Inside

The power offriendly persuasionBrands increasingly usecelebrity endorsementsto push their productsPage 2

The future lies innumber crunching‘Mad Men’ turn toalgorithms to bookadvertising spacePage 2

Graphic: commercialsin the Facebook eraHow are social mediasites shaping up asmarketing platforms?Page 3

Sports and ITGoal line technologyand safety equipmentft.com/connectedbusiness

On FT.com

See the The ConnectedBusiness interactivevideo with Maija Palmerft.com/cbexplore

Mobileadvertising isabout toreachatippingpoint.Marketersare likelytoincreasetheirspendingonmobileadverts fromalmost$69bnthisyeartomorethan$100bnin2016,overtakingthesumspentondesktopadvertising.

Onlythreeyearsago,mobileaccountedfor less than2percentofglobaladvertisingspending,but itssharewill reach12percent thisyear,accordingtoresearchgroupeMarketer.

Themaindriverof thisgrowthisconsumerpreference.EightyearsafterApple launchedthe iPhone,morethan2bnpeoplegloballyhavesmartphones.BenedictEvans,ofAndreessenHorowitz,aSiliconValleyventurecapital firm,saysthatby2020four ineveryfiveadultswillownasmartphone.

Sofar thegrowthinmobileadvertisinghasmainlybenefited justGoogleandFacebook.Bothquicklyidentifiedtheriseofmobileandoptimisedservices forsmartphones,allowingthemtocapture55percentofallmobileadvertisingspending in2014,eMarketersays.

However, industryexpertssayboththesecompanies’mobiledominancewilldecreaseasrivalmediaandtechnologygroupscompetetoofferinnovativemarketingplanstobrands.

Here isabriefguidetosomeof thecurrent trendsthatmaypredicthowfuturemarketingstrategieswillberun:

The rise of the machine“Programmatic”advertising—inwhichbrandsandmediagroupsbuyandselladvertisingspaceusingautomatedcomputersystems—iswellestablishedfor theweb,but this trendisbeingrapidlyreplicatedonmobile.

JamesHilton,chiefexecutiveofM&CSaatchiMobile,amarketingagency,saysmorethanafifthofmobileadspendisnowprogrammatic,upfrom5percentayearago.Proponentsofprogrammaticadvertisingsay it ismoreefficient thantheoldwaysofbuyingandsellingadspace,andmakes iteasier totargetconsumers inreal time.

Greater creativityTraditionally,mobileadvertisingformatshavebeenmostlysimpleandstatic: thinkofGoogle’s searchadsorthebanneradsonnewswebsites.Butadvertisersare increasinglyable todeploymorecreativeandelaborateadformats, includingvideo, thankstoimprovingsmartphonetechnologyandtheadoptionofhigh-speed,3Gand4Gwireless internetconnections.

Inthepast,directresponseadvertisers, lookingforanimmediatereactionsuchasaclick,haveaccountedfor thebulkofmobileadvertising. Inthefuture,adagencyexecutiveshopethatthegrowingpotential forcreativityonmobilewillencouragemorespendingonbrandbuilding.

Location, location, location . . .Smartphonesprovideadvertiserswithmoredatathananyothermedium—including locationdata,accurateto just10metres,andtheopportunities foradvertisers toexploit thisarebecomingevergreater thankstotechnology.

Brandsare increasingly“geo-fencing”mobileadvertisingcampaignstotargetbuyers inparticular locations.Forexample,Walmarthasusedthis toofferdiscounts toparticularpeoplenearacertainbranchatacertaintimeofday.

Someretailersareevenfittingstoreswithbeaconsthatcancommunicatewithashopper’s smartphoneviaBluetooth.Beaconscanallowthedeliveryofadvertisingwithunprecedentedprecisionandalertshoppers topromotionsas theypassthroughacertainaisle, forexample.

WearablesThelaunchofApple’s iWatchhasgeneratedgreatexcitement inthemobileadvertising industry. JustasAppleupset thesmartphoneandtabletmarketswiththe iPhoneandiPad,manyexpect that the iWatchwilldothesameforthewearabledevicemarket.

ForresterResearchbelievesApplewill sellasmanyas10miWatches in itsfirstyear—morethanall theothermanufacturersofwrist-baseddeviceshavesoldtodate, includingNike’sFuelBandfitness tracker,Samsung’sGearsmartwatches,anddevicesbyotherup-and-comingcompanies.

