Search: Digital Future

Monday 22 December 2008

The Digital Year in Review – and 2009 Trends

2008 was a great year if you worked in the digital industry. So many advances in technology, huge leaps forward in the numbers of people connected to the Internet and using high speed broadband to access content and a rock solid acceptance of digital (mobile, Internet, email, search, social media) by the general public – in fact, if you’re Generation Y, you’ve never known anything else. Below are some of important things we learned throughout 2008 and a few of the trends we should see in 2009.

The maturity of search marketing
There’s a lot of talk about moving marketing dollars away from traditional media into search marketing during times of economic uncertainty. This has been validated by two things – Google’s revenue figures and the persistence of Microsoft in trying to buy Yahoo!’s search business. Google’s numbers speak for themselves. As for Yahoo!’s search business – while Microsoft might have gotten some strategic things wrong in the past, I wouldn’t want to put my money at risk by betting against Microsoft this time around.
The move to search marketing is very simple. If you think about search marketing as a direct response channel and not for its branding potential, the reason is clear – search marketing is about sales. Search marketing for a lot of companies is the most effective way of growing sales. This isn’t true for all industries (particularly FMCG, where search is the most effective drive-to-web strategy but not direct sales) but it’s where companies in the IT, professional services, travel and automotive industries are putting their marketing budgets. This was the trend in 2008 and this will only increase in 2009 as budgets need to be harder working and more effective.

The rise of social networks.
2008 saw the rise of social media – Facebook becoming the dominant player, MySpace narrowing it’s focusing onto music and movies, Friendster leading South East Asia and Bebo being bought by AOL.
Facebook has long been the darling of media and the public, despite skirting dangerously around privacy issues a number of times this year. If you look at a lot of the social networks, they are now becoming surprisingly similar – a person’s profile, user generated content, third-party applications and often a wayward business model. This can be directly attributed to Facebook’s success and popularity with its audience.
Social media is very popular. OgilvyOne Singapore released a report titled “Can Brands Have a Social Life?” that focuses on social media in Asia. It identifies a staggering 456 million people in Asia (of a total Internet audience of around 571 million people) who are engaged in social media activity. Admittedly, this is more than social networks, including blogging and other social interaction, but the numbers are extraordinary.

Social Networking going mobile
The Japanese had a whole new perspective on social media. Mixi and Mobagetown, two of the leading social sites in Japan, are attracting tens of millions of people who are accessing their services through mobile devices. While other countries such as Singapore and Hong Kong have over 100% mobile penetration (i.e. there are more mobile devices than the country’s population), use of data services and applications is still in its early stages. Japan leads the world with its sophisticated mobile market and it will be really interesting to see how Mixi, Mobagetown and other mobile-focused social media help shape the social media landscape. It feels like only a matter of time before one of these players’ moves onto other mobile-savvy markets in Asia and across the world…

Blogs as buying guides
Asia is really driving the proliferation of blogs and blogger activity. This is particularly seen in Korea and China but is becoming more common across the world. This of itself is not the big issue because people have always wanted to express themselves. The major trend that is starting to affect marketers is how blogs have been inadvertently commercialized and used by consumers as buying guides. Consumers trust other consumers much more than they trust brands, so it’s no surprise that blogs are now being seen as buying guides for new products and services. The automotive industry is a great example of this – once you’ve done your online research from the brand’s website, compared prices on a few different websites, many people are now going to blogs to see “real world” experience. Does the car drive well? Does it breakdown often? How does the automotive company deal with complaints? These questions are no longer being answered by call centre staff or showroom personnel but by real people and their blogs.

The year of the job seeker.
With the doom and gloom of the current economic downturn one of the unfortunate trends is that more and more people are now facing unemployment. With so many people facing an uncertain future and a lot of people losing their jobs, 2009 will be a great year for the job classifieds sites (think, JobsDB, ClassifiedPost, SEEK, etc.). Job classifieds sites make the majority of their revenue through job ads, which will decline, so these sites will have to evolve or die out. The savvy job boards are already working on talent management tools, interactive CVs, career content and other tools that will help candidates better promote themselves. These sites will have a huge increase in site traffic and if they are clever in working out ways to commercialize this increased audience or monetize their job seeker toolkits.
For the same reasons, there should be a significant increase in the use of business social networking. Recently release a new batch of tools – introducing networking groups, applications (similar to Facebook) and other features that allow business professionals to connect and network with each other. is now posing a legitimate threat to online job sites and print classifieds simply because it allows people to connect and network in a much more interactive way. 2009 should be the year and other business-focused social networks come into prominence.

Digital Marketing in an Economic Downturn

One interesting by-product of the current economic turmoil is that while people are becoming more cautious about spending, they tend to research product information more thoroughly and in greater detail. This is done through things like word-of-mouth recommendations and through available written information (usually found in print, brochures and of course in large quantities on the Internet, particularly on a Brand's corporate websites). So the Internet in particular has to key role to play in purchase behaviour, which means digital media and search marketing take on a more important part in the marketing mix. This point of view is contrasted with a view from a certain type of media agency executive who believe that in a time of crisis, media budgets will flock to traditional media, namely newspapers and print media.

