Iab Bain Building Brands Summary

8/8/2019 Iab Bain Building Brands Summary

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This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.

Building Brands Online:

An Interactive Advertising Action P lanNovember 12, 2009
http://www.iab.net/


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SFR 2091112 Building Brands Discussion2

Project sponsors
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Why care about Building Brands Online?

Direct response and driving transactions is thekiller app for online advertising

but online advertising is not delivering onb r a n d m ar k et er requirements andexpectations

Growth in supply of online inventory creatingprice pressure and commoditization

Trend toward ROI-based and responseadvertising, (versus longer-term brand equity

investments) exacerbated by cyclical downturn


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Marketers see high value in online, butconsider it a call-to-action medium

2.0

2.5

3.0

3.5

4.0

Average

Displa

y

3.7

Sear

ch

3.7

Mag

azin

e

3.0

Netw

ork

TV

3.0

Cabl

eTV

Newspap

er

2.8

Mobile

2.8

Radio

2.7

Spot

TV

2.6

Media " Value"(5 = Excellent, 1 = Poor)

3.0

-30

-20

-10

0

10

20

30%

Netw

ork

TV

Mag

azin

e

+2

Cabl

eTV

-4

Spot

TV

-7

Nat'l

radio

-10

Mobile

-17

Dis

pla

y

-19

Sear

ch

-20

Newspap

er

-23

Local r

adio

"Reach" vs."Call-to-Action" Ratio

+21

-24

Call-to-action

Reach/brandbuilding

NATIONAL ADVERTISERS

Source: Bain ad buyer survey (02/2009); Bain analysis


5/31This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.

SFR 5091112 Building Brands Discussion2Source: Bain/IAB 2009 Marketer survey; Bain Media 3.0 Study

0

25

50

75

100%

TV Magazine Newspapers Internet

Generating

Familiarity

Creating

Awareness

PromotingConsideration

Driving

Traffic/

Purchase

Intent

$64.4B $13.3B $34.4B $23.1BTotal AdSpend (2008)

PromotingLoyalty

Which marketing objectives are the followingmedia vehicles best suited for?

Brandobjectives

Marketers believe online can be moreeffective at all stages of the purchase funnel




0

20

40

60

80

100%

Brand

Marketers(>75% of spend)

Response

Marketers(>75% of spend)

Magazine

Newspapers

TV

Internet

Radio

Other

Outdoor

Weighted above-the-linemarketing budget (2008)

Mobile

Yellow Pgs

Brand marketers expect only modestgrowth in online spend

Brand marketers rely heavily on TV, whileresponse marketers advertise more online

Future mix shift to Online much morepronounced among Response Marketers

0

20

40

60

80%

Internet

2011

2008

TV &

Magazines

2011

2008

Internet

2011

2008

TV &

Magazines

2011

2008

% of above-the-line ad spend

+5

+3

+8 -4

BrandMarketers

ResponseMarketers

Source: Bain/IAB 2009 Marketer survey




We need to address five key obstacles tobring more brand advertising online

Ad formats and creative are not innovating withthe medium

We are awash in undifferentiated, low-costinventory

Metrics, metrics everywhere but not the onesthat brand marketers really need

Media companies lack ideas, strategic expertise

and engage too late in the planning process

Marketers want cross-platform campaigns; instead

they get a model rooted in platform-specific silos

1

2

3

4

5




Problem: Ad formats and creativeare not innovating with the medium

1




Bulk of online advertising volume isineffective for brand building

0

10

20

30

40

50%

Effectiveness for online brand-building

Sponsor-ships

Effective

Extrem

ely

effective

Digitalvideo

Email Socialnetworking

Non-prem.display

Search Premiumdisplay

Richmedia

Leadgen.

Classifieds

1




SFR 10

1 Solution: more custom executionshowcasing emotional potential of online

Fakeresponsead clutter

Non-standard formats

Interactive and engagingCreative/ technical support from media

Cross-platform integration

Whats

different?



SFR 11




Whats

different?


S l i i



SFR 12




Whats

different?





