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Digital Media – is it....Effective?..Economic?..Efficient?

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Is it Efficient?Can it deliver large audiences?

Does it make the investment work hard?

3

Huge number of intermediaries makes programmatic expensive or inefficient…

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…Resulting in a significant loss of working media spend

100%5%

15%

10%

25%

5%

40%

Client AOR ATD DSP Tech/Data fees Exchange Publisher

*WFA member survey: Oct 2014

“Agencies are fighting a war on two

fronts. Digital is the battleground and

programmatic is the fault line.

Management consultants have the

strategic and technologic expertise -

no doubt. Agencies need to re-invent

their business models - the woods are

burning.”

YvonneO’brien,

Data & Insight consultant,

formerly Head of global Insight @ Havas

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Dumping of inventory in low quality environments is common place and often goes un-noticed

As the campaign progresses, the amount of inventory served at night increases

Source: MediaSense DiPA Evaluation – Daypart Targeting Analysis

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For all it’s charms, social media also struggles to reach significant numbers of people

To say I want tomake a viral movie,

is like a musiciansaying I want tomake a hit song.

- Casey Neistat,YouTube star with2.7m subscribers

For brands with over 1m fans, just 0.06% of them interact

with the average Facebook post (like, share, or comment)

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7

Customer penetration?

CUSTOMERS

187,000

66,000

201,000

10,000,000

11,000,000

19,500,000

0.6%

1.7%

1%

CUSTOMER PENETRATION

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1,00

0,38 0,32 0,29 0,24

TV RADIO PRESS OOH DIGITAL

Ebiquity Benchmarks: Average ROI Index

TV is still king: 3 times as efficient as other media channels

3x

Source: Ebiquity database 2008-2016

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Why is digital ROI low? High cost of digital video relative to TV and wide range of creative quality

1,00

0,38 0,32 0,29 0,24

TV RADIO PRESS OOH DIGITAL

Ebiquity Benchmarks: Average ROI Index

Min 0.00

Avg 0.24

Max 1.68

Range withinDIGITAL ROI Index

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Is it Effective?Can it engage audiences?

Can it drive a direct response?

Can it build brands?

Can it deliver creative?

Can it target audiences?

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Trust is an important environment for communications

59%50% 46%

36%21%

34%46% 48% 48%

59%

0%

50%

100%

Radio Television The Press Internet Social Networks

Percentage of EU Population: 2016

Tend to Trust Tend not to Trust

Source: European Commission, Eurobarometer

62%

42%

22%13% 13% 16% 19% 16% 19%

66%

38%

17%7% 6% 10% 14% 11% 14%

68%

30%

12%3% 3% 7%

12% 8% 12%

0%

20%

40%

60%

80%

Personal experience Friends, family Social media Traditional opinionleaders

Opinin leaders online Experts in traditionalmedia

Experts online Communication fromtraditional media

Communication fromonline

Millenials Generation X Baby boomers

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…but the trend locally is encouraging

Source: European Commission, Eurobarometer

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2006 2007 2008 2010 2011 2012 2013 2014 2015 2016

Tend to Trust: Internet

UK Germany Turkey

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Users who choose to complete view a skippable are more engaged than those who view pre-roll

Sources: https://storage.googleapis.com/think-emea/docs/old/rise-of-viewer-choice_research-studies.pdf . http://www.slideshare.net/antonovn/youtube-trueview-skippable-prerolls-study

Users who complete view a skippable ad are +75% engaged vs. seeing the pre-roll

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Evidence that the ‘sit-forward’ nature of digital gives it an edge over TV

▪ The majority (62%) of all YouTube mobile advertising, paid and non-paid, receives viewers’ attention compared to only 45% of TV

▪ Paid YouTube mobile advertising is 84% more likely to receive attention than TV advertising (83% for Paid YouTube mobile ads and 45% for TV ads)

* Paid Mobile Advertising Time includes YouTube video ads that are played for at least :30, or in full if the ad is less than :30

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There are things that drive personalisation…

▪ The fact that we can: registration data, cookies, fingerprinting, mobile device=person

▪ The promise of zero wastage

▪ The benefits of increased resonance

…and there are things that prevent it…

▪ Increasing privacy regulation

▪ Devices people

▪ Browser blocking

▪ Rejection of 3rd party cookies/pixels/tags

▪ Algorithms & models are not a replacement for deterministic data

▪ Growing academic evidence on the limits of precision marketing

▪ Reputation management concerns

The trend toward personalisationIT’S NOT AS EASY AS WE THINK

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Precision Targeting: Could we? Should we?

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Is it Economic?Are the investments reflective of it’s performance?

Are CPMs in line with other media?

Is Earned Media really free?

Are the absolute costs low?

Does it still work with low investment levels?

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The low CPM for Online advertising is so appealing

7,8

13

22,325

21,3

28

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CPM – COST PER MILLE (THOUSAND) VIEWS

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But there are warning signs….

…digital Media price inflation is far in excess of inflation

….targeting and Video are fuelling the rises

Source: Adobe Digital Advertising report 2017, Ebiquity

2 Questions: ▪ for how long will it be acceptable to burn through inventory to identify the best creative?▪ Are these prices being fuelled by performance…or by scarcity?

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So what might we conclude?

Efficient?But digital does seem to deliver complimentary audiences and can efficiently deliver on some younger audiences. A small number of registration-based platforms can deliver TV levels of cover

Effective?Be aware of the limits of Precision Marketing: the question is surely should we, rather than could we?

Economic? Inventory price inflation is becoming a threat, driven through scarcity

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POOR TARGETING

IMPRESSION FRAUD

SMALL AUDIENCES

FOCUS ON THE WRONG METRICS

HIGH ADVERTISING YIELDS SHORT TERM EFFECTS DON’T BUILD LONG TERM EFFECTS

POOR QUALITY CREATIVELOSS OF WORKING CAPITAL

Some thoughts on why digital performance is lagging potential

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What can Brands do?

