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Trends Reportby Performics@Performics 14

For years, audiences have been fragmenting. Participants move seamlessly across screens, channels & devices, creating highly personalized experiences. They interact with brands wherever & whenever they want.

For marketers, the speed of participants—and the data they leave behind—can be overwhelming. For Performics, it’s what motivates us. We embrace fragmentation to find participants by leveraging data sources (search keywords, engagement metrics, demographics, browsing behaviors, etc.). We then engage participants with highly personalized experiences at the right bid, in real-time, to Activate Participation—shares, clicks, actions, leads & sales.

2014 will bring a host of new analytics, content & channel opportunities that will aid in activating participation. We explore these opportunities in this Report.

Par•tic•i•pa•tion Acti•vat•ed:The Process of Turning Engagement into Performance

2014 THEMES

CONTENT A.I.

VIRTUAL MARKETPLACES

The science of real-time content production driven by analysis of user behavior

The expansion of access by shoppers to products beyond physical stores & native sites

DATASHADOWING

The trail of trackable data left behind as participants move across channels & devices

Tracking Cross-Channel & Device

DATA SHADOWING

WikiLeaks, Snowden & the NSA gave us a sobering view of privacy in 2013. To quell fears, Google further encrypted organic search data. Firefox planned to block third-party cookies. Yahoo! announced steps to protect email data. Microsoft even vowed to fight in court attempts by the government to seize data.

And this is just the tip of the iceberg. As advertising networks seek to protect privacy, we believe that the third-party cookie may become a thing of the past. In 2014, tracking could move to native, walled gardens (e.g. Google, Microsoft, Apple), where users are only tracked when (1) they’ve agreed to be tracked via the ecosystem’s Terms of Service & (2) they’re signed in. To illustrate—to use Google—users must now agree to be tracked across all Google properties (search, YouTube, Google+ on laptops, phones, tablets, TVs) when signed-in.

This may pose measurement challenges for marketers, but it will also enable us to attribute cross-device/channel activity—within individual ecosystems—like never before. Everywhere people go, everything they do, a Data Shadow will follow.

Eye to Privacy Walled Gardens

Ecosystem Attribution

MICRO-TRENDS

DATA SHADOWINGMicro-Trend 1: Eye to Privacy

In response to potential snooping, advertising networks are squarely focused on proving that their users are safe—that data is protected. Most notably, Google encrypted 100% of organic searches in Sept. 2013 (e.g. marketers can no longer see which queries searchers entered before visiting their sites). This eye to privacy will continue in 2014.

Keep Calm & Optimize

Losing access to data certainly makes digital marketing more challenging. However, digital marketing is defined by change. The mark of good marketer is turning change into performance.

100% Secure Organic Search (9/13)

Cookie-Blocking (pending)

Data Encryption (pending)

DATA SHADOWINGMicro-Trend 2: Walled Gardens

We believe that privacy concerns could give way to “cookie-less” tracking within native, logged-in ecosystems (Walled Gardens). Hence the race to integrate properties within ecosystems—services, hardware, etc. In 2012, Google unified its Privacy Policy to allow user permission to share data across all Google services. Native integration will continue into 2014. Additionally, each ecosystem is pairing cross-property user data with ad management capabilities (e.g. Google/Doubleclick & Facebook/Atlas) which gives the ecosystem the ability to activate data from their walled garden across the “open web.”

Chrome

Search

Android

G+

Play

Drive

YouTube

MapsiCloud

iPhone

iTunes

AppleTV

iPad

Mac

App Store

Safari

Skype

Xbox

Bing

HotmailOffice

Surface

Internet Explorer

Amazon

CloudDrive

Cloud PlayerInstant Video

Kindle

DATA SHADOWINGMicro-Trend 3: Ecosystem Attribution

As ecosystems integrate, advertisers will gain new opportunities to track signed-in users across properties, devices, browsers & locations. For instance, in Oct. 2013, Google released Estimated Total Conversions, which provides a cross-device view of all conversions driven through Google paid search (including those that take multiple devices to complete). Conversions are estimated using aggregate data from people who have signed into Google. Google’s initiatives will move the market given the scale and small (or no) cost.

A Cross-Device View of Participants Enables Us To:

• Find incremental conversions; reduce lostattribution across devices & browsers

• Better evaluate the impact of mobile

• Make better budget allocation decisions

• Better understand participant journeys

Real-Time Content through User Data

MICRO-TRENDS

In 2013, “content strategy” was the art of creating content we think people will engage with. Going forward, marketers will move beyond content strategy to Content A.I—the science of creating content we know people will engage with.

The artificial intelligence (A.I.) content machine is getting smarter; we’re using advanced analytics to track and observe participant response metrics (likes, shares, Reddit upvotes, Amazon reviews, click-through, social chatter, abandonment rates, etc.) that enable us to optimize content in real-time. Participants start talking; then we create the content. This can include moving a product up a landing page based on metrics like clicks, creating Vine videos in real-time informed by participant tweets, or even producing animated content based on the current, most-talked about stories on the Web (like Taiwanese Next Media Animation is doing).

In 2014 & beyond, we’ll better leverage participants to tell us exactly what they want, when the want it—through the data they create in real-time.

