Final Digital Ad Brochure

Accenture Media and Entertainment

The Capabilities to Drive
High Performance in the
Digital Advertising Industry
Results from the 2008 Accenture
Global Digital Advertising Study

Overview

Digital Advertising:
Explosive Growth, High Potential
Last year's inaugural Global Digital Advertising a percentage increase over the previous year that
Study conducted by Accenture focused on puts digital advertising on a trajectory to reach
the implications of the digital transformation 21 percent of the market by 2012.1
underway in the advertising industry. Analysis of
the survey results led to a series of strong recom- Last year also saw a frenzy of acquisitions and
mendations about how to advance toward high investments as companies jockeyed for leadership
performance in this challenging environment, positions and competitive advantage. During
including investments in technologies and capa- one six-week period in April and May 2007, for
bilities that offer advanced customer interactivity, example, $12 billion in acquisitions took place,
targeting and analytics. involving some of the biggest names in the
business, both traditional and digital.
Since last year's study, the digital advertising
industry has experienced a year of impressive Partnerships and alliances are also an influential
growth. Internet advertising revenues around the phenomenon, leading to an aggregation of
world now exceed $45 billion. That represents audiences and advertising inventory, and creating
about 7 to 9 percent of the total advertising mar- economies of scale that will become the founda-
ketplace (depending on which analysis one uses), tion of future growth.

1 Kelsey Group, “The Kelsey Group’s Annual Forecast (2007-2012): Outlook for Directional and Interactive Advertising,”
www.kelseygroup.com/press/pr080225.asp. See also ZenithOptimedia, quot;Western ad markets continue to slow, but surging developing
markets propel healthy world growth in ad expenditure,quot; press release, June 30, 2008.

Accenture Global Digital Advertising Study 1

As confidence increases, so does the prevalence of innovation.
Increasingly sophisticated analytic capabilities are being pursued
by major digital advertising players. Such capabilities can enable
more effective ad targeting, better ad performance and a higher
return on advertising investment.

New ad formats are emerging, as well, and investment. Companies are inter- The future looks very bright for digital,
with the goal of better engaging the ested in mobile advertising for several a technology that can deliver advertis-
consumer and improving the effective- reasons. One has to do with respon- ing that is:
ness of brand advertising. For example, siveness. Advertising campaigns using • Results-based and measurable
banner ads targeted to certain profiles text messaging, for example, have
are not effective on social networking achieved up to a 70 percent response • Richer, more varied and interactive
sites such as Facebook and MySpace, rate. Another attraction is the ability • Targeted effectively at desired
so new formats have emerged. to target mobile users and personalize consumer segments
Advertisers are turning to so-called messages down to an individual profile • Attuned to consumers' desires to
widgets, clusters of software in the based on a mobile ID number. Finally, control their media experiences
form of games, quizzes, videos or the inherently interactive nature of
other tools that users can download, mobile means that companies can If the technology is adequately sup-
customize and forward. track, measure and build relationships ported by new business models that
between the audience and the subsidize content, the value and
For example, “Parking Wars” is a game advertiser. demand for digital advertising will
created by the A&E Television Network continue to skyrocket.
to promote a new reality show about In short, digital advertising is doing
parking-meter readers in the US city more than simply quot;shaking upquot; the
of Philadelphia. Within eight weeks industry; it has ushered in a period of Charting new territory:
of its introduction, Parking Wars was revolutionary change. No wonder that Standards, guidance and
installed by more than 150,000 the CEO of a traditional advertising keys to success
Facebook users.2 and communications company noted
recently that all the changes and posi- At the same time, because digital
Mobile advertising has also become a tioning by powerful new competitors advertising is a relative newcomer on
hot topic for discussion, exploration had “unnerved” him. the scene, many companies are

2 “Building a Brand with Widgets,” by Rachael King, BusinessWeek, March 3, 2008.
2 Accenture Global Digital Advertising Study

struggling to understand how to assess Answering some of these critically executives have about who the indus-
value, how to measure progress and important questions about perfor- try leaders are and what gives them an
how to benchmark performance. If a mance, standards, return on invest- edge in terms of sustained excellence.
start-up looks to be acquired for two ment and keys to success was the It is not yet possible to know who the
or three times its annual revenue is goal of this year's Global Digital high-performance businesses in digital
that a fair price or not? What is the Advertising Study conducted by advertising will be over time, but we
potential return on investment? For a Accenture. In general, the quest for can certainly probe various perceptions
company with $15 billion in overall high performance frames this year's of what high performance means
revenue, is $50 million in annual rev- study. Accenture's ongoing High today and sketch out who the digital
enue from an interactive advertising Performance Business research initia- leaders are and what has made them
division good performance or average? tive continues to shine light on a so, at least in the eyes of their peers.
range of industries today, detailing
What are the characteristics of a high- what it takes to be a high performer: The 2008 Accenture Global Digital
performance business in the digital a company that outperforms its peers Advertising Study surveyed executives
advertising arena when it comes to over extended economic cycles and of start-up and acquired digital media
sales, costs, operations, talent man- changes in executive leadership. organizations, digital media divisions
agement, organizational structures and of traditional firms and digital media
leadership? What can be learned, both Although it is too early in the maturity services companies. We asked execu-
from the new up-and-comers in the curve of digital advertising to conduct tives to think about keys to achieving
industry, as well as the traditional, the kinds of rigorous financial analyses high performance in digital advertising,
well-established firms? What are the that would provide information about phrased in terms of 14 attributes
barriers to growth and what are some keys to success over an extended time related to strategy, technology, busi-
companies doing to overcome those period, it is not too soon to ask about ness performance and culture. What
challenges? what is working today for leading are the attributes most important to
companies, and about the perceptions success? Which of these attributes do