FewadvertisingchiefsbelievetheiWatch—whichhasascreenthesizeofapostagestamp—willbeanappropriateplacetoengagewithconsumers,althoughsomeplantoexperiment.Muchmore interesting, theysay,willbetheopportunitytousedatacollectedbyappsonwearabledevices forbettertargetedadsonawearer’s smartphone.

Linking the mobile and the desktopFormarketers,oneof theholygrailsofonlineadvertising is“cross-devicetargeting”.This is theability totrackaconsumerfromtheir laptoptotheirsmartphoneandbackagain, targetingthemwithaseamlesscampaign.

Brandshavefounditdifficultorimpossible toobtainasingleviewofaconsumeracrossdevicesbecausethemobileadvertising industryreliesonaseparatesetof technologytothedesktopadvertising industry.

Increasingly,however, thesilosbetweendesktopandmobilearebeingbrokendown.GoogleandFacebookareat theforefrontof this trend,providingwaysforbrandstotargetconsumersonmobilesusingdesktopdata,andviceversa,whetherontheirownsitesorthoseof thirdparties.

Five trends that could drivefuture campaign strategiesMobile

There is growing potentialfor creativity to buildreputations, reportsRobert Cookson

Hold the phone: ads can be targetedat customers while they are in stores

W hen Heineken USA waspreparing to launchDesperados, a tequila-flavoured beer, in thesoutheastern US in

2014, the importer tried out two adver-tisingcampaigns.

In some states, Heineken bought tra-ditional television commercials, whilein others it ran ads only on mobilephonesatspecific timesofday.

In the states that received the digitalcampaign, awareness of the millennial-targeted drink reached 23 per cent —well above the rate in states that onlyhad TV ads. “We were reaching millen-nials in pre-party occasions,” says NunoTeles, Heineken USA’s chief marketingofficer. “On Friday at 9pm, they are not

watching TV. They are checking theirphonesandsocialmedia.”

One of Heineken USA’s main motiva-tions for investing 30 per cent of its adbudget in digital platforms this year —up from 20 per cent in 2014 — is thisability better to align marketing spendwith outcomes. “We can impact thebusiness significantly through digital,”MrTelessays.

Thanks to the proliferation of provid-ers from Netflix and the BBC’s iPlayer toFacebook and Snapchat, consumershave greater access to more media onmore devices than ever before. That isallowing advertisers to tap user data totarget their messages precisely to theright people at the right time in theirdigital campaigns and, increasingly,

through traditional media such as TV.“The way consumers are consuming

content is becoming more digital,” saysJeff Green, chief executive officer of TheTrade Desk, an advertising technologycompanythatautomatesadbuying.

“Ultimately, every advertising formatwill become digital, whether it’s print,TV, radio,” he says. “The most efficientway to operate is [by being] somewhatelectronic and market-driven. And theprimary way marketers look at it is: ‘Iwant to have the most effective market-ingthat I’veeverhad.’”

The way advertising is bought, soldand created is being reshaped bythe enormous volume of data from set-top TV boxes, credit card purchases,online profiles and retailer loyalty card

programmes — and by the technologythat allows marketers to access, analyseand implement that data. IDC, themarket research group, predicts chiefmarketing officers will boost theamount they spend on marketing tech-nology to $32.4bn in 2018 from $20.2bnin2014.

Nearly half of marketers surveyedrecently by research company Forresterplan to increase their digital budgetsthis year. Forty per cent said they wouldspendmoreondataanalytics.

This investment comes as big adver-tisers face a challenge in “digesting allthe different pieces of data they’re get-ting: loyaltycardandcustomerrelation-ship information, a blitzkrieg of datafrom social channels, clicks, Facebook,”

Digital isreshapingthe world ofadvertisingMarketers raise spending on data analytics totarget campaigns better, reports Shannon Bond

says Drew Panayiotou, chief executiveof BBDO Atlanta, an advertisingagency owned by Omnicom, a globalcommunicationscompany.

He asks: “How do marketing dataintersect with data coming internallythrough the company, through the chiefinformationofficer,or thechief technol-ogy officer, or the ecommerce group?We’re seeing clients trying to sortthat . . . out internally to make the datauseful.”

While the rise of targeted advertisinghas been enabled by data and technol-ogy, its proliferation reflects marketers’demand for evidence that the moneythey spend is really influencingcustomerbehaviour.

