Carol Bartz was fired by phone from her post as CEO of Yahoo! in what must have been a Trump-worthy conversation with Roy Boystock, Yahoo!'s Chairman of the Board. Tim Morse, Yahoo!'s current CFO will act asinterim CEO and part of a larger executive committee to manage Yahoo! operations until a replacement CEO is found.
I like Yahoo! And I was optimistic about Bartz taking the reins from Yahoo!'s founder Jerry Yang, as I thought it signaled an desire by Yahoo! to aggressively course correct its languishing strategy. But now I'm just disappointed. Three more years have passed and Yahoo! is the same sinking ship it was when Bartz took the reins. Here is my take on Yahoo!'s situation. Yahoo!:
Has terrific online advertising capabilities. The online opportunity is *still* a huge and growing one; we project interactive marketing will near $77 billion by 2016. Yahoo! has tremendous traffic and user engagement globally which populates its monster user database that it is a pro at mining on advertisers' behalfs. It's ad labs scale testing and optimization. Its reach and available inventory is massive. And its ad marketplace is making real-time ad buying mainstream.
I've received a few questions and have seen some social conversations around the theme "marketing is not advertising" relating to my recent interactive marketing forecast. I in no way meant to imply through the research that marketing and advertising are the same thing, nor is this the point of the research. So if you are hung up on that notion, let me 1) provide a bit of background on the report, 2) recommend that you read the full report -- I think inferring conclusions from the summary slide published in AdAge may be confusing without our detailed definitions, and 3) iterate that the primary conclusion of the report is that spend on interactive media and technology is no longer experimental, but now established budget line items.
I've worked on this report since 2004, and the report originally began as an online *advertising* forecast -- sizing spend on online media, which at that time was primarily display ads. We've done the report 5 times since 2004, and with each new report, it became clear that budgets were growing to include other investments besides online media. So we have adjusted the forecast to best represent what is included in clients' interactive budgets.
By 2016, advertisers will spend $77 billion on interactive marketing – as much as they do on television today. Search marketing, display advertising, mobile marketing, email marketing, and social media will grow to 26%35% of all advertising spend within the next five years.**
What does this growth mean for you?
1) Interactive media has gained legitimacy in the marketing mix. In past forecasts, we found that interactive budgets grew because of marketing experiments, or firms looking for lower-cost alternatives to traditional media. No more. The next five years of growth comes from bigger interactive teams spending sizably to bake emerging media into their strategies for creating rich customer relationships.
2) Search’s share will shrink. Search marketing (paid search and SEO) will continue to own the largest portion of the interactive marketing pie. But its overall share will decline as marketers shift search spend into biddable display investments, mobile marketing, and even social media.
3) Display media will rally. Bolstered by advances in audience targeting and bid-based buying approaches, advertisers will renew their love affair with display media. We expect display investments to grow as marketers apply display instead of search. And niche or remnant inventory sells for higher prices due to demand-driven pricing.
In January we published a spate of research around automation tools specific to the search marketing space. See "Automation Helps Marketers Scale Organic Search" and "The New Paid Search Automation Landscape." Our audience for these reports is the enterprise marketer. So we represented here tools that sell directly to marketers. But, of course, there are vendors who service marketers indirectly -- by selling agency-enabling technologies instead.
One such vendor, Canadian-based Acquisio sent me some case studies recently about the efficiencies it brings agencies. Like the vendors we featured in our report (e.g., Adobe Search Center, Marin Software, Kenshoo, Efficient Frontier), Acquisio provides bid optimization, campaign management, and reporting. But Acquisio's sweet spot is providing these services for agencies that might manage high volumes of keyword groups across several search engines for multiple clients. One agency grew its client base by 50% without adding any new headcount by using Acquisio to support campaign workflow, bids, and reporting.
The takeaway here for agency readers is that there are considerable firms outside of the set we profiled in our published research that might provide particular value for you.
