Global online unit of OMD
May 9, 2006
OMD Digital
Recent OMD Recognition
• Named ADWEEK Magazine’s 2005 Global Media
Agency of the Year
• Named Advertising Age’s 2005 Media Agency of the
Year in the U.S.
• Named Campaign Magazine’s Global Media Agency
Network of the Year;
• Ranked #1 in the Gunn Report for most industry
awards
– Won more Cannes Lions and had more cases short-listed
than any of our competitors
• Ranked #1 by RECMA for largest worldwide billings
total
Complete Full Service Offering
Database Services: Portal
-Data Mining Consulting &
-Solutions Central Negotiations
(Extranet)
Convergence/
Multi-Platform:
Planning,
-Broadband/
Buying &
iTV/PVR
Optimization
-Wireless
Tracking/Analytics
Search
-All key metrics
Services:
customized to
-Paid Search
Email: client need
-SEO Video Game
-List Planning
Advertising
& Buying
-In game
-Blasting
-Web based
-Appending
-Promotional/
retail tie ins
THE NEXT GENERATION
Extraordinary Changes Over the Past Eight Months
October 12: Steve Jobs unveils the iPod Video and announces
that ABC shows, “Desperate Housewives”, “Lost”, and “Night
Stalker” would be available for download at $1.99 per episode.
November 7: NBC announces a deal with DirecTV.
DirecTV DVR owners will be able to view on demand
“Law & Order: SVU”, “Monk”, “Battlestar Galactica”
November 7: CBS announces that 4 shows “CSI”,
“The Amazing Race”, “Survivor”, and “NCIS” will
be available on Comcast On-Demand for $.99.
November 13: AOL announces In2tv, several
broadband channels of classic WB TV
programming available for free on AOL broadband.
Extraordinary Changes Over the Past Eight Months
November 23: Tivo announces upcoming
technology to allow programs recorded on Tivo be
downloaded on PSP and the video iPod
November 26: Tivo announces Ad Search product that will allow users to
select categories of ad interests/ companies from whom they want to see
short /form advertising from. (permission marketing)
December 1: Tivo
announces ability to purchase
tickets via Fandango and
listen to online radio via
Live 365.
January 6: Google announces Google video.
Users can purchase recent and classic CBS TV
shows as well as classic NBA games.
Extraordinary Changes Over the Past Eight Months
March 2006: 56 games of March Madness is streamed for free
on Web. Over 19MM streams and 1.3MM registered viewers.
March 17: NBC announces that they will film 10 new episodes
of The Office which can only be viewed on NBC.com.
March 29: E! stikes up a deal with You Tube to
promote programming the network‟s linear channel.
March 30: CBS announces that 4 shows “CSI”,
“The Amazing Race”, “Survivor”, and “NCIS” will
be available on Comcast On-Demand for $.99.
Extraordinary Changes Over the Past Eight Months
April 10: Disney-ABC announces that they are
going to make ABC and other channels available
anytime for free online. Advertising will be
embedded and cannot be skipped. Pods limited to
1 minute
April 21: Comcast announces launch of FEAR, an ON-
Demand and Broadband channel of classic Horror Movies
April 26: Microsoft purchases
Massive, a 3rd Party Ad Server
into Videogames.
Dell 2006 March Madness Program
CBS/Sportsline: Cross Media & Streaming
The NEXT Fund
• A database of Macro-Level Learning and Best Practices that go
beyond what they would get from individual tests
• On-Going Dialogue with a group of non-competitive advertisers to
understand the challenge of the evolving media marketplace
• A better understanding of the metrics of success in a Digital Media
world.