Continuedonpage2

Stores can have beaconsthat communicatewith ashopper’s smartphone todeliver adswith precision

The Connected BusinessFT SPECIAL REPORT

www.ft.com/reports | @ftreportsWednesday April 29 2015

Illus

tration:OivindHov

land

2 ★ FINANCIAL TIMES Wednesday 29 April 2015

The Connected Business

Simulmedia, an advertising technol-ogy company, is so confident thattargeted TV advertising can havemeasurable business impact that it isguaranteeing that any advertisers whospend $1m for a month on ads aimed atspecific viewers will have better resultsthan they would have achieved usingtheircurrentTVplans.

Dave Morgan, chief executive ofSimulmedia, says: “We’ve been measur-ing the outcome of TV campaigns foryears. Did they actually deliver? If youmeasured TV the same way as digital,how would it do? We find it’s doingreally, really well.” Companies such asChoice Hotels International, owner ofthe Comfort Inn and Econo Lodgebrands, have worked with Simulmedi-atotargetpotentialclients.

Targeting is also valued by marketersas they are under great pressure to showefficiency and make sure they are notwasting valuable ad dollars on peoplewhoareunlikelytobecustomers.

“To some extent, the non-targeting ismore important,” says Mr Green of TheTrade Desk. His company advised afast-foodrestaurantchaintostopadver-tising to anyone who lived more than 10miles away from its 10,000 locations.“That eliminated 40 per cent of Amer-ica,” Mr Green says. “Then we focusedon reaching those within five miles. Weweretrimmingthefat, sotospeak.”

The chain agreed to start with a five-figure budget to test it out. It ended upboosting the campaign to more than$10m, Mr Green says, based on its suc-cess. “It was exponentially more effec-tive advertising by customising mes-sages based on time of day and proxim-ity[tooneof thechain’s locations].”

Those in the industry also say that

closer targeting can improve consum-ers’ experiences watching TV or brows-ing the web by making sure they are see-ingadsthatarerelevant tothem.

“With targeting, a lot of what we do isfocus on the negative space — the sup-pression of advertising messages topeople who are inappropriate,” saysJonathan Nelson, chief executive ofOmnicomDigital.

However, research suggests there arelimitations to how far marketers shouldtake targeting. Lisa Barnard, of IthacaCollege, has found that online adstailored to specific consumers doincrease their intent to purchase items.Butshealso foundanegativeeffect fromwhat she calls “the creepiness factor” oftargeted ads that reduces the likelihoodtobuyby5percent.

“Even digital natives were botheredby this. They know they’re being mar-keted to. And they don’t like it,” shesays. “Marketers have made blanketassumptions that the more data wehave, themoreweshoulduse,” sheadds.“But just because we have that informa-tion, it doesn’t mean you should just goaheadanduse itall thetimeinall cases.”

Continued frompage1

Digital isreshapingthe world ofadvertising

ContributorsShannon BondUS media and marketingcorrespondent

Robert CooksonDigital mediacorrespondent

Maija PalmerTechnology writer

Jane BirdJessica TwentymanFreelance technology writers

Adam JezardCommissioning editor

Steven BirdDesigner

Andy MearsPicture editor

For advertising details, contact:James Aylott, +44 (0)20 7873 3392,or email james.aylott@ft.com,or your usual FT representative.

All editorial content in this report isproduced by the FT.Our advertisers have no influence over, orprior sight, of the articles contained inthis report.

FT Reports are available at:ft.com/reports

Follow us on Twitter: @ftreports

C onsumer brands have longunderstood the power of acelebrity endorsement. Theappearance of a much-lovedfilm or sports star in a print

or broadcast advertising campaign cando much to boost sales and build brandloyaltyamongtargetaudiences.

These days, so-called brand ambassa-dors are also expected to spread theirsponsors’ messages among fans andfollowers on social media. This onlineinfluencer trend is particularly relevantto companies targeting females, and thepanel on the right gives some examplesof the most popular and powerfuladvocatesatworktoday.

Women, after all, dominate manysocial networks. US research companyPew Internet Research said in a recentupdate that 77 per cent of female inter-net users are on Facebook, comparedwith 66 per cent of their male counter-parts. Twenty-nine per cent use Insta-gram, against 22 per cent of men. And,while male internet users edge ahead onTwitter (24 per cent, compared with 21percentofwomen),Pinterest isanover-whelmingly female domain, used by 42per cent of female internet users andjust13percentofmen.

