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Fifteen percent of mobile subscribers say that the option of keeping their same mobile phone number, which will be possible November 24, will entice them to switch providers. Carriers, take note: These switchers are more likely to respond to productivity-oriented marketing messages as opposed to entertainment-oriented gadgets and services.
What exactly is customer analytics? Forrester segments vendors along two axes: 1) type of analysis -- statistical or descriptive, and 2) information currency -- batch mode or real-time processing. NCR Teradata, E.piphany, and SAS are among the leaders in their respective categories.
Despite cable's leadership in broadband subscribers, DSL price drops will resonate with new broadband users. Today's broadband adopters are lower-income and less optimistic about technology than early broadband adopters. This means that these newbies will respond more positively to DSL's low-price marketing message than cable's high-speed market positioning.
Forrester's Email Marketing Boot Camp teaches companies best practices in email targeting, design, delivery, and measurement. The day-long seminar also includes a group exercise in designing effective emails and a panel of experts from ISPs and email service providers. Our upcoming Boot Camps are:
January 29 (Cambridge, Mass.)
March 18 (Atlanta)
To register, contact Sam Stern at sstern@forrester.com.
. . . Dell, which comes out on top in our 2003 technology brand rankings. Companies with long histories in the PC space and an American or Japanese heritage were more likely to have higher trust scores than CE brands from Europe or the rest of Asia. Among retailers, Amazon.com scores highest, far above Wal-Mart.
Forrester's European research reveals that broadband users in Europe do twice as many activities online as dial-up users. Downloading media files and peer-to-peer file sharing are the activities that experience the highest growth as users upgrade to broadband.
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Search -- not display ads -- will drive digital marketing
Back in 1998, I gave a speech at Forrester's Consumer Forum called "The Marketing Resource Shift." I argued that as marketers began to measure the efficiency of advertising in a digital world, marketers would shift dollars away from impression-based, awareness-generating advertising (like banners, buttons, and sponsorships) and toward marketing that reached consumers further down the marketing buying cycle. Well, it took five years, but we are finally seeing the marketing resource shift in action.
In Charlene Li's recently released 2003 report on digital marketing, we forecast that search engine marketing will drive digital marketing to about $16 billion by 2008, from $7 billion today. Search engine marketing and email, which draw lots of activity but few dollars, will comprise close to half of the digital marketing spend. Both of these reach consumers at a later -- and more valuable -- stage of the marketing cycle. Banners aren't dead: Five years from now, display advertising will still account for half of digital marketing expenditures.
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One thing is clear: Marketers see the value of digital marketing and are pushing more dollars there relative to traditional marketing channels (see figure). The 95 US marketers we surveyed see digital marketing as a complement to traditional advertising. They tell us that these dollar shifts will only increase as broadband penetration rises.
So the composition of digital marketing is the real story. Overall growth? Well, we still have to keep this in perspective. At $16 billion, we're still only talking about 4% of the typical marketing budget, reflecting the conservative nature of marketers and their agencies. But, as an old CEO once remarked: "A billion here, a billion there -- pretty soon we're talking about real money."
Around the world in 14 days
I just returned from a two-week trip to Korea, Japan, and India -- speaking with our consumer electronics, media, and advertising clients. It was an incredibly valuable trip, given the pace of broadband, consumer electronics, and media activity in Asia. Here are some insights:
1. The entertainment home network is the next frontier.
At almost every company I visited, the impact of IP-based technology on entertainment activities in the home is top of mind. CE companies want to know if there is an opportunity for a new device -- like a media center set-top box to stream and store media. Media companies want to know how much video will be consumed on the PC. Telecom companies want to know how to get on the bandwagon. We've written a lot about this already, and we'll expand our coverage on this topic in 2004.
2. Content holds back new TV applications.
Companies -- and consumers -- see the value of personal video recorders (PVRs), video on-demand (VOD), electronic program guides (EPGs), and interactive digital television (iDTV). But, to be useful, each of these applications needs content that can be described, segmented, and delivered in new ways. Media companies aren't ready to deliver. In my travels, I got a lot of questions about broadband metadata standards, digital asset management, and rights management -- all of which are needed for these new apps to deliver value to consumers. So, exciting as these new video apps are, they won't go very far without content. Case in point: VOD. VOD in the US is weak today because the networks aren't willing to provide the content to make it attractive. These technology and business model issues will take years to resolve.
3. Advertising is still run by creatives.
During my trip, I was fortunate to speak at AdAsia, a gathering of 1,400 of Asia's leading ad executives. My speech about how new technologies will change the ad business was well-received. Still, the bulk of the conference agenda (by a long shot) revolved around producing great creative. Don't get me wrong: Creative is crucial in marketing and will remain so in a digital environment. But most executives are in the dark about consumers' ability to block, ignore, or skip advertising. No matter how great the creative, if consumers don't see it, it's worthless. This education will take years.
That's it for now. In December, we will publish our updated broadband, PVR, and VOD projections, as well as research about the advertising backlash and the state of TV ad targeting.
Have a great November!
Chris Charron
Devices, Media & Marketing Group Director
P.S. If you'd like to suggest research for us to write, or if there are data points you are looking to track down, feel free to drop me a line anytime at chrischarron@forrester.com.
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