the dark.” Super Bowl will be played esting, they have to be Dan Plant, head of real- on adverts. This allowed Sellers, director at Dia- the most watched television The image was retweeted at Motel 6. They’ll leave the interesting. time marketing at media the marketing campaign on logue, a shopper marketing broadcasts in the US, mak- more than 15,000 times and lights on.” It received less And “being relevant on agency MEC, says this shift ‘Clients have to let behalf of the new mobile agency. “If they can’t get ing it coveted real estate for has been held up as a than 30 retweets. Facebook is probably com- to real-time will spread to go a little bit. That is network to be tweaked as it the client at the end of the advertisers. highly creative – and suc- Drew Burdon, head of menting on something that more traditional media, went along. phone then they can’t do So much so that brands cessful – example of the lat- strategy at digital agency happened five minutes such as press and televi- going to require “When you are spending anything.” compete to have the most est buzzword in the ad R/GA London, says the shift ago”, he says. sion. He says television ads millions of pounds, you MEC’s Mr Plant says: talked about advert during world: real-time marketing. to real-time response is forc- Big brands are starting to can be put together in a courage and is a don’t have three or four “Clients have to let go a lit- the sporting event. Oreo’s success was not an ing brands to question their respond. Ron Peterson, more modular fashion, say, little bit scary’ weeks to wait,” explains Mr tle bit. That is going to This year, it was arguably accident. Mondelez Interna- traditional thinking. practice lead of social at by creating two minutes of Plant. require courage and is a lit- a single tweet that eclipsed tional, maker of the cook- “Brands have been broad- AKQA, a digital agency, copy in 12 10-second However, to react to this tle bit scary.”