“Buying influence is not a new thing,but the evolution of social technologymeans that the rules have changed,”says Mark Sinnock, chief strategyofficer at advertising company M&CSaatchi. “Today, if you have a social net-work,youhavethepowerto influence—and the potential to make a lot ofmoney. Brands have been quick to pickthisup,”hesays.

In particular, this female dominationof social media sites spells a potentialcashbonanzaforcompanies thatcangettheir celebrity marketing right becausea star’s opinion of a brand, even if thatopinion is paid for and costs megabucksto achieve, means far more to manycustomers than what the brand saysabout itselfanditsproducts.

That is causing many companiesmarketing to women to work not only

with well-known stars, but also withrising female celebrities who derivetheir fame from internet channels, saysKate Cooper, managing director ofsocialmediaagencyBloomWorldwide.

“But whether they’re celebrities oronline stars, what successful influencerstend to have in common is that theyhave a large number of followers whoare genuine targets for a particularbrand and are regularly active on social

media sites in their own right,” says MsCooper.

There are risks, not least that of acelebrity scandal or public meltdown.And, regardless of what demographic abrand may wish to attract, it is forced towalk a tricky line between keeping con-trol over its messages and allowing itsbrand ambassadors to convey an“authentic” message that tallies withtheirpersonalviewsandpublic image.

“Trying to maintain too much controlcan result in forced content that couldignite a backlash from influencers andtheiraudiences,”saysMrSinnock.

Today’s online audiences are not stu-pid, says Jason Hartley, chief strategyofficer at The Partners, a consultancy.“They can tell the difference betweensomeone promoting something theygenuinely believe in, versus simply sell-ing out their followers for a pay cheque.”

Bright young stars spread themessagePersuasion JessicaTwentyman considershow organisations areincreasingly usingwell-known faces tosell theirmessages

Emma WatsonActorWhen the British actor, best known asHermione in the Harry Potter films andas a UN goodwill ambassador, was castto play Belle in Disney’s forthcominglive-action remake of Beauty and theBeast, she chose Facebook as the venueto share the news with her fans.

Ms Watson has almost 29.5m fans onFacebook. At the time of writing, thatpost had attracted more than 1.2m likesand been shared almost 64,500 times.Ms Watson has also used her Facebookpage this year to host an onlinequestion-and-answer session about thegender equality campaign she fronts onbehalf of the UN, HeForShe.

Jessica Ennis-HillAthleteThe UK Olympic heptathlon champion isthe public face of a number of brands,including bank Santander, sportswearcompany Adidas and insurer PruHealth.

She tweets about her activities withthese companies to 1.43m Twitterfollowers and her YouTube channelshows adverts she has made for them.

Announcing her link with PruHealthin 2013, she said: “Everything I stand foris echoed in the values of [the] Vitality[campaign] and I hope I can makepeople see that achieving yourpersonal health goals is really a matterof planning the journey and stickingwith it.”

Sali HughesJournalist and bloggerMs Hughes is one of eight womenchosen by British lingerie companyTriumph UK to promote its Find the Onecampaign, which aims to help womenbuy a better-fitting bra.

Before the March launch, Ms Hughesposted a teaser to 68,000 Twitterfollowers: “Excited to be working withiconic lingerie brand Triumph. Allrevealed next week.”

However, she is mindful her audienceappreciates her frank approach tobeauty advice. As she wrote in a blog onher website about the campaign: “Wewill never say we love something unlesswe really, truly do. Not now, not ever.”

Michelle PhanEntrepreneurMichelle Phan from the US was one ofthe first to post make-up tutorials toYouTube and more than 7.5m peoplesubscribe to her online channel.

She has been “liked” by almost 3mpeople on Facebook and followed byabout 1.8m on Instagram. In 2013, MsPhan launched her own make-up rangewith cosmetics giant L’Oréal, Em byMichelle Phan.

Last month, she teamed with DutchTV production company Endemol tolaunch Icon, an online platform for videocontent on beauty, fashion and lifestyleissues, created by Ms Phan and a hostof other female online influencers.

Brand ambassadors Celebrities whose endorsements count with female followers

30%Percentage ofHeineken USA’sad budget spenton digital in 2015

$32.4bnLikely spendingon marketingtechnologyin 2018

Imagine you have a problem with yourcontact lenses. You visit an unfamiliarbranch of your optician, only to findtheyhavenorecordofyou.

