2010 Razorfish Outlook Report

evolve

outlook report

This report contains opinions, estimates, and forward-looking statements by Razorfish and industry leaders;
these statements may turn out to be wrong, so keep that in mind when reading this report. Razorfish undertakes
no responsibility to update this report and makes no warranty as to the accuracy of statements in this report.
Statements in this report are the personal opinions of the individuals quoted and should not be attributed to
any other entity or individual.
©
Razorfish, LLC. All rights reserved.

cover photography
RICARDO SANTOS BERLIN

back cover photography
PAUL MITCHELL PORTLAND
CARSTEN LINDSTEDT FRANKFURT
GREG CARLEY AUSTIN

1

photography GABE JOYNT SAN FRANCISCO

01 The Razorfish Outlook Report ............................. 4
02 New Lenses .......................................................... 8
03 Publishers to Watch in 2010 .............................. 24
04 Looking Ahead to 2010 ...................................... 28
05 How to Become a Social Brand ........................ 40
06 The New Brand................................................... 46
Your SIM Score
Health Metric:

07 One-to-One Marketing to the Masses .............. 52
08 How the Ad Exchange Ecosystem Works ........ 58
09 Measuring What Matters ................................... 62
10 The Power of Small Thinking............................. 68
Becoming More Agile:
11 Iterating for Innovation....................................... 74

All imagery in this year’s report was 12 It’s Time for Everyday Innovation ...................... 78
created by Razorfish employees
from around the globe. Photographs 13 Retail Therapy .................................................... 84
were shot on Kodak 120 VC or Tri-X
film with a Holga 120 camera. To all
who helped produce this beautiful
14 The Fragmented Consumer............................... 88
body of work, Thank You.
15 Search Everywhere ............................................ 92
3

photography LAUREN EDWARDS LONDON

The
Razorfish
Digital
Outlook
Report

The Digital Outlook Report is
now the Razorfish Outlook Report.
When we started Razorfish in 1995, our founding our mantra became true: Everything has become
mantra was: “Anything that can be digital, will be.” digital. Digital is not on the fringe — it’s on center
We were building the first online stock trading plat- stage. In fact, it’s now so mainstream that it no
forms, the first ecommerce sites — we were even longer needs to be included in the title. So say
experimenting with things like a soda machine that goodbye to Razorfish’s Digital Outlook Report
could be operated with a cell phone, and a kitchen and hello to, simply, the Razorfish Outlook Report.
Internet device called “Audrey.” Meanwhile, Avenue The “digital” is understood.
A, long before it became part of Razorfish, was
Even as digital has taken center stage, however,
proving that online media could be as effective as
it isn’t sitting still. It’s the catalyst for a perpetual
mass media, and created an ad serving platform to
revolution in business and culture, a digital domino
efficiently service clients’ needs. At the time, most
effect that encompasses everything from the death-
of America was still watching an awful lot of prime-
by-DVR of appointment TV to the role that Twitter
time television — and accessing the Web with a
played last year in Iran’s attempt at revolution. Con-
dial-up modem. And many who knew us consid-
sumers and technology are driving the change.
ered us crazy — and interesting at the same time.
But are marketers keeping up?
We were definitely operating at the fringe of the
marketing world, too small and obscure for most When we ask CEOs, CMOs or CTOs about their
conventional ad agencies to even notice. businesses today, we generally hear more ques-
tions. That’s because most companies, brands
Things look pretty different today. We’re still building
and marketers are attempting to navigate a con-
trading platforms and ecommerce sites, implement-
sumer and technology landscape that continues
ing sophisticated targeting technologies within all
to shift — and at a faster and faster pace. Who
digital media, launching brands solely using digital
has the luxury of long-term strategic planning
technologies and working deeply with mobile
when technology is leapfrogging, conventional
devices (though we’ve moved beyond soda ma-
marketing tactics are tanking and the only thing
chines). We are driving sales and moving clients’
consumers seem to be confident about is Twitter,
businesses forward, but we’re not considered
Foursquare and Facebook?
crazy anymore. That’s because, as it turns out,

5

The fact is that even if we’ve been talking about No matter how you look at it, if you wait another
the need for marketers to change for years, it is year to see how all this shakes out before ramping
now, simply, do-or-die — because of both the up your digital strategy, your company won’t just
scale and the pace of technological revolution. stand still — it will fall even further behind.
Consider that it took Apple only one month to sell
Therefore, as we publish the Razorfish Outlook
a million iPads, that Facebook has grown from 150
Report, we are urging marketers to embrace
million users to almost 500 million in 15 months or
change — now — and hone the skills necessary to
that Hulu now streams over one billion videos per
harness it. If Moore’s Law is taken seriously, then
month. Yes, there are dozens of other statistics
the pace of cultural evolution — and the prevalence
we could cite about this tectonic shift in consumer
of digital innovation — are going to continue doub-
behavior, but the epicenter is mobile: In the U.S.
ling every two years. Marketers must evolve.Quickly.
alone, there are more than 280 million mobile
subscribers. By the end of 2011, more than half We could go on and on about how essential this
will be smartphones. The mobile transformation is but, frankly, that’s become obvious. What may
alone has extraordinary implications for every not be so obvious is what to do about it. This Out-
brand, as consumers will expect a brand’s social look Report should help, by providing a roadmap
universe to be accessible and delightful and for navigating the hills and valleys ahead. We hope
on-the-go. And, when combined with emerging it will help you move your business forward — and
technologies such as multi-touch, augmented real- that you’ll even enjoy the journey.
ity and cloud computing, an ocean of opportunity
opens up.

Consumers aren’t just craving new experiences —
they’re demanding them, and aren’t shy about shar- Bob Lord, Global CEO
ing from their social media soapboxes. Successful
brands will be those that adapt and derive from
customer insights, both positive and negative.

photography clockwise TIM PETHEL ATLANTA, PAUL KARLIK CHICAGO, JASON DRAKEFORD NEW YORK, LAUREN EDWARDS LONDON

7

photography BRYCE GIBSON PHILADELPHIA

New Lenses
A Fresh Look at How Razorfish
Clients Invest in Media
Joe Mele, Managing Director, Marketing & Media
with assistance from Thomas Sudassy, Media Research Manager

As one of the biggest buyers of digital media, each year in the Outlook
Report, Razorfish aggregates spending information on all of our clients,
providing insight into where clients spend their money, where they’re
experimenting and why.
But for several reasons, 2009 called for us to in 2009? Did our clients change the way they
look at this data differently; to, if you will, come bought media? How did behaviors for consumers
to it with a new set of lenses. Therefore, the data and corporations potentially change permanently
you’ll find here is a more detailed picture of what because of the economic crisis?
was going on in the online media ecosystem in
But what made 2009 different wasn’t just the
the past year.
economy. We also decided it was time to set
So how is this data different from years past? new benchmarks because media consumption
First, the Great Recession of 2009 presented has changed so much since when we started
all of us, agencies and clients alike, with new publishing these reports back in 2004. Although
realities. In light of that, we thought it particularly we are only five years removed, a great deal has
important to see if we could uncover some clues changed in digital media. Consider the following
in the data we collect about how the recession statics from U.S. media usage: see figure 02.01
may be affecting spending. Did we see a recovery

NEW LENSES 9

U.S. media usage:
2004 /2009

end
1 iPhone

did not
exist
9.8
million
Because the media landscape and our own
behaviors have changed so dramatically in that
sold
time frame, we felt there was an opportunity to
2 Hulu expand our focus beyond the types of media that
did not
exist
18.9
million
have ruled the industry for many years: the big
portals, the big search engines, ad networks and
monthly visitors
vertical networks. In looking at the data this year,
3 YouTube we found these old definitions were becoming

did not
exist
107.4
million
harder and harder to use as media types
increasingly overlapped. Is Facebook a vertical
monthly visitors
in the “communities” category, or, because it is a
4
starting point for many users, is it a portal? How
Facebook

111.9
do you define Google? Is it search, or is it a
closed network network or is it a portal?
to college students million
monthly visitors
Because these old definitions don’t adequately
5 Broadband penetration describe how we plan and buy media, and how
we think about investing our client’s precious
54%
of Internet HH
96%
of Internet HH
investment dollars, this year we looked more
closely at the myriad ways our clients buy media
and determined how this uncovers trends in the
6 Internet HH
marketplace, particularly when it comes to emerging

57%
of Internet HH
66%
of Internet HH
media. These are the trends that our clients are
most interested in, as we help them determine the
best ways to divide up their media dollars to make
7 % of media to online the most impact.

Sources
eMarketer
2.60% 14.50%
ComScore
figure 02.01

New Realities:
The Great Recession and Its Effect on Media
Did we see any recovery Did clients switch tactics or
in 2009 over 2008? approaches to become more
Yes. Although small, we saw an overall percent-
direct response oriented?
age increase in average media spend per client. In general, our clients did not change their
On average, the increase was 4 percent in 2009 tactics. Seventy percent of them kept their mix
after an average drop of 13 percent in 2008. the same. Interestingly, of those that did shift
see figure 02.02 tactics, 40 percent moved to a heavier focus in
direct response, while 60 percent actually shifted
to more brand-focused marketing. see figure 02.03
Increase / decrease
in average spend per client
2007 2008 2009 Switching tactics
40% No Change
30%
20%
10%
0%
-10% Brand
Source DR
Razorfish
-20% Media
Department 12 % 70 % 18 %
Sources Survey
Razorfish media data; Razorfish Media Department Survey figure 02.03
figure 02.02

Looking forward:
Looking forward:
We also expect to see a greater mix of strategies
We expect to see continued increases in digital
as brands see the value in both branding and
investments, particularly as broadcast budgets
doing direct response in digital.
continue their shift to digital.

NEW LENSES 11

What adjustments did
clients make in 2009?
We asked our media teams to give us some idea
of the kinds of things clients did in 2009 to adjust
to the Great Recession. Our clients’ responses
were varied, and in some cases, enlightening.
Here are six ways they adjusted their plans:

1 More discounting in messaging

2 Decreases in overall budgets, but with
more budget shifting to digital

3 Scaling back in ad spends for the year
or not running certain campaigns

4 Shifts to search and out-of-home display

5 Increases in overall ad budgets to grab
more share

6 Shift in goals — more focus on return
on ad spend
Source
Razorfish
Media
Department
Survey

Looking forward:
We expect brands to be less focused on promotions
as the year progresses. Clients are anxious to
retreat from heavy discounts and promotions as
soon as possible.

photography PAUL KARLIK CHICAGO

New Benchmarks:
Taking Stock of Media Investments
What percentage of media was
spent on performance-based buys? What did prices look like in 2009?
Although all of our media is judged on the return it Putting context around average prices paid for
provides our clients, almost 60 percent of our media certain types of media is tricky because there is
spending was focused on impression-based buys. so much variation in client goals and strategies.
see figure 02.04 On a per-unit basis, ad networks and homepage
take-overs on major portals and sites may both
have very low CPMs, but the approaches and
Buy type % media spend goals of each are very different. We thought,

CPM 48% however, it would be interesting, starting with
this year’s Outlook Report, to offer some pricing
CPC 36% data, and then compare with current pricing data
in subsequent years.
Time Based 10% One important comparison point — in the
CPA/CPL 06% 2008 Digital Outlook Report (looking back
on 2007), average cost-per-click prices on the
Sources
major search engines ranged from $.56 to $.88.
Razorfish media data; Razorfish Media Department Survey. As the landscape has become more competi-
Data includes paid search.
tive, and brands have become more targeted in
figure 02.04
their keyword buying, we are seeing significant
increases in prices. see figure 02.05

Looking forward:
We expect consistency here. Major swings are
not expected.

NEW LENSES 13

Where are clients investing
their dollars, and how was that
Average CPM and CPC’s different in 2009?
2009 2009 For all of the talk of “emerging media,” the
average median
$25.00 breakdown of media spend in digital is focused
mainly on traditional online media choices:
$20.00
verticals, search, ad networks and portals.
$15.00
Because of the recession, a great percentage of
$10.00 client spending was in highly-efficient vehicles:
$5.00 search, ad networks, data brokers and ad
$0.00 exchanges accounted for just over 50 percent
CPM Video CPM CPC of the total. Note, however, that classifications
Sources can be hard to make, and that things like social
Razorfish media data; Razorfish Media Department Survey.
figure 02.05 and verticals can be contained within networks
and portals. see figure 02.06

Looking forward: Still, despite the demand for efficiency, clients
We expect to see publishers try to create more were willing to experiment in 2009. When we
and more premium inventory as well as pull back asked our media teams about client spending in
non-guaranteed inventory from ad networks as channels that were new to them, we found some
they build their own exchanges. With more dollars robust statistics. One hundred percent of Razorfish
going into digital, publishers will try to take more clients that spent in digital out-of-home did so for
control over their inventory, and in a revived the first time this year. More than 80 percent of
economy, we expect prices to rise this year. clients investing in ad exchanges in 2009 were
doing so for the first time. All told, the channels
which clients experimented with the most in
2009 were ad exchanges, data brokers, digital
out-of-home and social media. see figure 02.07

% ad spend
35%
30%
25%
20%
15%
10%
5%
0%
ites ries ork
s ve) pla
y ers ges bile pla
y ail e e
al s cto etw abo dis rok han mo dis em gam f-h
om
idu dire ies dia ta b exc on- in- t-o
div adn r me da an ou
/ in rch
& ego ial
ad
edi ital
als sea cat soc lm dig
rtic des cia
ve clu so figure 02.06
(ex
als
p ort

Sources

% of clients investing in specific media
that were new to that channel Source
Razorfish
100% Media
Department
Survey
80%

60%

40%

20%

0%
es rks ers om
e ail
gam
e bile ies lay pla
y
ites ve)
ang wo rok f-h em
in- mo tor isp dis al s abo
exch net ta b t-o irec dia d on- idu ing
ad ad da
ital
ou &d me an
/ind
iv clu
d
rch ial edi (ex
dig sea soc lm als
cia rtic tals
so ve por figure 02.07

NEW LENSES 15

We also asked our media teams whether clients Only 4 percent spent on
were increasing or decreasing their investments in social media? OMG!!! WTF?!?
particular channels. Spends increased significantly
in ad exchanges and networks, data brokers, Social is an interesting case. Despite the fact that
mobile and social. see figure 02.08 everyone talks about it constantly, it does not gar-
ner a huge share of media dollars. There are three
Looking forward: reasons why:
These trends look like signs of things to come.
We expect to see greater investments in social, 1 Social ads can be bought very inexpensively.
mobile, in-game, and digital out-of-home this Top social sites such as Facebook and You-
year, and ad networks to drop in total investment Tube have more inventory than they can sell,
as publishers try and find more lucrative options and without a clear homepage for Facebook
for their inventories; more money will also go to and with most of YouTube’s traffic bypassing
ad exchanges. the homepage and linking directly to content,
there is little premium inventory to sell at
high prices. We can often buy this inventory
through exchanges and networks as well.

How did your client’s spend change in
this channel in 2009 compared to 2008? Source
Razorfish
Media
Department
100% Survey

80%

60%

40%

20%

0%
ges ork
s ers om
e ail e bile ries pla
y
pla
y ites ve)
han etw rok f-h em gam mo cto dis dis al s abo
exc ta b t-o in- dire dia on- idu ing
dn da ou me an v
ad a
ital rch
&
ial edi ndi lud
dig ls/i exc
sea soc cia
lm ica ls (
so vert po rta figure 02.08
% that said % that said % that
increased decreased stayed flat

2 Much of the media spend on social doesn’t
express itself in the form of buying media, but New ways to think about
in the labor it takes to build a page, manage media investments
a community, respond to Twitter comments
The media department’s job has changed. In
and so forth. To really do social means having
the past, media was a job focused, in part,
the right people committed to the community
on the purchase of media. While that is still
and conversation, not on buying a bunch of
true today, the growth of social media in
ad space.
particular has altered the role of media’s
3 Media dollars are spent toward social efforts relationship with content providers and
to drive users to communities, content and creators. And it also requires advertisers to
apps but these are not captured under “social” rethink their definitions of what “media
ad spending because the buys don’t occur on dollars” really means. Increasing one’s
social sites. investments in “earned” and “owned” media
means radically shifting how those dollars
Looking forward: are spent. Rather than going directly to
More dollars will go into social, but it will be hard media companies, dollars need to flow to
to measure as most of those dollars will not go content creators, social media strategists,
toward ad impressions or clicks. Brands will community moderators, etc. We can still
have to come to terms with two types of social view the connection between marketing
investment; first, they’ll have to invest in people investment and customers similarly — a
more than media. Second, even the best social communication connection with consumers
strategies need support, so media dollars will that results in an interaction, whether that is
need to be spent on other types of media to build a sale or a more positive impression of the
stronger communities and programs. brand — but passive spending on media is
quickly becoming a thing of the past. So,
while the studies show that companies intend
to put more dollars toward social, the truth
is that those dollars are largely not going to
be spent on buying ad space, but instead on
investing in the people, resources, technologies
and relationships that having an ongoing
conversation with consumers requires.