Content Optimization

Speed to Content

Automation

CONTENT A.I.

CONTENT A.I.Micro-Trend 1: Content Optimization

For years, brands have been creating content, then optimizing it for search engines & social—a process sometimes called Content Optimization. 2014 will usher a new definition of Content Optimization: creating content, on-the-fly, that is already optimized because it was informed in response to participant engagement metrics (clicks, chatter, abandonment rates by individual & participant segment) uncovered via analytics.

Create relevant content (videos, articles, tweets)

based on what your participants are

searching for & talking about in social media

Design promotional strategies/priorities (paid

search copy, display creative, landing pages)

in real-time based on reviews & social chatter

CONTENT A.I.Micro-Trend 2: Speed to Content

Once the relevant participant engagement data has been collected & analyzed, the key is speed to content creation. In 2014, more agencies, advertisers & publishers will dedicate more time & resources to content—and the fastest producer will win.

Taiwanese Next Media Animation is epitomizing

speed to content. According to its site: “30

animated news stories are published daily, covering breaking stories . . .. The animations are combined with video footage to help

viewers visualize and quickly understand headline events

as they unfold”

CONTENT A.I.Micro-Trend 3: Automation

While some content creation (like Next Media Animation’s videos) requires labor, other content will be increasingly automated. Content automation can include moving products up/down landing pages based on metrics like sales or clicks or swapping paid search copy in response to metrics like customer lifetime value. Real-time content automation can also help link creative & promotions across paid & owned assets. More marketers will test/install data management platforms (DMPs) in 2014 to support automation.

By integrating back-end CRM data associated with certain products or keywords, we can take into account KPIs like customer lifetime value (new vs. existing) to focus on acquisition vs. retention paid search copy or bid strategies. This hinges on developing processes to integrate first-party (CRM, web analytics) & third-party data at scale in real-time.

Client Data Feed

Search Management

Platform

Product Customer Lifetime Value

#127867 $345

#787167 $10786

#456755 $5787

Expansion of Access to Products

VIRTUAL MARKETPLACES

MICRO-TRENDS

Online marketplaces continue to slowly chip at brick-and-mortar’s competitive advantage—immediacy. To illustrate, Amazon partnered with the USPS for Sunday Shipping. Google Shopping Express launched in San Francisco, enabling customers to get laundry detergent, food & office supplies delivered within hours—at the same price as in-store. Jeff Bezos even revealed that Amazon is testing drones to deliver within 30 minutes by 2015.

Participants no longer have to go to the physical store or brand’s native website. They can buy what their favorite TV characters are wearing while watching TV, purchase music on-the-go with QR codes on billboards or splurge on designer close-outs on Gilt & HauteLook.

Meanwhile, many brands still focus their marketing efforts primarily on in-store & native site experiences. In 2014, we expect these brands to join their customers on Virtual Marketplaces like Amazon & Google Shopping. Marketplace/product feed optimization strategies will be critical as marketplaces increasingly figure into the mix.

Real-Time Delivery

Marketplaces in the Mix

Optimization

VIRTUAL MARKETPLACESMicro-Trend 1: Real-Time Delivery

In Q4 2013, we saw a revolution in speed-to-deliver for marketplaces. Google Shopping Express launched with 30 min. delivery. Amazon’s warehousing strategy evolved for speed (it now pulls directly from some brands’ master inventory to ship). Amazon also partnered with the USPS for Sunday Shipping, and it revealed its plan for delivery drones. For immediate needs, online marketplaces will soon become as convenient as physical stores.

Shopping Express San Fran. (Sept. 2013)

Sunday Delivery (Nov. 2013)

Prime Air Drones (pending)

VIRTUAL MARKETPLACESMicro-Trend 2: Marketplaces in the Mix

Your physical store & native website are no longer the only places to sell. In 2014, marketplaces are squarely in the performance marketing mix. Shoppers want to interact with brands on marketplaces like Amazon. In addition, Google Shopping has emerged & daily-deal marketplaces like Gilt/Hautelook continue to engage. Inventory/feed management should be a part of performance media for all advertisers in 2014.

2013 Amazon Black Friday sales were up 34.7% Y/Y (Trefis)

Google PLA spend increased 30% from holiday 2012 to 2013 for our clients

30% of people now start their shopping process on Amazon vs. 13% on Google (Forrester)

VIRTUAL MARKETPLACESMicro-Trend 3: Optimization

Many brands fear utilizing marketplaces because of the potential for cannibalization. But in reality, most marketplace sales are incremental. Not to mention, retailers are finding that shoppers on sites like Amazon or Gilt aren’t the same shoppers as those on their native sites.

Marketplace Optimization Strategies 2014

Google Shopping (PLAs)

• Shopping-Search Integration: In this new landscape, where shopping & search are one, retailers must have an integrated experience

• Relevancy: Google’s 2013 purchase of Channel Intelligence (CI) will give retailers more ability to create highly engaging feeds. We see that PLA CPCs are falling.

Amazon & Other Marketplaces

• Selective Use: Consider leveraging marketplaces as additional, shorter-term channels to clear out-of-season or low margin inventory

• Test & Learn: Compare names/addresses of ship-to customers in your Amazon orders to your existing customer database to see if cannibalization is (or isn’t) occurring

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