Optimizing Paid Media - eConsultancy / Adobe - Sept.2013 report

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Information about Optimizing Paid Media - eConsultancy / Adobe - Sept.2013 report
Marketing

Published on March 6, 2014

Author: eldadyogev

Source: slideshare.net

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eConsultancy and Adobe report on Optimisng Paid Media. Very informative giving both the landscape and ideas of what you can/should be doing. For example, pg. 7's chart makes me wonder how many SMBs actually look at their digital marketing with these four tactics in mind

Market Data / Supplier Selection / Event Presentations / User Experience Benchmarking / Best Practice / Template Files / Trends & Innovation  Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe

Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Published September 2013 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013 Econsultancy London 4th Floor, Farringdon Point 29-35 Farringdon Road London EC1M 3JF United Kingdom Telephone: +44 207 269 1450 http://econsultancy.com help@econsultancy.com Econsultancy New York 350 7th Avenue, Suite 307 New York, NY 10001 United States Telephone: +1 212 971 0630

Contents 1. Foreword by Adobe .......................................................... 4 2. Media optimisation driven by business goals still just an aspiration for most...................................................... 5 3. Marketers strive to overcome challenges of resourcing and disparate ownership ................................................. 8 4. Analytics integration and attribution are key building blocks .............................................................................. 11 5. Understanding the path-to-purchase and customer journey in a mobile world .............................................. 13 6. Scale, skill and science: three key requirements for optimisation success ...................................................... 15 7. How quantification of benefits can help drive budgets 18 8. Companies still missing out on advantages of realtime bidding ................................................................... 21 9. Improved proposition for advertisers helps Facebook dominate social budgets ................................................ 23 10. Appendix ........................................................................ 26 10.1. Use of paid-for media ................................................................ 26 10.2. Respondent profiles .................................................................. 27 10.2.1. Geography ..............................................................................28 10.2.2. Business sector ....................................................................... 29 10.2.3. Job role...................................................................................30 10.2.4. Job function ........................................................................... 31 10.2.5. Size of company by revenue................................................... 32 Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 3 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

1. Foreword by Adobe This latest Quarterly Digital Intelligence Briefing explores the topic of media optimisation, and how companies can ensure the most effective use of their budgets in helping them to meet their business goals. It is clear from this research that many advertisers don’t have the visibility they require across different channels to ensure that they have an optimal media mix. Only a fifth of companies responding to this Econsultancy business survey say they are effectively optimising their media, and a similarly small proportion say they have a single view of campaign performance across channels. With this being such a widespread challenge, we are proud of the way Adobe Media Optimizer can now enable our clients to gain visibility of performance across media channels, helping to explode the myth that half of ad spend is wasted. We now offer our clients a complete picture of how campaigns are performing across search, social and display, providing the first unified ad management system for digital marketing programmes across these three types of media. The top three benefits of media optimisation outlined in the report are reduced cost per acquisition, reduced media costs and more sales. Tellingly, those companies who are able to quantify improvements from media optimisation are seeing, on average, an uplift of 28% in performance. For those already sold on the benefits of media optimisation, our own technology can also enable companies to predict which scenarios will shift customers from awareness to purchase before any marketing budget has been spent. By running simulations, our spend recommendation models can advise you about the amount and proportions of budget you should be investing in each channel to reach specified revenue goals, and even what degree of confidence you should have in these forecasts. Our platform also helps you to set up display campaigns to re-target those who have shown an interest in your products or services but haven’t converted. Asked what single feature they would like to add to their media optimisation technology, we were particularly interested to see that marketers have better integration with web analytics at the top of their wish list. The integration of Adobe Media Optimizer with our Adobe Analytics solution, also part of the Adobe Marketing Cloud, means that our customers are already benefiting from understanding how their ad spend is impacting key metrics on their websites. Mark Phibbs VP Marketing EMEA, Adobe Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 4 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