— Alyson Hyder, VP, Digital Marketing

NEW LENSES 17

I thought 2009 was going
to be the year of mobile!
The prognosticators have been saying this every A lot of mobile isn’t paid media. Some of the most
year since 2004. In fact, here is a quote from our effective marketing on mobile phones is found in
first Outlook Report in 2005: “While moving in fits texting programs, which are still the largest
and starts over the years — leaving advertisers opportunity, and in apps. In general, these require
wondering if ‘the next big thing’ will in fact be a time in terms of labor and development; as with
‘never was’ — the wireless advertising industry social this investment doesn’t go toward media buys.
continues to make progress.” While we are
Change may be in the air, however. With Google
seeing more clients involved with mobile, the
and Apple moving forcefully into mobile advertising
challenges with shifting a lot of money into mobile
with their purchase of mobile ad networks, and
are as follows:
Apple’s announcements around iAd, the mobile
• Mobile is hard to measure. Because most landscape could quickly change. Both companies
transactions occur off of the device, it is hard to have the ability to change both the ad experience,
justify spending money on mobile, particularly in and start to connect together the user information
a down economy, when there is almost no way so that it can be tied to meaningful activities.
to optimize it.
Looking forward:
• Advertising formats from the Internet We expect more money to go to mobile, particularly
don’t translate well to mobile. In general, in local search. We are watching Google and
banner ads don’t display well in mobile surfing Apple closely in the mobile space, and intend to
and in apps, which makes moving significant test new ad platforms and measurement systems
dollars hard to justify. The growth of smart- as they come online. 2010 will likely turn out to
phones and the introduction of mobile rich be the year of testing before mobile really takes
media should help to improve the experience. off in 2011.

Flexibility trumps pricing
Our approach to planning and buying media Looking forward:
has always been to think and look broadly for Our strategy will not change, but consolidation will
opportunities. As such, we find that flexibility in have an effect on where inventory is purchased.
our planning more often than not trumps pricing, We expect to see continued consolidation in both
which is why we tend to buy on many more the ad network and ad exchange space, as well
properties than other agencies. as consolidation among sales organizations. This
could very likely lead to a reduction in the number
This was as true in 2009 as it has been in previous
of entities that sell media, but not in the number of
years. In total, we bought media with over 900
sites that exist.
different entities (note that ad networks are made
up of several thousand more sites, but we do not
count those separately). And, yes, the top 25 sites
garner a huge percentage of our clients’ media
dollars, but the long-tail of sites is healthy.
see figure 02.09

Spend concentration by site

600

•
500

spend in thousands
400
300
200
•
100
1 26 51 76 101 151 176 201 226 251 276 301 326 351 401 426 451 476 501 526 551 576 601 626 651 676 701 751 776 801 826
sites
Source Razorfish Media Data figure 02.09

NEW LENSES 19

How big was video?
We are seeing more and more of our clients Looking forward:
invest in video advertising as well as other forms We expect more and more dollars and impressions
of rich media — though different companies have to move into video in 2010, particularly as analog
different definitions for rich media. For instance, dollars move to digital, and broadcast “make-goods”
at Razorfish, we consider all Flash-based creative are fulfilled in the digital space. It will be crucial
to be standard. These ads, because they are for brands to understand the true value of video
standard and efficient, are still the workhorse of ads — valuations which may be very different
the industry; they provide the backbone of nearly from what ad buys cost on TV. For instance, the
any communication plan to drive traffic and currency of offline video — the GRP and TRP
conversion. For sake of clarity, we define video — are much less relevant in the digital space
as “advertising messaging that can be placed where actual rather than estimated exposures
in or around video content across all digital and views can be counted and subsequent
media channels.” actions can be measured. Until analog becomes
see figure 02.10 more precise and/or a more common language
is found, evaluating online and offine video will
continue to be a challenge. In addition, when
% display spend digital video becomes more interactive, and
less like a 30-second TV spot, we expect to see
Standard Ads 77% more focus on it.

Rich Media 15%
Video 08%
Sources

figure 02.10

What do we see as the differences
among the “big four” portals?

The “big four” — MSN, Google, AOL and Yahoo!, Yahoo! dominate premium impression buys.
despite not being as sexy anymore, are still an Below is a graphic showing, on a relative basis,
extremely important part of our media planning how we invested our clients’ dollars in the “big
and strategy. In fact, the search/portal category four.” (The stars demonstrate how much money
still garners about 45 percent of our clients’ was spent in relation to the other properties as
media dollars. well as being an indication of total investments.)
see figure 02.11
But our huge investments in them don’t mean that
we think they are all built the same. Some have Looking forward:
more robust product offerings and/or inventory in Google will continue to try and move more into
certain areas than others. Google still dominates the display space, but until it improves its offering,
search, although the combination of Microsoft’s there is no reason to invest. We expect more
Bing and Yahoo!, which have partnered on search, gaming and search dollars to be spent with
is certainly poised to take share from it. AOL and Microsoft over the next year, but Google will
MSN dominate performance buys, and MSN and remain the leader in search.

lowest highest

Portal comparisons 1 2 3 4

Performance/ Display/ Email In-game Mobile Search & Social media Social media Video media
ad-network impression directories display non-display
media

AOL 3 2 1 1 1

GOOGLE 1 1 1 4 1 1

MSFT 3 3 1 1 1 1 1 1

YAHOO! 2 3 1 1 2 1 1

Sources Razorfish media data; Razorfish Media Department Survey figure 02.11

NEW LENSES 21

A final word
Now that the Great Recession is
behind us (we think, we hope), we
expect 2010 not only to be a year of
experimentation, as 2009 was, but
also a year of tremendous growth,
as budgets increase and more money
moves to digital channels. To be sure,
just like last year, the experimentation
will be carefully considered and mea-
sured, but we expect our clients to be
hungry to stretch into new places and
spaces, to explore new opportunities,
and to reach into new types of media.
Will 2010 be the year of mobile? The
year of the iPad? The year of the
iPhone killer? Only time will tell, but
where the ad money goes will be an
important part of the story.


23

photography RICARDO SANTOS BERLIN

Publishers
to Watch In 2010:

03
Facebook, Greystripe, Hulu, Pandora
and MySpace (yes, MySpace)
By Tricia Lasky, VP, Media, Discipline Lead

When looking back at online publishers in 2009, which did the most to drive
change and push the advertising boundaries, it’s incredibly hard to land on just
one standout. So, even though, traditionally, we have named a Publisher of
the Year in our Outlook Report, we’ve taken a different route this time around.
Last year drove change in many areas of digital marketing: smarter targeting,
location-based social technology, even mobile creative that actually engaged
users. Therefore, in lieu of picking one shining star, below are a handful of
publishers that pushed the limits; In 2010, these are ones to watch as they
continue to be at the forefront of digital media and advertising.

1 Facebook 2 Greystripe
With its explosive subscriber growth and Although officially a mobile advertising
apparent social dominance, it’s not a huge network, Greystripe proved an advertising
surprise that we are keeping our eyes on engine that fired up many mobile publishers;
Facebook in 2010. In the last year, Facebook it was among those taking the lead in bringing
has added an eye-popping 200 million users richer advertising experiences to mobile users,
— doubling its user base. It has staked its making it possible for advertisers to create
claim as the leader in social networking and dynamic full-screen rich media in mobile
everyone is waiting for its next trick. The games and applications across the iPhone,
growth was not only focused on their user Java and Android platforms. With smartphones
base but also on the product. Feeling the accounting for 15.4 percent of all mobile
pressure to focus on the product and its phones shipped in 2009, it was about time.
marketing offerings, Facebook grew its Others, such as Google-owned AdMob and
engineering staff by 50 percent and started Millennial Media, soon followed in bringing

3
to focus on simple marketing solutions like richer advertising to mobile. With more and
learned targeting and geo-based status more consumers digesting media through
updates. We’ve seen the fan base of one their handhelds, mobile advertising will need
of our clients grow 150 percent in one to continue to surprise us; Greystripe showed
day based on placing a non-offer based it has what it takes to do so.
ad on its homepage. Now that’s reach.
And reward.

PUBLISHERS TO WATCH IN 2010 25

3 Hulu
5 MySpace
While social platforms took off in 2009, many
If one thing was clear in 2009, it was that
failed to recognize the treasure-trove of
choice is king — and as on-demand media
information at their fingertips. One that did
consumption increased, the marketplace
is MySpace; yes, MySpace. The News
took notice by adapting advertising to user
Corp.-owned social network has continued
preference. Hulu reinvented the video ad
to innovate and be ahead of the curve in
platform by allowing users to choose not only
utilizing its users’ profile information to help
whose advertising they would see, but also
put together relevant messaging and smart
how often and when they wanted to see it.
advertising opportunities. While MySpace
As Hulu’s tagline says: TV on your terms. As
may have taken a backseat to other rising
reported in Vivaki’s marketing report The Pool,
stars in the social category, it took its loss of
the ad-selector model on Hulu produced
the driver’s seat as an opportunity to realize
a 33 percent lift in purchase intent over standard
what it really was: a niche site which caters
pre-roll executions.
to a young, music-hungry audience. Further,
4 Pandora it has learned to become comfortable with
that position. As it goes through this transition,
Video wasn’t the only place where online MySpace has learned how to leverage the
publishers adapted to consumers’ passions strengths of its community, encouraging a
for on-demand media — and advertising
high level of user interaction within high-quality
consumption — on their own terms. Pandora
original entertainment content.
is one of a number of services that acts as a
predictor for the music that speaks to each We’ve seen how well this works for marketers,
individual listener, making like-minded first-hand — for one of our key retail clients,
suggestions based on their love for one song MySpace built a program for young couples,
or artist. Pandora extended that intelligence leveraging age, demo and relationship status
to tight behavioral — and one might say targeting to recruit for a reality TV-like contest,
emotional — targeting capabilities based on allowing one lucky couple to win their wedding
the music and artists each listener consumes, registry at the partnering retailer. In addition,
making the advertising part of the user their entire wedding was planned by the
experience and less of an interruption. MySpace audience and MySpace hosted and
documented the entire journey, producing
video of the couple shopping at the retailer to
pick out items from their registry. It’s that deep
understanding of its audience that will attract
advertisers, and, we hope, secure the social
net’s future.


As these examples show, the
definition of online publishing is
continually expanding, from its start
as static text and pictures to video
to music to social networking and
mobile. As such, it is fertile ground
for innovation, both in terms of
the content it serves up, and the
advertising experiences that are
being built around it.

PUBLISHERS TO WATCH IN 2010 27


04
Looking Ahead to 2010
Things That Might Not Be on Your
Radar Screen, But Should Be
Joe Mele, Managing Director, Marketing & Media
with assistance from Thomas Sudassy, Media Research Manager

4 What does 2010 hold in store for us? There are, of course, the usual suspects:
particularly mobile and social, which we explore in other sections of the Outlook
Report. However, for the purposes of this article, we wanted to spend time
exploring some not-so-discussed topics that we nonetheless think will have
significant impact on online media in 2010. Below, Razorfish’s media leaders
offer insights and predictions, both domestically and internationally, for some
often below-the-radar areas that will attract interest in the next year.

Ad verification systems Dynamic ad delivery systems
Ad verification systems allow advertisers to confirm As digital advertising becomes more and more
ads are running where they are supposed to on personalized, the challenge for advertisers
what have traditionally been opaque network buys. is delivering personalized ads at scale. Building
tens of thousands of ads is not a viable solution,
What we’re seeing:
so some companies have started to offer dynamic
Mostly new to the market in 2009, display ad
ad delivery systems to solve this problem. These
verification systems started hitting our radar
systems offer advertisers the ability to run large
toward the end of the year, but their impact was
numbers of ads without putting stress on the
slight — only one of our clients actively used
creative teams. They are effective for creative test-
one. However, about 20 percent of our clients
ing as well since many different variables within a
are looking to learn more or test ad verification
creative can be controlled and swapped out.
in 2010, leading us to expect the use of these
systems to explode in 2010. Because most ad- What we’re seeing:
vertisers are sensitive about the kinds of content Last year, about 15 percent of our clients started
their ads appear next to, ad verification will be using systems like Tumri and Teracent to deliver
increasingly important. dynamic ads. In a survey of clients, about 40
percent of our clients have shown interest in
— Joe Mele
using these vendors; the majority of those inter-
Managing Director, Media & Marketing
ested are focused on direct response strategies.

LOOKING AHEAD TO 2010 29

In the coming quarters, we are looking at apply- lower prices than search, rather than a preference
ing combinations of technologies like these in for one or the other. We expect to see this change
delivering brand experiences, or for activating in the next year as newspapers continue to decline
social interactions. These technologies will in circulation, the iPad and other devices like it bring
become essential in managing the increasingly newspapers back to life but in digital formats, and
sophisticated matrices of placement, audience smartphone usage increases local search.
and message created by ever more refined
— Joe Mele
audience segmentation.
Managing Director, Marketing & Media

Interactive TV
Local online advertising
Like local online, interactive TV has been part of
Though local online advertising has been around the media dialogue for some time; however, while
for some time, its nature is changing, as GPS- historically most of the focus has been on interac-
enabled mobile devices, mobile apps such as tive advertising coming to cable, the definition of it,
FourSquare and geo-location targeting make for too, is expanding as PC and TV applications be-
enhanced targeting. come intermingled and players beyond the MSOs
come on to the scene.
With the “death” of newspapers, and a rise in What we’re seeing:
location-based technologies, many are curious to The amount of ad inventory available within
see if advertisers will move more of their budgets interactive TV continues to be incredibly small.
to local online. Approximately one-third of our The biggest barrier here is the lock the cable com-
clients ask us to run local ads. For most clients panies have on the headend and the data that
these are small percentages of their outlays — flows from it. Much as advertisers might like inter-
they still use digital as a targeted mass media. active TV, the cable companies just don’t have the
Local mobile spending is still very small, and was incentive to change the current model because
tested by only a few of our clients. Interestingly, their ad market remains strong; traditional cable
although the number of clients participating in advertising brought in $19 billion last year to net-
local display and local search activities was about work TV’s $20.5 billion, increasing its share of the
equal, local display spending was twice as large as TV advertising pie, according to Kantar Media.
local search spending. This may be due to there be-
Yes, there are privacy issues with opening up set-
ing more inventory available in local display, and at
top box data, but at the heart, it’s still about

cable’s lack of incentive. Google TV found this out Twitter advertising
the hard way; it made headway in interactive TV
through its partnership with satellite TV’s Dish Net- A work in progress. While third-party providers
work, but got relatively little traction outside of that have created their own Twitter advertising models,
footprint. Even Canoe, the cable industry-funded at this writing, the industry is waiting for Twitter to
consortium, has had little success in implementing announce its own ad platform, which the company
addressable or interactive TV testing. That said, says it will do soon.
there are small tests going on that will allow cable What we’re seeing:
subscribers to request information from advertisers; Even without a confirmed ad model, brands are
Cablevision seems to have taken this further than using this social tool in a variety of ways. Twitter
any other MSO. Other interactive TV initiatives to is an excellent tool for brands to use if they want
watch include the partnership between TiVo and to have conversations with their customers, as it
Quantcast, which looks like a promising attempt provides opportunities for customer service and is
to tie together both online and offline panel data, a great platform for announcing sales and promo-
making the connection between how TV viewing tions. Furthermore, it enables brands to have
and Internet behavior affect each other. Addition- personal “voices,” which can be reinforced in ways
ally, Yahoo! Connected TV, which uses widgets that resonate with their loyal consumer bases. For
to put Yahoo! content on TV, as well as Google’s brands that have acquired enough Twitter power
partnership with Sony and Intel to bring interactivity to obtain large followings, creating trending topics
to the TV, are two models that will try to bypass the around hashtag keywords can corral users into
cable operators in getting direct-to-set interactive participating in a controlled conversation around a
capabilities launched. Additionally, as the tele- certain event, promotion or campaign.
phony IPTV footprint continues to scale, through
products like Verizon’s FiOS and AT&T’s U-verse, Therefore, we expect brands to continue to use
they will bring increased interactive TV possibilities Twitter to support their digital marketing efforts
as well. no matter whether its ad model takes off or not —
especially now that the company provides verifica-
— Julie Weitzner, VP, Media tion certificates for major companies and advanced
analytic measurements. We also expect many more
companies from multiple verticals to create pres-
ences for themselves on Twitter. The smart brands
will be the ones that keep their users interested,
involved and a central part of the conversation.