they feel is most in need of upgrading website traffic analytics and using it The digital leaders
at their companies if they are to to target messages to a consumer.
compete effectively? When respondents were asked to name
Investments and business the digital leaders in terms of the
These two questions led to the development media attributes and capabilities need-
emergence of three attributes that Creating more extensive and robust ed to achieve high performance in dig-
are seen both as most important to investment and business development ital advertising, one name rose most
overall success in digital advertising plans that can meet the needs of a consistently to the top: Google. Other
and simultaneously in most need more dynamic environment, one in companies mentioned most frequently
of attention: which alliances and partnerships in included Microsoft, WPP and Apple.
particular are critical to success.
Workforce talent Why is Google so dominant across all
Attracting and retaining top talent, Although each of these attributes is attributes? “I think they are constantly
so that a company has the right skills important, the executives' self- in sync with what their customers
and experience to be innovative and assessed gap between their existing want and have the data to support
to define the right operating models, and desired capabilities in these areas that,” one executive noted. “Google's
technologies and business partnerships creates an uneven sense of urgency. culture is very creative and open, so
necessary to drive high performance. For example, although the develop- there is no fear of failure there,“ said
Improving sales force performance is ment of workforce talent was named another. One respondent summarized:
especially important. as the most critical attribute, the “Because they have creative know-
greatest self-perceived weaknesses how and strong management, they
Applied business analytics came in the area of applied business are a flexible and forward-looking
Developing more effective information analytics. These findings should sound organization capable of recognizing
technology and process capabilities several alarms, because developing the new trends.”
that support the timely application of people and technologies needed to
analytic insight to business problems execute strategy and grow market In other words, Google occupies a top
and offerings—for example, taking share is on the critical path to high position in the minds of this executive
performance. survey group precisely for showing


Digital advertising at Accenture
The global advertising practice at Accenture helps Accenture has worked with more than two dozen
drive high performance for clients with significant companies, from digital media and traditional
potential for revenue growth from advertising. media firms to cable and telecommunications
companies, in areas ranging from business
Accenture's focus in particular is on: strategy definition to management of a client's
migration to a new ad-serving platform.
• Strategy formulation (e.g., from improving go-
to-market strategies to developing a new digital
With a focus on developing research-based
advertising business strategy and capability)
insights, and on helping clients leverage innova-
• Yield management (with the goal of increasing tion for profitable growth, Accenture has exten-
average revenue per user) sive experience driving high performance for
• Ad operations outsourcing (working to help clients in the exciting area of digital advertising.
streamline processes and operational visibility)

excellence across all the key attributes Accenture believes that capitalizing on opment to newer workers—who might
of high performance in digital the opportunities of digital advertising simply take the training and then
advertising. is, in large measure, a cultural issue. leave for another company—Google
Indeed, this year's survey underscored approaches the situation differently.
Imperatives for action a similar finding from last year: that They put their most promising recruits
the cultural and people challenges for into management positions quickly
The need to adapt quickly to the world
an established business facing rapid, and provide two years of hands-on
being shaped by digital advertising is
disruptive change are profound. training. It's been a successful way to
critical to media services companies
attract top talent.3
as well as traditional companies with
The answer is, in part, strong leader-
interactive departments. Talent man-
ship, but also attention to the details We also believe that the digital adver-
agement presents one important set
of managing change and putting new tising winners in the coming years will
of challenges. For example, if the
performance measures in place. A be those companies capable of com-
newer, digitally-savvy entrants to the
different approach to recruiting and bining leading practices both from the
advertising industry become a more
hiring is also important. All companies new and from the old: for example,
attractive destination for top talent,
need to actively recruit net-savvy from traditional publishers that have
that reality will shift the balance of
people who are well versed in critical learned how to develop and sustain
power away from traditional firms for
aspects of the digital advertising effective relationships, and from
many years.
world, including Web 2.0 principles newer entrants who are developing
such as social networking. successful ways to target relevant
Technology developments are also
messages to key consumer segments,
important to bear in mind. For exam-
Different tactics are necessary to methods of tracking and measuring
ple, if faster-moving competitors
recruit, develop and retain the results, and more effective tactics to
develop superior technology-based
younger workers often referred to as attract and retain workforce talent.
analytics, traditional advertising agen-
“millennials.” For example, while many
cies may lose their client relationships
traditional companies are hesitant
to companies that know their client
to offer too much training and devel-
base better than they do.
3 “Recruiting Gen Y: Four Killer Tactics,” by Andrew Tilin, BNET Business Network, www.bnet.com.

Detailed Findings

Figure 1: 2007 share of various media in the $479 billion global advertising business
Source: ZenithOptimedia 5

TV Newspaper Magazines Internet Radio Outdoor Cinema

37% 27% 12% 9% 8% 6% 1%

Figure 2: Percentages of respondents answering the question, “Have overall company revenues grown at a faster or slower
pace than your company’s total digital advertising revenues?”