2. Media optimisation driven by business goals still just an aspiration for most A key finding of this research is that most companies have a great opportunity to improve their business performance by taking a more integrated approach to managing their digital media mix. It is clear from this Econsultancy survey of more than 600 businesses that effective media optimisation across digital channels is being undertaken by only a minority of companies. As the chart below shows, only a fifth of companies (21%) say their media optimisation is ‘effective’, while the majority (57%) say they carry out only ‘limited’ optimisation across different digital media channels. The remaining fifth (22%) rate themselves as laggards in this respect, admitting that there is ‘no optimisation’. The perspective of agencies surveyed as part of this report tells a similar story, with almost two thirds of supply-side respondents rating their clients’ level of media optimisation as only limited. Figure 1: To what extent do you or your agency (or your clients) optimise media buying across different digital channels? In an increasingly complex media landscape with fast-changing consumer buying patterns, the reality for businesses is that they cannot afford to eschew a joined-up and optimised approach to digital media. Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 5 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

A key requirement for effective optimisation is to ensure that the media mix is always driven by business goals, rather than tactical objectives within a silo which may improve the performance of a particular channel, but not necessarily contribute to collective success. Figure 2: ‘Our media mix is driven by business goals’ As an example which illustrates the need for an integrated approach, paid search has proved to be a phenomenally effective performance channel in recent times but the contribution of other types of media in supporting this success should not be overlooked. Seen in isolation, the value of display might be understated if it is not seen as part of a bigger picture defined by overall uplift (both revenue and branding – related) and cost. One of the issues companies face is the ‘use of different success metrics by channel’, with 69% of responding companies pointing to this as a barrier to optimisation of media activity (see Figure 6). That said, it is encouraging that more than two thirds of companies (69%) agree that their media mix is driven by business goals, compared to only 7% who disagree (Figure 2). So why are many companies only achieving limited media optimisation, despite an appreciation that the mix should be determined by business imperatives? Figure 3: ‘We have a single view of campaign performance across search, social and display’ Figure 3 highlights a major problem faced by organisations trying to keep the bigger picture in mind. Only 19% of companies agree that they have a ‘single view of campaign performance across search, social and display’, a figure dwarfed by the 56% of companies who disagree with this statement. The chart on the next page (Figure 4) shows the main business objectives associated with paid search, social advertising and online display. The differences between channels are most obvious in the case of ‘direct online sales’ which is significantly more likely to be the principal objective for paid search than for display and social advertising. The reverse is true for branding. Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 6 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

Figure 4: What is your main business objective for the following media? Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 7 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

3. Marketers strive to overcome challenges of resourcing and disparate ownership While integrated marketing activity is about more than just advertising, the focus of this report is paid-for digital media, namely paid search, display advertising and social advertising. For many companies, the buying of these media has been owned and managed by different parts of the business, with responsibility for different channels also split across in-house and agency teams. The chart below shows who is responsible for each paid-for media channel across our sample of responding businesses, with display advertising the most likely to be managed exclusively by an agency and social advertising the least likely to be outsourced. Figure 5: Do you buy the following media in-house or are they outsourced to an agency? The need to rely on agencies is a reality for many companies where they don’t have the in-house bandwidth and expertise to manage channels themselves. Asked about obstacles to effective media optimisation, lack of resources emerged as the most significant obstacle, with 43% of responding companies citing this as a ‘major’ barrier and a further 36% pointing to this as a ‘minor’ barrier. Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 8 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

Figure 6: What is preventing you from optimising your media activity as effectively as you would like? While sometimes unavoidable for practical reasons, disparate ownership of media can present obvious problems in trying to adopt a unified approach and gaining a single view of campaign performance, especially when there is a lack of communication between different departments and teams. It is clear that companies need to overcome the technological and people-related challenges born out of fragmented media buying, both through integrated technology platforms and shared business metrics. As a good example, there is an obvious synergy from having a joined-up approach to buying of display advertising and social ads within platforms such as Facebook which are really a sub-set of display advertising. Encouragingly, Figure 7 below shows that almost two thirds (64%) of respondents say that the same person is responsible for buying across these media, while for a fifth of businesses (20%) different people within the same team or agency oversee both these activities. But for 16% of companies ownership resides within different internal teams or agencies which can make it extremely difficult to reap the benefits of an integrated approach. Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 9 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

Figure 7: Are social ads typically bought by the person responsible for display advertising? Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 10 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