— Debrianna Obara, VP, Media


Influencer outreach In-game advertising
This can take a variety of forms, but the massive In-game advertising is more than just putting
growth in blogs has led many publishing compa- sponsored billboards within console video games.
nies to develop sophisticated methods of bringing In-game advertising includes branded mobile
bloggers into conversations about products and gaming applications, branded online games, or
services. Blogger outreach networks, such as more broadly, any use of a video game to deliver
BlogHer, serve as third parties for brands to have advertising. Even applications like Farmville or
relationships with these individuals, through, for FourSquare, which reward user for usage, can be
example, a centralized area for the brand’s spon- considered in-game advertising as the advertiser
sorship; network bloggers are then invited to add integrates within the actual game itself. It should
to the conversation around a certain topic, usually not be confused with advertising around games or
spawned by the advertiser. To amplify conversa- the sponsorship of a game in which the brand is
tions, the host will ask the more influential bloggers not integrated.
to chime in, thus creating a halo effect of influence
with their loyal followers.
Gaming continues to grow in popularity and
What we’re seeing: usage, and for a long time now, research has
Consumers no doubt consider bloggers to be shown that in-game advertising reaches almost
influential since they offer educated opinions all demographics. Web-connected multiplayer
on products and services; however, they aren’t games are becoming more and more common,
always clued into the relationships that may exist and the line between application and game is
between bloggers and marketers. In October becoming increasingly blurred as social activities
2009, the Federal Trade Commission ruled that become integrated in gaming. In-game advertising
bloggers who receive products or paid endorse- stalled when the opportunity was mostly limited to
ments from brands must disclose these relation- billboards in games because although they were in
ships to their readers. While blogger outreach the right environment, the lack of interactivity made
programs are influential, we may possibly see their them hard to value in the digital space. However,
effectiveness diminish if the increased need for as gaming and social intertwine with location-
transparency hampers the degree to which read- based services, the opportunity for brands to be
ers trust that their favorite bloggers’ opinions and relevant and meaningful parts of the interaction are
recommendations are truly authentic. growing. We expect to see growth in this category
not only from brands focused on entertainment,
— Debrianna Obara, VP, Media
but truly all brands who have a product or service
that can be an integral part of a gaming, social, or
local experience.


photography JEREMY SOMERS SYDNEY

Data providers buying inventory, auction-based pricing
to price inventory and the ability to layer in
Data providers offer an extra layer of data to third-party data to help advertisers make
buyers who want to purchase inventory over ad buying decisions.
exchanges and other real-time bidding platforms,
by giving advertisers and agencies demographic What we’re seeing:
profile points such as gender, age and geography. The Interest of buyers in ad exchanges
exploded in 2009, leading to the
What we’re seeing: development of a new category of
We expect to see many more data providers sell buy-side players such as demand-side
their advanced profiling data to brands in the up- platforms and agency trading desks. At
coming year. For example, pharmaceutical brands the same time, publishers on the sell-side
can target users who are predicted to suffer from seemed caught off guard by the flood of
certain medical conditions based on “geo-medical” buy-side interest, and many have taken
data. This data includes HIPAA-compliant medical a measured approach to this new sales
claim data that is stripped of personally-identifiable channel, perhaps limiting scale and cat-
information, and targets selected condition suffer- egory growth. 2010 will be a seminal year
ers down to the ZIP code+4 geographic level. This for the ad exchange industry, and will likely
data can be applied not only to ad exchanges, but determine whether this will be a primary
some networks and portals. channel for marketers in the future, or sim-
— Debrianna Obara, VP, Media ply an interesting and efficient side-tactic.
Sophisticated advertisers have already
taken steps to answer this question for
themselves, and those who have not yet
Ad exchanges entered the fray will do so this year.
Ad exchanges are marketplaces that connect
— Matt Greitzer, VP, Search Marketing
publishers and advertisers for buying and selling
ads. Publishers turn to ad exchanges to liquidate
unsold advertising inventory, while advertisers and
ad networks use ad exchanges to acquire inven-
tory, often at discounted rates compared to up-
front buys. Major ad exchanges include Yahoo!’s
Right Media and Google’s DoubleClick, as well
as AdBrite, OpenX and AdNexus; there are also
publisher yield optimizers such as PubMatic and
AdMeld. Ad exchanges are generally consistent in
three ways: They use a spot market for

33

photography CARSTEN LINDSTEDT FRANKFURT

Digital out-of-home (DOOH) viewing what you want when you want,
it’s also about where you want it. Successful
More than just electronic billboards, digital out- content integration takes all this into account,
of-home has emerged as a way to deliver highly weaving a brand into the fresh, third-party content
customized and targeted messages to a variety that consumers have a strong affinity towards.
of locations. While studies have shown DOOH
can have positive ROI, there is still a gap in What we’re seeing:
measurement; the impact of these initiatives aren’t Smart marketers are recognizing this and enabling
yet quantifiable to the level which digital marketers their brands to live a different life, away from their
have become accustomed. homes on their Web sites. For example, we have
worked with publishers to create custom content
What we’re seeing: through blogger relationships or their own editorial
As new digital touchpoints continue to infiltrate staff to comment specifically on how brands and
consumers’ media consumption habits, the DOOH products enrich consumers’ lives, help them reach
environment is becoming a more important part goals or solve problems. Paired with the right
of the media mix since it has the ability to change content, integration can show consumers that we
creative dynamically, influence customer behavior, understand the brand means different things to
build brand identity, activate mobile programs and different people. Putting it in the right place shows
speak to customers where they are. Retailers, in consumers we respect their consumption habits
particular, are seeing value in reaching shoppers and are comfortable delivering branded messaging
while they are on-the-go, using it to guide con- right where they are. Leveraging relevant content
sumers to an unplanned stop at their brick-and- in an environment that is natural to the consumer
mortar stores. On the flip side, touch screen tech- can be as powerful as leading them to a fully-
nology has helped shoppers interact with products branded destination site. More and more, clients
without ever having to step foot in their stores. are becoming savvy to these opportunities, and
we expect them to grow in 2010 as publishers see
—Tricia Lasky, VP, Media
them as more powerful ways to partner with brands
and offer compelling content to customers, and
brands see them as effective ways to communicate
Content integration with their consumers.
An older definition for this might have been
— Tricia Lasky, VP, Media
sponsorship, or product placement. Today,
content integration is inherently a part of the “on-
demand” consumer mentality. It’s not just about


Going Global: Some (Zhi Fu Bao), which, like TaoBao, is owned by the
Alibaba Group. This unique system guarantees
International Digital Trends a fraud-free shopping experience, ensuring it is
easier, faster, safer and friendlier, compared to other
to Keep an Eye On forms of payment such as by credit card or C.O.D.
Here are some insights into what 2010 The experience of TaoBao shows that China may
holds in store from a few of our global offices. have an opportunity go beyond just transactions
in its ecommerce experiences. TaoBao is also build-
ing its own e-Shop, and its own instant messaging
View from China: Ecommerce platform, called Ali Wang Wang. There is already
goes national, but with a social spin some community built around it, and ecommerce
will probably further integrate with social networks.
Ecommerce in China is the new retail boom, and it What will TaoBao become in future years? A new
is, without a doubt, going to have an important role type of social network/ecommerce experience? It’s
in China’s retail market. From consumer packaged not certain, but one thing is for sure: There will be a
goods to high-end luxuries, it is still difficult to find lot of opportunities ahead.
certain products across this land. And with slim op-
portunities to travel internationally — or even to first- — Joyce Ling, Account Director, China
tier cities within China — ecommerce has opened
a window for Chinese citizens to the outside world.
The shopping behavior of Chinese consumers isn’t View from the UK and Europe:
exactly like what is found in the West; they rely more Digital media takes a bigger
on search and ecommerce for product and price
piece of the marketing pie
comparisons, looking for credible opinions from
consumer comments from ecommerce sites. Unsurprisingly, the trends in the United Kingdom
during 2009 were hugely similar to those in the U.S.
Take the example of TaoBao.com — the site may
Clients’ digital media spend remained relatively flat
have started as a consumer-to-consumer service
or slightly up, whilst other channels were subject
very much close to eBay, but it has gradually be-
to cuts. The main outcome, though, was a change
come much more than that. Today, Chinese
in senior clients’ interest in digital. First, the returns
consumers go on TaoBao to search, view, com-
from digital held up incredibly well whilst other chan-
pare, purchase, do business, chat, meet friends,
nels floundered, and second, the volume of media
join communities, follow trends or even find lifestyle
coverage given to iPhone apps and Facebook last
and travel tips. For many Chinese youngsters, hav-
year was huge, enhancing the attractiveness of
ing a virtual shop on TaoBao is similar to having a
digital channels.
profile page on a social network. Behind it all, there
is one important component facilitating its growth “This digital media thing” became amazingly tan-
and pushing it forward: the payment system Alipay gible, but it didn’t look like media. This conundrum

opened the door to more interesting discussions of spend. Companies must to be willing to pay
about what digital media means and what it can agencies for what they want them to do, even if
be used for. Thus, there will probably be more the cost is up to 100 percent of “media” spend,
emphasis on idea-led marketing — such as social, and should be happy to do so as long the return
mobile, games, apps and video — and their as- on investment (revenue generated directly or indi-
sociated measurement challenges. One hot area rectly) is worthwhile.
may be video production companies since video
—Rob Watt, Managing Partner, Media, UK
can become the unifying asset that seamlessly
moves cross-platform from TV advertising to Web
advertising, to social platforms such as Facebook,
to email, mobile, the iPad and out-of-home, de- View from Southeast Asia:
livering the same context and impact across all of A fragmented, mobile-using
them. So, while digital marketing is now no longer market poised for growth
an afterthought in Europe with 30 - 40 percent of
media budgets now spent across digital channels, Although this region is categorized as one, digital
many businesses haven’t updated how they consumption varies significantly between countries
budget successfully for these digital initiatives. For because of differences in their relative wealth and
digital marketing to work, clients will increasingly technology infrastructure. It includes both devel-
have to view their agencies as partners and be oped countries such as as Singapore and Hong
more willing to compensate them on time rather Kong, and lower-end ones such as Laos and
than on a percentage of media. This represents Cambodia. These differences mean that technolo-
a dynamic shift in agency/client relationships, gy is not available equally to all, and it also creates
and it exists less in the U.S. than it does in the massive differences in what digital platforms are
UK and other European countries. When clients available. Connectivity varies widely, too. Indonesia
pay for the time agencies spend on an account has broadband penetration of less than 1 percent,
rather than on a percentage of media spend (thus while Singapore has more broadband connections
incenting agencies to drive growth rather than just than households. Meanwhile, more than 80
efficiency), the nature of the relationship changes. percent of Malaysians use the Internet outside
It also focuses attention on strategy, analytics and the home at Internet cafes. Therefore, advertisers
optimization rather than just buying. This becomes need to be mindful of these broader differences
especially relevant when thinking about owned and understand that overseas digital initiatives do
media, such as email and search engine optimiza- not always translate well in this region.
tion, and earned media, like social, where there is
There are other technological differences as well.
no spend to base percentage upon. Even across
Individuals in this region rely more on mobile
paid media there are certain disciplines, like pay-
phones to stay in touch than in many other parts
per-click, where the volume of work required to
of the world — approximately 17 trillion SMS mes-
maximize the returns may bear no meaningful re-
sages originated in Asia Pacific in 2008 — over
semblance to the fees generated as a percentage


three quarters of the world total. Mobile handset are distanced geographically from family, friends
ownership is also staggering; Singapore has nearly and cultural capitals. This gap is bridged using
as many mobile phones as people, with penetra- technology. Australians are educated and wealthy;
tion of 96 percent. The high mobile penetration their smarts and money make the adoption of
in this part of the world means the social aspect technology both desirable and possible. Internet
is limited to one-on-one conversations. This is a use is high, with 83 percent of Australians using
difficult area for marketers to penetrate as mobile it, and time spent online is growing — but there
handsets are deemed as personal spaces. is less commercial content (like Hulu, which is not
available in Australia). Broadband is very expensive
In addition, online commerce entities are scarce
(but people are subscribing anyway), uploading is
in Asia Pacific, which drives consumers to rely on
slow and 3G handset adoption is growing. Almost
overseas sites for online purchasing, or not pur-
all Australians can claim a tax break by buying
chase at all. Amazon is the most visited ecommerce
iPhones and laptops as organizers — so there is a
site in Singapore. On the other hand, less than 5
financial incentive in investing in digital technology.
percent of Indonesian online users purchase items
over the Internet, while banking capital Hong Kong, While the desire for digital technology is well
not surprisingly, has the highest online banking formed, there are differences in how it is used
usage. Online users are very active in user-gen- in Australia. Because of the country’s good
erated content. Blogs are viewed as being on an weather, people are not as dependent on digital
even plane with established news sites. Although for entertainment; it’s more important as a way to
Facebook is the most popular social site in some connect, with social channels such as Facebook
countries, competing brands such as Friendster being particularly popular. The active lifestyle also
still dominate in a few areas. While this region lends itself to use of mobile. Australia’s switched-
represents a smaller part of the global digital pie, on population and geographic isolation makes the
it is catching up quickly. This gives unprecedented country a fantastic place to test new products and
opportunities for established digital entities to pave digital executions. It is also poised for growth in
and structure the digital-scape for this region. digital spending because the population is above
average in its use of digital and because Australian
—Kai Huang, Account Director, Singapore
brands are below world averages in their spending.

Government is highly involved in the country’s
View from Australia: A highly digital digital growth, too. Universities and the the
Commonwealth Scientific and Industrial Research
culture continues ramping upward
Organisation (CSIRO) continue to lead innovation.
The big picture: Australia (and New Zealand’s) Australia’s GOV 2.0 task force is evidence of a
colonial past means that they are the world’s most wider trend in Australia in which governments are
isolated Western countries. Couple this with two attempting to embrace Web 2.0 technologies. The
centuries of sustained immigration from all parts of New South Wales Government sponsored a com-
the world, and you’ve got a group of people who petition, Apps4NSW, allowing consumers to

create applications that would make it easier for brands ignore Classe C at their peril. In the next
citizens to access, add to and analyze data about 18 months, almost half of them will buy comput-
the state. The federal government is proposing ers and smartphones — and with that they will
a nation-wide mandatory Internet firewall to protect jump definitively across the Digital Divide. Brazil is
children from undesirable content. This proposal already the world’s leader in usage of email, IM,
to censor the Internet has given rise to a creative and time spent with social media, and in 2010,
protest movement, which organized through social understanding how to connect online with Classe
media using the tag #nocleanfeed. C should be at the top of the marketer’s agenda.

—Tim Longhurst, Strategist, Australia —Joseph Crump,
Head of Strategy & Planning / Latin America

View from Brazil: Digital Baptism
for the Emerging Middle Class

This decade will be remembered as the era when As these predictions make clear,
Brazil — the perennial “Country of the Future” —
2010 will be about much more than
became the Country of the Present. On the world
political stage, Brazil is emerging as a leader and a few hot platforms. While things like
innovator. Consider the global popularity of Presi- mobile and social are expected to
dent Luiz Inácio Lula da Silva, and the exemplary make headlines, there are a number
progress in infant mortality, HIV, and poverty
of other developments that will
rates. On the economic front, Brazil was largely
untouched by the global economic crisis; the grab the attention of marketers and
country is booming, and the Wall Street Journal agencies alike. From infrastructure
predicts it’s headed to being the world’s fourth plays like ad verification systems
largest economy. And from a popular perspec-
tive, there is the World Cup in Brazil in 2014 and
to local online advertising, 2010
the Summer Olympics in Rio de Janeiro in 2016. is shaping up as a year in which
change in online media will make
From a digital perspective, there is an even bigger
megatrend afoot: Almost 70 million people, the itself felt both in front of and behind
largest socioeconomic block in the nation — are the scenes.
becoming upwardly mobile and are about to swell
the country’s previously anemic middle class. In
the past, Classe C — as they are known in Brazil
was believed by digital marketers to be on the
wrong side of the Digital Divide. Today, digital


05

photography PAUL MITCHEL PORTLAND • GREG CARLEY AUSTIN • LAUREN EDWARDS LONDON • SUZANNE FEE PHILADELPHIA • JADE LAU, SIU FUNG SHANGHAI

How to Become
a Social Brand
Six Steps to Realign Your
Marketing Around Social Media
By Andrea Harrison, VP Strategy
& Joe Mele, Managing Director, Marketing & Media

Quiz time: It’s 2010. What’s the biggest
unknown for marketers today? The state
of the economy? Not quite. The biggest
question mark we at Razorfish see can
be summed up in two words: “Social
Media.” Not at all coincidentally, social
media was also the biggest question mark
facing marketers when we published our
Outlook Report last year.