Faster The same Slower

56% 35% 9%

A changing advertising available, and as technology has digital advertising. (See Figure 2.)
landscape enabled consumers to skip or speed More than half (56 percent) of our
through commercials, the advertising- survey respondents noted that the
Any analysis of digital advertising based revenue model for media such pace of revenue growth is faster than
must begin with a foundational as television is changing. that of traditional advertising growth.
understanding that traditional televi-
sion and newspaper advertising still Although global revenues for newspa- What’s behind such shifting revenue
dominates the marketplace. Globally, per advertising have stayed strong, patterns? In part, it’s the fact that
estimates about annual spending on most of that strength is in emerging companies are being drawn to a num-
television advertising range from $170 markets. Some of the numbers ber of extremely attractive capabilities
billion to $200 billion, more than in mature markets, however, are of digital advertising. The digital
three times the market for online troubling. Print advertising sales for environment enables richer media
advertising.4 Of the $479 billion spent US newspapers, for example, were forms, and provides interactive func-
globally on advertising in 2007, 37 projected to fall $2 billion in 2007. tionality that engages customers more
percent was on television advertising. Year-on-year comparisons across effectively. Digital advertising also
Newspapers constitute the second- major US newspapers are indicative of offers real-time measurement and
largest advertising medium at 27 the industry as a whole: The New York consumer-targeting capabilities, which
percent. (See Figure 1.) Times, down 7.5 percent; The Wall help companies reach the consumer
Street Journal, down 10 percent; USA segments they want. It also helps them
Yet several vulnerabilities in tradition- Today, down 14 percent.6 determine what effects their advertis-
al advertising models, lurking in the ing is having on buyer behavior—and,
shadows for years, have now emerged Respondents to the 2008 Accenture therefore, what return companies are
into broad daylight. With so many Global Digital Advertising Study also getting on their investments.
alternative forms of entertainment strongly affirm the growth trend of

4 Kelsey Group, “The Kelsey Group’s Annual Forecast (2007-2012): Outlook for Directional and Interactive Advertising,”
www.kelseygroup.com/press/pr080225.asp.
5 ZenithOptimedia, quot;Western ad markets continue to slow, but surging developing markets propel healthy world growth in ad expenditure,”
press release, June 30, 2008.
6 quot;Drop in Ad Revenue Raises Tough Question for Newspapers,quot; by Katharine Q. Seelye, New York Times, March 26, 2007.

Figure 3: Analysis of current market leaders and digital share leaders show four primary groupings of players

US$20B #15*
#5
#9
#1
#12
Total Advertising Revenue

#4
#8
#17
#2

#13

#7
#6
#10
#3 #11
#14
#15* Industry Average (7% to 9%)
US$0
* Designates tie
0% Digital Share of Advertising Revenue 100%
Numbers indicate ranking by survey
respondents of who future high performers
Traditional Player New Entrant Emerging Digital Converging Digital in advertising are likely to be

What does high performance digital media divisions and digital the heart of the Accenture Global
mean for digital advertising? media services companies to ask them Digital Advertising Study was to
several basic questions: assess the impressions of experienced
What are the attributes and capabili- executives regarding high performance
ties—the business strategies, technolo- 1. What are the attributes and
in the advertising industry. Details of
gies, processes, talents and skills— capabilities you believe are
this part of the research follow later
needed to achieve high performance essential to achieving high
in this report.
in digital advertising? Here, arriving at performance in the future
answers requires thinking creatively in through digital advertising?
First, however, Accenture researchers
terms of research methods. Accenture looked at the financial and market
2. How does your company stack up
defines a high-performance business performance of 17 different players in
against a perceived ideal when it
as one that outperforms its competi- the advertising industry, both tradi-
comes to such attributes?
tors over extended global economic tional and new-media companies.
cycles and through multiple changes 3. Who among today's companies Plotted against both total advertising
of executive leadership. To date, digital would you classify as a digital revenue and digital share of advertis-
advertising is at too young a stage on leader within the relevant ing revenue (see Figure 3), the compa-
the maturity curve to have produced attributes? nies naturally form groupings accord-
companies that can, technically, be ing to four categories:
termed high performers. Four types of players
1. Traditional players still generate
The key to an assessment of the digi- the majority of their revenues from
Yet asking the question about high
tal advertising industry at this stage in non-digital advertising activities.
performance now is essential. That was
its evolution is a healthy mix of the Their share of total advertising
the driving purpose behind this year's
subjective with the objective. Lacking revenue is high, but their digital
Accenture Global Digital Advertising
longitudinal data at this point—perfor- share is low.
Study. We sought out more than 80
mance numbers over an extended
senior executives of digital media
period—the research methodology at
organizations, traditional firms with


Market ranking Executive perception
Market ranking Executive perception according to total of who the potential
according to total of who the potential advertising revenues high performers are
advertising revenues high performers are
1 4
1 4
2 9
2 9
3 16
3 16
4 6
4 6
5 2
5 2
6 12
6 12
7 11 7 11

8 8 8 8

9 3 9 3

10 13 Figure 4 (left): Many of today's 10 13
11 14 advertising leaders are perceived to be 11 14
less viable as high performers in the
12 5 12 5
digital era of the advertising industry.
13 10 (Source: Accenture analysis) 13 10
14 15 14 15
Figure 5 (right): Many of the compa-
15 1* nies that currently lead in terms of 15 1*
16 17* share of the digital advertising mar- 16 17*
ketplace are perceived by their peers
17 7 to be more viable as high performers in 17 7
Digital share leader * Designates tie the future. (Source: Accenture analysis) Digital share leader * Designates tie