4. Analytics integration and attribution are key building blocks As Figure 6 in the previous section showed, disparate data sources emerged as the second most commonly cited barrier to effective media optimisation (after lack of resources), with around a third (34%) saying this is a ‘major’ barrier. In a world of ‘big data’ hype, companies could be doing a lot more to be using the data already at their fingertips. Bigger is not always better or more efficient: some invest in the most complex platform that can ingest large volumes of data and attempt to make sense of it all, but barely manage to scratch the surface in the process, with no direct impact on their business. As marketers are trying to get their head around what data they have access to and how all this information can be translated into something they can action, integration emerges as one of the significant issues that are hindering progress. When asked what feature they would add to their media optimisation technology if they could, over a third (37%) of marketers put ‘better integration with web analytics’ at the top of their wish list, significantly more than for the next most sought after feature (‘predictive forecasting’). Figure 8: If you could add one feature to your media optimisation technology right now, what would it be? Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 11 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

While most of the features included in Figure 8 may feel somewhat advanced or out of reach for many organisations, integration with analytics is the low hanging fruit that can have a positive effect on media optimisation. Attribution is another related area where advertisers really should be exploiting the possibilities afforded by technology to scratch beneath the surface to gain a more nuanced perspective on what is really driving performance. As the chart below shows, around two-thirds of organisations aren’t remotely ready to focus on media optimisation because they’ve yet to do any marketing attribution beyond the basics of ‘last click’. Figure 9: How would you describe your own (or your clients’) marketing attribution across paid-for digital media? Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 12 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

5. Understanding the path-to-purchase and customer journey in a mobile world Figure 10 below shows whether respondents agree with a number of statements relating to media optimisation sophistication. When we look at capabilities at this aggregated level, there’s really only one thing that most companies are doing; mapping their media mix to business goals. The issue for many, though, is that the right media mix for given business goals depends on a deep understanding of the customer journey. Based on the responses in Figure 10, it appears that there’s a significant knowledge gap that needs to be addressed. Only 27% of our sample see their organisation as having a media mix that reflects the path to purchase, and the problem isn’t desire, it’s knowledge. Customer journey analysis and attribution/mix modelling are hard work, and even though technologies are here to help, most organisations haven’t done the work to understand the customer journey and how it relates to their disparate channels. This is also evident from Figure 9 in the previous section which showed the low level of take-up for anything more than basic, last-click attribution. Figure 10: In the context of media optimisation, please indicate whether you agree or disagree with the following statements. It is clear for all of us to see as consumers that the customer journey is changing fast. Mobile devices only account for a small fraction of total retail, but already influence a significant Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 13 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

percentage of store sales (Econsultancy estimates roughly 7% in the US for example). For some demographics and sectors, the number is already far higher. Whatever the number for a particular organisation, it’s rising quickly, adding a new wrinkle to the customer journey and therefore to the media mixing process. Another consideration with the rise of mobile is immediacy. The ability to deliver real-time optimisation is relatively rare (25%) but important on a number of fronts. In the case of mobile search, for example, research suggests that the vast majority of mobile-driven purchases take place within hours of the search itself. The ability to optimise in real time based on factors such as time of day, query, trends and environmental factors is especially powerful in this context. It’s especially surprising that only 21% describe themselves as being able to deliver the right ad at the right time to the right person. We know that audience targeting and re-targeting work, so the question is where the challenge lies in the chain… with finding the right people, identifying their intentions or delivering the right ad? With so much technology focusing on the first two challenges, marketers should be free to do what they do best, conceiving the ideas, words and images that tell the right story. Figure 11: ‘We hit the right people with the right media at the right time’ With so much information coming from so many points, seeing the big picture is perhaps the greatest challenge for marketers today. Roughly one in five report having some capability of getting a single view of campaign performance across media, but it’s a number that’s likely to rise as more midmarket companies invest in platforms that consolidate data inputs. It’s an important step because it encourages thinking about how channels work together, not simply how they perform on their own. Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 14 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

6. Scale, skill and science: three key requirements for optimisation success One aspect dominates optimisation success across display, search and social, namely audience. In search, audience comes self-selected, but in the other areas, there’s no more effective variable against which it works to optimise. In display, the top three techniques chosen by clients are all audience-related. Initial targeting and re-targeting are closely followed by content placement, a synonym for audience targeting. Figure 12: What are the most important tactics for optimising display advertising? For social marketing (Figure 13), audience is again the dominant concern, but creative testing, landing page optimisation and alignment with other online and offline media are also important.. Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 15 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