There’s a reason why social media continues to
be a quandary for marketers and their agency
partners: They haven’t adapted their organizations
to the social behaviors driving social media. Further,
many of them don’t even realize that it’s their
problem. A recent eMarketer report summed it up
nicely; it found that 37 percent of brands indicate
their main barrier to adoption of social is simply that
they don’t know where to begin. see figure 05.01

HOW TO BECOME A SOCIAL BRAND 41

Barriers to social media adoption Brand
according to U.S. brand marketers and ad agencies, June–July 2009 Agency

We don’t know enough about social 37 %
media to know where to begin
31 %

There’s no established way to measure the 37 %
effectiveness of social media 28 %
There is no funding for social media in 26 %
our budget
24 %
We just don’t have the time to invest
in starting a social media program
25 %
right now 17 %

Social media is not a 19 %
proven/tested strategy
31 %
We have legal constraints and/or
corporate policies that prevent us from
15 %
these types of marketing activities 9%

Social media is not seen 7%
as a good use of employee time 10 %
9%
Other
9%

Don’t feel there are any barriers
18 %
21 %
Note: n=85 brand marketers; n=85 ad agencies 0 10 20 30 40

Source figure 05.01
eMarketer, “2009 Marketing Industry Trends Report” August 18, 2009

How Social Parallels Aligning your company
with the social consumer
Older Marketing —
For a brand to be successful, it needs to re-engineer
and How It Doesn’t its marketing department around cross-functional
digital expertise in the six areas outlined below, and
However, while social media may seem mystifying,
seek agencies that have done the same.
it has definite parallels to what marketers have done
for decades: understand their consumers and mar- 1 Behaviorally focused account planning.
ket to them accordingly. The key, when it comes Having a deep understanding of consumers
to social media, is to understand how consumers is vital to creating the right solutions and
use technology and adapt it to their social lives. It’s communications. The account planning
a cross between behavioral psychology and tech- function must be focused on behaviors —
nographics, and definitely rooted in the principles not just attitudes and mindsets — to be
of user experience and ethnographic research. able to deliver strong social solutions.

It is also based in some of the technological skills 2 Content strategy and creation. There is no
that agencies and marketers have developed in the social without content, but the skills needed in
digital era. Just as we conduct user research and social content have to go beyond copywriting
testing to design our Web applications, we should because they require creating interactive
also spend time understanding our users’ social be- and personal conversations. Agencies and
havior before we make recommendations on social marketing groups need to staff themselves
programs. The strategy and planning required to de- with people who have the time and expertise
velop successful social influence marketing programs to respond directly to the target.
is very much a part of how we do business today.
3 User experience design driven by customer
The biggest difference, and this is where much of insight. User experience design is about
the need for realignment comes in, is in implemen- understanding consumer needs, desires and
tation. While previous forms of marketing, even actions, and creating design strategies to
in the early days of digital, were composed of make those experiences better, deeper and
carefully-crafted, one-way messaging, these skills more useful. Marketing departments need to
don’t necessarily apply themselves to social. Sure, have experts who understand the principles
you can buy ads on Facebook, but how do you behind this and who value them as much as
build a fan page that both attracts your consumers “The Big Idea.”
and keeps them engaged? How should a market-
ing department respond when there’s a rising tide 4 Deep technological expertise. Social has
of consumer complaints on Twitter? An advertising created new technology platforms like Facebook
slogan or banner campaign isn’t the solution. and Twitter. To get the most out of them,
marketing departments need to appreciate


the long-term viability of solutions, and evolve and It’s about people, not platforms
adapt the technology along the way.
In addition to giving marketing more focus around
5 Interactive media design. Media expertise in social, realigning around social behavior also helps
social goes beyond finding the right place to avoid a major pitfall of implementing social programs:
put an ad. Media people need to determine becoming obsessed with platforms and vendors.
how consumers are behaving on different At its core, marketing in social media is really about
platforms, and create the right environments understanding social behavior and acting accord-
for them. Marketing departments need to be ingly. The behavior is what makes people want to
able to conceive of, and pay for, media planning play a game with a friend or be tagged in a photo.
and strategy when buying media isn’t part of
the program. Of course, the major growth in social over the last
few years has spawned a huge upswing in vendors
6 Real-time data analytics. There are two and platforms rushing to gain market share. Plat-
flavors of social data: the chatter itself and the forms like Facebook and Twitter have made social
behaviors that occur as a result of social activity. a major buzzword for marketers — convincing many
The biggest challenge is not collecting data — that a fan page and a Twitter account are critical
it’s having the right people and partners who marketing platforms for brands. But marketers need
can uncover the insights that come from the to continue to ask the core question of whether the
data and act upon them. social behavior of their target mandates using them.
If aligning around the six areas above sounds like Alongside the platforms are the application devel-
an impossibly tall order, it doesn’t have to be. We opers, who specialize in creating content for the
have had great success with many of our clients, platforms. These niche industries are now core to
who have realigned their organizations and their many marketing programs, and continue to gain
relationships with us and other partners in order share every day, but, again, if use of them isn’t
to take advantage of social. These moves have anchored in consumers’ social behavior, they are
helped them to attain the skills, expertise and not worth employing.
operations needed to be social brands.
The reality is that social may seem like something
new and foreign — the platforms, vendors and
tools overwhelming and confusing. However, it’s
still just about continuing to build relationships with
consumers through marketing. The difference is
that marketers and agencies must develop a deeper
understanding of how consumers’ social behavior
is constantly evolving and align resources around it.

photography TIM PETHEL ATLANTA


photography GREG CARLEY AUSTIN

06
The New Brand
Health Metric: Your SIM Score
Using it to Make Smarter Marketing Decisions
Across All Channels and Platforms
By Shiv Singh, VP, Global Social Media Lead, @shivsingh, http://goingsocialnow.com

6 On January 21st, all hell broke loose for Toyota. Its sudden car recall was the
most challenging crisis the company had ever faced. In fact, a few industry
insiders even wondered whether the mighty Toyota brand could survive, as
six million cars were recalled worldwide. The crisis is going to change Toyota
forever and it may take years to recover lost market share.

Around the same time, something rather dramatic
happened to another company, but this time by
Why the SIM Score matters
beyond the social Web
its own choosing — for the first time in 23 years,
PepsiCo decided not to advertise its flagship Pepsi Nine months ago, we introduced the SIM Score
brand on the Super Bowl. With Coca-Cola spon- and at the time, felt that it was an accurate measure
soring the Winter Olympics, Pepsi launched a year of how people perceive your brand in the social
round “movement” called “Refresh Everything” to Web in one moment of time. But since then,
donate money to charities based on consumer through our experiences in deploying the SIM
voting. For the traditional marketer, this was Score and the even more explosive growth of social
indeed a bold and risky move. media (now it transcends all media and all platforms
including mobile and gaming devices), we have
What do Toyota and Pepsi have in common? They come to believe that the SIM Score can and should
both are in business situations that demand new be used as a broader measure of a brand’s health,
ways of measuring their brand health — measure- not just as a measure of the strength of a brand in
ments they haven’t had before. And that’s where the social Web.
the SIM Score — monitoring how a brand ranks in
Social Influence Marketing — comes in. At the root of this thinking is the belief that we now
live in a world where brands are shaped in real-time
more by how consumers talk about them — versus
anything the brands may do to market themselves
or that we as an agency may help them do. This
does not mean brand-building is dead. You shouldn’t
fire your marketing department or your marketing
agency. In fact, please don’t.

THE NEW BRAND HEALTH METRIC 47

Nor does it mean brand equity has no meaning. However, in the meantime, let us show you how
But whether your brand is worth $55 billion (as the SIM Score is already being used as a broader
Apple is, according to one analysis) or $10 billion brand health metric by taking you back to the Toyota
cannot be revealed through annual, laborious and and Pepsi examples.
expensive brand tracking studies. You need to be
tracking your SIM Score every day, every week and Toyota: SIM score numbers result
every month of every year. Brand health, measured in shocking short term findings
using a SIM Score, is dynamic, because it constantly
When the Toyota recall crisis first broke, we
captures the consumer conversations of your brand
uncovered something extremely surprising. In the
relative to its competitors and determines whether
first two weeks, the Toyota SIM Score, (see figure
they are helping or hurting your brand. The SIM
06.01) instead of dropping dramatically, actually
Score tells you whether your brand is healthy,
increased. In some bizarre way, the crisis at first
based on actions that you, your competitors or
actually helped Toyota.
your customers are making every day.
This happened for two reasons. First, as
With 50 billion tweets being published every
Edmunds.com later pointed out, the crisis made
24 hours and millions and millions of consumer
many prospective buyers believe they could get a
conversations taking place across social platforms
bargain on a Toyota. They felt the cars would be
and company Web sites via desktop computers,
fixed and there’d be a special discount on them
laptops and mobile devices, your brand health is a
because of the bad publicity. Second, at first it
reflection of how consumers are talking about you
wasn’t clear how big a deal the crisis was and
in real-time everywhere.
Toyota brand advocates came to the automak-
But it also means that the SIM Score must be er’s defense. As a result, not just negative — but
further optimized to address this new responsibility. also neutral and positive — conversations about
Thus, watch for announcements as we work with Toyota increased as the advocates spoke about
additional analytic partners to refine the SIM Score their experiences with the cars and their safety —
methodology. We will be focusing on four areas: all helping to prop up the Toyota brand. In fact,
Toyota saw a sharp increase in the number of fans
1 better automated sentiment analysis on its Facebook page during this period too.
2 manual analysis of conversations via sampling Without the SIM Score, one would never have
3 a sharper mechanism for applying influence uncovered these findings — findings that, as we’ll
weight-age explain on the following page, warranted a
unique response strategy. Did Toyota know this
4 a tighter formula to give additional weight-age was happening? Did it respond to these findings?
to positive mentions It is hard to tell from the outside. But one thing is

improve its brand health by finding ways to get
Toyota SIM score
consumers talking positively about the brand again
40.00 and building trust with those brand advocates first
35.00 and foremost. Discounting cars and running ad-
30.00
vertising campaigns touting their safety message
will not be enough. They will need to focus on
25.00 Ford
learning how they can build trust and figure out
20.00 GM what it takes to inspire their advocates once again.
15.00 Honda In a sense, it is like a marriage that’s spiraling
10.00 Nissan downward and needs counseling. We’ll be watch-
Toyota ing the SIM Score to see whether they are able to
5.00
save the marriage with their advocates or not.
0.00
NOV DEC JAN
figure 06.01

Pepsi: Strategic choice or blunder?
Let the SIM score decide
certain; if we were in Toyota’s shoes at the time, The Cola Wars are probably among the most
we’d have discounted the cars just as the crisis fascinating and historic rivalries in consumer
broke (without waiting to see sales drop first) and marketing. The choices made by Coke and Pepsi
would have actively started explaining the situation in the last few months epitomize how daring their
to the brand advocates of Toyota across the social brand marketers feel they need to be.
Web and especially on the brand’s Facebook
Pepsi, as mentioned earlier, chose not to advertise
page. Those brand advocates needed the right in-
on the Super Bowl, which would have given it
formation quickly as they were becoming Toyota’s
instant, and momentary, visibility with 100 million-
new sales force.
plus U.S. TV viewers. Coke, for its part, chose
Unfortunately, the SIM Score uptick was short-term to sponsor the Winter Olympics and had its logo
for Toyota. After those first two weeks, its score plastered everywhere from billboards to advertise-
started dropping, precipitously partly because the ments and t-shirts, potentially reaching even more
advocates felt betrayed by the brand too — not U.S. TV viewers (the estimate over the course of
to mention the fact that the full extent of the crisis the Vancouver Games was 190 million). Which
slowly came to light. approach resulted in a higher SIM Score?

Arguably, Toyota’s fate will be decided by whether The chart on the next page captures the story. The
it can stop its SIM Score from dropping the way Pepsi “Refresh Everything” movement helped its
it has been lately. In other words, Toyota needs SIM Score significantly around the time of the


program’s December 13th launch and through the What does this tell us? That by not advertising in
course of it opening up for suggested charities the Super Bowl and launching “Refresh Everything,”
submissions on February 7th. In real terms, that Pepsi was able to gain on Coca-Cola, gains that
translated into 1 billion media impressions, includ- were only reversed at the time of the Winter Olympics.
ing 44 million on blogs, 70 million tweets and Would the Super Bowl advertisements have
300,000 new Facebook fans. (It is worth pointing resulted in similar gains? Probably not, and an
out that a recent study by a social media vendor analysis of the previous year’s SIM Score numbers
puts the value of Facebook fan to a company at would answers that question.
$3.60 annually.)
Does this mean “Refresh Everything” was a good
However, those gains were halted when the Winter idea? It certainly improved the overall health of
Olympics began on February 10th and Coke re- the brand in the short-term. But what excites us
turned to its earlier SIM Score numbers. The scores is how the SIM Score, tracked through the course
have since leveled off, leading one to believe that at of the year, can give these two brands a stronger
least so far, the Pepsi “Refresh Everything” initiative measure of the impact of their marketing choices
only gave the brand a short-term SIM Score bump over a period of time, more so than any other
that was halted by the Winter Olympics. metric we know of (other than sales, of course).

Pepsi & Coca-Cola: SIM comparision figure 06.02

11/08 11/15 11/22 11/29 12/06 12/13 12/20 12/27 01/03 01/10 01/17 01/24 01/31 02/07 02/14 02/21 02/28

67.19 68.54 68.05 69.12
67.74 66.89 62.60 67.52
69.17 60.06 63.77
63.00 64.91
52.29 68.64
62.96 57.52

43.60 40.06
33.95 45.54 49.84
35.44 34.88 40.54 37.11 39.6735.52 36.30
34.67 34.12 35.6340.00 37.16

Coca-Cola
Pepsi

This longer-term application of the SIM Score is new experience for consumers — an experience
an evolution in our thinking about its value. that was useful, helped people manage their
spending — and have some fun with it too. The
If the gains are significant as the year progresses,
fact that this cool new product is associated with
it’ll be the proof that Pepsi made a smart choice
the three large corporations can only serve to
by not advertising in the Super Bowl and launching
improve their SIM Scores in time as they benefit
the social media-driven cause marketing effort
from the halo effect.
instead. It will also show that making the switch
from a campaign-oriented mentality to a longer How brands will make multi-million
term movement has paid rich dividends. And when dollar decisions because of it
those numbers are examined, we’ll also need to
correlate them to overall market share metrics to The SIM Score, which measures a company’s
see if brand health translated into sales. brand health in the social Web, is increasingly a
reflection of the overall health of the brand — as
Integrating the SIM Score long as you accept the fundamental premise
into your business that a brand today is shaped as much by how
consumers talk about it as by anything that the
No more can one ignore the conversations taking
brand may do itself.
place in the social Web. In fact, they’re so
significant in volume, that today they don’t just As a marketer, your challenge today is to manage
represent a slice of your customer base — but your SIM Score effectively and to launch campaigns,
increasingly are the voices of your entire customer marketing programs, innovative products and
base. Businesses must take actions and create services that help you improve your SIM Score
experiences for their consumers that ignite their versus your competitors that then result in sales
social influencers to change their impression of upticks. Yes, you need to create social experiences
the brand, share their perceptions with the world, for your consumers that provide value, encourage
and directly influence sales, too. them to advocate for your brand and appear
responsive to them in real-time. Because one
One good example of this is what Citibank,
thing is certain: If you aren’t seeing the SIM Score
Microsoft and Morningstar chose to do in January.
correlations, as a leading indicator to market
Realizing that trust in big brands had dropped
share today, you definitely will in the near future.
significantly due to the financial crisis, they needed
to find a new way to connect with consumers
about the issue of money and serve their needs
more directly. By launching Bundle Corporation,
a new company to help people view spending
habits of others around the country and then talk
about them, these three corporations created a



One-to-One
Marketing to
the Masses
How Can You
Extend Personalized
Communication Beyond
Your Existing Customers?
Mike Selman, Strategy Director
with input from
Marc Sanford, Strategy Consultant

“The old paradigm, a system of That’s certainly not a new concept — in fact, this
quote is more than 15 years old. But even today,
mass production, mass media, you have to look hard to find a company that’s
and mass marketing, is being gotten serious about embracing one-to-one
marketing beyond implementing loyalty programs,
replaced by a totally new paradigm, inserting a person’s name in an email, or other
a one-to-one economic system.” efforts targeted toward its existing customer base.
That’s a start, but these are all post-purchase
– Don Peppers and Martha Rogers, activities, and we know customer relationships
The One to One Future
begin well before a purchase is made. So why do
we continue to rely on the same old one-to-many,
mass-marketing approach when it comes to
reaching new prospects?

Marketing engagement landscape:
Increased adoption of technology makes it possible for 1:1 engagement methods to radically improve performance

Conventional Advertising & Engagement 1:1 Advertising & Engagement
Pre-Purchase Post-Purchase Pre-Purchase Post-Purchase
Description Broadcast TV, radio, Direct mail and email Uniquely tageted and Targeted direct mail and email
conventinally targeted online purchasers based on database dynamically personalized online to purchasers based on unique
advertising segmentation (or not) ads and other digital experiences customer level behavior.
based on knowledge of user and
recent behavior.