2. New entrants are those only get- be heard based on a comparison of On the other hand, Figure 5 demon-
ting into the advertising business, current industry performance with strates that today's executives believe
but who show promise of being perceptions of executives about who the future lies with the kinds of com-
significant players in the future. will dominate in the long term. panies who are already dominating in
terms of digital market share. These
3. Emerging digital companies are
As part of our analysis, we created a companies (marked in blue) are
focused mostly on a limited number
ranked ordering of advertising compa- perceived by their executive peers to
of channels but who are leveraging
nies according to total advertising be better equipped to achieve high
those channels to be serious con-
revenues (see left side of Figure 4). performance as the advertising indus-
tenders in the future.
We then compared that evaluation to try evolves in a digital age. Several
4. Converging digital companies how executives in our survey ranked companies rise in ranking based on
are trying to do more than just these same players according to the perceptions of their potential to be
compete in the online world. They perception of the companies' ability to high performers in the future.
are working to push the envelope in achieve high performance in the future
all dimensions, both traditional and (right side of Figure 4). The importance of this disparity—
digital, and in fact are working to between current performance and
create a converged advertising This analysis shows that many tradi- perception of performance potential—
presence across all dimensions. tional advertising companies drop pre- is clear: executives realize that dra-
cipitously in ranking, meaning that matic change is at hand. The attributes
Evidence of dramatic change executive peers are less than confident and capabilities needed to drive high
ahead in the advertising in the ability of traditional advertising performance in a digitally driven media
industry companies to meet the challenges of age are not the same as those that
the digital advertising age. have produced success to this point.
One major headline from our research
is that the rumblings of major change
in the advertising industry can already


Figure 6: The relative importance, according to survey respondents, of a range of attributes for achieving high performance in
digital advertising

Not Extremely
Important Important
1 2 3 4 5
Workforce Talent 4.54
Applied Business Analytics 4.30
Investments and Business Development 4.28
Business Intelligence 4.25
Sales Force Performance 4.24
Long-Term Business Strategy 4.14
Planning and Forecasting 4.14
Advertising Product Performance 4.09
Advertising Management Technology 4.00
Advertiser / Agency Service Level 3.95
Operating Model 3.91
Advertising Yield Management 3.84
Advertising Operations 3.82
Impact on Average Revenue per User 3.79

Ranking the attributes of Figure 6 ranks the averaged responses Further clarification about the most
high performance in the survey. critical attributes needed at this point
in the digital advertising maturity
We asked our survey respondents to The results reveal an interesting mix curve was reached in our study by
rate the importance of 14 attributes of strategy, technology and workforce asking an important follow-up ques-
and capabilities, on a five-point scale performance concerns. From a strate- tion: For each of these attributes,
(1 = Not important; 5 = Extremely gic point of view, concern about how do you rank your own company's
important) that must be mastered, if investments and business development current capabilities on that same five-
a company is to achieve long-term rose to the top. From a technological point scale?
success and high performance in perspective, capabilities such as
digital advertising. The attributes analytics, business intelligence, adver- This question enabled us to narrow
considered included: tising management and planning the list of critical digital advertising
• Advertiser/Agency service level and forecasting all scored above an attributes even further, to three capa-
• Advertising management technology average of “4.” From a workforce per- bilities that ranked high both in terms
• Advertising operations spective, general talent management of overall perceived value and in terms
• Advertising product performance capabilities were a concern, as were of the differential between companies'
• Advertising yield management the specific skills and capabilities of current status and where they would
• Applied business analytics the sales force. like to be. These three capabilities as
• Business intelligence shown in Figure 8 are:
• Impact on average revenue per user In terms of perceptions of digital lead-
• Investments and business ership, Figure 7 shows that Google • Workforce talent
leads all others in terms of being • Applied business analytics
development
ranked best-in-class in at least one of • Investments and business
• Long-term business strategy
the 14 digital media attributes development
• Operating model
explored in our study.
• Planning and forecasting
• Sales force performance
• Workforce talent


Figure 7: Companies mentioned as best-in-class in at least one of the essential digital media attributes (percentage of
respondents)

Google 93%
Microsoft 53%
WPP 42%
Apple 42%

Figure 8: Top priorities in digital advertising capability development: Combined analysis based on perceived importance
and on gap between self-assessed and ideal attributes

Gap between the
importance ranking
of the attribute
Not Extremely and the company's
Important Important self-assessment
1 2 3 4 5
Workforce Talent 4.54 -0.73

Applied Business Analytics 4.30 -0.98

Investments & Business Development 4.28 -0.65

New digital advertising capabilities for a major sporting league
Accenture recently worked with a major sporting The site’s advanced digital advertising capabilities
league to enhance the capabilities of its website now enable targeted advertising across the site
and to better leverage its content assets by that has achieved high sell-through rates at high-
providing such things as video game highlights, er than average cost-per-thousand impressions
real-time game statistics, photo galleries and (CPM) and cost-per-click (CPC) rates. With peak
player details. Given the popularity of the sport weekends seeing more than one million videos
and its website, and a need for the website to be viewed, video advertising has been a huge success
self-funding, online advertising was a core part for the league. In addition, the ad operations team
of the strategy. Accenture worked closely with is able to effectively track, monitor and optimize
the client's chosen ad server supplier to enable advertising campaigns to ensure successful delivery.
targeted advertising—specifically, IAB7-standard
banners, AJAX-based photo galleries and Adobe®
Flash®-based) video advertising.