The Media Imperative

7Implement campaign controls to ensure even delivery

8Make Viewability-based trading deals work harder

9Optimise to context

10Optimise to device

11Ensure a fully integrated media plan

12Balance the long and short term objectives by selecting the appropriate metrics for evaluation

13Apply the same rigour to digital data as you would with disciplined media

The Creative Imperative

1Ensure you only have above-average creative

2 Consider pre-testing video formats

3Ensure the big idea is appropriately communicated in the medium

6 Make sure your creative succeeds in it’s purpose – to convey a brand message

5 Integrate Attention to compliment audience delivery

Clearly distinguish between diagnostics and outcomes

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75%

MEDIA

Creative Quality

With strong creative, your ROI

will be 5 to 7 times higher than weak-to-average creative

Source: Ipsos

1. Ensure you only have above-average creative

THE CREATIVE IMPERATIVE

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Source: Ipsos

2. Consider pre-testing video formats

THE CREATIVE IMPERATIVE

Digital allows clients to run different creatives and optimise inflight.

This is based on Digital providing large quantities of cheap inventory

For how long will this be possible with increasing inventory pricing?

How long my ad must be viewed to deliver its message.

Which of my executions have the greatest brand impact.

Which ad format best fits my execution.

A B

C Skip Ad

Skippable

Outstream

Non-skippable

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3. Ensure the big idea is appropriately communicated in the medium

THE CREATIVE IMPERATIVE

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4. Clearly distinguish between diagnosticsand outcomes

THE CREATIVE IMPERATIVE

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5. Make sure your creative succeeds in it’s fundamental purpose – to convey a brand message

THE CREATIVE IMPERATIVE

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Not surprisingly, a lot of people watched the video … liked what they saw and felt inspired to share it with friends and family …

….unfortunately no-one recalled the brand or understood the product message “

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THE CREATIVE IMPERATIVE

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THE CREATIVE IMPERATIVE

6. Testing, learning and adapting: Coffee-Mate Natural Bliss

2015 2016

4.1 million video views, media impression

+3% brand awareness

5.9 million video views, media impression

+23% brand awareness

80%earned

53%earned

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7. Implementing campaign controls to ensure even delivery and weighting of activity is critical

THE MEDIA IMPERATIVE

Source: MediaSense DiPA Evaluation – Daypart Targeting Analysis

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8. Make those trading deals work better for you

Example:

Client plans 40m impressions video

campaign at cost of $8 cpm*

Viewability Test

Connect:Digital shows the ad needs to be viewed for

at least 5 seconds to deliver a brand impact

Client switches from to 20m impressions

viewed for 5 secs at $10cpm

Client saves $120k and delivers campaign with

more brand impact

*Note: cpm is cost per 1000 viewable impressions based on MRC/IAB standard of considering an ad viewable after 2 secs

THE MEDIA IMPERATIVE

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9. Optimise to context…

The brand must appear early and avoid slow builds because viewers won’t wait.

Digital video ads are placed in a different context. Ads that work well on TV may fail as skippable

video, and vice versa.

THE MEDIA IMPERATIVE

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50% of

YouTube video consumption is on

mobile

10. Optimise to device…

Desktop ads achieve better results when optimised to mobile – shorter, key scenes, simpler visuals

18% greater brand

awareness uplift for (shorter) mobile specific

ads on YouTube vs. desktop creative shown

on mobile

Source: Experiments in Video - Changing Habits and Behaviours - Google

THE MEDIA IMPERATIVE

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Remember the role of consistent creative cues in how people make decisions

The

Why

11. Ensure a fully integrated media plan

The

WhatEnsure the creative is suited to the medium & the format

The

Where

Remember the complimentary nature of TV and online audience delivery & TV’s ability to build cover with digital frequency upweights

THE MEDIA IMPERATIVE

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11. Ensure a fully integrated media plan

Remember the role of consistent creative cues in how people make decisions

The

Why

The

WhatEnsure the creative is suited to the medium & the format

The

Where

Remember the complimentary nature of TV and online audience delivery & TV’s ability to build cover with digital frequency upweights

THE MEDIA IMPERATIVE

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3,9

5,8

7,9

Low Enjoyment (1-3)

Moderate Enjoyment (4-7)

High Enjoyment (8-10)

3,5

6

7,8

Low Enjoyment (1-3)

Moderate Enjoyment (4-7)

High Enjoyment (8-10)

12. Integrate Attention as a critical dimension to compliment audience delivery

THE MEDIA IMPERATIVE

Average Attention to the Program/App

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13. Balance the long and short term objectives by selecting the appropriate metrics for evaluation

THE MEDIA IMPERATIVE

Communicationsobjectives:

Brand awareness

Brand relationship

Brand purchase

Brand advocacy

Behavioural:Web analytics

Impressions, visitors, reach

Completed views, ratings, likes, up/downloads

Incremental sales (on and offline), enquiries

Retweets, shares

Attitudinal:Surveys

Brand & campaign awareness, ad recognition & brand link

Brand desire, closeness, performance, image

Brand consideration, purchase intent

Recommendation, NPS

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14. Apply the same rigour to digital data as you would with disciplined media

THE MEDIA IMPERATIVE

▪ Don’t conflate browsers, cookies, DiDs, AiDs, fingerprinting, with people

▪ Are we happy that those that serve the ads are also telling us how well they performed?

▪ Are we happy with the relationship between online measurement companies and publishers?

▪ When is census really census?

▪ Big data gives us speed and granularity and is usually free…..but is it representative?

▪ Remember the old adage:

You can have your data cheap, fast, good – pick two