• P.R. that positions companies on the leading edge of media (optional)
• On-going proprietary research from OMD
Engaging with the Future
• RELEVANT
• Communicate in ways that makes sense to core consumer
– Understand their consumption behavior
• EDUCATE
• Provide true value to the consumer
– Customized benefits/tips
• ENGAGE
• Enhance the brand‟s cultural relevance, authenticity and
credibility
– Genuine connection through consumer involvement
• ENTERTAIN
• Generate buzz and infuse it with some fun
– Create or Grow “Brand Influencers” & “Brand Evangelists”
Projections for
2006 Media Spending???
Myers Group
6.1%
Merrill Lynch
5.3% TNS 5.4%
5.0%
S&P 5.0%
Radio spending, in billions
$30.00
$21.41 $21.45
$20.00
$10.00
$0.00
2004 2005
Source: Radio Advertising Bureau, 2006
Growth in
Newspapers???
2%
Business-to-business print ad spending
(in billions)
+5.4%
$15.00
+3.8%
$9.75 $10.13 $10.64
$10.00
$5.00
$0.00
2003 2004 2005
Source: American Business Media, 2006
Broadcast network television advertising
spending in the U.S. (in billions)
-0.3%
$30.00
$22.56 $22.50
$20.00
$10.00
$0.00
2004 2005
Source: TNS, 2006
70% of FURTHERMORE… that
advertisers said
P.S. 30 million
30 “reduce
DVRs and VOD will million HHs,
When DVRs enter in 2008
happens effectiveness
or destroy” the
60% of advertisers will cut
of :30 spots.
back on TV, and one quarter
P.P.S. --eMarketer, 2006
will slash spending by 25%
80% of (ANA) advertisers said they
would reallocate dollars by spending
more on Web advertising
Source: ANA and Forrester Research, March 2006 (n = 133)
Online Advertising spending, in billions
Growth = 24.7%
$30.0 $28.5
Growth = 30% $25.5
$21.9
$20.0 $18.6
$15.6
$12.5
$10.0
$9.6
And B2B online ad spending
is targeted to grow at about
$0.0
the same rate 2006 2007 2008
2004 2005 2009 2010
Source: eMarketer, 2006
US online ad spending growth in 2006
• BtoB*: 72% of marketing execs worldwide plan to
increase their spending online in 2006
• WebTrends**: 83% of marketers (B2B and B2C) will
increase their Web marketing spend
• Forrester: 49% of B2B marketers were using online
marketing in „05, and more will in 2006
Source: * BtoB Mag. Survey, Dec. 2005; **WebTrends 2006 CMO WebSmart Report (n = 250); Forrester Research, 2005
Online’s share of total media dollars will pass
5.0% this year!
12.0% 10.8%
10.0%
8.0%
6.0% 5.4%
4.5%
3.6%
4.0% 3.0%
2.0%
0.0%
2003 2004 2005 2006 2010
Source: eMarketer, March, 2006
The Internet audience is still under-monetized
The Internet accounts for 20% of time spent consuming media
Advertising dollars will continue to close the gap of dollars to
audience
Internet Watching movies
20% 15%
Shopping
5%
Watching TV
Playing games shows
5% 25%
Reading News,
sports,
entertainment, or
Listening to Music
weather
22%
8%
Source: Goldman Sachs Research estimates, Synovate.
% of marketers ranking the Internet as equal to or
better than traditional media for creating brand
awareness
40% of B2B marketers consider online
50%
39%
marketing to be very/extremely effective
for building a brand image
40%
30%
--Forrester Research/ABM, 2005
24%
58% consider the Internet to be the Most Important
20%
source of information on business, vs. 18% for
10%
newspapers and 11% for industry trade pubs
0% --Gartner Group
"As effective" "More effective"
Source: Forrester Research, May, 2005
Marketer’s opinions regarding the effectiveness
of media for providing measurable ROI
Direct Mail 66%
Internet 61%
Magazines 37%
Television 34%
Radio 26%
0% 10% 20% 30% 40% 50% 60% 70%
Source: Millward Brown,
Advertising.com, Sept, 2004
Take advantage of the
Broadband revolution!
Within the universe of 74.1 M
Internet households in 2006:
69% are on Broadband*
UP!
HEADSvideo each month**
59% view streaming
98% of at work Internet users
24% watch online video weekly***
are on broadband, and they
16% download a full-length movie or
TV show between period****
spend in a two-month 116 -132
minutes per day online.