7 The Interactive Advertising Bureau (IAB) works with publishers, marketers, agencies and other industry associations to formulate and
develop interactive advertising standards and guidelines. These standards and guidelines play a vital role in creating efficiency in the
interactive marketplace.

Workforce Talent
Leaders raise the bar on recruiting and culture

The task of finding and managing tal- attitudes to work across the scales. This problem should become
ent has become more complex, turbu- generations. less of an issue over time, as more
lent and challenging than ever before. efficient tools and processes are
Once-familiar talent pools are drying • Steady change in the nature of brought online. For now, however,
work—from a product orientation
up as new ones are rapidly opening— the challenge is particularly intense.
to one based more on a deep
creating significant challenges for
understanding of a customer's needs
managers and leaders of advertising Third, companies are witnessing a
and desires.
companies and digital media services battle for top talent and an increase
companies: • Employee turnover rates that can in movement as employees move more
exceed 18 percent annually, costing fluidly from one company and oppor-
• A demand for digital experience
some companies as much as 40 tunity to another. Statistics from the
that is outpacing the supply of skilled
percent of earnings.8 US Department of Labor, for example,
resources.
show that workers aged 25 to 34 have
• An aging workforce, with many In the digital marketplace, the talent an average tenure with their compa-
workers headed toward retirement challenge is especially severe, for nies of only 2.9 years, compared with
and not enough younger workers to several reasons. First, it’s a new area 9.3 years for workers aged 55 to 64.9
replace them. that is growing at a double-digit rate,
leading to a shortage of available tal- One executive in our survey noted an
• Rising demand for new skills aggra- employee who had worked for a med-
ent. Second, the work is still very labor
vated by educational shortcomings. ical information website, left to join a
intensive. So when one considers digi-
• New methods of working and new tal advertising growth targets set at major portal company, returned briefly
relationships between users and 20 percent or 30 percent, one must to the medical website company and
suppliers of talent. remember that such growth must be then immediately left to join an online
supported by a comparable increase in lifestyles website—of course receiving
• More diverse and remote or even hiring talent. One has to be able to a salary increase with each move.
virtual workforces with different scale the organization as revenue

8 quot;Driving the bottom line: Improving retention,quot; Saratoga, © 2006 PricewaterhouseCoopers LLP.
9 United States Department of Labor, Bureau of Labor Statistics, www.bls.gov/news.release/pdf/tenure.pdf.

Figure 9: Perceptions of which industry players excel at attracting, developing and retaining top workforce talent
(percentages of respondents)

Google 43%
Apple 15%
Microsoft 14%

The importance of sales talent Perceptions of digital leaders Talent imperatives
The sales organization is critical to the Asked to name the digital leaders in From Accenture's perspective, digital
pursuit of high performance in digital the area of attracting, developing and leaders need to be thinking about
advertising. Sales force performance retaining top talent, Google was the several things when it comes to
is also an area where the executives overwhelming choice, followed by developing and managing talent.
in our study perceived a wide gap Apple and Microsoft. (See Figure 9.)
between the importance of the Respondents cited both quot;softquot; and Consider core vs. non-core skills
attribute and their own capabilities. quot;hardquot; factors in ranking Google tops and capabilities and expand the
when it comes to talent. That is, exec- scope of outsourcing.
Other Accenture research10 has shown utives noted cultural strengths at Carefully consider the company's core
that corporate executives in a majority Google—an open and creative culture focus: which strategic capabilities are
of companies believe their sales force where failure is not punished. At the essential to develop internally and
performance is no better than aver- same time, the company's rigorous which are better sourced elsewhere?
age—and sometimes actually worse or recruiting process was also men- In our experience, traditional compa-
much worse than average. Even more tioned: the willingness to invest nies are often superior when it comes
troubling is the fact that most of considerable time and resources in to understanding within their organi-
these executives do not point the fin- screening employees for the attributes zation what capabilities they need to
ger at tough economic conditions as Google believes are critical to their own within their own workforce and
the cause. Rather, they are more apt success. what capabilities they can outsource.
to find fault with the performance of Fifty-seven percent of executives in
their salespeople, or with how those our survey believe that ad sellers will
people are managed and measured, outsource their high-volume but low-
than with customers’ tight budgets or value advertising operations tasks
increased competition. (e.g., trafficking, invoice reconciliation)

10 quot;Changing Sales Force Behavior to Achieve High Performance,quot; Accenture, www.accenture.com <http://www.accenture.com/>.

