This document summarizes key findings from a 2012 report on the state of the new digital economy. It discusses how decision makers can no longer ignore digital technologies and must focus on mobile, cloud computing, and social media. Mobile usage is growing rapidly and will transform business models. Cloud computing offers lower costs, faster deployment, and ability to scale as needed. Social media is where influence takes place, so brands must create engaging content rather than rely on traditional advertising. The cloud and social media were transforming how businesses operate by 2012.

1. The 2012 State of the
New Digital Economy
Brought to you by
What you need to know to survive
as a corporate leader in the digital world.

2. Aericon Insights Research
For Chief Executives and Marketing Professionals
August 2012
Aericon is a full service digital marketing agency headquartered in Boston, MA. Our focus is on results oriented agile digital
marketing programs. We provide strategy, creative and technology services.
www.aericon.com

3. Contents
14–15 PART 4
Social Media
­Takeover
4–5 PREFACE
The New Digital
Economy
8–11 PART 2
Mobile Mania 16–17 PART 5
The Facts That are
Driving Change
6–7 PART 1
Decision Makers Can No
Longer Ignore Digital
12–13 PART 3
The Cloud Rush 18–19 PART 6
One Area CEOs Should
Focus On in the 3
Current Economy

4. Based on both quantitative and qualitative global research
conducted by Oxford Economics and sponsored by PwC,
AT&T, Cisco, Citi, and SAP, this white paper presents key
topics that are transforming the global marketplace.
Preface
The New Digital
Economy 364 corporate decision makers and other
c-level executives predict the future
O
xford Economics released a detailed white paper, in mid 2011, entitled “The New
Digital Economy,” based on a series of questions they asked 364 corporate decision http://www.pwc.com/gx/en/technology/
publications/assets/the-new-digital-
makers and other c-level executives and thought leaders. The research paper was produced economy.pdf
in collaboration with AT&T, Cisco, Citi, PwC & SAP. We have reviewed the report, updated it
The New Digital Economy
with research from McKinsey, KPMG & the International Telecommunications Union, and
How it will transform business
4 combined it with an insights from our very own Digital Expert and CEO Dean Whitney.

5. One year later the relevancy of the report
remains sound with many of the fears
and hopes of last years leaders coming
to fruition in 2012. This report gives us
a current view on a changing economy,
touching on the effects of Cloud based
Technology, Mobile Commerce, Business
Intelligence and Social Media. We will re-
view this report again in 12 months time.
We also look forward to your feedback
and comments.
Survey profile
This global survey of 364 business execu-
tives was conducted in December 2010.
Of the respondents, 19% hailed from the
US, 20% from the UK, 15% from India, 14%
from Japan, and 8% each from China,
Brazil, Mexico and Australia. The survey
represented a broad range of industries,
including financial services (26%); manu-
facturing (19%); technology, information,
communication and entertainment (18%);
retailing and consumer products (15%);
and life sciences and healthcare (11%).
More than half (52%) of respondents
worked at firms with revenues of more
than $1billion; 25% had revenues of $500
million to $1billion; and 23% had revenues
under $500 million. Approximately 46%
held c-level titles; 27% were senior vice
presidents, vice presidents or directors;
and 27% were heads of their business
unit or department.

6. PART 1
Decision Makers Can No
Longer Ignore Digital
Nor do they intend to
What should CEOs be doing to ensure their firms remain
competitive in this disruptive environment?
T
he new digital economy is here to represent vast opportunities for estab-
stay. The barriers to entry are being lished brands and a melting pot of con-
lowered and there is a constant threat to sumption for new ones. More and more
established business models that don’t executives are realizing that its time to get
keep up with societies growing digital af- serious about the new digital economy and
6 finities. The race is on. Emerging markets initiate change; before they are forced to.

7. The three vital areas executives
intend to focus on over the next
five years are:
1 Mobile Technology:
From mobile payments to mobile
gaming and web surfing, smartphones
and tablets usage is skyrocketing.
2 Cloud Computing:
The days of building expensive and
time consuming local hosting networks is
over. The cloud is faster, cheaper and less
averse to technical difficulties.
3 Social Media:
Corporations are fighting for your
attention against everybody from teenag-
ers with an iPhone to blogging moms. Our
world has gone social. “We” the people
have the power, “You” the corporation
need to operate with that mindset.
The new era of connectedness enables any individual
or organization in the global network to sense, analyze, FIGURE 1: Digital Megatrends
and respond to create value, and exploit untapped
opportunities. Which do you believe will have the greatest positive impact on your business over the next five
years?
Mobile technology
Business intelligence
Cloud computing
Social Media
0% 10% 20% 30% 40% 50% 60%
7

8. PART 2
Mobile Mania
How to make business sense of mobile
I
s it even a question anymore that the
mobile Internet will play a large role in
any businesses development?
It’s predicted that by
2014, mobile Internet
searches will overtake
desktop Internet usage.
Your business needs to have a budget for marketing and technology. The question is, what percentage of that
budget should you invest in mobile. Can you engage customers or solve problems with the native features of their
8 smartphones and tablets?

