Post on 09-Feb-2017
[Experience] Writing, Sales, Marketing, Customer Experience
[Client side] Startups, Apple, USRobotics, 3Com
[Agency] Critical Mass / Omnicom
[Advisory] Mobile, eCommerce, Analytics, SaaS
[Verticals] Technology, Financial Services, Retail, CPG, Automotive Luxury, Healthcare, Telecom, Professional Services
[Passions] Strategy / Technology / Consumer Behavior / Developing Talent
About Me
@neilclemmons
The Marketing Landscape
The Agency Landscape
The Opportunity Ahead
Implications for IMC Students
Agenda
The Marketing LandscapeThe Agency Landscape
The Opportunity Ahead
Implications for IMC Students
Agenda
• Marketing is increasingly about customer experience and engagement augmented by context.
• Context comes from data. Data feeds both the impression and the experience.
• Context is derived from many activities & sources - Transactions, Participation, Information, Conversation, Applications, Location, and others.
• Interactive media will reach 24% of spend in 2014. and surpass TV by 2017. Digital CPM’s have declined but are stabilizing with strongest growth in mobile and video over typical paid search and banner ads.
• Increasingly, brands and retailers are integrating services to deepen digital interactions and augment a product experience - compelling content, commerce, community, and connectivity tools.
• More and more, marketers are embracing pull efforts over the typical push efforts of the past. These include social media and hosted communities.
• Many marketers are wrestling with mobile as a key opportunity (and it’s the fastest area of investment right now). Yet most marketers have yet to establish a compelling mobile strategy.
• In time, we will see platforms and ecosystems of engagement and customer value that define marketing and value exchange to sustain relationships and encourage loyalty.
What’s Happening?
What’s Happening?
Accountability Increasing
Channel Choices Exploding
Speed Increasing
Budgets Shifting
Consumers Even More in Control
Fast Forward to 2020By 2020, 80% of the world’s adults will have a smartphone
Source: World Bank, GSMA, Andressen Horowitz
Population Adults TV Audience Literate adults Mobile Online
populationSmart
phones PCs ConsumerPCs
8
7
6
5
4
3
2
1
0
Global Population (bn)
2014 2020
Mobile Provides Huge Potential for LeverageIncreased sophistication from mobile is as important as the increase in scale
2-3x more smartphones than PCs by 2020
• Personal • Taken everywhere • Frictionless access • Sensors, cameras • Location • Payment • Social platform • Much easier to use
10x the opportunityX =
Scale Sophistication
Source: Andressen Horowitz
Yet Most Marketers are Not Yet Ready for Mobile
Source: Forrester, Mobile Commerce Daily, 2014
• Marketers tend to focus on the latest shiny mobile technologies and don’t make the most of the mobile services their customers are using.
• Early branded mobile apps offered little in the way of back-end integration to systems or loyalty programs, thus offering little value for consumer use.
• Only 55% of marketers know their customer’s mobile needs, attitudes and behaviors.
• Only 35% of marketers have the budget they need for mobile.
• About half of marketers have a validated mobile business case for key initiatives.
• Only 38% of marketers have analytics in place to measure the impact of mobile.
• Some marketers are seeing great success with mobile. Notable examples are Starbucks which is now driving over 15% of their sales with mobile payments. And Domino’s is doing over 40% of their revenue via mobile sales.
• And mobile payments are expected to drive connected commerce online and in-store.
The Client Challenge
The Average Tenure of a CMO is 45 Months. '04
'05
'06
'07
'08
'09
'10
'11
'12
'13
$ 25 B $ 50 B
45
45
43
42
34.7
28.4
26.8
23.2
23.5
23.6
AVERAGECMO
TENURE
Months
Source: Spencer Stuart
The CEO has a tenure of 84 Months.
Can the Agency help?