Many younger employees are not taking the traditional route
to a job: looking for job postings and then trying to fit into
the mold of a job description. Instead, they are going to an
employer saying, “Here's what I can do; let's try to create a
job for me.”

to third parties so they can focus The newer companies are, at least for advertising for the past 10 years can-
on higher-value business needs. now, enjoying more success when it not, overnight, sell online advertising
Outsourcing can be an important comes to using an innovative culture at the same volume levels and effec-
means to help increase profits and to attract and retain top talent. All tiveness. That capability will require
improve efficiency; it can also provide companies must think in new ways. retraining and the implementation of
important flexibility and fixed costs For example, many younger employees different incentive programs.
for capabilities that may be needed are not taking the traditional route to
only seasonally or during certain a job: looking for job postings and Although knowledge of products and
points in the economic cycle. Many of then trying to fit into the mold of a services is obviously important to a
the newer media companies are just job description. Instead, they are going salesperson's success, the greater
beginning to sort out their sourcing to a potential employer saying, quot;Here's value comes in the relationship the
strategies. For example, one of the what I can do; let's try to create a job person has established with clients.
major portals has just recently begun for me.quot; That kind of model is difficult The traditional direct sales force
considering outsourcing its ad opera- for traditional companies that have a has built those relationships and no
tions for their small- and medium- much more regimented hiring process. company on the quest for high perfor-
business group. Given there’s a war mance should ignore them. This means
for talent, outsourcing is a critical Analyze the current workforce based significant retooling is necessary to
mechanism for optimizing talent. on capacity for repurposing. leverage relationships while also giv-
Workforce analyses must consider the ing salespeople the knowledge, skills
Focus on developing the right extent to which workers currently and tools needed to succeed in a
culture for success. focused on traditional aspects of the digital environment.
On the other hand, traditional compa- business can be retrained for the digi-
nies have something to learn from tal age. A sales force for a newspaper
new media when it comes to culture. that has sold only offline newspaper


Applied Business Analytics
Leaders refuse to live without it

Figure 10: Percentage of respondents agreeing or disagreeing with the statement, quot;There will be a vast proliferation of
digital ad formats with an associated increase in the complexity of accurate measurement.quot; (Note: Data includes a 2 percent
rounding allowance.)

Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree

17% 47% 21% 12% 1%

This year's Accenture Global Digital mary value point of digital advertising develop deeper business intelligence
Advertising Study affirmed last year's (see Figure 10). Respondents over- and analytics capabilities. The compa-
findings that more sophisticated, tech- whelmingly agreed or strongly agreed ny is looking to use the data that it
nology-based analytics capabilities are with the statement, quot;There will be a gathers from its traditional wireless
essential to achieving high perfor- vast proliferation of digital ad formats and wireline communications and
mance in digital advertising. As one of with an associated increase in the apply it in a way to do targeted online
this year's survey respondents put it, complexity of accurate measurement.quot; and mobile advertising, given the con-
quot;Leaders refuse to live without deep sumer overlap among its businesses.
and extensive analytics capabilities.quot; Companies are now awash in a flood This is a good example of taking data
of data about customers. (Consider that already exists and using it in a
There's good reason to care about this that Wal-Mart's legendary data ware- different way.
attribute in particular. Accenture's house of sales and inventory data was
research finds that high-performance assessed two years ago at 583 ter- All companies, therefore—not just
businesses are twice as likely to abytes; by comparison, the United those in the advertising industry
use analytics strategically compared States Library of Congress's entire print itself—need to determine whether or
with the average company, and five collection takes up only 20 terabytes.)12 not they have the requisite informa-
times more likely to do so than low The data is there; the big question is tion technology capabilities related to
performers.11 whether companies can become more business intelligence and customer
nimble at manipulating that data. analytics to react to data quickly as it
Our digital advertising study found comes in and use it to target cus-
that executives clearly believe that the For example, Accenture has been tomers more effectively.
increased capability to make more working with a large communications
sophisticated measurements is a pri- provider in Asia to help the company

11 Competing on Analytics: The New Science of Winning, by Thomas H. Davenport and Jeanne G. Harris (Harvard Business School Press, 2007).
12 Ibid., p. 98.


Figure 11: Percentage of respondents agreeing or disagreeing with the statement, quot;Consumer privacy fears will significantly
limit the growth of targeted advertising capabilities.quot; (Note: Data includes a 1 percent rounding allowance.)

Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree

17% 33% 21% 26% 2%

The sophisticated analytics possible in Data privacy issues are a concern for Nevertheless, half the respondents
digital advertising will drive a decline many when it comes to targeting also feel that there are opportunities
in the use of many traditional success customers based on better analytics. for more targeted mobile advertising
measures in advertising, such as cost That's one reason why many are mov- that will not necessarily be limited by
per thousand impressions (CPM). At ing fairly cautiously when it comes to consumer's privacy concerns. (See
the same time, analytics will enable mobile advertising, for example. The Figure 11.)
advertisers to realize a better return potential backlash could be huge for
on investment through more accurate companies perceived to be engaging Perceptions of digital leaders
targeting of audiences. in mobile spamming.
Digital leaders in the analytics area,
according to survey participants,
Analytics becomes even more impor- This year's Accenture survey showed
included Google, Microsoft, WPP,
tant in a down economy, in which that executives are certainly aware of
Apple and BT. (See Figure 12.)
chief marketing officers need to do the potential pitfalls presented by
Executives noted, in particular, the
more with less. Some recent survey mobile advertising. For example, 64
analytical tools that come with
data suggests that chief marketing percent of respondents agreed or
Google's advertising system. Google
officers have had budgets reduced strongly agreed that mobile carriers
quot;pretty much invented analytics for
this year as much as 25 percent.13 will not begin to enable any unsolicit-
digital media,quot; one participant noted,
So more sophisticated targeting can ed, commercial mobile advertising
quot;and they understand all this better
help companies get more impact for until consumers give their permission
than anyone else.quot; quot;Google is proac-
a lower advertising spend. through an opt-in capability.
tive,quot; said another, quot;while everyone
else is reactive.quot;

13 quot;Advertising Analytics: Doing More with Less,quot; www.podtech.net/home/4904/advertising-analytics-doing-more-with-less.

