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Google Confidential and Proprietary

Scott Townsend January 18, 2011

Four Priorities For Marketing In

The Digital Future


While we all were focused on the Recession, consumer behavior

changes have marched on.

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Digital Revolution in Context

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2006 1B

2003 500M

1994 Users 77M

1998

Distribution & Commerce

2000 400M

Information Communication

2010 1.9B

“Buy” “Read” “Really Talk”


Digital information in the world – videos, photos, music, texts, etc.

800 exabytes 2010

Internet users worldwide 2010 1.9 B

Mobile subscribers

2010 5 B

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Google Confidential and Proprietary 5

Digital information in the world – videos, photos, music, texts, etc.

800 exabytes 2010

2020 53 zettabytes

Internet users worldwide 2010 1.9 B

2020 5 B

Mobile subscribers

2010 5 B

2020 10 B


Farmville 30M people using it every day;

an est. 800K virtual tractors sold daily at $3.33 each

YouTube views Lady Gaga 95M views in

only 4 months with 10M fans (MTV audience = 500k)

iPhone App store 5B apps downloaded

Red Cross 20% ($23M) of donations for

Haiti in first week made via text message

Amazon 180 Kindle books sold for

every 100 hardcovers

Transformation Of Consumers Is Taking Place

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ebay Selling $6B via mobile

in 2010


Four Priorities

1. ZMOT: The battle will shift to “Before the store”

2. Localization: Digital targeting will be more locally focused

3. Mobile: Will change the shopping experience

4. Speed: Acting fast will take on a new meaning

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1. ZMOT becomes the battleground

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According to P&G, shoppers make up their minds about a product in 3 to 7 seconds, just the time it takes to note a product on a store shelf.

This time lapse is called (by P&G) “First Moment of Truth” and it's considered the most important marketing opportunity for a brand.

– 2005 WSJ article

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Historical Path-to-Purchase Model:

2nd Moment of Truth:

(SMOT)

1st Moment of Truth

(FMOT)

Stimulus

10 Google Confidential and Proprietary


NEW Path-to-Purchase Model:

SMOT FMOT Stimulus Zero Moment of Truth:

Which Effects ZMOT



More Decisions Made Before Entering Store…

Source: Longitudinal Economic Study Series, IRI Attitude Link, n = 1,000+ shoppers. CPG Purchase Decisions. IRI, 2009.

Where Purchase Decisions Are Made, % of Shoppers

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60% 75% 83%


81%

The New Path To Purchase

81% of shoppers conduct research before they shop, typically for an hour or more.

Source: GMA, Booz & Company, and SheSpeaks Shopper Marketing 3.0 Survey; n = 3,600 respondents 13 Google Confidential and Proprietary


Online Research Forever Changed The Game

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Since the recession began, 54% of consumers are spending more time researching products online before they buy them in a store.


+149% Local Searches

+288% Coupons

+188% Reviews

+209% Recipes

New Behavior Drives A Surge In Search Volume

Source: Google internal tools, Jan 2007-Jan 2010

Google Confidential and Proprietary Source: Catapult Marketing study conducted by Forrester Research as cited in PROMO, December 10, 2009 Marx, a Kantar Media solution

Coupon Search & Use Is Up Since Recession

Coupons

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The number of digital coupon events increased by 60% Y/Y


83%

Source: Google Touchpoints Consumer Survey, 01/09. “Online Consumer Reviews Significantly Impact Consumer Purchasing Decisions,” Opinion Research Corporation, 06/08

rely on trusted places like user ratings or product review sites (buyers read 4 to 7 reviews before feeling comfortable with a purchase)

Consumers Are More Discerning Than Ever


Which Is Good News For Shopper Marketers!

+20% Searchers Spend

Source: MarketingVox : Search Affects CPG Brand Building, Offline & Online Sales. Oct 2007. http://www.marketingvox.com/study-search-vital-for-cpg-brand-building-and-both-offline-online-sales-033942



Search Works

Source: White-labeled Search and Display Match Market Study for Ready-To-Eat Cereal Advertiser, August 2010, Sales in volume.. Life versus control (dark – no search). All results significant at 90% or greater.

Sales Lift in Product Only Campaign

Sales Lift in Coupon Campaign

Sales Lift in Brand Only Campaign

Private Label Test Brand



The Sheer Volume Is Staggering

recipes weight loss soap shampoo deodorant mayonnaise pasta sauce

Annual Query Volume

153,200,000 54,540,000 26,970,000 15,820,000

3,569,000 1,475,500 1,292,000

Source: Google Keyword Tool, US only.


Owning The Digital Shelf



Leverage Digital End Caps

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Product Ratings Will Help Win ZMOT

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Promote Specific SKU’s Outside Of Circular



McDonald’s Leverages ZMOT For New Smoothies

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2. Localization

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Google Confidential and Proprietary *Marketer is responsible for translating ads into selected languages.

Region City Radius Custom

Digital Enables Precision Targeting



Location Extensions Will Help Win ZMOT

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272 8TH AVE, NEW YORK, NY

Address appears as the 5th line of ad text


Drive Traffic With Google Maps

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Geo-Target Coupon Distribution



Think About The Local Community

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3. Mobile

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The Mobile Audience Is Significant Today

1)  US Census 2010 2)  Internet WorldStats, June ‘10 3)  Includes active smartphone, mobile Internet device (iPod touches & iPads) and feature

phone devices on mobile web or apps. Source: comScore, CTIA, analyst reports

314M Population of US

239M Online Population

134M Mobile Web & App Population

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Mobile Becoming Just As Prevalent As Desktop

Source: Morgan Stanley Research, April 2010

0

400

800

1200

1600

2000

2007 2008 2009 2010 2011 2012 2013 2014 2015

Mobile Internet Users Desktop Internet Users

Global Mobile vs. Desktop Internet Population, 2007-2015

Global Internet Users (MM)

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Mobile Search Is Exploding

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iPhone

iPhone 3G

Android G1

Blackberry Storm

Palm Pre

iPhone 3GS

Android Nexus One

Moto Droid & Eris

Sprint Evo

Droid X

HTC Incredible

2010

Edge 3G 4G

Source: Google Internal and Third Party Google Confidential and Proprietary


•  During Holiday ’09, 10% of all shoppers took pictures of products in-store

•  In 2010 1 in 3 online shoppers used a mobile device to browse e-commerce sites

Source: Morgan Stanley 39


Engage Consumers: Anywhere – Anytime

Browse Internet Use Apps

Searching Watch Video

Home Work

Shopping Commuting



Consumer Mobile Intents

Where can I buy something?

What are others charging for it?

Can I buy it on my phone?



The Winning Brands & Retailers will optimize for Mobile

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•  Look in the Mirror

•  Think National with Local Intent

•  Link messaging to other platforms

•  Address mobile users directly with valuable offers

Mobile Do’s

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4. Speed

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Google Confidential and Proprietary 45 Google Confidential and Proprietary

Leverage Insights To Move At New Speeds


General Mills Informed Product Decisions

www.target.com/chex Try Gluten Free Chex cereal. Available at Target!



Concept Was A Huge Success!



Take Advantage of the

Unexpected…Good or Bad


Amplify Assets Fast & Creatively

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Speed Beats Perfection!


Be Opportunistic And Move Fast!

Miracle Whip Airs on TV Colbert Responds Kraft Immediately Joins in on Fun via Search

Drove to Facebook and YouTube Homes And Received Positive

Feedback From Consumers Accelerated Brand Interest



Scott Townsend January 18, 2011

Thank You!

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