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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.

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