Figure 12: Perceptions of which industry players excel at applied business analytics (percentages of respondents)

Google 30%
Microsoft 6%
WPP 4%
Apple 4%
BT 4%

Analytics imperatives People who love numbers. If compa- The good news for those who want to
nies are going to excel at analytics, become analytical aces is that they
As the digital leaders in digital they need employees who are data already have much of the data they
advertising embrace more powerful, savvy or who can quickly become so. need. Knowing what to do with it is
forward-looking techniques such as Clearly, this calls for hiring, training another thing entirely. But the effort
predictive modeling, forecasting and and rewarding for analytical skills. must start now. Experience suggests
optimization, they are relying on that at least 18 months of data is nec-
sophisticated IT tools, of course. But Processes that revolve around facts. essary before one can begin deriving
they are also making sure they abide High performers when it comes to meaningful insights. That's a year and
by four fundamental factors: analytics work toward a quot;single ver- a half in which your competitors may
sion of the truthquot;—not the clashing already be well down the same road.
Leaders who quot;get it.quot; Taking a broad views of the same metrics that bog
analytical approach to business calls down other companies. Newer
for big changes in culture, process, processes take an integrated, cross-
behavior and skills. One CEO of a enterprise view of the data.
major entertainment company regu-
larly asks employees, quot;Do we think this Technology to capture, sort and
is true, or do we know?quot; Effective make sense of the data. There is
executive leadership when it comes no shortage of processing power to
to analytics pushes to create a fact- support analytics efforts. New tech-
based culture that extends even to nologies are available that can plow
suppliers and other business partners. through enormous databases at speed.
Much of the necessary analytical soft-
ware is available, too.


Investments and Business Development
Leaders are bold and selective

This year's Global Digital Advertising These consequences will, in turn, What kind of company owns the
Study both confirms and strengthens create a wave of change in advertising household? This question is important
Accenture’s view that the encroach- models. Yet our research and experi- because the providers who, in essence,
ment of digitization of content and ence suggest that the future high per- own the bulk of a household's activity
Internet-originated business models formers will be those who are both can earn a premium from marketers to
into other forms of media such as bold and selective in their acquisitions those households. We asked survey
television will cause an even greater and in the development of new busi- participants whether cable and
shake-up than the online revolution. ness and operating models needed to telecommunications companies are
There will be two particular conse- succeed in a digital environment. best positioned to own the household
quences for participants: News Corporation, for example, was because of access they provide into
prescient in acquiring MySpace a few the home. Only 38 percent agreed or
years ago, anticipating the rising strongly agreed; 32 percent disagreed;
• A threat to the survival of incum-
importance of social networking web- and more than a quarter of them (28
bents—primarily traditional media
sites to the advertising industry. And percent) were not sure or had no
companies and advertising
the $22 billion in acquisitions made opinion. Clearly the competitive land-
agencies—that do not embrace new
industry-wide during 2007 suggest scape is uncertain at this time.
technologies and business models.
that these kinds of approaches to
• Huge new opportunities in the business expansion will be a perma- The role of new trends such as
digital advertising sector for service nent part of the landscape. social networking sites is uncertain.
and media providers with experience Executives in our survey were divided
in delivering digital content and A number of questions and concerns over the ease with which money can
access to deep customer insights. dominate the discussion of invest- be made through advertising associat-
ments, development, competition and ed with social networking sites. Only
business models, based on our survey just over half (54 percent) agreed or
findings. strongly agreed with the statement


Figure 13: Perceptions of which industry players are strongest at the business development and investments necessary to
achieve high performance in digital advertising (percentages of respondents)

Microsoft 28%
Google 23%
News Corporation 9%

that, quot;Over the next five years, social budget, and a track record in effective customer insight data from multiple
network revenues will continue to trail research. quot;Microsoft is playing catch- partners, or by investing in sophisti-
that of content owners because social up,quot; one executive noted, quot;but they cated customer data analytic solu-
network site traffic is less easy to have a ready pool of investment tions. These capabilities can enable
monetize than content owners' site money that will continue to position companies to use dynamic, behavioral
traffic.quot; Nevertheless, executives are them as a strong player.quot; differences in customer segmentation
clearly drawn to the possibilities of to target and drive response rates on
social networking. As one respondent Business development advertising.
put it, quot;Once a social network site imperatives
becomes popular and continues to Effectively manage the transition to
Accenture believes several imperatives
grow and gain new readers, the possi- a performance-based environment.
are foremost when it comes to the
bilities for advertising opportunities One of the biggest shifts in the adver-
investments and developments needed
are endless.quot; tising industry today is toward perfor-
to achieve and sustain high perfor-
mance-based advertising. This means
mance in digital advertising.
that customers want to do more than
Perceptions of digital leaders quot;establish brand valuequot; in some gener-
Invest in more sophisticated cus-
Asked to name the digital leaders in al way; they want to understand
tomer segmentation capabilities. The
the area of business development and exactly how consumers are interacting
most important areas for focus today
investments, Microsoft, Google and with their brands. This is focusing
are in customer understanding and in
News Corporation rose to the top. (See industry players to look specifically at
developing sophisticated, appropriate
Figure 13.) Survey participants how their advertising offerings drive
customer segments to target advertis-
referred to Microsoft strengths such conversion with their partners—how a
ing. This can be done by aggregating
as its large research and development company can provide more assurance