Customer
The Future is About Connected Experiences and Platforms
Journey Clarity
Realtime Feedback
Valuable Platforms
CustomerContext
Needs & Behaviors
Communications
Community
Content
Commerce
Competitive Landscape
The Future is About Connected Experiences and Platforms
Customer Clarity
Realtime Feedback
Valuable Platforms
The New Reality for a Real Time Age
Strategic Plans Matter Less Than Strategic Thinkingand Opportunistic Decision Making
A Huge Strategic Shift
Idea Driven Advertising & Promotion Led
Planned Quarterly A Few Channels
Integrated in Look, Feel, Tone Reported Data
Brand-out Half-life Measured in Years
Insights Led Customer Experience Focused
Executed Real-timeHundreds of Channels
Integrated in Experience & Relevance Algorithmically Generated
Customer-in Half-life Measured in Weeks
What Was… What Must Be…
The Marketing Landscape
The Agency LandscapeThe Opportunity Ahead
Implications for IMC Students
Agenda
Agencies in the News…
Apple shifts away from TBWA/ Media Arts Lab to in-house team, April, 2014
Capital One acquires Adaptive Path as captive in-house agency. Oct, 2014
Publicis to acquire Sapient for $3.5B in cash, Nov. 2014
Smart Design SF shutting down. Cannot compete with startups for talent, Oct, 2014
The Rise of the In-house Agency, ANA, Sept. 2013
Razorfish & Peets Ink Deal for Profit Sharing on eCommerce, March, 2014
Agencies Paying Top Dollar for Data Analysts, Oct, 2014
Kraft Cuts More than Ten Agencies, Consolidates on Fewer AOR’s, Nov. 2014
What do Clients Look for Most in an Agency?
• Strategic Thinking• Creativity• Responsiveness• Low Cost• Process / Approach• Results
Source: Ignition, AAAA
What do Clients Look for Most in an Agency?
• Strategic Thinking• Creativity• Responsiveness• Low Cost• Process / Approach• Results
Source: Ignition, AAAA
But Clients Want More Than Just The Category Benefit!
No Brand can Survive Delivering Only the Category Benefit!!
• Strategic Thinking• Creativity• Responsiveness• Low Cost• Process / Approach• Results
Neither Can Agencies!
My Experience with Clients
• Relationship• Leadership• Creativity / Ideas• Strategic Thinking• Talk Value / Advancement• Responsiveness• Results• Process / Approach (Compliance)• Cost Competitiveness
Senior Client
Mid-level Client
Procurement
Expectations vary by role
AOR (Roster, Jump Ball)
Talent (Freelancers, Contract, Insourcing)
Idea (Crowdsourcing)
Execution (Production Shops)
Media Firm (In-house, Self-service, Programmatic)
Publishers (Custom Integration)
Retailer (Commerce)
Retainer (Projects, Pay for Performance)
Unbundling and Disintermediation of the Value Chain
Client
Consumer
Why?• Increase Control • Decrease Costs • Improve Margins • Speed up Responsiveness • Deepen Direct Relationship
AOR
Talent
Idea
Execution
Media Firm
Publishers
Retailer
Retainer
Looks like elements of disruption to me!
What Forces are Driving Agency Change?
Today’sAgency
Client RealitiesCompetitive Pressure
Roster vs. AORIn-Sourcing
Platforms vs CampaignsContract & Rate Pressure
Marketing RealitiesMyriad Channels
Programmatic BuyingData Overload
Consumer AttentionIncreasing Specialization
GlobalizationLack of Role Clarity
Operational RealitiesFresh Creative / Ideas
Realtime NeedsAgile Methods
Push to AutomateDecoupling
Talent RealitiesTurnover @ 30%Increasing CostsStartup Growth
Growing Freelance BaseMinimal Barriers to Entry
Media Spend Has Lagged Media Consumption for Years!
Percent of media time
2009 2010 2014
Watching TV 34% 31% 32%
Internet time (home / work) 45% 49% 52%
Reading newspapers 6% 6% 5%
Listening to the radio 15% 14% 11%
Source: Forrester, Nov. 2014
Percent of media spend
2009 2010 2014
Watching TV 31% 34% 43%
Internet time (home / work) 12% 14% 24%
Reading newspapers 14% 12% 11%
Listening to the radio 7% 8% 9%
Over
Over
Under
Index
Under
Base: 4,611 — 58,725 US online adults (18+)
Source: Forrester, Nov. 2014
US$
Mill
ions
$50.00
$60.00
$70.00
$80.00
$90.00
$100.00
$110.00
$120.00
2014 2015 2016 2017 2018 2019
Television Interactive
Digital Finally Projected to Beat TV
32% of Total2% CAGR
35% of Total12% CAGR
Crossover
The Marketing Landscape
The Agency Landscape
The Opportunity AheadImplications for IMC Students
Agenda
It’s a Crowded Services Field Surrounding Marketers Today
CMO, CDO & Teams
Customer Experience Agencies
Creative Agencies
Ad & Marketing
TechnologyFirms
Startups & Product
Development Shops
MediaAgencies
InnovationConsultancies
Brand Agencies
ManagementConsultancies
PR & SocialMedia Firms
Mobile Development& Marketing
Firms
EventMarketingAgencies
Shopper & Location-
Based Marketing
eCommerce Consultancies
Analytics & Data
ManagementConsultancies
Systems Integrators
DirectMarketingAgencies
SponsorshipAgencies
MarketResearch
Firms
Aggregators (FB, Google,
etc)
Publishers (Digital, TV,
Print)
Data ProvidersLoyalty
Program Consultancies
The Next Act for Agencies
Type of agency
Marketing-led initiatives Innovation Integration Implementation
Create campaigns to drive awareness X
Automate internal marketing processes X
Establish a customer experience strategy X X X
Bring digital concepts to in-store experiences X
Build digital products or services X X
Automate media buying X
Produce video content for digital & broadcast X
Develop mobile-first brand experience deployment X
Revisit the brand / business strategy X X
Develop a process and support for marketing innovation X
Source: Forrester, 2013
Forrester believes ‘digital agencies’ will fall into one of three buckets.