Such experiences are frustrating forcompanies as well as customers,because they fail to match the highexpectations brand managers are tryingto create, says Woody Driggs, globaladvisory customer leader at EY. “Thereis a gap between what marketers aredefining and an organisation’s ability todeliver it.”

To avoid this, Mr Driggs says market-ers have to take on more responsibilityfor client projects. “They have to definecustomer experiences and work with ITtoensuretheyaredelivered.”

But becoming more involved in theselection of advertising and marketingsoftware isnotsimple,because thereareso many products. Scott Brinker, chieftechnology officer of Ion Interactive,says: “Marketing has exploded from anancillary communications function to[being] the Grand Central Station ofcustomerexperience.”

He recommends thinking six to 18months ahead about what functionalityyou want sales and marketing teams tohave, and testing products before mak-ing a commitment. This is relativelyeasy,hesays,asmostpackagesareavail-ableoverthe internet.

He also says companies should stickto industry-standard architecture: “Youwant to understand how you can get

data in and out of systems, so that ifthings happen that you can’t predict,you will be able to plug in third-partyproducts.”

One of the biggest changes has beenthe ability of mobile technology to ena-ble more personalisation, says DianaMarian, marketing strategist for UK-basedconsultantsAmpersandMobile.

But most mobile customers are disen-chanted with their experience, she says,because apps tend push informationanddonotengagepeople.

To offer personalised experiences,marketers need sophisticated tools totarget, segment and communicatewith mobile users in real time, saysMs Marian. She recommends choosing

software that helps identify customersaccording to particular characteristics,suchasdemographics,userpreferences,historicalbuyingpatternsandlocation.

ProviderssuchasXtremePush,UrbanAirship and Localytics do this well, shesays. “[They] also provide dashboardsso that marketers can measure howmany users have responded and thelevelofactivity.”

Being able to track customer motiva-tion is also important. “At the moment,systems are poor at understandingwhether customers have bought itemsfor themselves or for others, and howmuch their mood has influenced them,”MsMariansays.

While it is possible to let purchasersreport theirmoodsandmotivations, sheadds that people’s reports of theirmoods are unreliable. Sentiment analy-sis software struggles to cope with idio-syncratic and non-concrete conceptssuchassarcasmor irony, forexample.

Measuring motivation requires largequantities of data. The more data areavailable, theeasier it is formarketers toextrapolate and draw conclusions aboutwhat people may like. Being able toaggregate data from separate sourcessuch as wearable devices and the inter-net of things will enable greater person-alisation,MsMariansays.

Mr Brinker adds that organisationscan be experimental with software thatperforms specialised tasks, such as con-tent marketing, search engine optimisa-tion, online webinars and interactivecontent, because it can be discarded rel-ativelyeasily.

But “foundational” software is harderto change and requires a longer-termview. This includes customer relation-shipmanagement(CRM),contentman-agement for the web and mobile, andmarketing automation, including emailandecommerce.

Foundational software should beintroduced first, says Mr Brinker. “It iseasy to get excited about cutting-edgeapps such as Pinterest, Instagram orspecialised analytics, but if you don’thave a sound foundation, it’s difficult tomap insights back into CRM or market-ingautomation.”

Another common error is not havingenough technical people to evaluateproducts. Ideally, you want hybrid pro-fessionals, “marketing technologists”Mr Brinker calls them. These people,who are becoming more common, havea technical background but are focusedonapplying it tomarketing.

Such professionals can help evaluateand implement tools while appreciatingwhat marketing teams want to achieve.Without them, Mr Brinker warns that:“If marketing people buy software inde-pendently, theycanendupwithabunchof cool tools that they can’t connect totherestof theirsystems.”

Customers’ experiencemust match expectationSoftware

Professionals must takemore responsibility for theirclient projects, says Jane Bird

An online advertising campaign lastyear by Kronenbourg, a French brewer,adopted an innovative tactic: it usedreal-time temperature data to targetonly those people it calculated would bemost susceptible to the temptation of arefreshingbeer.

To execute the campaign, Kronen-bourg worked with Infectious Media, aUK-based agency that specialises in thefast-growing area of “programmatic”advertising,orusingautomatedcompu-ter systems to deliver ads across theinternet.

The 350-year-old brewery had longknown that people prefer to drink beerin warm weather. It had also found thatpeople in the north of France consider itwarm when the temperature is above20°C, while people in the south have athresholdof25°C.

Using these insights, Infectiouscreatedanalgorithmthatonlydeliveredadverts to internet users who were inthe right location at the right tempera-ture and at the right time of day for acoolbeer.