The most important areas for focus today are in customer
understanding and in developing sophisticated, appropriate
customer segments to target advertising.

that customers driven toward one of Carefully analyze the buy-vs.-build Consolidation is key to achieving
their advertisements will be a quality question. Because of the speed marketplace dominance. Aggregation
lead. Providing that kind of assurance necessary to get out in front of the is an important development in this
can increase the value of a company's marketplace in critical areas of digital field and it has really changed the
advertising compared to competitors. advertising—areas such as social net- game. The four major portals (Google,
working or mobile—companies must Yahoo!, MSN and AOL) have been
Think mobile gaming. Gaming, and engage in detailed analysis of what moving aggressively to make acquisi-
especially mobile gaming, are the capabilities they can realistically tions so that they can create the
quot;next big thingsquot; in advertising. develop internally and which they dominant platforms on which everyone
Because of the traffic driven to these need to create through outsourcing, else will run. Business developments
game sites, companies have the acquisition or other means. that can raise the bar for entry quite
opportunity to sell advertising by high can extend a company’s ongoing
working brands into these digital share of the market.
infrastructures. WiFi-enabled mobile
devices mean that such games are
available to users anytime, anywhere.
To date, mobile gaming has not been
targeted by advertisers with the same
level of sophistication as online, PC-
based gaming. This will change in the
very near term, and companies must
be ready to compete in this new arena.


The path to high performance in
digital advertising
The 2008 Accenture Global Digital Advertising Study creates a
new set of imperatives for different kinds of companies when it
comes to developing and sustaining the capabilities discussed
here—the capabilities that can drive high performance.
Total Advertising Revenue

Traditional Player Converging Digital

New Entrant Emerging Digital

Figure 14: The move to convergence
Digital Share of Advertising Revenue in the advertising industry

Accenture believes that, over time, all If you are a new media company: If you are a device manufacturer:
types of companies in the advertising • Build and integrate systems for sales, • Focus on developing features and
marketplace must be moving toward reporting, delivery, etc. to support functions that enable data collection
the converging digital space. (See products across multiple channels for targeting and advertising. These
Figure 14.) All players must be think- and delivery systems or devices. kinds of devices will be most highly
ing about comprehensive ways to prized by service providers and
integrate their advertising capabilities • Equally important, develop processes
and knowledge transfer capabilities consumers alike.
across all major channels, traditional
and digital, while bearing in mind that to create new, needed skills in the
workforce. The advertising industry—and, indeed,
the future clearly belongs to digital any company that purchases advertis-
high performers. If you are a telecommunications, ing—is currently experiencing one of
cable or satellite company: the most disruptive periods in the
In terms of specific recommendations: history of any large business sector.
• Increase the potential for revenue
growth by building enhanced, But companies that get it right—
If you are a traditional media through the mastery of technology
differentiated and complementary
company: trends, the adoption of more sophisti-
services to your core business that
• Exploit all digital content and can be monetized through new cated analytics, the ability to develop
advertising, and repurpose where advertising inventory. more nimble and collaborative busi-
necessary to fit the changing needs ness and operating models, and the
of consumers across different com- If you are a technology development capability to attract, develop and
munication mechanisms. company: retain top talent—will have an edge in
• Target segments more effectively • Focus on creating extensible systems attaining and then sustaining high
so that content and advertising are that have application programming performance in the years ahead.
appropriate to consumer interests interfaces that can reuse widgets
and to different ways of consuming and capabilities built by the
information. developer community as well as
open-source programmers.


Contact us heads from agencies, media, technolo- About Accenture
gy providers and major advertisers.
For more information on the 2008 Quantitative outputs from the inter- Accenture is a global management
Accenture Global Digital Advertising views were analyzed by Accenture and consulting, technology services and
Study and what Accenture can do to combined with our industry insights to outsourcing company. Combining
help you become a high-performance develop the points of view expressed unparalleled experience, comprehen-
business, please contact: in this paper. sive capabilities across all industries
Emily O'Halloran, Accenture Senior and business functions, and extensive
Executive Digital Advertising Lead at About the Accenture Media & research on the world’s most success-
comms.and.high.tech@accenture.com Entertainment Industry Group ful companies, Accenture collaborates
and in the subject line write with clients to help them become
Accenture helps entertainment, broad- high-performance businesses and gov-
”DigitalAdStudy2008”.
cast, publishing, printing and portal ernments. With more than 180,000
companies adapt to the realities of people in 49 countries, the company
About the research
the digital evolution and capitalize on generated net revenues of US$19.70
The research that forms the basis of new opportunities to improve business billion for the fiscal year ended
the 2008 Accenture Global Digital performance. Its dedicated profession- August 31, 2007. Its home page is
Advertising Study was conducted by als provide media and entertainment www.accenture.com.
Accenture in association with The companies with a distinctive combina-
BPRI Group. Research was based on tion of business and technology
face-to-face and telephone interviews consulting, systems integration and
from January to March 2008 with 81 outsourcing capabilities. Accenture
advertising industry leaders in North has worked with 19 of the 20 largest
America, Europe and Asia. The survey media and entertainment companies
participants include CEOs, chief strat- in the world.
egy officers and key business unit

Copyright © 2008 Accenture.
All rights reserved.

Accenture, its logo, and
High Performance Delivered
are trademarks of Accenture.

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