Required data None Basic CRM system Integrated anonymous CRM system integrated with
customer behavioral and/or behavioral data
household level data

Typical hurdle to Demonstrated ROI Scalability Scalability and data Scalability and data
greater adoption availability integration

Relative ROAS
X ~10-15X ~5-10X ~20-40X
Enabling
technology Ad serving or agency Basic CRM system Personalization engine Personalization engine,
partnerships CRM system

Adoption
among
marketers

figure 07.01

ONE-TO-ONE MARKETING TO THE MASSES 53


Because even with the great technological What’s “personalized” in this model is not just
advances of the digital era, it still hasn’t been the person’s first name but the content of
possible to scale such efforts due to the the message itself — the products, the offers,
resources required. Broadcast media has been the calls to action — all based on what is most
inefficient from a performance standpoint, but relevant to the user. Because each ad is tailor-
hugely efficient from a resource standpoint — a made for the user at the point of impression,
media buyer can buy $50 million worth of TV a uniquely relevant message is delivered every
using his iPhone while riding the bus. One-to-one time. Now, one-to-one marketing can be done
marketing, however, has required more time on a mass scale because there are efficiencies
and people to implement. Fortunately, things in both technology and resources; it can truly
are changing. Razorfish believes there is a new move the needle for a $10 billion company.
and compelling opportunity to create one-to-
And the opportunity will only get better. Today,
one personalized messaging that can be aimed
online is the only media channel that can do
at the mass of consumers that are further up
this; it will expand to others, such as TV, as they
the purchase funnel, in the awareness and
become interactive, and therefore, addressable.
consideration stages.
The logical conclusion is that one day most
Increasingly, marketers can access and aggregate advertising will in some way be customized. That
massive amounts of data across multiple media will be great news for advertisers, who are always
sources, and use it to build a smart, behavior-based looking for better ROI, and consumers, who
“personalization engine” which can dynamically increasingly want advertising on their own terms.
serve ads to millions of prospects every day.

The impact of
customizing to the masses
The adoption of one-to-one marketing, as mentioned campaign. When used in conjunction with more
before, tends to start with the existing customer traditional top-of-the-funnel activities, the lift is
base. For most companies, there is certainly room maximized across an even larger base. While
for more sophisticated personalization in this area; that’s impressive, it will only get better as other
however, the overall business impact is tempered media channels come on board.
by the relatively small budgets most companies
When this happens, and addressable media
allocate to loyalty marketing and other customer
comes to platforms such as mobile, digital
retention vehicles. The real impact begins when a
readers and tablets — such as the Kindle and
robust, data-agnostic personalization platform is
iPad — and even TV, it is not hard to envision as
established and used to drive relevant advertising
much as 30 percent of an entire media budget
to new prospects.
being allocated to one-to-one messaging
In our experience running personalized online campaigns. This is when the full impact of
ad campaigns, we’ve seen ROI that is typically personalization will be realized and truly become
5 to 10 times that of a standard, broad-reach a competitive advantage.

Marketing budget ROI:
progressively shifting ATL budgets to 1:1 channels can double media efficiency at scale

Today Max 1:1 Online Maximize Long-Term
Post-Purchase Pre-Purchase 1:1 Pre-Purchase 1:1
Performance Conventional Shift greater % of CRM Shift greater % of online Shift greater % of CRM, Maximized 1:1 marketing
driver tactics budget to 1:1 display media budget to 1:1 online, TV, radio and print
advertising display advertising budgets to 1:1 messaging

Enabling Integration of behavioral Continued shift of media TV, print and radio
media data with CRM systems mix to digital channels; become addressable.
dynamics become less costly increased data availability Personalization enabled
and integration solutions across all digital channels.

Budget
allocated 1:1 <1% ~5% ~15% ~30%
ROAS
$ 10 $30
$5
$35 $80

figure 07.02

ONE-TO-ONE MARKETING TO THE MASSES 55

How to build a personalization engine
While the technical details are complex, the basic components of a
personalization platform can be broken down into five core building blocks:

1
Data aggregation. Data is aggregated
from various sources, typically leveraging
cloud computing due to the size and the TV POS CRM WWW.
frequency of updates necessary to keep
the profiles fresh.

2 Decision engine. A decision engine Last Action Recommendations
makes sense of the data, offering an
intelligent recommendation for what
message should be served up. Rules

3
Creative development. Personalized ads
are produced with an eye to developing
as many different ad units as possible in Offers Messaging
a way that maximizes efficiency. To do
this, creative assets are developed in a
modular fashion with heavy use of existing Images Design
assets, allowing the emphasis to go
toward creating ads that are relevant to
the consumer.

4
Media targeting and dynamic ad Messages
serving. Media networks find targeted
users and assemble the ad using dynamic Image
Offer

ad serving. Logo/CTA

5
Marketing channel. Finally, the
customized ad is delivered to the user
through the relevant channel in real-time.

figure 07.03


Why now is the time to get
personal with your prospects
Companies that start to develop pre-
sale one-to-one marketing efforts now
will seize a significant competitive
advantage by more effectively
communicating with their prospects
and squeezing more results out of
marketing dollars that traditionally
have been spent in expensive mass
media. It will also set the stage for
when personalized advertising will
be delivered across all major media
channels. Starting now could be the
thing that keeps you one relevant
message ahead of the competition.

57

How the Ad Exchange
Ecosystem Works
And Why Marketers Need to Understand Its Disruptive Power
By Matt Greitzer, VP, Search Marketing & Head of ATOM Systems
08

photography JASON DRAKEFORD NEW YORK

8 What a difference a year makes. When we released our Outlook Report
last year, the ad exchange market was in its infancy, perceived as an
intriguing side-show by mainstream marketers. Today, this market is in full
growth mode and is sending shockwaves through the media community as
advertisers, agencies, publishers — and everyone in between — scramble
to figure out exactly how this market is taking shape.
While there are no hard industry estimates of the size of the ad exchange
market, industry observers suggest agency trading desks, which execute
deals on ad exchanges, will control $500 million in media spending in
2010. Since we at Razorfish have seen this market up close, we’ll walk
you through the ad exchange ecosystem, and why so many marketers are
enthralled by it.

How the advertising
exchange ecosystem works
As we said above, the ad exchange market Ad networks: Networks that aggregate online
is an ecosystem consisting of interdependent ad inventory across multiple sites, repackaging
components. Below are definitions, followed by it along various targeted parameters for sale
a chart showing how they interconnect: to advertisers.
Agency trading desks: Consolidated agency Data providers: Third-parties offering behavioral,
buying groups, which work with demand-side demographic, psychographic and social graph data
platforms and data providers, to optimize and to enhance ad targeting and pricing decisions on
leverage buying clout across ad exchanges. ad exchanges, for example.
Demand side platforms (DSPs): Cross-exchange Publisher-side platforms (PSPs) and yield
platforms used by trading desks (and others) to tap optimizers: Cross-exchange and cross-ad
into exchange inventory. network platforms and service companies used
by publishers to manage demand and generate
Ad exchanges: Marketplaces that allow for the
maximum ad revenue.
buying and selling of ad inventory in a biddable,
real-time spot market on an open platform.

HOW THE AD EXCHANGE ECOSYSTEM WORKS 59

Why ad exchanges interest marketers Meanwhile, yield optimizers increasingly do business
directly with DSPs, cutting the exchange out of the
Marketers are interested in ad exchanges for
mix and playing that role themselves.
their ability to deliver highly-targeted advertising
at levels of efficiency not found elsewhere; both The relative stability on the buy-side of the equation
brand advertisers and performance marketers may be a result of buyers’ enthusiastic embrace
are tapping into these benefits. But, as the chart of this new channel. Barely a market in 2008, the
suggests, with an alphabet soup of vendors in Agency Trading Desk model is in full swing at most
hyper-niche categories, this is not an easy landscape of the major ad holding companies, and is one of
to navigate, partly because not all players are coming the fastest growing segments of the agency business.
to the ecosystem with equal levels of enthusiasm. Marketers and agencies are receptive to this buying
model for two reasons. First and foremost, the ad
While the buy-side players on the left hand side of
exchanges are an efficient way for marketers to
the chart are relatively consistent in their behavior
target specific audience segments through the
(an agency trading desk always works with a DSP,
smart use of their internal and third-party data.
for example), the sell-side players on the right are
The opportunity to target audience without using
anything but. Publishers often forgo yield optimizers
content as a proxy for audience is very appealing.
and work directly with ad networks or exchanges.
optimizers and work directly with ad networks or
Second, the ability to de-average pricing across

The advertising exchange ecosystem
Agency DSP’s Data providers Ad networks PSPs/
trading desks yield optimizers
Advertisers

Publishers
Ad exchanges

Buy Side Sell Side

audience segments (i.e., set a different price for The broader implications
each audience segment based on its predicted of ad exchanges
value) and employ tactics like re-marketing
with no arbitrary markups is a boon for direct- But the ad exchange phenomenon isn’t just about
response marketers who are seeing their ad the buy-side/sell-side divide. Its greater impact
exchange campaign performance rival that of may be in the flood of technologies it’s unleashed,
search marketing. which automate the buying and selling process
for online display. Automated buying and selling of
Why some on the sell side IAB-standard ad sizes is inherent in the exchange
are treading carefully model, as is automated optimization of placements,
pricing and ad creative. It’s easy to envision this
While buy-side adoption has been overwhelming,
technology expanding beyond the exchange spot
sell-side counterparts have been less aggressive
market to accommodate other forms of standard
in their embrace of ad exchanges. Inventory is
ad buys, greatly reducing the administrative burdens
in no short supply, to be sure, but many top-tier
on buyers, sellers and campaign managers.
publishers, such as The New York Times, have
expressed skepticism this new sales channel is in And therein, perhaps, lies the true revolutionary
their best interest because they believe it devalues power of exchanges, cleaving the media landscape
their premium inventory. In fact, some, like Turner into two parts: highly transactional, automated,
Digital, actively deride the ad exchanges despite algorithmic buying on one side, and highly customized,
the strong buy-side signals. Publisher reluctance bespoke, integrated buys on the other. Such a
to place inventory on exchanges is perhaps the shift has implications for marketers, agencies and
greatest barrier to the channel’s growth. publishers in how they plan, organize and optimize
their businesses. Marketers embracing exchange
And if publishers are confused, many ad networks
buying techniques in 2010, then, will not only to
are downright fearful of the new market forces
tap into a highly efficient buying channel, but will
brought about by the growth of the ad exchange
also get a front row seat to the unfolding of this
ecosystem. The vast majority of the aforementioned
new paradigm, next year and beyond.
$500 million controlled by agency trading desks
are coming straight out of budgets that would
have previously been allocated to broad-reach ad
networks. Several progressive ad networks such
as Undertone Networks, Collective Media, Turn
and InterClick to shift their businesses to respond
to this new dynamic. How the other broad reach
networks fare in 2010 and beyond, however,
remains to be seen.

HOW THE AD EXCHANGE ECOSYSTEM WORKS 61

photography VENUS LEE
& JADE LAU, SIU FUNG SHANGHAI

09

Measuring What Matters
Say No to Meaningless Metrics and
Define Your Measurement Ecosystem
By Jason Leigh, Group VP, Analytics & Sandy Schlee, Ph.D., VP, Analytics, West

Here we are, in the midst of the anything useful. Razorfish believes it’s time to just
say “no” to meaningless metrics, and adopt a
information revolution, where
disciplined mindset that focuses on measurement
practically everything we do is that truly matters to your business.
measured, and our daily lives leave
The search for meaning in
behind a trail of digital bits. During
the data universe: Identifying
the course of this year, according accountable measures
to a February report on the data
There’s a need to take a practical look at what
deluge by The Economist, mankind
this means for marketers dedicated to collecting
will produce 1,200 exabytes (or 1.2 insights. It means measuring and focusing on
trillion gigabytes). Individuals and accountable measures, measures that matter
businesses have never produced to you and your business, and pretty much
ignoring everything else. This approach will
such an incredibly detailed trail of deliver better decisions and, ultimately, a
measurable activity — a potential sustained business advantage.
treasure trove for marketers.
Paul Musante, Vice President of Individual
Investor Group, puts the challenge facing
So why can’t marketers make better decisions
analytically-driven organizations this way, “We
with the sophisticated data measurement tools
have limited internal bandwidth, so we haven’t
they now have at their disposal?
been able to expand our analyses at a rate in
Because, we’re trying to measure everything, when line with demand. Across all business units,
we should be focusing on accountable measures the demand for incremental analyses has
that matter to us and our businesses. In our fascination outstripped our capacity to produce them.”
with gathering and storing as much marketing data It’s the dilemma faced by so many internal, and
as possible, it’s becoming impossible to decide external analytics groups; everyone in the

MEASURING WHAT MATTERS 63

organization clamors for more analysis, and those disclosures, and are often discussed in internal
teams struggle to provide enough bandwidth planning sessions. Some measures that don’t
to fulfill the requests. Meeting current analytical pass those tests are useful to keep around, but
demand requires a shift iMeeting current analytical they shouldn’t draw focus, attention and analytics
demand requires a shift in focus, which starts with resources away from key measures.
knowing how to identify accountable measures,
Identifying which measures are important will likely
along with the discipline to apply good standards,
require some robust discussion amongst various
smart analysis and timely delivery of facts to key
stakeholders, ideally, starting as a top-down
decision-makers. It requires the curiosity to move
exercise; namely, what is the C-suite interested in
from knowing what happened to knowing why it
measuring? Usually, it’s a combination of sales,
happened, and the willingness to make decisions
unit volume or profit, but it takes heavy lifting to
based on this knowledge.
articulate those measures in a unique way that
Taming the jungle: Looking at makes sense for your business.
your measurement ecosystem Recently we worked with a sales-driven organization
We talk a lot about ecosystems. It’s an instructive to uncover its accountable measures. We
concept, especially when applied to the possible ultimately realized that the measure of “sales
ways we can measure business. Organizations generated per sales rep hour worked” was the
needs to shift their thinking away from the mindset most important measure — after several weeks
that all measures are equal, and begin thinking of mapping out their measurement ecosystem,
of a living measurement ecosystem with all that conducting one-on-one stakeholder interviews,
entails. Some measures are the big bad predators: and, finally, holding an animated four-hour debate
They carry outsized influence on the rest of that included key decision-makers and tactical
the measures available; they are the proverbial analytics staff. We all walked out of the room
800-pound gorillas of your business’ potential knowing exactly how we’re all going to be held
performance measures. These heavy hitters are accountable for our work. That’s the key point:
composed of, or relate to, a sometimes infinite “Sales generated per sales rep hour worked” was
set of other measures. Examples would include the accountable measure for this client because
sales volume, margin, return on investment or the components of it are the things this group of
net present value. executives has to deliver.

It’s a useful exercise to at least list all the possible There were two things that made this analysis
measures that your company looks at today — to particularly challenging. The first was that most
begin the process of mapping out your own of the measures we were gathering paled in
measurement ecosystem. Typically, the accountable comparison to this one all-important measure.
measures are the ones the senior executives ask The second was that we had to figure out how
about over and over again, the ones that show up to distill measurements that cross disciplinary and
on P&L statements, within the company’s financial P&L silos within the organization. Each of those

silos had their one true measure of success, so are the responsible measures — the ones that
we needed to combine them in a way that members of the team use to optimize their actions
satisfied each group. That required honest day-in, day-out. Other measures that are related
discussion and delicate negotiations. (It’s worth to, highlight or explain the accountable measure
noting that most organizations we’ve worked — but aren’t used day-in and day-out to run the
with never have more than two to five true key business, are the consulted measures. Finally, any
performance indicators — or accountable measures.) other measures that people might think are worth
tracking fall into the realm of informative measures.
It’s not enough to identify these all-important
accountable measures, however. Finding them Recently, for a national healthcare provider, we went
and setting up systems to track them accurately through the process of helping them plan out and
enough won’t drive business all by itself. If you clean up their measurement ecosystem using this
don’t like what you’re seeing in those accountable approach. Most of their marketing efforts were
measures, they usually aren’t enough in and of aimed at generating leads — and once those leads
themselves to uncover why the results were either turned into appointments, they had a well tooled
terrific or poor. person-to-person process to close those leads
and turn them into paying customers. We chose
Refining your measurement lead volume as the accountable measure.
ecosystem using the RACI chart
Lead volume was based, in this case, on the reach
We’d like to suggest a type of chart to help and frequency of the client’s advertising, and how
organizations flesh out their measurement good those ads were at getting customers to act.
ecosystems. Called a RACI chart, it uses an The responsible measures we selected were
acronym that stands for Responsible, Accountable, impressions, ad frequency and clickthrough
Consulted and Informed, and comes from project rates at several key steps in the sales funnel,
management and process engineering circles. the cost associated with those efforts, and the
It’s a tool to map processes that highlights which cost per impression; these were measures that
person takes which action at each critical step of each marketing channel needed to optimize to
a process. There is lots of good information on efficiently generate the most leads for the business.
how RACI charting works available online (a good Information about the tagline, offer and time of day
primer can be found here: http://en.wikipedia.org/ the ads were presented all fell into the consulted
wiki/Responsibility_assignment_matrix). measures bucket — as these dimensions were
used mostly to help understand why the key
We’d like to suggest that for each critical part of your
performance measure and responsible measures
business, you identify one accountable measure as
performed as they did. There were a series of other
outlined above — the key performance indicator.
measures that particular stakeholders wanted to
Then, think about measures that are used to define
track, but that frankly had no direct bearing on
that measure, or have a direct impact on it. These