The Kronenbourg campaign is oneexample of how data and technology arechanging the way ads are delivered —and with it the skills required of practi-tioners in the $500bn worldwide adver-tising industry.

“Peopleworking inthisareanowneedto be comfortable with technology andbe incredibly data-literate,” says MartinKelly, chief executive of InfectiousMedia.

The company employs people withskills in maths, engineering and ana-lytics in order to set the parameters forits programmatic campaigns. Oncethese parameters are set, the computerstake over, buying ad space on websitesvia real-time auctions on so-called adexchanges.

“The days of faxing over an insertionorder and presenting results a monthlater are over,” Mr Kelly says, making adig at the techniques that agencies havetraditionally used to buy ad space frommass media providers such as thetraditionalpressandtelevision.

Most media are still traded the old-fashioned way. However, according toeMarketer, a research company, 55 percent of all online display ads in the USwill be bought programmatically this

year, in a market worth almost $15bn.Two years ago, US advertisers spentonly about $4bn using programmatictechniques.

Brian Lesser, chief executive of Xaxis,a programmatic media company that ispart of WPP, the world’s biggestadvertising group, has predicted thatultimately, “all advertising will bedigital and all digital advertising will beprogrammatic”.

Sir Martin Sorrell, WPP’s chief execu-tive has described this shift as one from“Mad Men to maths men”, referring tothe popular television series depictinglife at the fictional Sterling Cooperadvertising agency on Madison AvenueinNewYorkinthe1960s.

For some people in the advertisingindustry, this shift is something to befeared. They worry that computers willprogressively take over jobs that wereonce the preserve of human beings.Another fear is that programmatictechnologieswillkill creativity.

But agency executives say such con-cerns are misplaced. While the mostmenial jobs in advertising will be auto-mated, the thinking goes, this will onlyfree time for people to work on morecreativeaspects.

Indeed, the number of specialist rolesin advertising agencies has surged inrecent years, as has demand for strate-gists who are able to understand

the complexity of modern media.Pippa Glucklich, UK co-chief execu-

tive of Starcom MediaVest Group, partof Publicis and one of the world’s biggestmedia-buying agencies, says that thecompany has doubled its headcount inLondon in the past five years alone inorder to cater to growing demand frombrandsfordigital specialists.

“There’s a very different mix of [job]titles now,” she says. “What’s reallyimportant is having people who canlookatdataandextractastoryfromit.”

Until recently, media agencies such asMs Glucklich’s focused on planning thebest way to spend a client’s advertisingbudget and negotiating on price withmedia owners. The process of actuallydesigning the ads would be left tocreativeagencies.

But the growing complexity of onlineadvertising has prompted some mediaagencies to start hiring “creatives” anddesigning ads themselves. This newbreed of creatives includes data-drivencontent producers who are able to opti-mise the appearance of an ad campaignonthefly.

As Ms Glucklich puts it: “Technologyandcreativityhavetosithandinhand.”

Programmatic advertising campaignscan feature thousands of versions of thesame commercial, each of them tailoredforaspecific targetaudience.

Designing such micro-targeted con-tent is a very different activity from thathoned by traditional creative agencies,which are geared towards a smallnumber of polished ads for TV, radioandthepress.

But as brands such as Kronenbourgshift more and more of their advertisingbudgets online, agencies may find thattheyhave littlechoicebut toadapt.

Tech revolution has turnedMadMen into ‘maths men’Computer campaigns

Robert Cookson finds thatthe shift from traditionalagency practices to newtechnologies has createdfears and opportunities

Old school: the traditional Madison Avenue-style advertising agency, depictedin the TV series Mad Men, is increasingly embracing digital technology—Lionsgate

‘The days of faxing aninsertion order andpresenting results amonth later are over’

Scott Brinker:‘Marketing hasexploded [into] theGrand CentralStationof customerexperience’

Wednesday 29 April 2015 ★ FINANCIAL TIMES 3

Monthly active users

How socialmedia compareas advertisingplatforms

Percentage of userswho log in daily

Pros

Cons

Average cost of advertising – cost per 1,000 impressions (CPM)*

Percentage of platform users who are millennials

Options and latestdevelopments

1.393bn 288m 300m 187m 70m

? ?

100m 1bn+

? ?

?