Figure 13: What are the most important tactics for optimising social advertising? The question is not so much whether a given optimisation technique works, because it probably does at least in some situations. The approaches that floated to the top in our study also tend to be those most frequently practised. To an extent that is a reflection of effectiveness, but also of accessibility and familiarity. Marketing departments that build a culture of testing and optimisation typically build a strong expertise in baseline skills but, over time, they should evaluate and add new ways of increasing the yield of their media. Optimisation tends to live in the extremes, a “nice to have” at some companies and a vital piece of the puzzle at others. What’s missing at those organisations that aren’t taking full advantage?  Scale One of the main reasons that marketers don’t invest in optimisation is simply their scale. Display advertising, at least, is a volume enterprise and its impact on sales is a challenge for many companies. But search and social aren’t so easy to dismiss even when they’re on a small scale. In fact, smaller players in those spaces should be especially interested in learning from and taking advantage of optimisation. Limited investments in optimisation can vastly improve the yield of these media, and inform future investment. Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 16 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

 Skill Optimisation includes a number of different practices, as we see in charts 12, 13 and 14. Some of these are usually done internally, while others typically reside with an agency or specialist third party provider. Organisations that excel at optimisation have to build skills in dealing with both. The case for internally conducted optimisation is a strong one. Aside from the financial efficiency that should be achieved, there may be more profound impact in having natural advocates inside the team for the lessons and improvement of optimisation. At the same time, highly specialised types of optimisation, like audience targeting and retargeting, may be best left to experts. Even in these cases, the client benefits from having a strong working knowledge of how these processes work, both to drive the partner toward excellence and to be able to internalise not just the topline results of such efforts, but to see how they fit in the larger context of integrated marketing and their impact on the customer journey.  Science Marketing technology is most useful when it improves efficiency or when it enables something that’s simply not possible to achieve manually. Optimisation is math at a high volume. The individual calculations aren’t always complex, but as the rows and columns multiply, manually conducting optimisation gets increasingly difficult and error prone. As a result, optimisation is an area where technology thrives. Figure 14: What are the most important tactics for optimising paid search media? Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 17 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

7. How quantification of benefits can help drive budgets By a five to one ratio, marketers say that their organisations have benefited from media optimisation. Opinion is even more lopsided among agencies, which have the advantage of looking across, and learning from, a variety of companies. That’s fairly definitive, but leaves open questions that vary by where an organisation sits in terms of its sophistication in the practice of optimisation. Figure 15: Has media optimisation benefited your organisation (or your clients)? Companies that don’t do any media optimisation should take stock of why. What’s lacking from the list in Section 6 – scale, skills or science? What are the first steps to building a business case? Is it an issue money or time (hint: they’re the same)? What is the simplest test you can conduct internally, reliably on a shoestring budget? Perhaps it’s an A/B split or a landing page, but tangible results, however small, are the most compelling argument going. Those that conduct optimisation but can’t evaluate the results are in a tough spot. They are making an investment, but can’t gauge its impact. That’s a recipe for, if not disaster, at least disappointment. The most frequent blocks are often in digital display and involve technical details of measurement, so is there a shortcut, such as using third party or identifying a “soft” proxy? Note: Figure 15 above doesn’t imply that 39% of clients and 25% of agencies are in this position – many respondents simply aren’t privy to how well optimisation is working. Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 18 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

The small number that conduct optimisation but don’t see it working (roughly 10%) are either early in the process, or at a place to re-evaluate their approach. It’s certainly possible that optimisation in some media might not increase yields enough to warrant continued investment, but a rigorous and diverse process should produce results significant enough to measure and spark further testing. Figure 16: How has media optimisation benefited your organisation / clients? Organisations that conduct optimisation and know that it’s working just need to ask “what’s next?” A surprising number of marketers install a set of practices that are the easiest to perform or associated with their largest media expenses, but don’t go further. Once the evidence is in the bag, marketers can push the envelope and explore the Figure 17: Are you able to economies of third party specialists or internal hires quantify the uplift in your return devoted solely to optimisation. on ad spend you've had as a result of media optimisation? The reasons for marketers optimising their paid-for media are highlighted in Figure 16, which shows that the top three benefits of media optimisation are reduced cost per acquisition (cited by 58% of respondents), reduced media costs (55%) and more sales (52%). While there’s some overlap in the benefits listed in the chart below, they boil down to the opportunity to generate more revenue at a higher margin. “More sales” is often the result of an increased conversion rate on key pages, and can work in tandem with greater Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 19 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