MEASURING WHAT MATTERS 65

understanding why leads were or were not gen- Finally, smart analysis, as alluded to earlier, involves
erated. These became the informative measures. providing answers, not just data. All too often, we
analysts fall in love with the detailed charts and
The next step: Using smart analysis graphs that build a case for a simpler answer. We
to understand your data do all that work to ensure the answer is right —
and we like to show our work. But the reality is,
Getting this robust understanding of what’s driving
most decision-makers don’t have time to wade
your business, and weeding out everything else,
through all the interesting factoids to get to the
won’t magically make your business better. That’s
one nugget they need to make a better decision
why it’s necessary to apply smart analysis —
— so ensure that your analytics organization is set
uncovering why the accountable measures are
up to answer your key questions, not just produce
trending the way they are. Analysis-driven insight
charts and graphs.
comes from comparing one key measure to another,
such as looking at a measure’s value this week Successfully managing your measurement
as opposed to last week — and then asking and ecosystem requires you to focus on the few
answering: Why did this measure change? In short, metrics that can indicate when your business
it’s about generating hypotheses and then finding is succeeding and when it is failing. Here are
data to prove (or disprove) those hypotheses. five ways you can stay on track:
Uncovering why performance is what it is remains 1 Measure what matters to your business;
half the battle, however. The other half is delivering don’t measure everything possible.
answers to key decision-makers in a timely manner,
and having the discipline to act upon those findings. 2 Take the time to institutionalize your key
A well-developed measurement ecosystem includes measures across the organization.
not only a full list of potential business measures, 3 Create an environment that can ask “why.”
but also a robust organizational governance model,
which focuses on which decision makers can direct 4 Provide adequate resources to your analytics
the organization to change tactics in response to providers so that they can deliver results in a
new and emerging information. It’s therefore critical timely manner.
that you set up processes to monitor the accountable
5 Set aside resources for testing and learning
measures, quickly uncovering why they’re moving
to increase your analytics prowess.
in a given direction, and appropriate methods of
communicating these answers to the right people at Companies that can derive insight and value from
the right time. the analytics, and make decisions based on the
facts, will lead the way in the new millennium.

photography TIM PETHEL ATLANTA

67


10
The Power
of Small Thinking
Agency Creativity Should Move Beyond the
Big Idea to Meet Demands of Evolved Marketers
By Brandon Geary, SVP Strategy for Americas

0 Despite the increasing emphasis on
ad platforms, exchanges, automation
and cost-reduction, creativity is
still vital to marketing effectiveness.
It remains an elusive X factor in the
quest for results.
But we have found that creativity, as it has been
traditionally expressed in advertising, needs to
change to meet the demands and opportunities
inherent in both changes in consumer behavior
and advances in ad technology. Further, creativity
has to meet the demands of the evolved CMO,
experience and identifying new sources of
revenue, the advertising creative team is not
necessarily the first, and certainly not the only,
stop in their journey to improve the prospects for
the brands they’re stewarding. They now also
call upon product development firms, innovation
consultancies, co-creation panels and forums
to provide the sparks necessary to drive market-
ing innovation.

JetBlue has effectively used social platforms to
improve customer service and experiment with
new trial and pricing models in a manner outside
of most ad agency mandates. General Electric’s
marketing organization has secured help from
who must show a quarter-by-quarter value to his
IDEO and the academic community in an effort
or her business beyond campaign results. This
to influence a culture of innovation beyond the
creates a problem for campaigns centered around
campaign. Community platforms from Starbucks,
The Big Idea — a grand, sweeping and fixed
Nokia and Dell represent co-ideation and
vision of a brand — because they don’t have the
co-creation efforts, which allow for a daily
agility to adapt to consumer reaction and evolve a
infusion of ideas sourced from the crowd.
brand narrative.
Thus, agency creative teams, if they are to stay
We see the need for a creative approach that better
in the game, need to shed old habits of how ideas
complements today’s marketplace; one that
are generated and how campaigns are created.
is faster, more informed and structured around
They need to leverage external sources and
multidisciplinary teams which can constantly
customer insight with the same level of zeal to
iterate a brand’s advertising based on customer
generate and perpetuate their ideas. And they
feedback. Otherwise, agency creative will have
need to move quickly.
an ever diminishing role in supporting the overall
marketing mission. In working with multiple agency partners, Razorfish
has found most continue to hold onto such marketing
The evolved marketing organization traditions as annual planning cycles, campaign
and the look beyond ad agencies launches and measures of sales activity and brand
Because today’s CMOs have so many health that occur long after a campaign has launched;
responsibilities — from evaluating a steady this, even though CMOs are responsible for driving
stream of new technologies, platforms and media short-term results and if they don’t, they’re out.
opportunities, to improving the customer

THE POWER OF SMALL THINKING 69

Though their average tenure has moved up since Putting small thinking to work
its 2006 low point of 23 months, most CMOs, per
Spencer Stuart, stayed in the job for only 28.4 So how does thinking small work in practice?
months. While traditional creative efforts move Looking at some of the most successful marketing
from a single-minded brief onto concept, test, efforts of the last 12 months shows five key
execution and results, the evolved CMO requires components of how these new multidisciplinary
more immediate action, along with customer teams are using to guide marketing ideas today.
participation and ideas that generate momentum. 1 What are we really doing here?
Uncovering the brand truth.
A new way of looking at creativity:
Creatives have often spoken of the need to
Small is the new big
begin with a brand truth. McCann-Erickson,
Therefore, agency creatives need to adopt a “think one of the world’s first global advertising
small” mindset, which transforms the search for agency brands, has long used the phrase
The Big Idea to an experiment and learn approach “Truth Well Told” to describe its mission
which adapts constantly to changes in the and offering.
marketplace. Certainly, some of this has been
The difference today is that uncovering the
happening for some time; ad platforms such as
most essential truth about a product — what
Google have proven a great testing ground for
consumers think of it — is less difficult than
what kinds of ads elicit response. But this new
it used to be. Social monitoring tools provide
model isn’t just about paid search. In contrast
a clear sense of how consumers perceive
to the high risk and slow approach to get to The
brands. And getting to the truth today is fast —
Big Idea, the creative side of the business needs
feedback from the marketplace is more rapid
to move quickly and show the agility of its
than ever.
technology counterparts.
But obviously, brands have to be listening
Small thinking isn’t emphasizing tactics over
to know what their brand truth is. As an
strategy and “seeing what sticks.” We found
example, take the situation with two major
evolved marketing organizations instead deploying
beer brands, Razorfish client Coors Light
cross-functional teams made up of both behavioral
and Bud Light:
insight and technology specialists to generate ideas
born from observation and a sense of what’s Coors Light’s relentless pursuit of “cold”
possible. They use flat organizational structures positioning is reflected in all aspects of its
to allow and encourage ideas to surface, while marketing efforts. Packaging innovations
crowd-sourced platforms bring a steady stream support cold positioning and digital experiences
of ideas from consumers into the process. The like happy-hour locators, cold experimentation
new creativity looks more like a writer’s approach communities and detailed advice for keeping
to the constantly-evolving Lost, than the book- product cold allow the brand to constantly
ended sitcoms of the previous century.

launch new experiments into the marketplace. Similarly, energy drink stalwart Red Bull is
The effort increased sales volume. constantly refining its active sports network to
align its brand with the activities and people
In contrast, competitor Anheuser-Busch,
that drive volume and reduce its emphasis on
working closely with a consulting firm, poured
those that don’t. Having sponsored action
millions of dollars into a major, relatively static,
sports events and athletes for several years,
brand re-positioning of its flagship Bud Light
Red Bull makes it easy for fans to follow the
brand around “drinkability.” The Big Idea,
Twitter feeds of snowboarder Shaun White,
which was scrapped as of this year’s Super
NASCAR driver Brian Vickers and countless
Bowl, is held by some as responsible for its
others to maximize brand ambassadorship.
first-ever decline in shipments during 2009.
New, lesser-known events and efforts
2 Who will tell the others? Identifying the like the Stratos mission to the edge of space
brand ambassadors or brand network. are integrated constantly to create an
Marketers have long touted the importance addictive quality to the brand’s Web site
of trendsetters, influencers and influentials and social presence.
in spreading brand ideas. But the method of
3 What should we make? Connecting the
identifying and reaching the right individual has
right experiences to the right platforms.
been the domain of black-box approaches
As consumers adopt new platforms and
espoused by trend hunting consultants
devices, it’s all too easy for creatives to
and hipsters. Today, the rapid emergence of
quickly jump to a checklist approach to using
multiple social platforms and behaviors make
them: iPhone app (check!), Twitter distribution
any effort incomplete, unless it defines a core
(check!), YouTube channel (check!). However,
influencer or network.
Razorfish has found the most successful
Ashton Kutcher’s 4.6 million Twitter followers efforts are closely tied to the brand truth and
may be dismissed as nothing more than celebrity desired set of influencers.
worship or self-promotion. But his social media
Starbucks has leveraged the passion of its
production company, Katalyst, provides a critical
consumers and used CRM to dramatically
value to willing brands: the teaming of brand
turn around loyalty and same store sales
with appropriate individual and voice. The Web
through its crowdsourcing mystarbucksidea.
show, KatalystHQ, which follows a day in the
com. The site came from the insight that
life of Katalyst headquarters and is sponsored
many customers have opinions about what the
by Nestle’s HOT POCKETS, has been a viral
company should do next, born from their
hit. Kutcher not only leveraged his own followers,
emotional connection with their local Starbucks.
but incorporated other social channels, such
as Facebook. It has been distributed 62 times
per viewer.

THE POWER OF SMALL THINKING 71

JetBlue’s effective use of its Twitter channels who are actively engaged in ideation and
has gained it more than 1.6 million followers refinement. On-trend brands like Adidas, Coke
interested in bargain travel. Rather than and Mercedes-Benz are constantly deploying
coming up with a big-ticket ad campaign to new ideas into Passenger panels to build the
promote last year’s “All You Can Jet” program, insights into both product refinements and
which allowed purchasers to travel as much as new marketing experiments.
they wanted in September, it went straight to
5 Where will the story go next?
Twitter. The program sold out within days. That
Guiding the narrative.
doesn’t mean that every brand needs a Twitter
Once the truth, ambassador and experience
account, but that it’s important to find the
has launched, we have found evolved
platform that fits with the brand’s customers
marketers in a mode of narrative guidance
and what it’s trying to do.
steering consumers forward down the path
4 What is the market telling us? to using their brand. This is in stark contrast
Deploying and adapting. to the “wait for the brand tracking” mindset of
While concept testing has long been used by marketers past, and it’s being employed by
disciplined brand marketers, multiple plat- marketers big and small.
forms and methods have emerged as fertile
Kogi, a Korean BBQ truck in Los Angeles tips
in-market testing grounds for creative leverage.
off its 55,000 Twitter followers each day to
Research/marketing hybrid Passenger has locations, menu changes and special events.
effectively combined the consumer panels Taco Bell responded with a similar effort on
constructed by online research firms with a larger scale. And Virgin America leverages
product designers and account planners who a core group of influencers and media-like
offer creativity support and projective techniques, partnerships to constantly create a story of
which help respondents express their feelings category re-invention.
about something in a more compelling way.
The result is a panel made up of brand advocates

Summing it up
Both agency partners and marketers
agree that creativity still matters. But in
order to keep up with the new demands
of the marketplace, and therefore of the
evolved marketing organization, it will
need to evolve from an over-reliance on
The Big Idea to a more agile definition
of creativity that constantly adapts to
the marketplace. At the same time, it
must get rid of such hoary institutions
as individual creative rock stars, and an
over-reliance on annual planning and
development cycles.
Today, moving fast requires small
thinking — cross-functional teams that
use behavioral insights to quickly identify
a brand truth, find the appropriate brand
ambassadors and platforms, deploy
and iterate new ideas and guide a brand
narrative onward.

photography PAUL KARLIK CHICAGO
73


Becoming
More Agile:
Iterating for
Innovation
By Ray Velez, Chief Technology Officer
& John Ewen, Program Director

Marketers and product managers That’s why Razorfish has been increasingly
employing Agile practices to deliver digital exper-
no longer need to swing for the
iences, Anyone who cares about building an
fences to create a great customer experience that resonates with consumers needs
experience — gone is the era when to embrace the Agile way.
every step in a campaign or product So, what is it? Unlike old-world “waterfall” design
launch had one shot at success, approaches in which technologists and designers
and when, once The Big Idea was work in isolation and hand off finished ideas to each
other — an Agile approach allows technologists
live, you had to wait, sometimes for
and designers to work together in small teams to
months, before you learned, if you develop digital experiences that are constantly
learned at all, how effective it was revised based on continual customer feedback.
going to be. Agile is a process of testing and testing again;
where ideas are rolled out, tweaked and reintro-
Not anymore. In the digital world, marketers don’t duced to the marketplace. Users benefit because
have to wait, and shouldn’t — there’s just too much their input has been embedded into the design —
pressure to develop innovative experiences quickly and of course the brand benefits by providing
before a more nimble competitor (or consumer) an experience their customers really want.
beats you to the punch. Using traditional appro-
aches often means designing complex features
that, by the time they reach the market, are either “If you’re not somewhat
too late or ignored. As the Standish Group posits,
if your customers only use 36 percent of what you embarrassed by your 1.0
build, the risk is too great to waste time building product launch, then you’ve
the other 64 percent.
released too late.”
– Reid Hoffman, founder of LinkedIn

BECOMING MORE AGILE 75

Changing the game plan
Definitely a scary thought, but it’s not just about conceived of won’t be needed — and the ideas
moving quickly, it’s about accepting the fact that for many new features that were never thought
implementing a perfect, fully-formed strategy is not of will be discovered.
more important than listening to your customers.
How Web site X is designed is as important
In fact, a strategy can’t be perfect until it contains
as how it is built. Designing a complete solution
customer input.
and handing it over to a development team won’t
The best way to hear about what customers want ensure that you can release it any sooner. It must
is to give them something to use. Release the be designed in such a way that it can be built and re-
smallest possible pieces of your strategy, and then leased in small pieces. This means designing many
tap into the many forms of consumer feedback increasingly complex final states instead of just one.
that are available. Web analytics data is obviously
one, but you also need to use social feedback, Checking the box score:
direct feedback from message boards, comments, The Razorfish Iterative Index™
emails and so forth. Think about successful digital
We’ve seen the implementation of Agile method-
properties — they are constantly evolving and
ologies run the gamut from highly-effective ways
that means setting up your strategy so that it can
of enabling incremental product improvements
evolve too. Ruthlessly cutting out anything but the
to a mere set of tactics used to organize team
highest priority features is the only way to learn
activities. There is certainly value to be found
and meet your customers’ needs.
across the spectrum, but how do you know if
Show me the sign your process is truly driving the kind of innovation
we’re describing? There are some keys to look for
To better explain the Agile process, let’s use an to help determine how your initiative scores.
example. Web site X thinks it is going to change
the game in its category. Its list of features clearly The Razorfish Iterative Index outlines the benefits
differentiates it from everything else on the market. and characteristics of these various points within
Or so its creators hope. But, how do they find out? that spectrum and puts them on a scale. It starts
First, they get something in front of customers as with the product backlog and how it is used. A
early as possible, so they can start playing with it. product backlog is simply a list of features,
There are ramifications in such a customer-centric enhancements or improvements that are prioritized
approach. First, it means that not all of the features based on what their perceived value is to the
on the list can be completed for the first release; experience. As feedback from users is gathered,
second, not everything envisioned for Web site X this prioritization will change rapidly, and often
will make the cut; third, this means that it will be dramatically. The easier it is for your process to
built in iterations instead of a single, drawn out address this scoping and de-scoping of functionality,
phase. The benefit? Many of the features originally the faster you can respond to the feedback.

The second factor in determining how effectively
you’re implementing Agile methodologies, is the
availability and commitment of the individual The combination of these factors
responsible for the overall project. His or her role on
can help place an initiative on the
an Agile project is to represent all the constituencies
involved with it, and, on their behalf, make critically
following scale:
important adjustments to the priority of each item in
the product backlog. Therefore, he or she needs Level 1
to be available to provide consistent direction and Scope Rigidly Defined at Onset. Agile tactics maybe
be authorized to make key decisions. used for daily communication and continuous
improvement, but not for managing change. Often,
The final factor is how closely a team adheres to the design must precede all development to meet
restrictive deliverable schedules.
Agile methodology being used. Innovation within
rapidly changing digital experiences requires the
Level 2
input and commitment of the entire team. The Upfront, Yet Flexible, Product Parameters. Scope is
team must be empowered to assign themselves committed to, but with the expectation it will change
responsibilities they feel qualified to take on, to over time as high-priority items supplant lower ones.
However, design may be too far removed from the
estimate how long each task will take and, development process and not able to respond quickly
ultimately, to determine how much can be enough to feedback for upcoming releases.
accomplished within each iteration. see figure 11.01
Level 3
The intent of the Razorfish Iterative Index is to Backlog Defines Scope. Scope is strictly based on team
help evaluate where teams are encouraging speed and time. Functionality that is not considered
essential is excluded. Increasing priority of one backlog
innovation with their process and where they can item is able to lower priority of another. Design may not
improve. Moving up the index decreases time be modified for every iteration.
to market and increases the likelihood that your
customers’ needs will be met. Level 4
Backlog Defines Evolution of the Experience. Design
If you’re a marketer used to implementing big completed incrementally from simplest functional
form to more complex to ensure that only areas of high
ideas, switching to an Agile process will mean
value are included. Scope is defined by the product
re-thinking long-held practices. However, today’s backlog and the methodology is broadly understood
empowered consumers give feedback whether and adhered to.
it’s been solicited or not. Using an Agile process
assures them not only that you’re listening figure 11.01

to their concerns, but that you’re committed
to taking action.