75.6%18-34-year-olds

23.8%18-34-year-olds

43.1%18-34-year-olds

13%15-34-year-olds

17.9%18-34-year-olds

32.9%18-34-year-olds

70% 36% 49% 13% 17%

$1.54 $12.16 $27.90

of which 20m-30m are estimated to be active

The biggest of the social networks, and the one with the most options for targeting.

People like to tweet while watching TV so advertisers are able to create ‘two-screen’ campaigns combining TV and Twitter.

Appeals to a younger generation who view Facebook as their parents’ social network.

Works well for brands that have strong visuals.

Access to a professional audience with accurate information about people’s professional lives: people can be targeted by job title, employer, industry and even skills.

LinkedIn members have twice the buying power of the average web audience, according to Comscore.

Users come to the site in a mood receptive to shopping. Many are creating boards around life events such as weddings, childbirth and redecorating, which advertisers are keen to tap into.

Users are highly engaged, and need to actively press a button to view a story, so advertisers can be sure attention is not wavering.

Holds users’ attention for a long time: they can spend hours watching videos.

A familiar advertising medium, very similar to creating material for TV.

Advertising is becoming more expensive.

Because users do not need to use real names or reveal much about themselves, does not allow as much targeting as Facebook.

Only a limited number of brands allowed to advertise at the moment.

Lack of links on the site makes it hard to direct customers to products.

Users do not log on to LinkedIn as often as other networks.

Just one advertising format: Promoted Pins.

Stories and associated ads disappear after 24 hours.

Ads are not shareable and there are no outbound links.

Viewers do not like pre-roll adverts and often skip them. Brands cannot request a specific slot, so there is a risk the ad will be playing just before something unpleasant.

Two options for ads: as a sponsored post in Facebook’s news stream, or on the right-hand column.

Allows advertisers to target users based on past purchases and demographics, even outside Facebook.

Rumoured to be creating a video hub to make it easier to find and view video content.

Three options for advertising: promoted tweets, promoted accounts and promoted trends.

Twitter ads can be targeted based on what users search for and what they reveal in their profiles.

Also allows targeting according to what users have done online, outside Twitter.

Launched advertising a year ago with selected partners.

Recently started allowing marketers to include links to their own products and websites from posts.

Two options: ads that appear in the sidebar, or sponsored updates that appear in the news feed.

Recently launched a tool similar to Facebook’s Atlas, which allows advertisers to target LinkedIn users outside the platform.

Reported to be planning to introduce a ‘buy’ button that would make it easier for users to make purchases directly from the platform.

Offers advertisers access to the ‘Pinstitute’, a programme that teaches users how to create successful ‘Pins’.

Advertisers sponsor ‘stories’, or collections of many people’s pictures, often around specific events.

Snapchat also recently launched Discover, where publishers such as the Daily Mail, Vice, Yahoo, CNN and ESPN display stories. Companies can buy ad space around this content.

Four options: display ads next to or below the YouTube player; semi-transparent overlay ads that appear over the bottom 20 per cent of a video; skippable video ads that can be inserted before, in the middle or after a video and non-skippable ads that must be viewed before the video is shown.

Experimenting with a paid-for, ad-free service.

82%18-29-year-olds

could be close to 200m now but this is unconfirmed

Adweek reported that advertising on a ‘my story’ could cost brands $750,000 a day . This is unconfirmed by Snapchat.

FT graphic. Sources: eMarketer; InSites Consulting; Pew Research Centre; Maija Palmer; FT research. * CPM can vary greatly according to different campaigns. Figures should be considered indicative only

Facebook Twitter Instagram LinkedIn Pinterest Snapchat YouTube

The Connected Business

Inthe late1980sIspenta largeportionofmytimebeingawalkingbillboardforCoca-Cola,quiteunpaid.TheCoca-Colasweatshirt—arugby-style topwiththesoftdrinklogoacross thechest—wastheheightof fashioninmyteenagepeergroup. Itwastheviralmarketingcampaignof itsday.Theseshirtswerewornwithtight,acid-washedjeansandaFlockofSeagullshairstyle that tookaboutanhour—andhalfabottleofhairgel—tocreate.

It isoneof those fashiontrendsthat isincrediblydifficult toexplaintoanyoneundertheageof30,but itwasrecentlyrankedasthefourthgreatest1980sfashiontrend,coming inbelowVanstrainersandneoncolours,buthigherthantheboombox, themullethaircutandHawaiianprintshorts.

