20140401-高盛-GS_Digital_Seminar__Personalization_the_key_theme_17页_440kb

GS Digital Seminar Summary: Personalization as the Key Theme

Core Content and Main Points

The GS Consumer Digital Seminar focused on the transformative role of technology in enabling personalization, efficiency in advertising, and choice in retail. The event highlighted how digital innovation is reshaping traditional industries and creating new business models.

The central theme was personalization, with a particular emphasis on targeted advertising and curated retail experiences. Companies like BSkyB and Shazam were showcased as pioneers in delivering personalized content and ads, which can significantly improve the effectiveness of marketing campaigns.

Despite the migration of advertising dollars and eyeballs to online platforms, TV remains a core medium for brand-building, especially due to its reach and resilience. The consensus was that TV's linear nature and traditional viewing habits will continue to support its role in the market for some time.

Key Trends and Insights

1. Technology Enabling Personalization

• Technology is allowing for greater segmentation and targeted ad delivery, increasing the value of advertising.
• BSkyB's AdSmart is a key example, offering 90 audience segments compared to the traditional 12 categories.
• Shazam and Blippar demonstrated how interactive and augmented reality can enhance traditional advertising.

2. TV's Role in the Digital Age

• TV is still a dominant medium, especially for brand-building and mass reach.
• Linear TV viewing remains high (98% linear, 92% live), indicating resilience against digital disruption.
• Programmatic buying on TV is not yet mature, with advertisers preferring traditional methods for now.

3. Cloud and Connected Ecosystems

• The future of TV is moving towards cloud-based services, but infrastructure challenges remain.
• Connected set-top boxes and networked DVRs are seen as interim solutions.
• BSkyB is investing in next-generation set-top boxes with 4K capabilities and multi-tuner DVRs to enhance multi-room viewing and revenue streams.

4. Retail and E-commerce

• Personalization is crucial for e-commerce in a market of increasing choice.
• Mobile is becoming an important access point, but conversion rates may be lower due to its use for product research.
• Curation is equally important to help consumers navigate the vast array of choices.

5. Digital Marketing and Advertising Agencies

• Economies of scale and broad service offerings are key for advertisers.
• Unbundling of marketing services is unlikely as clients demand integrated, global campaigns.
• New entrants like IBM, Deloitte, and Rocket Fuel face challenges in expertise, relationships, and service breadth.

6. Balancing Reach, Targeting, and Attribution

• The "segment of one" is the holy grail for marketers, but attribution remains a challenge.
• Facebook's 15-second video was highlighted as a game-changer for reach and targeting.
• Attribution issues persist unless campaigns include unique identifiers or specific distribution channels.

Key Recommendations

• BSkyB (Buy): AdSmart represents a high-growth opportunity with potential to monetize underutilized inventory.
• Publicis (Buy): Benefits from merger accretion and cash returns are underappreciated.
• WPP (Buy): Strong scale and scope to compete in digital marketing.
• ProSieben and Mediaset (Buy): Strong structural outlook for traditional broadcasters.
• Ocado (Buy): Strong online retail potential and personalization capabilities.
• Sports Direct (CL Buy): Seen as a value-driven retail player.
• Sainsbury (CL Sell): Potential overexposure to digital challenges.

Summary of Key Takeaways

• Technology is the enabler of personalization and efficiency in both advertising and retail.
• TV remains a core medium for brand-building, with personalized ads enhancing its value.
• Cloud-based TV is the future, but hybrid models are likely to dominate in the near term.
• E-commerce and online retail benefit from personalization and curation, with mobile playing an increasing role.
• Advertising agencies are still preferred by clients for their broad services and expertise, despite digital alternatives.
• BSkyB's AdSmart is a key innovation with potential to increase ad yield and expand reach.
• Measurement and attribution remain challenges in digital advertising, affecting campaign effectiveness and pricing.

Exhibits Summary

• Exhibit 1: AdSmart opportunity is significant, with targeted media worth £3.8bn.
• Exhibit 2: Total UK marketing spend is visualized, showing digital's growing role.
• Exhibit 3: Sky AdSmart attributes show detailed segmentation based on lifestyle, region, and household composition.
• Exhibit 4: TV evolution stages show a transition to connected and converged environments.
• Exhibit 5: Connected home ecosystem highlights the role of set-top boxes and streaming services.
• Exhibit 6: Traditional TV viewing remains resilient in the US.
• Exhibit 8: Online video growth has slowed, still accounting for 5% of total viewing.
• Exhibit 10: TV ad share is expected to remain stable until 2017, with digital gaining share from print.
• Exhibit 12 & 13: Larger agencies show higher margins, with digital being incremental to profitability.

Conclusion

The seminar reinforced the idea that personalization is the key to success in both advertising and retail. While digital disruption is ongoing, TV remains a critical asset for brand-building and reach. BSkyB is at the forefront of this transformation with AdSmart, and the future of TV is likely to be interactive, connected, and cloud-based, with hybrid solutions playing a central role. Advertising agencies are still valued for their scale and expertise, and e-commerce continues to benefit from personalization and curation.