Problem: We are awash inundifferentiated, low-cost inventory

2

2 A i t ti t d


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SFR 14Building Brands discussion document 100109

Endless supply + Response dependency =Relentless path to commoditization

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

0

10

20

30

$40

6/05

12/05

6/06

12/06

6/07

12/07

6/08

Impressions (MM) CPM

0

200,000

400,000

600,000

800,000

1,000,000

0.0

0.5

1.0

1.5

2.0

2.5

3.0

$3.5

6/05

12/05

6/06

12/06

6/07

12/07

6/08

Impressions (MM) CPM

Banner Ad Impressions & CPM,2005-2008

Rich Media Impressions & CPM,2005-2008

Source: Morgan Stanley; ComScore

Banner AdsImpressions

Banner Ads CPM

2 As inventory continues to expand,marketers have more options at lower cost

2 S l ti d l d d li th


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Larger-scale,reduced service,efficiency model

Larger-scale,more automated,efficiency model

High touch,high cost,

premium model

2 Solution: develop and deliver threedistinct triple playservice models

Marketerobjectives

Drive customers to site

Generate transactions andimmediate ROI

Supplement buys in othermedia

Generate wide exposure

at low cost

Build brand awarenessand purchase intent

Deliver custom, high-

impact campaigns

Productofferings

Banners, rich media

Mix of premium and non-premium positions

Banners, rich media

Mix of premium and non-premium positions

Content/placementcontrol

Digital video, rich media

Premium position banners

Social/UGC applications


Keydecisionmaker

Buying agency(downstream)

Creative agency (large

clients only)

Brand marketing team

Creative agency(upstream)

Buying agency

Brand marketing team

Creative agency(upstream)

Buying agency

Response Brand reach Brand engagement


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Embrace non premium for reach/response;2


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Description: Demo-focusedvertical ad networks

Partners with audiencessimilar to MTVN

Ad network by contentarea

Premium ad units,campaign reporting andoptimization

Suite of advertisingon proprietary sites,(People, Sports

Illustrated, Time)

Ads only shown onbranded sites

Impact: Large publishers get higher ad rates andrevenue from small publisher sales

Small publishers access scale - reach

marketers upstream in buying process

Publisher can deepenadvertiserrelationships across

properties

Partner with smaller sites to offergreater reach and scale

Network ow n properties

Embrace non-premium for reach/response;build scale through networks or partnerships

2

Source: Advertising Age, MediaPost, ClickZ, Marketing Pilgrim


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Problem: metrics, metricseverywhere but not the ones thatbrand marketers really need

3

Brand marketers maintain preference for3


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0

20

40

60%

Brand

awareness

#1

#2

#3

Likelihood to

recommend

Conversion

rates

Click

through

Message

association

Time spent

on page

View

through

Percent of respondents

Purchase

intent

Favorability Recall Unique

visitors

Ad

impressions/views

Interaction

rate

Engagement

time

Which metrics are most valuable for brand-building campaigns?

What brandmarketers w a n t

What brandmarketers g et

Brand marketers maintain preference fortraditional brand impact metrics

3

Solution: New metrics can help marketers better3


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Key measurement needs

Combined target audience reach and frequency

Unified metrics across multiple sites (de-duplicated) Share of voice

Brand recall and awareness within target audience

Link to sales impact

True number ofunique impressions

Consistent standards enabling comparison across mediaplatforms

Engagement/interactivity measures

Brand equity measures

Reach/frequency

Brand

Impact

Currencystandards

Reliability/

consistency

Solution: New metrics can help marketers bettercompare and fully value brand campaigns

3


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Problem: Media companies lackideas, strategic expertise and

engage too late in the process

4

Brand marketers desire high-impact4


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0

10

20

30

40%

#2

#1

% of respondents

Deep

knowledgeof marketer

and industry

Effectivetargeting

Strongrelationship

with marketer

High impactonline creative

Customizedoptions

Digital advtknowledge

Digital

advtsuccessmetrics

Best

contextualfit for ads

Cross-

platformcampaign

optionsFull ad

placementtransparency

Streamlined

purchasingoptions

Brand marketers want

ca tegor y exp er t i se ,cus tom iza t i on and a

re l at i onsh ip m indset

Which capabilities are most important in supportingyour online advertising?