This is the first global economic downturn where digital is now considered a relatively mainstream media option. Budgets will be affected across the board and the direction they'll travel (back to mainstream or increase in new media) is actually open to debate because it's a first time event. That said, the accountability and ROI focus argument should mean digital remains the obvious choice in time of economic crisis, however this will vary according to:

1) How digitally developed marketers are in specific markets
• Those marketers that already 'get it' are probably those for whom new media has already been working relatively, or, very well. They will stick with it through this crisis, and possibly even look to increase the proportion of spend dedicated to it. They'll do this based on the understanding they have a very strong opportunity to further accelerate the development of their brands in an arena that their consumers are in and which isn't going away.
• Those marketers who have remained conservative towards digital may become even more difficult to entice. They'll normally want to stay with what they know however I think there are opportunities here, especially the potential for paid search as it allows for an efficient way to show results fast.
• On a practical note it can be argued that when asked to contract budgets, many marketers take into account the ease of cancellation of non-traditional campaigns versus traditional media with frequent long term contracts and stinging cancellation penalties. Digital media may simply be an easier cancellation to absorb as the amounts still aren't as high when they attack the schedule with a red marker pen.

2) Where consumers are actually spending their time in those markets
• Whilst print undoubtedly has a role to play, in many markets it's a declining medium whilst online and search marketing in particular have grown and played a huge role in redefining how, when and where consumers get their information; in essence acting as a substitute for print. To this end why would consumers choose to regress back to print during a downturn? It doesn't make sense when digital formats offer all that information with so much more ease of access and interactivity. The statistics say that consumers are showing a strong move away from print and onto online. To this extent, the sensible marketer follows their consumer (while the best ones stay in front).

Consumers in a downturn are much more price sensitive - online offers the ability to compare prices in a far more comprehensive and up-to-date manner than print ever could. Then comes the best marketing tool of all – “word of mouth”. Word of mouth is more easily accessible online via forums and reviews, forming a vital precursor to purchase. Print can offer this but never at the same level of discourse and interactivity of a social media site, forum or review site.

However, it’s not all good news for digital media. There are a number of key considerations to take into account, particularly for Asia:

• In developing markets, the actual cost of access to the web (whether via Internet Cafes or home connection) may be seen as a discretionary purchase, an audience who previously paid for this may find other uses for that cash. If the economy really crashes then could this mean a contraction in overall numbers online in markets with heavy Internet cafe or dial up usage.
• Likewise, in those same markets, the uptake of in-home broadband will slow as consumers who were considering the upgrade decide against further outlay and live with the bandwidth they've got. This in itself is not a huge problem as at least these consumers remain online and can be reached, but bandwidth limitations will affect the degree to which more engaging executions can be rolled out from marketers.

Overall, the current economic downturn is one driven by financials, which therefore underpin all commercial budgets. It's not like the bubble bursting. It's a credit crunch which means lower liquidity, no credit, less cash, no budgets. To this end digital budgets will be affected along with all other channels, although if you look at Google’s recent Quarterly Results suggest that Search Marketing is the exception, but it is digital that is likely to recover fastest, and probably at the expense of print.

Effective Email Marketing in Asia

How to succeed with Email Marketing in Asia

Email marketing in the US and Europe is a “must have” for any serious marketer. It is one of the most cost-effective ways of establishing and maintaining a one-to-one relationship with customers that delivers serious sales. So why is it so underutilized here in Asia?

The lessons learned from other parts of the world are compelling. According to Forrester Research, people who buy consumer products that were promoted to them via email spend 138% more than other people. Similarly, 50% of consumers who open and read email marketing messages also are likely to purchase other items on impulse.

However, for Asian marketers email is more of a challenge. The key reasons there has been a lack of take-up for brands doing email marketing include having to do things in multiple languages, the cost of content creation, poor data quality and government regulation. For consumers, email isn’t as popular as instant messaging, there are language barriers, inconsistency in when emails are sent, a lack of compelling content and a hell of a lot of spam out there cluttering their inbox.

Language is a factor
The need to develop content in multiple languages is one of the key reasons that Email Marketing has been slow to take off in Asia. A lot of marketing teams tend to be lead from a Regional office, so will develop a campaign idea that may have to be implemented in 10 countries - all with different cultures and languages. This can be a daunting task that turns a simple eDM into a complex exercise where the copy has to be translated multiple times, the creative needs to be optimized for different cultures and rigorously tested to ensure the most effective results can be achieved. This can make something that seems very simple into an expensive exercise.

This is also one of the reasons that Instant Messaging (IM) and use of Mobile devices is doing incredibly well in Asia, because people can interact with their friends and community in their own language. With Instant Messaging the consumer creates their own content in their local language, so smart marketers are working with their media agencies to get their communication into IM. Combined with IM advertising, triggered email messages can be very effective.

Data vs Spam
Another barrier for marketers is the lack of good data. Consumers in Asia are wary of providing their personal information because there’s a high expectation that your inbox will instantaneously flood with 109,398,765 spam emails overnight. Marketers and brands have work to do in persuading consumers that if they hand over their valuable personal information they will not be spammed and only presented with relevant and compelling content. Consumers need brands to understand them and only send the information that they want. No one wants useless junk mail – email or otherwise.

Who’s doing it well?
The airline industry, and the low cost airlines in particular, are a great example of success. The savvy Marketing Directors are using email as a channel, promoting their lowest cost specials (e.g. the $1 airfare) exclusively through email. This drives incredible loyalty and response rates. While there are some great examples of this starting in Asia, some of the best case studies of this I’ve seen are Jetstar and Virgin Blue in Australia who use email marketing as an exclusive channel for low cost airfare deals. When compelling content (particularly when it’s exclusive deals) are sent to your inbox, you start to see open and click through rates go through the roof and massive sales start rolling in.

Email marketing is a great tool for any company interested in developing a better, more personal relationship with customers. It’s time Asian marketers looked to the success of email marketing in places like Europe, Australia and the US and adapted it for local conditions. Sure, there are challenges, but it’s hard to think of a more cost-effective tool that’s available to us today.