Final BlueGlass _April 2012_

							    Marketing in Today’s
      Changing World



Mark Suster

BlueGlass – April 2012

@msuster
                           Ex software developer
                            (‘91)

                           BuildOnline
                            (’99)

                           Koral / Salesforce.com
Both Sides Of The Table
                            (’05)

                           VC at GRP Partners
                            (‘07)
The Marketing Landscape Changes Very Quickly These
                      Days

 Pre Web    95 - 2007         08 - Now          10 - Now             Future

                                                 Mobile,
                                                                 Who The F
  Offline       Online         Social            Video,
                                                                  Knows?
                                                 Images


 • TV       •   Display   •   FB Ads        •    Pre-roll
 • Print    •   Email     •   FB Likes      •    Overlays
 • Radio    •   SEO       •   Twitter       •    Brand Integration
            •   SEM       •   FB Timeline   •    CPI
                     What IS Clear
   Pace of change will accelerate

   You need a strong POV / strategy
         Are FB “Likes” better than FB ads that convert directly?
         Are Twitter Sponsored Tweets a good ad unit?



   You need to be metrics driven & test a lot

   You need to monitor emerging trends
         Should we put energy into Pinterest?
         Is the celebrity endorsement model worth it?
As a VC it’s my job to stay
  ahead of these trends

 Investment strategy

 Portfolio advice
The Move to Online Forced Standards That Sub-
     Optimize Experience & Performance


                Banner




                                       Skyscraper
          99% of
       User Attention
Banners are a brand category. The Internet has been
               about purchasers (DR)
Jakob Neilsen eye-tracking has confirmed we are
    trained to ignore banners (CTR = 0.08%)
Big dollars still pursue brand campaigns. They just
              keep their money offline.
But didn’t Google prove you
  could make money with
       “side links” ??
     Paid Search Worked as a Text-Based Side Link
                 Because of “Intent”
                                               1. Intent-
                                               Based Ads




2. Organic
  Result


 3. Google
Comparison
 Shopping
Many technologists confuse
    this. They think:

 “The best ads are those
that are ‘not in the way of
  the user experience’ ”
Facebook Ads initially much less effective without
    intent & integration (but targeting helps)

                              SAP?




                            Seamless?




                            Is My Site
                            Optimized?



                            Get Sales
                             Cloud?
We all know what really converts
  in non-intent ads: Cleavage




Not joking. Ad studies consistent
Twitter’s came up with a “side link” product –
             “Promoted Tweets”


                   #Droid Charge

                 “Screwed up battery”

                 “Not the phone I’m looking for”

                 “What the fuck is a Droid
                 Charge?”
My Biggest Marketing Themes
 of Past 5 Years Have Been
   Integrated

   Targeted

   Personalized

   Measurable
We Know How Powerful Images are in Advertising.


  Images = Content = Ad (integrated)
We Even Know How Valuable Images are in Today’s
                Applications
Images avoid the blind spots & aren’t spammy like
             double-underlined text

                 Banner




                                          Skyscraper
Integrated Images: Higher CTR, Higher Brand Recall,
              Automated & Relevant
In video, YouTube standard ad units work well at scale



 $4 CPM
          Pre-Roll




                                Video
                              Translucent Overlay




                     $1 CPM
   But integrated campaigns are performing off the
charts, even for niche audiences. Example: Style Hauls

       Blair Fowler                   Elle Fowler




                      750,000 views
Integrated YouTube Campaigns Have Proven Successful
                   at Conversion


       Authentic

       Engaging

       Youth Demo

       Call-to-Action
  Mobile Games have offered opportunities for
              “integrated ads”
Ad as Part of Game           Incentivized Ads
And an increasing part of media conversions is moving
    to “sponsored stories” – an integrated ad unit




                              Excellent engagement,
                               even on sponsored
                                      posts
Other companies betting big sponsored story model




     Converts better media-to-media
     More cost effective than SEM
     Gravity is even personalized
Measurement is an important
 part of managing effective
         campaigns.

But social has been measuring
 vanity metrics, not business
      Likes
      Clicks
Link tracking shows clicks. Awe.sm tracking shows
          bottom-of-funnel conversions.




    $18.41   $68.11            $34.60                …
                                                     $72.41           $57.50

                                   SHARING:
$2159.03 + 611 +
purchases  clicks
                      321
                      downstream
                                        $1134.29 =
                                        downstream
                                                         $3293.32
                      clicks            purchases        total revenue
                                                         from this post
It also tracks down-stream influence / conversion



                                                          $57.50              $331.22
                                                          direct purchasesdownstream
                                                                          purchases
                                                   15        6                58
                                                   clicks    downstream downstream
                                                             shares     clicks


                                                                      $74.2
                  $94.09        $97.09                                1                                    $65.02
                  direct purchasesdownstream                          direct                              direct purchases
                                  purchases                           purchases
             19       2           14                             11           1              7        7
             clicks   downstream downstream                      clicks       downstream downstream   clicks
                      shares     clicks                                       share      clicks




        $78.12                         $19.78                                     $18.41
                                                                                  direct purchases
        direct purchases               direct purchases

    9                            5                                        7
    clicks                       clicks                                   clicks
And through cookies can auto incentivize your best
                    “sharers”




               Welcome back, Suzy!
               4 of your friends have bought because of your
               sharing — you’re a Fashion Maven!

               Thanks for spreading the word! Enjoy 50% off
               your next purchase.



               Share the good news with your friends!
  Internet marketing is changing
  rapidly. It favors those who are

      Integrated
      Targeted                                      </end>
      Personal
                                                  Thank you
      Measurable


Mark Suster   ::   BlueGlass – April 2012   ::   @msuster