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Marketing in Today’s
      Changing World



Mark Suster

BlueGlass – April 2012

@msuster
 Ex software developer
                            (‘91)

                           BuildOnline
                            (’99)

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

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

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

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




                                       Skyscraper
                                       Skyscraper
          99% of
          99% of
       User Attention
       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
                 Banner




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



 $4 CPM
          Pre-Roll
          Pre-Roll




                           Video
                           Video
                         Translucent Overlay
                          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


$2159.0       61                         SHARING:

3           + 1         +   321
                            downstream
                                             $1134.29 =
                                             downstream
                                                       $3293.32
purchases      clicks       clicks           purchases       total revenue
                                                             from this post
It also tracks down-stream influence / conversion



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


                                                                      $74.
                  $94.09       $97.09                                 21                                  $65.02
                direct purchases downstream                           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

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Marketing Strategies for 2013

  • 1. Marketing in Today’s Changing World Mark Suster BlueGlass – April 2012 @msuster
  • 2.  Ex software developer (‘91)  BuildOnline (’99)  Koral / Both Sides Of The Table Salesforce.com (’05)  VC at GRP Partners (‘07)
  • 3. The Marketing Landscape Changes Very Quickly These Days Pre Web 95 - 2007 08 - Now 10 - Now Future Mobile, Mobile, Who The F Who The F Offline Offline Online Online Social Social Video, Video, Knows? Knows? Images Images • TV • Display • FB Ads • Pre-roll • Print • Email • FB Likes • Overlays • Radio • SEO • Twitter • Brand Integration • SEM • FB Timeline • CPI
  • 4. 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?
  • 5. As a VC it’s my job to stay ahead of these trends  Investment strategy  Portfolio advice
  • 6. The Move to Online Forced Standards That Sub- Optimize Experience & Performance Banner Banner Skyscraper Skyscraper 99% of 99% of User Attention User Attention
  • 7. Banners are a brand category. The Internet has been about purchasers (DR)
  • 8. Jakob Neilsen eye-tracking has confirmed we are trained to ignore banners (CTR = 0.08%)
  • 9. Big dollars still pursue brand campaigns. They just keep their money offline.
  • 10. But didn’t Google prove you could make money with “side links” ??
  • 11. Paid Search Worked as a Text-Based Side Link Because of “Intent” 1. Intent- Based Ads 2. Organic Result 3. Google Comparison Shopping
  • 12. Many technologists confuse this. They think: “The best ads are those that are ‘not in the way of the user experience’ ”
  • 13. Facebook Ads initially much less effective without intent & integration (but targeting helps) SAP? Seamless? Is My Site Optimized? Get Sales Cloud?
  • 14. We all know what really converts in non-intent ads: Cleavage Not joking. Ad studies consistent
  • 15. 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?”
  • 16. My Biggest Marketing Themes of Past 5 Years Have Been  Integrated  Targeted  Personalized  Measurable
  • 17. We Know How Powerful Images are in Advertising. Images = Content = Ad (integrated)
  • 18. We Even Know How Valuable Images are in Today’s Applications
  • 19. Images avoid the blind spots & aren’t spammy like double-underlined text Banner Banner Skyscraper Skyscraper
  • 20. Integrated Images: Higher CTR, Higher Brand Recall, Automated & Relevant
  • 21. In video, YouTube standard ad units work well at scale $4 CPM Pre-Roll Pre-Roll Video Video Translucent Overlay Translucent Overlay $1 CPM
  • 22. But integrated campaigns are performing off the charts, even for niche audiences. Example: Style Hauls Blair Fowler Elle Fowler 750,000 views
  • 23. Integrated YouTube Campaigns Have Proven Successful at Conversion  Authentic  Engaging  Youth Demo  Call-to-Action
  • 24. Mobile Games have offered opportunities for “integrated ads” Ad as Part of Game Incentivized Ads
  • 25. And an increasing part of media conversions is moving to “sponsored stories” – an integrated ad unit Excellent engagement, even on sponsored posts
  • 26. Other companies betting big sponsored story model  Converts better media-to-media  More cost effective than SEM  Gravity is even personalized
  • 27. Measurement is an important part of managing effective campaigns. But social has been measuring vanity metrics, not business Likes Clicks
  • 28. Link tracking shows clicks. Awe.sm tracking shows bottom-of-funnel conversions. $18.41 $68.11 $34.60 $72.41 … $57.50 $2159.0 61 SHARING: 3 + 1 + 321 downstream $1134.29 = downstream $3293.32 purchases clicks clicks purchases total revenue from this post
  • 29. It also tracks down-stream influence / conversion $57.50 $331.22 direct purchases downstream purchases 15 6 58 clicks downstream downstream shares clicks $74. $94.09 $97.09 21 $65.02 direct purchases downstream 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
  • 30. 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!
  • 31. Internet marketing is changing rapidly. It favors those who are  Integrated  Targeted </end>  Personal Thank you  Measurable Mark Suster :: BlueGlass – April 2012 :: @msuster