Idon’tknowwhethertheshirtsmadeusdrinkanymoreCoke,butwedidn’tmindthebranding. I spentanotinconsiderableamountofmypocketmoneyononeof thesetops, therebypayingfor theprivilegeofwearingadvertising,surelyamarketer’sdream.

OnlyApple, recently,hasbeenasclever inco-optingconsumers into itsownmarketingaimsbycleverlypositioning itself somewherebetweencomputersoftwareandhardware,designertrendandlifestylebrand.

Internetadvertising,ontheotherhand, inspiresanalmostvisceral loathing.Readanyonlinediscussionaboutonlineadsandsomewhere inthethreadwillbetheplaintivecry:“Why,ohwhy,doesthehatedpre-rolladalwaysplayflawlesslyandthentheactualvideostutters,haltsandbuffers tothepointwhere it isunwatchable?”

Onlineadshaveanunsavouryreputation.Hackershavebeenknowntohidetheirmalicious,computer-hijackingcode inonlineadvertsasaway

ofgettingthemintoyourcomputer.Usersarealsoconcernedaboutadsthatareborderlinespyware, trackingthepageswevisitonlineandthepurchaseswemake.

Atthevery least,adsuseupbandwidthandincreasethetimeittakesto loadawebpage. Ifyouarepayingforyouronlinedatabythegigabyteona4Gconnection,downloadingthatunwantedadvertaddstoyourcosts.

Littlewonderthatadblockers,softwaretools thatpreventadsappearingonthewebpagesyouareviewing,havebecomesopopular.Thesearegenerally freetodownload,andareeasyforeventhetechilliterate to install.Accordingtoonesurveysome144mpeopleamonth(4.9percentofallinternetusers)wereregularlyusinganadblockerat theendof2014.

Onlinepublishersaregrowing

worriedasadblockingtakesanincreasingly largechunkoutof theiradvertisingrevenues.

Publishershadhopedthateventuallyinternetaudienceswouldresignthemselves toonlineads inthesamewaytheydidtoadsonTVandinnewsprint,asatrade-off,abitterpillthatmustbeswallowedbeforeweget tothegoodstuff.

Butapainlesswayofcircumventingthe“pill”hasputpaidtothatpatientapproach.Millennials, thoseaged18-34,arebyfar theheaviestadultusersofadblockers,with41percentof themusingsuchsoftware.The13-17-year-oldcohortcomingupbehindthemareheavierusersstill.Theadblockproblemisonlygoingtobecomeworse forpublishers.

Noneof thesolutionstothepublishers’quandaryareconvincing.Publishershavetried, forexample, toofferpaid-for,ad-freeversionsof theirsites,but therehasgenerallybeenlittletake-up.Forexample, some61percentofpeoplesurveyedbyad-blocktrackingcompanyPageFairandsoftwareproviderAdobewantedanad-freeinternet,but80percentwereunwillingtopayfor it.Sucharesponse leaves littleroomformanoeuvre.

Google,Amazon,andMicrosoftwererecentlydiscoveredtobequietlypayingAdblockPlus, themakerofoneof themostpopularadblockingtools, tostopblockingadsontheirsites.While thismaybelegal, thebigquestion isdoconsumerswantproducts,orevencompanies, thatwethinkprotectusfromonlineadstobehave insuchafashion?

Therearealsoanumberofstart-ups,suchasNewYork-basedSecretMedia,offeringadvertisingencryptionthatcangetaroundtheadblockingtechnology.

Andhowlongbeforeadblockersadapt toblockthatkindofencryptiontoo? It seemstobeagladiatorialcontestthat isunlikelytoendwell.

Someonlinepublishers, suchasReddit, thankthosepeoplewhovisit thesitewithoutadblockers,apolite ifsomewhatpassive-aggressive—andprobably ineffectual—approach.

Anylastingsolutionwill surelyhaveto involveabettersortofadvertising—lessobtrusiveandperhapsofferingsomebenefit ratherthanirritationtousers—addingtobandwidthasopposedtousing itup,enhancingthequalityofavideoratherthanappearingtodegrade it.

Failingthat,publishersmayhavetorevivethebrandedsweatshirt.

Gladiatorial contest betweenpublishersand adblockers is unlikely to endwell

INSIDE TECH

MaijaPalmer

About 61 percent of peoplesurveyed byPageFairandAdobesaid theywanted anad-freeinternet

The real thing:viral marketing1980s styleDreamstime

4 ★ FINANCIAL TIMES Wednesday 29 April 2015