BECOMING MORE AGILE 77

photography GREG CARLEY AUSTIN

It’s Time for
Everyday Innovation
With Consumers Rapidly Adopting Emerging Platforms
Marketers Need to Build Them Into the Planning Process.
By Jeremy Lockhorn, VP Emerging Media
& Paul Gelb, Manager, Emerging Media

Too often, marketers take a schizo- In our view, emerging channels are so important
that CMOs must treat them as a strategic part of
phrenic approach to emerging media
their marketing mix — even possibly the core of
like digital out-of-home or mobility: their marketing plan — on an everyday basis,
On the one hand, dismissing the regardless of what metrics like reach or total line
“emerging stuff” until they see it spend indicate. Industry leaders like Mercedes-Benz
and Microsoft, discussed here, demonstrate three
achieve a scale measured by reach
principles of making emerging media rewarding.
or aggregate ad spend and, on the
In last year’s Digital Outlook Report, we discussed
other hand, treating emerging media
how digital media had outgrown the PC, amping
like an experimental toy — fun to up the magnitude and pace of change in the media
play with in one’s spare time but not ecosystem. A year later, the pace of change in
taken seriously. the ecosystem refuses to slow. The global mobile
phone subscriber base has reached 4.6 billion. By
comparison, the worldwide market owns a mere
800 million cars, 1.1 billion PCs and 1.5 billion TV
sets. Already, there are nearly 84 million American
mobile Web users who spend, on average, 2.7
hours per day using the mobile Internet.

IT’S TIME FOR EVERYDAY INNOVATION 79

Do small dollars equal Incorporating emerging
missed opportunities? media into the plan
As the usage of new platforms by consumers Whether leveraging mobile, digital out-of-home or
explodes, it’s easy to see why old metrics to broadband video, some Razorfish clients are dem-
evaluate them lead marketers astray. Tools such onstrating how strategically important andeffective
as financial analysis underestimate their actual it can be to make emerging media a core part of
importance. According to Kantar Media, U.S. ad the planning process, instead of merely being
spending was more than $125 billion in 2009. an add-on.
With only $3.8 billion spent on mobile ads, per JP
Morgan, and a mere $1.6 billion spent on online
video, per Piper Jaffray & Co., it’s not hard to ask: Brand: Mercedes-Benz
And you’re saying these platforms should be
central to the planning process? Program: Exclusive sponsorship of Motor Trend’s
iPhone app
But looking at those sorts of numbers misses the
point. We’re not talking about a line item on a Mercedes-Benz was the only advertising presence
budget here. We’re talking about dramatic shifts on the app for the first six months after its February
in consumer media consumption, which requires launch, and included both a full welcome ad as it
a significant shift in planning, strategies and loaded and a fixed homepage logo that allowed
objectives. Obviously, even if the mobile Web users to find a dealer. The app gave the brand
doesn’t command the money that the PC-bound 100 percent share-of-voice and a full interactive
Web does, those 2.7 hours a day Americans are experience during key flight dates.
spending with it should be significant to marketers. Assessment of program’s value: At one point,
And that’s just one example. Consumers have the Motor Trend iPhone app surpassed The New
leapt well past the tipping point in terms of adop- York Times as the #1 free news app. Because of
tion of new platforms, but marketers have not. its popularity, Mercedes-Benz got access to a
True, some marketers are already shifting huge large segment of its target audience. The sponsorship
portions of their budgets (e.g., Pepsi bowing out also had two other major benefits: It allowed users
of the Super Bowl in favor of its social program, to access content wherever they were in a device-
“Refresh Everything”). However, that’s more the friendly format, and gave them the ability to
exception than the rule. The point is this — whether juxtapose the brand against respected third-party
or not large buckets of dollars are getting reallocated, content. Reviews and ratings have a significant
new digital touchpoints demand to be an everyday impact on auto purchase decisions, and Motor
consideration in the minds of CMOs. Trend news and reviews on the app were enhanced
with a vast library of videos and photos that
interactively demonstrated the value proposition of
Mercedes-Benz cars.

Brand: Microsoft Windows Phone 7 Series Assessment of program’s value: Because of
continued media fragmentation and the explosion
Program: Digital out-of-home touch
of online video consumption, it’s crucial for big
screen experience
TV spenders to understand the role broadband
This large-format touch screen application emulated video can play in reaching target audiences. The
the user interface of Microsoft’s new smartphone analysis showed that shifting roughly 10 percent
OS during the 2010 Mobile World Congress. of budget from TV to an online-video-heavy plan
(supplemented by broad reach non-video ad
Assessment of program’s value: The touch units) for a single month could nearly double
screen experience attracted enormous crowds combined reach at the desired frequency level.
and became the focal point of Microsoft’s launch Though quarterly analysis showed a less dramatic
event at the Mobile World Congress, allowing the shift, reallocating dollars still led to increased
product to be demonstrated and tested in front aggregated reach.
of a large, influential audience of bloggers, press
and conference attendees. The experience also
spread virally, as audience members not only lined
up to play with the product simulation first-hand,
Three Necessary Steps for Analyzing
but also videotaped other users’ interactions with and Using Emerging Media
it, posting those video clips to social networks. What has enabled these marketers to have the
But the program’s value went beyond buzz; every confidence to capitalize on new platforms? There
user interaction was measured and analyzed to are three common elements:
improve the experience and the actual smart-
phone product. The touch screen application 1 Rethinking funding and staffing. Some
also can be leveraged at future promotional clients have set aside a certain percentage of
events and in retail stores. their budgets for experimentation or innovation.
Others have made emerging media a part of
agency retainer, tasking the agency with actively
Brand: Undisclosed portfolio of CPG brands pushing these kinds of programs. Some clients
are also looking at their internal structures,
Program: Reach and frequency analysis appointing in-house specialists who are charged
with collaborating with agencies and serving
A detailed analysis (conducted in partnership with
as the internal champions of innovative programs.
an offline agency) of reach and frequency in TV
These approaches are starting to remove the
and online video was compared with the money
fear of the new and are setting the expectation
spent to achieve reach and frequency goals. The
at both the marketer and the agency that
analysis also included aggregated totals at various
innovation is a not an option, but a requirement.
budget levels.

IT’S TIME FOR EVERYDAY INNOVATION 81

2 Never forgetting the consumer. It can be such as CES, SXSW Interactive, Digital Signage
easy to lose sight of your consumer while Expo, Digital Hollywood, Web 2.0 and ad:tech.
chasing new platforms and shiny objects. We While you can grok the trends by reading
find the key to success is really understanding industry trades and blogs, you often need to
consumer behavior within these new channels be there to witness key trends and meet those
and identifying gaps in how to reach them. behind them face-to-face. We’re also heavily
The question savvy clients are asking is: How involved in trade organizations like the American
can my brand deliver value within the new Association of Advertising Agencies,
media channels my consumer is using? the Digital Screen Media Association, the Mobile
Marketing Association and the Digital Place-
3 Developing ways to uncover the right
based Advertising Association. These organiza-
opportunities. This may be the hardest part,
tions help us build connections and separate
but just like the other steps, it’s a place where
the wheat from the chaff. Lastly, we’ve built strong
agencies play a crucial role in guiding their
bridges to the venture capital community, which
clients. There is no shortage of shiny objects.
help us not only identify useful opportunities but
Finding the right ones for a brand’s objectives
also help us gain connections and improve our
can be a challenge, but there are systematic
trendspotting abilities.
ways to do it. We look to a group of partners,
who we connect with at key conferences

photography TIM PETHEL ATLANTA, RONALD NG HONG KONG, DAN COE PHILADELPHIA

It’s not about the money,
but the power in emerging media
Those examples of effective emerging Clients will need these tools before
media are just the tip of the iceberg, they know it. If 2009 was the year
but they clearly demonstrate the of experimentation, 2010 will be the
strategic power and importance of year of strategic integration and
incorporating emerging channels into effective execution. Since emerging
the planning process and the market- media programs, however small
ing mix. Marketers should re-examine their budgets, are continuing to
how they go about planning by ensuring generate unmatched ROI, 2011
the correct amount of funding and will be the year clients who are
staffing exists, that they continue to committed to staying a step ahead
focus on consumer behavior and that will significantly reallocate budget.
they have mechanisms in place to The marketers who succeed will
discover and assess new opportunities. be those that make innovation an
everyday consideration.

83

photography FRED WELTERLIN LOS ANGELES

Retail Therapy
A Guide for Building Shopping Experiences
Around Today’s Consumer
By Jory Edmunds, Associate Director, Account Planning

13

It’s Always a Shame to Start Out mall? When shoppers are more selective in their
spending, why wouldn’t you want to capture the
With Such a Negative Statement,
spend that still exists?
But Let’s Tell It Like It Is:
We need to get consumers excited about shopping
Retail Kinda Sucks
again. They don’t just want places to buy products;
Not just because of the anemic economy, but they want accessible ways to escape their standard
because it hasn’t changed with the times. lives for a moment, tap into something emotional,
Consumers are more empowered — they have feel like a better version of themselves or test
more tools than ever before to build, create and out a new life entirely. This is a sharp contrast to
share — and the toolbox grows by the day. Now the fact that some, if not many, stores haven’t
anyone can have a voice, like Tavi Gevinson, the changed in years. Why is it OK to envelop the
13-year-old blogger who sits alongside Anna customer in an experience that’s 20 years old,
Wintour at fashion shows. And yet, despite these when it would be unthinkable to sell leftover products
great advancements in consumer empowerment from the 80s? If the product and experience
(and therefore data about what consumers really — from the store, to the Web site and all the
think), retail has been slow to respond. Sure, you other little bits in between — create the overall
can mix-and-match your outfit online, send it to a impression, we should stop separating the pieces
friend and declare your brand love on Facebook. so easily. We should make it possible for consumers
But for all the talk about two-way conversations to experience the brand at every touchpoint.
between brand and consumer, the retail experience
is largely unchanged from the 90s, or 80s, or let’s
be honest, the 70s.
“If we went into stores only when
we needed to buy something, and
Oh, and when the not-so-insignificant recession
reared its ugly head and made consumers retrench, if once there we bought only what

3
the malls and stores, rather than taking a step back we needed, the economy would
and realizing how much the retailing experience
sucked, stuck their heads in the sand. What collapse, boom.”
better time to reinvent than a time when shoppers
are feeling skittish and need a new call to the – Paco Underhill

RETAIL THERAPY 85

In addition to getting stale, many old standby merchandise to local tastes. Initial results point to
retailers have become boring and unfocused increased sales in Chicago, a city that held quite a
(GAP: Your sales figures don’t lie). Malls and stores grudge after the conversion of Marshall Field’s to
largely look the same, despite vast geographic the red-star empire.
and demographic differences in tastes, local appeal
and so forth. In the digital age, there are huge, and Retail needs to get back to its roots and consider
largely untapped, ways for retailers to leverage a consumer-centric approach to why people buy.
this diversity within vast amounts of customer It boils down to three key components:
data; data that can take the guesswork out of 1 Inspiration: Feeling like you’re buying more
who your customer is, what she’s interested in than just more “stuff” — you’re buying into a
and what she likes and dislikes. If a restaurant cause, a mindset, a different way to live.
sees consistently-negative feedback on Yelp. Every inch of the L.L. Bean flagship store in
com, they’ll probably reconsider their menu. Freeport, Maine helps you discover gear you
Retailers should be doing the same, because never realized you needed, live greener and
these connected consumers aren’t exactly shy feel tapped into the L.L. Bean lifestyle.
about voicing their opinions. Macy’s, a brand
that nearly hit rock bottom in the recession, 2 Validation: Feeling confident in what you’re
recognized this and smartly introduced the “My buying; this comes from both the store helping
Macy’s” program, which allows regions to tailor you feel smart, and peers helping you make
the right decision. LittleMissMatched lets
tweens play with colorful combinations of
socks, accessories, bedding and more. Social
shopping is encouraged, and customers are
actually invited to play both visual and product
designer. The store empowers customers to
create their own window displays, while “Project
Sock” lets budding artists create new sock
patterns for the 2010 collection.

photography MICHAEL MABALE SEATTLE
& GABE JOYNT SAN FRANCISCO

3 Exhilaration: Feeling a sense of escape or
transformation. On the affordable end, Hollister
gives customers a live, three-story video view
of the California surf in the New York City
flagship store. On the high-end, Harvey Nichols
department store in Jakarta reinterprets local
elements, like a taxicab turned into a feature
wall, to create a wildly artistic representation
of escapist luxury.

Of course, these are just starting points. But tackle
even one, and way to go! You’re back on the road
to recovery. In the era of wanting customers to
Facebook, tweet and blog about brands, fresh-
and-new trumps tired and hum-drum.

So retail, listen up. Your days of hiding in that
comfortable, well-worn box are numbered. You
have to stop thinking, “We can’t,” and start thinking
“Let’s try.” If you want your customer to invest in
you, you have to invest in yourself first. As the wise
diva RuPaul says on her TV show RuPaul’s Drag
Race: “If you can’t love yourself, how the hell you
gonna love someone else?”

This is taking shape right now in a handful of
key trends. Check out the Razorfish retail blog
shoptalk.razorfish.com to check out more trends
and see who’s helping to make retail a little bit
more awesome — and not suck.

87

photography FRED WELTERLIN LOS ANGELES

The
Fragmented
Consumer
Creating Sustained
Engagement Amidst
the Chaos
By Teresa Caro, Director CRM Solutions
& John Zell, VP Technology CRM Solutions

Today’s consumers are elusive: They Start “defragging” your consumer
are everywhere across the online and To obtain a defragmented, united view of your
offline worlds — on blogs, in immer- consumers and to create a sustained engagement,
sive games, on YouTube, in stores, use these three primary components: see figure 14.01

on mobile devices and on the Web. 1 Integration Platform:
Ensure your consumer data is healthy.
This fragmentation makes it more challenging
Identifying new sources of data and mixes of
than ever for marketers to get a solid view of the
experiences is putting pressure on businesses
consumers they care about and give them what
to look deeper at all touchpoints. Without a
they need. When marketers do not have data that
solid platform for integrating data, it will be
is fresh and complete enough to connect with
impossible to accommodate new data sources
consumers, the consumers simply disengage with
— especially unstructured social data sources.
the brand. Many customer databases today are
Start by tracking down all the data points,
as much as 50 percent inactive or dormant, which
identifying all the flows (how data is driven
just underlines the seriousness of the challenge to
into and out of the system) and getting these
integrate more sources, more meaningfully, and in
to a state in which you can see a single
real time.
consumer view and complete and relevant
The marketers who really understand consumer data through an integration platform. Maintain
behavior have a clear advantage over those it with metrics and a dashboard to quickly
operating with half-guesses. But, understanding the identify what data you can leverage. Include
fragmented consumer will require a fundamental data points such as:
shift in how marketers do business in 2010. The
2 Business Intelligence:
good news is it presents a stellar opportunity to
Create the ability to look forward.
outwit competitors. We believe the answer lies in
Unfortunately, reporting and analytics only
using business intelligence, uniting data across
allow you to look back — they do not give
systems and using cross-channel campaign
you the flexibility to react in real time, thus
management (as defined by Forrester Research1)
fragmenting the value exchange between you
to track consumer behavior.
and your consumer. Therefore, you need to
work cross-department to build a clear view
of the consumer, make a consumer experience
1
Suresh Vittal, Forrester, The Forrester Wave™:
map and apply predictive business intelligence
Cross-Channel Campaign Management, Q4 2009, December 14, 2009 to create sustained engagements with customers.

