Adobe 2012 Annual Report Download - page 11

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marketing executives are expected to demonstrate the success of their programs using solid metrics. In this environment, gleaning
insight in real time across channels is essential.
We believe there is a significant opportunity to address these challenges and help customers transform their businesses.
This market opportunity is accelerating as Chief Marketing Officers (“CMOs”), digital marketers, heads of digital, advertisers
and publishers are managing spending budgets to migrate their marketing and advertising spend to digital media.
These users are faced with several major market trends, and their choices for how they address these challenges are creating
broad opportunities for our Digital Marketing business:
• Broad commercial utilization of the internet
The internet has fundamentally altered the way businesses and consumers purchase and consume goods and
services. It has also redefined many business processes and has created opportunities for new online businesses, as
well as for existing offline businesses seeking to capitalize on online initiatives. Because of this, businesses are investing
in innovative online initiatives to increase sales, improve customer service, enhance brand awareness, decrease time-
to-market for their offerings, reduce fulfillment costs and increase operational efficiency.
We expect that the scope and scale of commercial internet usage will continue to increase. The roll-out of
broadband and mobile networks, particularly in emerging geographic markets, will contribute to the growth of internet
usage. Internet commerce should also continue to grow. Proliferation of online marketing and customer response
channels, such as mobile, digital video and social networks, will continue to generate interactions that need to be
measured, analyzed and optimized across channels.
• Need to measure online business
In order to make informed decisions about priorities and investments in online marketing and other commercial
initiatives, we believe businesses require timely and accurate measurement of customer behavior. The proliferation of
internet usage and the fact that nearly every user interaction on a website (or other digital medium such as mobile apps,
set-top boxes, kiosks, point of sale systems or any IP connected device) can be captured by the owner of the website,
or other digital medium, has resulted in the creation of an unprecedented amount of data about how a business' customers
interact and transact business with it.
Businesses are increasingly realizing the benefit of using information gained from online and other digital
customer interactions to improve functional areas, such as sales, customer service, product development, marketing,
pricing, manufacturing and inventory management. The interactive and measurable nature of internet activity also
enables businesses to determine how customers arrived at their online destinations, such as through paid search, a
display ad or a social media website. It also enables businesses to determine which advertising mediums are yielding
the greatest ROI, including whether visitors convert to customers once they have reached their destination site.
• Opportunity to optimize and automate online business
Measuring online activity and automating the capture and analysis of data are important for making informed
business decisions. Businesses also need to leverage data to optimize the results of their online business activities. For
example, businesses have historically measured the success of their online marketing programs by simple click-through
rates or conversion rates, the latter being the percentage of click-through users who make a purchase or otherwise
engage in the desired customer action during the online session. However, the effectiveness of online marketing can
be optimized by analyzing and acting on deeper information, such as repeat visits, transactions generated, registrations,
traffic pathways (various paths of online visitor traffic flow), time spent and quality of interaction (engagement),
eventual conversion (desired customer action taken in subsequent visits) or success over time (lifetime value of
customer) as well as comparing the relative effectiveness of different marketing channels (attribution).
Business success metrics can also vary based on the industry or vertical market—for example, media companies
drive engagement to optimize subscriptions and online advertising revenue, whereas retailers and e-commerce
companies focus on promotions and maximizing online purchases. Online businesses utilize a large and growing number
of complex and diverse advertising and communication channels to market to customers, including display advertising,
paid and natural search advertising, e-mail, social media marketing, affiliate marketing, blogs, podcasts, video, games,
rich internet applications (“RIAs”) and comparison shopping engines, as well as traditional offline initiatives.
The emergence of multi-channel marketing initiatives, which combine traditional offline marketing initiatives
such as television, print, magazine, newspapers, radio and catalog with online marketing initiatives, makes the
measurement and analysis of online activity more challenging, but presents additional opportunities to optimize results.
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