At least once a week I get a client inquiry wondering what is "the next big thing in interactive marketing," seeking to identify what will out-tweet Twitter or out Goog Google. Well, in his new report, Competitive Strategy In The Age Of The Customer, my colleague Josh Bernoff articulates what is next for all businesses: A disruptive shift, where the power of customers means that firms must focus on the customer now more than any other strategic imperative. In fact, the only source of competitive advantage is the one that can survive technology-fueled disruption — an obsession with understanding, delighting, connecting with, and serving customers. In this age, companies that thrive, like Best Buy, IBM, and Amazon, are those that tilt their budgets toward customer knowledge and relationships.
The zinger in this report for interactive marketers is to: Prioritize word of mouth over mouthing off. Cut your ad budget by at least 10%, and spend the money on connections that have a multiplier effect like social, devices, and content. Ads are far more effective when customers are primed to believe them.
This means that interactive marketing of the future is really focused on interactivity -- not just on pushing out marketing messages through digital channels. Three ways to get started creating more interactive marketing relationships:
Smith, Verhaaf and Preschern talked about the efforts they have underway to help their firms customize marketing experiences, optimize decisions and processes, respond to changing market conditions and empower employees and customers to advocate on your behalf. They raised some great points for interactive marketers to consider as they undertake CORE:
Epsilon's Symposium addressed email fraud head on, since its data breach accessed email data. Quinn Jalli, Epsilon's VP of Deliverability and ISP Relations, recommends that managing email fraud is not something to leave just to your email service provider. The wakeup call from this data breach: Brands must partner with email vendors and ISPs to protect their email send addresses, email brand assets, and in educating recipients about data usage and email fraud. Specifically:
Show ISPs your legitimate emails. Historically, marketers and ISPs haven't had much of a relationship because they were working toward different goals. Marketers want to get their emails into user inboxes, while ISPs want to manage email data volumes by blocking as many messages as possible. Well, phished emails — copies of your real thing — can be so good that neither consumers nor ISPs can tell real from fraud. Preempt this by showing ISPs the identifying characteristics of the emails that you create. And of course any examples you have of phished messages if you have suffered this. Your email service provider can facilitate this ISP connection.
By now, you've all heard about Epsilon's April 1 data breach — an unauthorized party accessed a subset of Epsilon's email clients' data. My colleague Dave Frankland outlines the circumstances of the incident and its implications on Customer Intelligence and data security in his blog post immediately following the incident.
I attended Epsilon's Customer Symposium in Naples, Fla., last week, and I wanted to pipe in with some commentary based on what was addressed directly by Epsilon at the event.
Marketers: The way I would look at this is "if a data breach can happen to Epsilon — a firm which specializes in data and data management — it can definitely happen to me." We learned from Bryan Sartin, director of investigative services, Verizon Business Security Solutions, and Mick Walsh, supervisor, Miami Electronic Crime Task Force, US Secret Service, that electronic crime is a huge and growing business, due in part to the ease of access to consumer information online and the ease of access to the data black market through online search engines. Three-quarters of cases of electronic crimes executed through malware come from data disclosed through Facebook.
I had breakfast yesterday with John Nicoletti, head of agency operations, and Dave Tan, head of SEM development for Google. They manage Google's relationships with search marketing agencies — updating them on what Google is working on and supporting the paid search business they manage with on behalf of marketers.
We chatted a bit about the findings from my recent Search Marketing Agency Wave, and John and Dave shared with me trends and differentiators they observe from their work with agencies. Here are our collective observations:
Technology doesn't differentiate agencies; how agencies use technology does. My wave does include automation as a point of differentiation in a lot of critiera. But to be clear, I don't think automation for the sake of automation is what makes an agency good. Nor does the technology enabling the automation need to be a proprietary tool developed by the agency. I'm agnostic when it comes to what tools an agency uses. What I care about is if the agency uses technology to improve processes, scalability, efficiency, and effectiveness of marketer search programs.
John and Dave pointed out — and I agree — that the features and functionality of search management technologies are universally very similar. The value to the marketer comes in how these tools are used to improve their overall performance and visibility.