12- 13% watch TV shows & movie previews
online weekly*****
Sources: *eMarketer, for year-end 2006; **comScore, 2005; ***OPA, 2006;
Source: Gartner, Harris Interactive, 2005
****Solutions Research Group, 2005;*****Points North Group, 2005
4A’s: form of New Media that will
show the greatest growth in 2006:
US Online Video Ad Spending, in Millions
Blogs 20.2% $1,500
Broadband video ads allow for
$1,600
Podcasting
$1,200 29.6%
greater measurability, $1,050
$640
$800
target-ability and 50.2%
Internet Video $385
$225
$400 $135 interaction!
$0
2004 2005 2006 2007 2008 2009
Source: eMarketer, November 2005
Methods which tech vendors plan to use in
2005 for generating B2B sales leads
E-mail 88%
White papers 86%
Webcasts 74%
SEO 70%
Direct mail 68%
Paid search 67%
Telemarketing 65%
Print advertising 59%
0% 20% 40% 60% 80% 100%
Source: Tech Target, Bitpipe, December, 2004
The Internet can reach buyers all along the
purchasing cycle
Customer Awareness/Branding
Relationship
Management
Attitudes,
Interest
Post-sales INTERNET
support
Pre-purchase
Information
Fulfillment Gathering
Sale/Purchase
Future of
Search?
55% of Internet users use
• Richer
engines
search (with video) to find info
about LOCAL firms
• Mobile (anywhere)
• Smarter
--Kelsey Group, 2005
(more intuitive)
• Vertically focused
• Google Sales = 2500 strong (largest in all media)
• Launching old media tentacles
– Magazine and Newspaper ad space
– Radio and TV ad placement
• Net ad revenues estimated to be $6.5 billion for 2006,
(up from just $2 billion in 2004)
• Popularity is based on cost & accountability
• AdWords, enables marketers to count how many click
from a Google text ad to their web site
Users typically visit two search engines
on average, but Google is used most often
Ask Jeeves
Other 3% Dogpile
4% 1%
Respondents
use a search
engine to find a AOL
site ~55% of the
13%
time vs. direct Google
MSN 45%
11%
45% of
respondents
cited Google as
the search
Yahoo!
engine they use
23%
the most
Source: Goldman Sachs Research estimates, Synovate.
US paid search Advertising Spending, 2001 –
2008 (in billions)
Growth =
Display 15%
Growth
$12 $11.3
ads also
=$10 $8.8
$10.1
grew over
31%
$8
$6.5
$7.5
$6 $5.1
30%
$4
$3.9
$2.5
$2
$0.3
$0
2001 2003 2004 2005 2006 2007 2008 2009 2010
Source: eMarketer, 2006, with IAB/PwC as baselines for 2001 – 2004
Share of total time spent online by US Internet
users, by site category
So, if you only do search, you are
missing 95% of your market
opportunity to connect with
50.0%
39.7% 39.0%
potential customers
40.0%
30.0%
20.0%
17.1%
10.0% 4.2%
0.0%
Communications Content Commerce Search
Source: OPA, Nielsen//NetRatings, January 2005
Taming the Blog Hype Machine:
Blog advertising
= $16.6 million
in 2005
Gallop Poll:
31 Mil
Pew: Read frequently….. 9%
Read occasionally…11%
eMarketer:
Teens (12 – 17)….. 38%
Gen Y (18 – 28)….. 41%
14% of Internet users
• Under 50% are still getting posts 3
on a
read blogscreation
months after their
regular basis
• Under 10% (3 million) are
updated at least weekly
The trust factor…
Princeton Survey Research
Associates:
12% trust accuracy in blogs
“always/most of the time”
So, advertisers SHOULD explore creative
ways to leverage the power of blogs
• Monitor the blogosphere!
• Work with existing bloggers, in ways that will encourage them to
link to your site
• Create your own blogs to:
– Obtain “free” market research from readers
– Create a community of interest around your product or service
– Allow you to connect with your audiences on a deeper, personal level
(with two-way interaction)