9. FIGURE 2: Mobility Supports Business Growth The facts
According to Nielsen’s report on the US
How strongly do you agree with the following statements for your business over the next
five years? (% stating agree or agree strongly)
mobile market in February 2012, smart-
phone usage is growing and 49.7% of mo-
bile subscribers now own a smartphone.
Our investment in mobile-enabled technologies will focus on supporting business growth comScore reports that more than 100
million U.S. mobile subscribers now use
smartphones.
We will have to mobile-enable our workforce to stay competetive
❖ f the worlds 4 billion mobile phones in
O
use, 1.08 billion are smartphones and
Our business models will be changed by mobile technologies supporting employee productivity 2.05 are SMS enabled.
❖ 6% of mobile Internet users are using
8
their devices while watching TV.
Mobile consumers will transform our business models ❖ 9% of mobile users are open to scan-
2
ning a mobile tag to get coupons.
❖ average Americans spend 2.7 hours
On
We will apply location-based technologies to enhance our mobile propositions and services per day socializing on their mobile
­device.
❖
91% of mobile Internet access is to
socialize.
0% 20% 40% 60% 80% 100% ❖ One half of all local searches are per-
formed on mobile services.
Your business needs to have a budget for
You don’t have to be a c-level executive to optimization (SEO). And SEO ties directly marketing and technology. The question
understand that the way we communicate back to the importance of content. It’s not is, what percentage of that budget should
with people is becoming more mobile than just keywords that matter, but the need you invest in mobile. Can you engage
ever. However most people don’t have the to produce high-quality content to impact customers or solve problems with the
checkbooks or the vision to know what your credibility in the eyes of Google. native features of their smartphones?
and where to invest. Can you better enable employees with
The majority of c-level executives said data or business automation? And do
The content and user-experience online mobile devices are game changers and these benefits outweigh the benefits
needs to be optimized for mobile. This rein- they will be investing heavily in mobile of all the other stuff you need to spend
forces the critical nature of search engine technologies. money on? 9

10. There are 3 ways your business can “do” mobile
1 You can build a website
that is responsive design 2 You can build a mobile
version of the website 3
You can build a mobile
native application
When a website is built with responsive If you do have the cashflow a mobile ver- You might think that it would be more ef-
design capabilities, the information dis- sion will lead to a better user experience. ficient to build either a responsive design
played on that website suddenly inherits Although building a separate mobile site website or a mobile site. Seemingly that
the abilities to morph in size. Layout, text, isn’t as cost effective as building a respon- would cover all bases. You’re content
pictures, and action buttons are all scaled sive design site. would be sized appropriately whether
to fit whatever size screen you’re using. you’re using mobile, tablet or a computer.
However, one problem with a responsive But, you still should consider building a
If you’re having trouble picturing what design site is that its mobile version will native mobile application, because of how
responsive design looks and acts like, try it have all the same copy as your regu- powerful and influential the Apple and
out right now. lar website. A mobile website should Android marketplace is.
have content that is much shorter and
Jeffrey Zeldman, founder of Happy Cog, a simpler for the smaller screen because App stores are huge channels that can
reputable web design and user experience “the lack of context reduces text com- reach wide audiences.
consultancy agency, named responsive prehension” [2]
design as number 2 on his list of “Top Web Different audiences like looking at dif-
Design and Development Trends for 2012″. At the end of the day, your decision should ferent content through different portals.
Having your messaging displayed seam- be driven by return on investment. Some of the most profitable and popular
lessly across all platforms is essential for mobile applications fall within the gaming
marketers and responsive design makes and social networking categories.
that integration possible. That means for
the everyday on-the-go web user, your
life just got a whole lot more zen-like. No
little buttons, no awkward formatting, and
no tiny text sizes coupled with bad zoom
capabilities.
Responsive design is typically cheaper
than building a mobile app or mobile ver-
sion of a website.
10

11. The Bottom Line
At the end of the day, you need to spend
time understanding who your mobile
u
­ sers are and what they want. Depending
upon your cash flow you need to deter-
mine the ROI of a mobile application vs. a
native application vs. a responsive design
mobile presence. That said, there’s an
affordable mobile solution, for your com-
pany, available right now; and you should
start investigating which option makes
most sense for your business.
11