efficiency (lower spending) on media to result in a lower cost per acquisition. When it comes to quantifying the uplift in return on ad spend organisations have had as a result of media optimisation, only around a third (35%) are able to do so (Figure 17). Those who are able to quantify the improvement are seeing, on average, a 28% uplift, slightly lower than the level of improvement noted by agencies (32%). As far as budgets are concerned, just over a quarter (28%) of companies surveyed have dedicated media optimisation budgets, while around a third (37%) use budgets assigned for other things, typically coming from marketing or advertising. Figure 18: Does your organisation / do your clients have a dedicated budget for digital media optimisation? Perhaps the most interesting result from looking inside this data is that strong results don’t necessarily result in a dedicated budget for optimisation. Just over a quarter (28%) of those who report lower acquisition/lower media costs/more sales work with a specific budget, which is only a bit higher than the average for those who haven’t observed those effects (23%). It’s common for optimisation to be part of a larger, channel-related budget. That’s certainly better than having no budget at all, but may not lead to the overall benefits which can result from a dedicated budget. Emphasis, accountability and flexibility go together with having a set budget number. Also, optimisation is most effective when it’s a cross-channel priority, and that’s less likely when resources are siloed. Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 20 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

8. Companies still missing out on advantages of real-time bidding Marketers have traditionally relied on click-through rates to ascertain if they reached the right audiences and tune their media plan accordingly. The latency between the end of a campaign and the moment the media plan was tweaked meant that what they were optimising might not have been relevant (or effective) anymore. As shown in Figure 12, real-time bidding is identified as an important tactic for optimising display advertising by less than a fifth (18%) of in-house marketers and a quarter of agencies. When asked how they buy display advertising, around two in five respondents (39% client-side and 45% supply-side) indicate they use ad exchanges or real-time bidding. Figure 19: How do you buy display advertising? Despite the overhyped “death of ad networks”, the majority of display advertising dollars continue to flow through these platforms, with three-quarters of companies surveyed using them for ad campaigns. When selecting the most beneficial route, it all comes down to the control, scale, sophistication and extent of optimisation that technology can offer. If display is a major part of your advertising efforts and you want to uncover how your target audience is interacting with display and other channels (such as search or social), real-time bidding is an obvious choice. Motivated by the increasing availability of real-time campaign performance data, organisations are lured into boosting performance as their campaigns run. Some media companies such as The Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 21 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

Figure 20: ‘We are able to optimise our media in real time’ New York Times (changing the featured articles on their homepage throughout the day) and The Huffington Post (using real-time A/B testing to test headlines) are typically at the forefront of using realtime data, but not many organisations in other sectors seem to make any forays in this area. The chart on the left shows the extent of this problem: only a quarter of companies say they are ‘able to optimise media in real time’. Perhaps even more worryingly, just under half (45%) disagree with the statement. Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 22 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

9. Improved proposition for advertisers helps Facebook dominate social budgets When it comes to paid advertising on Facebook, there is still significant variation in success: while some marketers report high ROI from PPC ads, others have chosen to abandon the channel completely and focus on other platforms. In May 2012, days before Facebook’s widely anticipated initial public offering, General Motors (and incidentally one of the largest US advertisers), made headlines when it stopped running paid advertising on Facebook. One year later, the automaker revisited its decision and started testing paid ads aimed at Facebook users who access their accounts on mobile devices. So what happened between the ‘divorce’ and the ‘reconciliation’? In a bid to capture a larger share of the growing performance marketing spend (and partly to combat scepticism around ROI from its ads), Facebook ramped up its proposition for advertisers. The company rolled out several platform updates and features in the last 12 months, particularly focused on targeting and measurement capabilities:  Facebook Exchange (FBX), which was often dubbed as last year’s biggest news in the world of digital advertising, opened up a large pool of inventory to programmatic buying. Interestingly, FBX partners do all the selling and provide all the data, measurement and optimisation. Retargeting is the primary tactic on FBX, enabling marketers to target people who have already expressed an interest in their brands.  Custom and Lookalike Audiences Back in September 2012, Facebook launched Custom Audiences, enabling advertisers to target ads to users who have previously engaged with them, through partnerships with data providers. Advertisers can upload their customer databases, which are matched against Facebook profiles. Lookalike Audiences, rolled out six months later, took this up a notch by finding audiences that are similar to people in custom audiences. Advertisers can optimise for either Similarity (top 1% of people who are most similar to the advertiser’s custom audience) or Greater Reach (top 5% of people that are similar to the custom audience, but with a less precise match).  Incorporating third party data to deliver ads based on shopping habits In April 2013, Facebook launched ‘partner categories’, a new self-serve advertising product allowing advertisers to target specific categories of people based on their actual and potential purchases, both in the online and offline space. This entails integration of the social network’s proprietary data with information provided by data companies such as Datalogix, Acxiom and Epsilon to help identify people who are in the market for a specific product and group them in anonymised segments. At launch, this included more than 500 unique categories.  Cost-per-action bidding Advertisers can set price caps for certain types of desirable actions and Facebook will then optimise ad placements to deliver ads to users that are more likely to convert on those actions. While initially restricted to three action types (likes, offer claims and link clicks), bidding will gradually include a wider range of actions.  And finally, Facebook is reportedly planning to dive into the lucrative video advertising market by launching a video ad service this autumn. Speculations followed shortly after: Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 23 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