What’s Holding Progress Back?
CMOs are feeling pressure to tie marketing efforts to financial impact
• Leapfrog / Medill IMC Study • Reported October, 2014
CMO’s Struggling with Data, Digital, Mobile
Barriers to Success: • Limited Internal Expertise • Siloed Organizations • Resistance to Change
Where do Marketers Need Help?
• Develop breakthrough ideas - creative, yet strategic, based on market or customer insight. Execution may not happen by the same firm, however.
• Harness & optimize data - data cleansing, system setup, analytics, customer analysis, loyalty program optimization, customer experience optimization.
• Offer channel expertise & leadership - from social to mobile to shopper marketing or native advertising, clients are looking for channel-specific depth.
• Content development - original content, story telling, social content, online content; most marketer’s second highest spending area behind paid media.
• Real-time agility - Operations, tools and talent to respond to the real time demands of their target audience interacting across channels. Automate, simplify and empower them to drive smart engagement at scale.
• Get shit done - Ability to scale, execute and deliver under tight timelines. Operationally execute the campaigns, social efforts and myriad tactics. Get stuff off the clients plate and take care of it to drive impact.
Connected Thinking for the Connected Age
• Customer behavior observed in context • Smart ideas derived from insights • Platforms differentiated with value to the customer • Initiatives supported by experience mapping • Relevance defined in real time • Results reinforced with data • Touch points integrated across the lifecycle • All designed for dissemination and adaptive access • With approaches and process based on agile methods • Continuous improvement to reinforce accountability • And smart collaboration across client and partners
People
Needs Behaviors Attitudes Jobs to be done Journeys
Digital Products
Feature / Function Context Content Commerce Communications
Elevated Brands
Equity Engagement Loyalty Expanded Services Extensions
Business Growth
Barriers to Entry Reduced Churn Increased Revenues New Adjacencies Differentiation
Sustaining Platforms
Sustaining Value Feedback Loop Differentiated Channel Go-‐to Resource Smart & Adaptive
The Path to Becoming Customer Obsessed…
The Marketing Landscape
The Agency Landscape
The Opportunity Ahead
Implications for IMC Students
Agenda
Group Total Revenue Non-Ad % Non-Ad Rev$14.584 51.70% $7.540
$17.457 58.00% $10.125
$7.122 42.00% $2.991
$6.953 70.00% $4.867
Total $ 46.116 B 55.35% $ 25.523 B
Follow the Money…
The Major Holding Companies Now Derive the
Majority of Revenuesfrom Non-Advertising Efforts
Where’s the Play for Agencies?
Drive Scale
Driv
e Sp
ecia
lizat
ion
Regional Global
Gen
eral
ist
Spec
ialis
t
• Challenge to Build & Scale• Strong Demand• Higher Multiple• > $50MM to Play
• Most Competitive• Tough to Differentiate• Higher Client Turnover• Smaller Clients / Engagements
• Easier to Scale / Differentiate• Stronger Demand• Rely on Systems & Tools• Acquisition Target
• < 25 Firms / Networks• Holding Company Plays• Slower Growth• Harder to Displace
Acquisition
Service Expansion / Client Opportunity
What Can We Learn from Startups?
Software is Eating The World - Embrace it.
Recurring Revenue Drives Growth / Value.
Extreme Focus. Minimum Viable / Desirable Product.
Full Stack - Talent with Multiple Dimensions.