Brand marketers desire high impactpartnerships with their media companies

4



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Solution: Leverage new capabilities and4


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Brandcampaign

design

Creativeprocess

Mediaplanning

Overallmarketingobjectives

Mediabuying

Campaignideas

Support incampaign

design Consumer

insights

Customizationto marketercampaignobjectives

Full creativeexecution

Proactivemediaplanninginvolvement

Cross-platformintegration

Response toRFPs

Pro-activedevelopment of

ad packages Ad allocation

and placement

Strategicsupport

Creativeservices

Planningsupport

Selling

Move upstream

Marketing P lanning P rocess

Media CoSupport

Solution: Leverage new capabilities andscale to move upstream in the value chain

OnlineOnline Online


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Problem: marketers want cross-platform campaigns; instead get

platform-specific silos

5

After many fits and starts, integrated5


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Q: What percent of your total above-the-linebudget is spent on each type ofmarketing campaign?

Leading brand marketers arereorganizing teams aroundcampaigns, not platforms

Agencies are being forced to followsuit, often through new teamstructures

0

20

40

60

80

100%

2008 In 3 years

Cross-platform

campaigns

Separate but

simultaneouson- and offline

campaigns

Singlemedia

vehiclecampaigns

Percent of brand marketer

above-the-line spend

After many fits and starts, integratedmarketing is becoming a necessity

Most media companies retainseparate organizations acrossplatforms


Marketers who use the same creative5


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0

20

40

60

80

100%

2008

Separateagencies

for onlineand offline

Sameagency for

online andoffline

Agency usage

Most marketers use thesame agency for onlineand offline creative

0

20

40

60

80

Sameonline/offlineage

ncy

Separateonlin

e/offlineagencies

Effective

targeting

High impact

online creative

Digital

advertising

knowledge

Online agency ratings(% respondents choosing 4 or 5)

Deepknowledgeof marketer

and industry

Strongrelationship

with marketer

Customizedoptions

and tend to be much more satisfied w ith onlinecapabilities than when using separate agencies

Marketers who use the same creativeagency for the whole egg are more satisfied


S l ti R th l f t t5


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ILLUSTRATIVE

Solution: Revamp the sales force structure

Typical legacysales force approach

Example futuresales force approach

Media company

Onlinesales force

Offlinesales force

Media company

Transactionalonline

sales force

Multi-platformengagement

sales force

Most needsEngagement

needs

CPG

Separate online and offline salesforces, impractical for cross-platformcampaigns

One-size-fits-allapproach

Limited category expertise

Vertical-specific sales forces with high-touch and innovation focus

Separate reach/ response sales force

Ability to meet reach requirements asnecessary for brand customers

Reach/response

needs

Engagementneeds

Auto Etc.

Summary: online media companies need to


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y pchange both their offerings and sales approach

Create distinct value propositions for each leg of theTriple Play

Sell cross-platform solutions,not units with deeperrelationships and more differentiated ad offerings

Deepen audience insights and strategic marketing skills

to help increase branding impact

Build category sales forces for brand advertisers, w ithseparate sales force for reach/response selling

Establish scale to enhance selling/delivery of brand solutions

Collaborate on common standards and metrics

For the IAB: focus on five key areas to


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yimprove online branding value

Create ongoing forums with marketers for discussion ofbranding approach, limitations, and key developmentsEngaging

marketers

Onlinecreative

Identify and communicate success factors for marketers,

agencies, and publishers in executing cross-platform creative

Automatedprocesses

Help develop low-cost and/ or automated processes for

brand reach and response buys

Establish common technical standards for the industry

Targeting Address current scale and data limitations for targeting

Identify ways to adjust for overlapping audience in reach buys

Measurement Work with other associations to establish clear standards for

measurement ofbrand impact and reach/ frequency

1

2

3

4

5


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Documents

Iab Bain Building Brands Summary