the ads are said to be under 15 seconds long, automatically play without audio (which would need to be enabled by the user) and come at a hefty price.1 All these efforts and changes seem to have paid off, as Facebook’s total ad revenue for the second quarter of 2013 reached $1.6 billion, which represents an increase of 61% from the same quarter last year. Figure 21 shows that marketers are spending the bulk of their social advertising budgets on Facebook. Companies surveyed indicate that, on average, spend on Facebook accounts for 41% of their budgets, while agencies claim that the platform accounts for more than half (53%) of their clients’ budgets. While still very significant, LinkedIn and Twitter lag behind, capturing on average less than a fifth of social advertising spend. Figure 21: How is your / your clients’ social advertising budget split between the following properties? When drilling down further into the specific types of social advertising companies are most likely to invest in, Facebook newsfeed (66%) and marketplace (45%) ads take the top two spots. The agency perspective is even more favourable, with the majority (84%) of respondents saying that newsfeed ads are most popular among their clients. This is again followed by marketplace ads, with three in five agencies (59%) mentioning them. Despite the impressive click-through rates that have been bandied around, Facebook Exchange doesn’t fare as well as Facebook’s other advertising products. It’s worth noting that the platform is not far behind though, with around two in five companies indicating that they invest in promoted tweets (40%), LinkedIn ads (37%) and FBX (36%). 1 http://online.wsj.com/article/SB10001424127887323838204578654684050767080.html Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 24 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

Uptake will definitely increase over the next few months, particularly when more brands will start factoring in the impressive reach and lower cost of using FBX compared to other options. Figure 22: Which types of social advertising do you (or your clients) invest in? Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 25 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

10. Appendix 10.1. Use of paid-for media Figure 23: Which of the following paid-for digital media channels do you / your clients use? Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 26 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

10.2. Respondent profiles This tenth Quarterly Digital Intelligence Briefing is based on an online survey of 600 client-side and agency respondents, carried out in July 2013. Figure 24: Which of the following best describes your company or role? Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 27 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

10.2.1. Geography Around two in five (44%) respondents are based in the UK. Just under a third (29%) are based in Europe (non-UK) and 19% in North America. Other countries and regions represented include Australia, South America and the Middle East. Figure 25: In which country / region are you (personally) based? Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 28 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

10.2.2. Business sector Respondents work across a wide range of different industry sectors. The best represented sectors are retail and mail order (16%), consumer products and services (11%) and financial services (9%). A quarter of respondents specify ‘other’ as their sector, which include public sector/not-for profit and IT. Client-side respondents Figure 26: In which business sector is your organisation? Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 29 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

10.2.3. Job role The survey had a senior audience, as shown in the chart below. Just under half (45%) of clientside respondents are managers, while 15% hold CMO, director or VP positions. Additionally, 10% are business owners or have board level roles. Figure 27: What best describes your job role? Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 30 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

10.2.4. Job function The most common function of organisations surveyed is digital marketing, with half of client-side respondents mentioning it. Customer acquisition (11%), advertising (7%) and search marketing (6%) are the next most cited job functions. Figure 28: What best describes your job function? Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 31 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

10.2.5. Size of company by revenue The chart below shows the annual revenue of responding (client-side) organisations. At the upper end of the scale, around half of client-side respondents earn more than £50m each year. Client-side respondents Figure 29: What is your annual company turnover? Quarterly Digital Intelligence Briefing: Optimising Paid Media in association with Adobe Page 32 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

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