THE FRAGMENTED CONSUMER 89

If you are prepared, have a solid data policy 3 Cross-Channel Campaign Management:
(which defines how data is gathered, cleaned, Enable real-time communication.
shared, and maintained), and have a progressive If the last decade was about ensuring consumers
view of business intelligence, your programs not have a consistent experience in the online
only will deliver on your promise, but will deliver and offline channels, then 2010 ushers in new
what consumers expect as well. As Henry challenges due to the Splinternet. First defined
Harteveldt said at Forrester’s Consumer Forum, by Forrester, the Splinternet reflects people’s
“Consumers are focused on their needs, not on new media and shopping behavior — behavior
your channels.2” that has shifted from the desktop and laptop
to a transient world that is mobile and much
• The number and sources of data assets
more fluid. For marketers, the chaos of the
used to unify customer data, month-
Splinternet means you have less control over
over-month
the transactional experience, as your consumers
• Data completeness, accuracy, validity have even higher expectations for consistency
and relevance to marketing needs and real-time communication throughout
every channel. That spreadsheet your team
• Business value and the cost to replace has been using to keep track of campaigns
existing systems and results is no longer going to work. When
you assess the time and money it takes to get
This may be even harder than it looks. With
a single campaign out the door, and then look
increased sources of data come the need to make
at the opportunity cost of running fewer and
sense of them. This is a huge issue, since as much
less-targeted campaigns, it’s easy to make
as 80 percent of enterprise data is unstructured,
the case for an automation platform. Automation
and customer data found externally on the Web —
can reduce the burn of resources while increasing
in blogs and elsewhere — is virtually 100 percent
the number of campaigns and delivering
unstructured. Somehow, you need to make sense
more relevant messaging. Your team will be
of this deluge and figure out how to align it with
more agile in an ever-changing environment
CRM data. 2010 will force you to be smarter about
and deliver the real-time communication and
how you leverage and react to new social behav-
relevancy your consumers want.
iors, how you listen to your consumers, and how
you build these brand engagement expectations.
2
Henry Harteveldt, Forrester Research’s Annual Consumer Forum
– Chicago, October 27, 2009

The Fragmented Consumer

Points of Entry 1 Defragged 2 Segmented 3 Sustained
Consumer Consumer Engagement Points

Cross-Channel Campaign Management
Financial Data
Email/ Direct Mail

Business Intelligence
Warranty Cards

Integration Platform
Customer Care Web site
Loyalty
Digital Media
Marketing Research
Sales Support Contact Center Scripts
Behavorial Data
UGC

figure 14.01

Organize for the future
The marketing organization of the long-term value. Take a progressive
future will certainly feature cross- view of business intelligence today,
channel campaign management to and you can leverage what’s coming
include media, search, Web, affiliates, tomorrow, such as text analytics
partners, email, customer service applications now in development
and social. Yet marketing automation to model, structure and enable the
tools are simply enablers. Without a analysis of unstructured data. Take
solid data supply chain and action the necessary steps to create building
framework to defragment your view of blocks today for sustained engagement
the consumer, your business will fail to with your consumers tomorrow, when
maximize consumer experiences and the chaos will only deepen.

THE FRAGMENTED CONSUMER 91

photography GABE JOYNT SAN FRANCISCO

Search Everywhere:
The Outlook for Search
By Joshua Palau, VP, Search Engine Marketing
15

5 Four years ago, Razorfish introduced a rallying cry of sorts. We talked to
marketers about the concept that “search is search.” Since the majority of
the population does not distinguish between paid and organic search listings,
marketers should not manage them separately and instead should develop
integrated search strategies.

When we first brought this concept to clients, it
was a different world. Universal search and social
media did not have the same groundswell they
Though things were gloomy, a silver lining emerged
that made us look forward to search marketing
in 2010 with hope. We believe that 2010 is the
currently do. So, nailing down a uniform strategy year where “search is search” evolves into
should have been easy! “search everywhere.” Successful marketers will
stop managing search tactics and, instead, adopt
The theory seemed so logical that it did not sound
the mindset that search impacts every marketing
at all revolutionary. What we found out, however,
tactic. Search isn’t a standalone tactic. Search is
was that very few marketers thought about (much
a verb that touches everything. It is part of the
less executed) their search engine marketing strat-
balanced ecosystem that is the marketing mix.
egy in a unified manner. Search was viewed as
very tactical and pushed further away from C-level With major game-changers such as widespread
conversations. Still, search made tremendous smartphone adoption and real-time search results
strides despite this, performing with incredible occurring last year, search has stepped out of the
efficiency and success. engines and into our phones, social media and the
world at large. Search is no longer just a service;
As we predicted, 2009 was a challenging year for
it’s a user behavior. 2009 showed us that users will
search marketing. Several industries historically
dictate where they want to search and what they
linked to search marketing spend were scram-
expect to receive. Isolated marketing efforts will no
bling just to stay afloat. Marketers scaled back
longer cut it.
their spending but still needed results. And, search
was asked to do more with less.

SEARCH EVERYWHERE 93

We can’t talk about 2010 without looking back at the Consumers interested in a movie such as “Avatar”
major story of 2009, the economic downturn. Initially, do not want to be confined to information on the
marketers reacted by focusing on high performing branded Web site. They want to read reviews on
tactics and scaling back the “waste.” This increased Twitter. They want to find the closest 3D IMAX on
the focus on search and, as always, provided flexibil- their mobile devices. They want to watch multiple
ity and performance. Search was required to do more trailers, and they want to connect with other fans.
with less — and not just less budget.
Even though we text the person sitting right next
But search budgets were cut, which required to us, it shouldn’t be mistaken that we don’t want
more scrutiny on every keyword. Even with this to talk to one another. It’s that we want to connect
focus, many search campaigns did not maintain and communicate in a different way. And search is a
their previous performance. Marketers learned the gateway to that. Consumers search for everything —
painful lesson that search cannot succeed on an and not just on search engines. They expect to find
island. Search needs digital and offline in order to you whenever they search, wherever they are on the
drive demand. Once these tactics were pulled out Web on whatever device they are using.
of the market, search performance suffered. The
There are few better examples of meeting consumer
economy served as search’s tipping point.
demand than the world of online shoe sales.
Meeting digital Since the dawn of the Internet, buying shoes online
consumer expectations has always been possible. Every major brand, off-
Consumer demand for information was unaffected line retailer — and aggregate reseller, has provided
by the economy, as was their adoption of digital consumers with ways to buy shoes online. However,
experiences. Consumers are no longer satisfied Zappos — a brand born online — has beaten them
with a 30-second spot and a tagline with a Web all. With Amazon’s purchase of Zappos, one can
address. They want customized, immersive experi- argue that while neither paid nor organic search will
ences that can be found in multiple places and make or break this business, a holistically search-
formats, and this will take greater shape in 2010. friendly operation can dominate a market.

“Search is search” started as managing paid and When Amazon, the Gap and others all essentially
organic search together. It morphed into search fail to sell shoes online, something’s up. Searchers
infiltrating all of your digital channels. It now de- expect sites will be useful, innovative, easy to use
mands that everything has a search component and relevant — even more so with mobile search.
because it’s what consumers expect. Zappos not only gets this but also finds additional
ways to reach people when they may not think
they’re searching.

Consumers expect that when they search, regard- strategy gaps. And search can serve as a wide-
less of where they are, they will find you. And if they reaching, cost-efficient, responsive medium for
don’t, it doesn’t matter who you are; they won’t research in several ways.
buy from you. You cannot have a mobile, social,
Zappos demonstrates the benefits of making the
local or video strategy without including search.
entire customer experience as quick and intuitive
Driving marketing as search. It created this experience by making
strategy with search search the locomotive and their inventory, site
content and shipping strategies the train. In the
With consumers pushing the demand of “search retail space, we may see more retailers attempt to
everywhere,” it will be critical for marketers to work with demand as it exists in real-time.
develop search-focused strategies that go beyond
the Web site. Marketing is usually understood as This doesn’t affect retail alone; real-time demand
capturing demand through media — which is a has ramifications in all industries. In healthcare, we’ll
targeting challenge. continue to see experiences that fuel Americans’
sense that better access to information improves
In search, the perfect target is at least 85 percent our ability to take care of ourselves. Travel and
of relevant clicks. There is also less ambiguity hospitality companies will build experiences that
around properties with which to work. For market- cater to the desire to find the cheapest alternative
ers, meeting this demand is difficult because it’s to stoke our appetites for adventure and discovery.
not demand as you shape it but demand as it really In banking, we’ll see more money management
is. You can’t force people to search for services in tools such as Bundle that combine search and
which they have no interest. Beyond conversions, social to provide guidance from trusted sources.
marketers must learn from customers and serve
them what they really want, where they actually are. Successful marketers will understand that in a
world of “search everywhere,” they need to use
We discussed creating search-focused content in search for more than just demand collection.
our 2009 Digital Outlook Report but did not observe Instead, they must integrate search data into all
enough marketers take proper advantage of it. channels. This will create the kinds of improvements
and experiences that, in turn, build brands. Orga-
For years, we operated under the belief that it’s
nizationally, CMOs will push their marketing leads
fully within the domain of marketers to make strat-
to align all channels, ensuring planning is not done
egy recommendations rooted in search data. By
in a vacuum. Consumers won’t care about your in-
combining search behavior with on-site behavioral
ternal structure or who reports to whom. But they
data, one can discover Web site problems and
will care when your competitor provides a video
that you do not, costing you a visit.


1 Creative testing 3 Audience targeting
Use search to identify top performing messaging Providing detailed surveys of brand searchers
concepts through ad copy testing and determine will help to define (or redefine) your user target,
what can then be carried into other tactics. In seasonality, campaign parameters and op-
the travel space, testing will help identify user portunities for local testing. This learning can
motivations. Search can handle this in a swift be used to inform site changes, including where
timeframe. From a media perspective, you can your assets live. Several clients in the health
segment the sites within your media plans and space discovered that while they focused on
creative to a specific target. From an email per- patient education, caregivers were frequent
spective, you can re-engage with your database visitors. Content, or even new site development,
around new experiences. may be needed to fully serve this audience.
Surveys can also illustrate how people would
2 Social monitoring
like to interact with your brand. If your audience
and content development
desires video and social content, it indicates
Search query reports can be used for more
that your video and social strategies need to
than just identifying content gaps. They can
have a search focus as well.
also be used to see how people are consuming
their information and what social sites they 4 Data focus
frequent. Marketers have the opportunity Marketers must learn to measure the value
to create tools around these findings. CPG of non-converting search traffic. Most traffic
companies will invest in quality content on the doesn’t convert, and a series of quantitative
scale of the Golden Age of television, only this and qualitative metrics are necessary to show
time, it will be interactive experiences they’ll value. Healthcare companies do a great job
sponsor. In 2010, knowing your customers with site-side surveys since most don’t sell
means knowing what they do and how they products online. A concerned friend who
do it, and that’s where search becomes vital. searches for “Alzheimer’s symptoms” may
All of this will inform the development of more not convert, but can be the link to getting their
social tools and content. Better content and friend to talk to a doctor. In the magazine world,
social usage will allow your brand to dominate we talk about pass-along rate even though we
the search listings for your brand, giving you don’t have the same metrics to follow up on
control over your brand experience. what that pass-along yielded. Marketers need
to value this audience and find ways to track
and message them appropriately.

Talking search with your CEO Microsoft introduced Bing, a “decision engine”
based on the premise that a high percentage of
The challenge for the CMO will not only be to create people that searched on Google were not satisfied
an integrated marketing organization but also present with its answers. Bing rolled out an interface orga-
this information in a compelling fashion to their C-level nized around taking a broad search and narrowing
team. This requires you to work with your partners it down. Additionally, it integrated non-text based
on developing metrics and scorecards that tie to assets (such as video and images) and was one of
revenue generation and/or customer acquisition. the first to integrate tweets.
This is a story that is simply not told as well as it Even with its flaws, Bing still represents the first
should be. Search data can be employed to inform real challenge to Google. And it forced a response.
site decisions that help increase conversion rate, traf- Over the past several months, Google has introduced
fic and visibility. However, those are simple stories. its Caffeine update, real-time search and a deeper
We expect that good marketers will go further, integration of universal assets. It’s also started as-
finding ways to tie in projected revenue in order to signing more link value to Twitter and Facebook links.
speak the language of their CEO. Instead of high- The partnership between Yahoo! and Bing will also
lighting how we will increase traffic for “cashmere force more innovation as the search landscape
sweater,” we must show demand, current traffic settles. The wave of acquisition and partnership ac-
and current rank. This is data that can be less tivity is the final validation that the “search is search”
than exciting, so more enticing metrics (such as mentality must now utilize all parts. Search is, well,
projected rank, additional traffic, conversion rate, everywhere.
monthly sales, transaction price and lifetime value)
should be included. This now motivates the CEO In 2010, we will see more partnerships similar to
to push his organization toward taking an inte- Google’s acquisition of AdMob and Teracent and
grated approach and spending appropriately. the Bing agreement with Wolfram Alpha. Both
engines have made improvements in the areas of
The engines will continue to innovate mobile and maps that will meet and reframe the
expectations of the consumer search experience.
Roughly three years ago, Google launched universal
We also believe there will be more targeting
search to expand users’ choices beyond 10 blue
opportunities available through search, as ad
links. Despite its intentions, adoption within the results
exchanges and cookie targeting further evolve.
was low, and rarely were more than one or two
non-text based results displayed. All of that changed,
however, over the course of the last six months.


User targeting and Both Google and the Bing/Yahoo! pairings see
cross-service data integration tremendous opportunity in developing more pro-
grams that integrate search with their tremendous
We believe very strongly in the principle of “search display volume. Our industry will be left to speculate
everywhere,” which dictates that marketers include on how they will execute against this while keeping
search in every aspect of their marketing strategies. the privacy police at bay. The engines have made
As marketers embrace and execute against this, a living out of figuring out how to tie the keyword
the next evolution will be to not only find these data they have to target user intent. The question
consumers, but more efficiently target them. for now will be how they draw in other forms of media.

Ad exchanges, search retargeting and user intent Based on their recent acquisitions, we can guess
targeting will take a greater hold in 2010. These that mobile advertising you receive in the future
tactics will be influenced by marketers’ needs to through AdMob will be influenced by the search
capture the instant gratification mindset of consumers data Google already has. This is also an area where
with an integrated approach. Bing has a shot to succeed thanks to its vast display
network. Both Microsoft and Yahoo!, however,
Marketers want to be more efficient and reach
need to break out of their past track records of
the right audience, even if it’s somewhat smaller
failed execution.
since the economic downturn. As we combine paid
search principles with cookie data, we will be able When search is everywhere,
to create much more complex programs.
search is everywhere
A hotel chain looking to segment business travelers
In 2010, search will become more than just a service;
from vacation seekers can employ search-focused
it will be viewed as a necessity. We are past the
strategies to cut down on waste. It will also be able
point where users think about searching. It is now a
to provide tailored messaging and tie together their
reflex, and it is an expected part of the user experi-
display and offline strategies with what it’s learned
ence — no matter where that experience may be.
in the search world. If more vacationers search for
Social, video, mobile, local and shopping are all
“pet-friendly hotels,” that data can influence many
tied to search.
components including the content sites to target,
the pages to create, the tone of offline materials, the The budget cuts of 2009 showed us that search
Twitter conversations to initiate, the questions to ask cannot succeed without other services, and the
on registration forms, etc. All of this data can now reverse has proven true as well.
be used to re-market and make your consumers
brand loyalists.

Search data can fuel and streamline
other marketing efforts. Search innovation
can and will bleed into new, unexpected
channels. And the search experience
will grow and alter user expectations.
We must now view and address
search everywhere.
“Search everywhere” illustrates our
belief that you can’t simply think that
you have a search problem. You have
a marketing problem that search can
help solve. It shows search for what
it is: a vibrant, vital component of, not
just marketing, but our daily lives.

99

Razorfish Locations

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Sydney +61 2 9380 9317
Seattle +1 206.816.8800
duke-interactive.com
dentsu-razorfish.com
@dukerazorfish
Osaka +81 6 6360 1461
London +44 (0) 20 7851 4141
Tokyo +81 3 5551 9885
Paris +33 (0) 1 53 44 19 00

For Additional Information: Media Inquiries:

Jeremy Lockhorn Katie Lamkin
VP, Emerging Media Public Relations
+1 206.816.8670 +1 312.696.5241
jeremy.lockhorn@razorfish.com katie.lamkin@razorfish.com
@newmediageek @ktlamkin

About Razorfish

Razorfish creates experiences that build businesses. As one of the largest interactive marketing
and technology companies in the world, Razorfish helps its clients build better brands by
delivering business results through customer experiences. Razorfish combines the best thought
leadership of the consulting world with the leading capabilities of the marketing services industry
to support our clients’ business needs, such as launching new products, repositioning a brand or
participating in the social world. With a demonstrated commitment to innovation, Razorfish con-
tinues to cultivate our expertise in Social Influence Marketing, emerging media, creative design,
analytics, technology and user experience. Razorfish has offices in markets across the United
States, and in Australia, China, France, Germany, Japan, Spain and the United Kingdom. Clients
include Carnival Cruise Lines, MillerCoors, Levi Strauss & Co., McDonald’s and Starwood Hotels.
With sister agencies Starcom MediaVest, ZenithOptimedia, Denuo and Digitas, Razorfish is part of
Publicis Groupe’s (Euronext Paris: FR0000130577) VivaKi, a global digital knowledge and resource
center. Visit www.razorfish.com for more information. Follow Razorfish on Twitter at @razorfish.

2010 Razorfish Outlook Report

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2010 Razorfish Outlook Report