12. PART 3
The Cloud Rush
This cloud rains healthy cash flow,
accelerates time to market,
and lowers cost
The view of cloud computing remains mixed as the
technology brings benefits and risks in equal measures.
46%
of companies surveyed Before the cloud “On the first day of launching a large
In 2008, Aericon CEO Dean Whitney was online client project our web server
said they planned to Digitas’ Vice President of Internet So- crashed. It was chaos. The campaign
lutions. He managed a wide-range of was so successful that our websites
invest heavily in cloud computing. A report campaigns that required hosting large were bombarded with traffic. And the
amounts of data on servers rented from servers couldn’t handle it. We spent the
by KPMG said, “the vast majority of senior third-party providers. whole day working on the servers get-
ting them back online. If we were hosting
executives surveyed expect Cloud invest- At the time servers were expensive and that data in the cloud, something like
required constant maintenance to make that would have never happened. We
ment in 2012 to skyrocket, with some sure they wouldn’t crash. would have hosted all that information
on a cloud-hosted server space. It would
companies planning to spend more than Cloud-computing wasn’t an option at that have programmed settings that would
time. If it had been, Whitney wouldn’t have automatically increase bandwidth and
a fifth of their IT budget on the Cloud encountered difficulties one August after- infrastructure to accommodate whatever
noon during the launch of a web-based traffic we were receiving at that time,”
12 next year.” client project. said Whitney

13. What is the cloud?
When people talk about “it” being in the
2 Cap-Ex free computing:
Will lead to a healthier cash flow.
4 Scale as needed:
You can buy space on a public,
cloud, what they are describing is any and You can rent server space from a cloud private, hybrid or community cloud.
all of their data being stored on a server within minutes without the hassle of
that can be accessed from any computer
with an Internet connection. Your com-
building a server infrastructure, which
can be expensive, time consuming, and
5 Lower maintenance costs:
Less physical resources equals less
pany doesn’t own the server and doesn’t r
­ equires the constant supervision of physical maintenance and power ­ sage.
u
need to maintain the server. The cloud ­specialized employees.
enables the real-time delivery of Internet
6 Resiliency and ­ edundancy:
r
computing services.
3 Deploy projects faster and
foster innovation:
If there’s an outage, cloud services
are equipped with disaster recovery
Six reasons why the cloud There’s nothing to install, you don’t need services.
is awesome to network a new hardware server.
If you haven’t staked your claim, it’s now Is there anyone who questions that the
time to figure out how to use the cloud to mobile Internet is here for good?
b
­ enefit your company.
1 Lower costs:
A 2009 Booz Allen Hamilton (BAH)
study concluded that a cloud comput-
ing approach could save 50 to 67 percent
of the lifecycle cost for a 1,000-server
­deployment [3].
The 2012 Future of Cloud Computing Survey results
(released on June 20, 2012 at the cloud leadership
dinner) reveal several important changes in respondents’
perceptions and plans regarding cloud implementation.
http://northbridge.com/2012-cloud-computing-survey
13

14. PART 4
Social Media
Takeover Social connectivity is where
influence takes place
Dean Whitney talks social
P
eople are much more persuaded by If you can have an impact on them, they
are more likely to tweet, blog and generate
other people than they are by brands. that word of mouth message.
If you think about all the people that are in
Technology is catching up with human-
ity in a sense. It’s forcing brands to make
the market to buy a car, of those people,
really cool content because you can’t buy
which ones would you ask for advice on your way into the minds of consumers.
which car to buy? Those are the people you Back in the recent old days, when a compa-
ny did a product launch, they’d buy TV spots,
want to reach and influence. website banner ads and other media buys.
There’s absolutely no doubt that social networks continue to play an increasingly important part in many people’s lives.
EMarketer predicts there will be a massive 1.43 billion social network users in 2012, representing a 19.2 percent increase
over 2011 figures.
http://www.emarketer.com/Article.aspx?R=1008903
14

15. Companies are forced to create unique c
­ onsumer profile of each visitor is built
and engaging content because they’re no invisibly in the background.
longer able to buy that kind of attention.
Consumers ignore TV spots and banner For example, if you’re in the market for a
ads with DVR and car and start looking around on the Inter-
net for one, what happens when you go
The thought process of a brand has to a web page is that there are real-time
changed from: “How can I force my brand bidding mechanisms in the background
message down the consumers throat” and in a split second the GM or Ford or
to “How can I create really cool material Honda will bid to show you their ad, based
besides the widgets I make or services I on how desirable your consumer profile is.
offer. Content that people truly get
excited about” If your brand is active on Facebook and
you create a compelling and engaging ad
Word of mouth is a lot cheaper than any campaign, and someone personally emails
other form of customer acquisition be- that ad to someone in their trusted audi-
cause the lead is already a referral from ence, its going to hold more weight than a
a trusted source. When you’re generating banner ad or TV spot.
WOM referrals your close rate is going to
be much higher. That is always going to be What’s so compelling
more effective than regular discovery or about social? Today, marketing is driven more by hard
paid advertisement. How has traditional marketing been work- numbers than ever before. Decision-mak-
ing for you lately? Is it generating the ers have the tools to tap into the pulse
Social media makes same leads it used to five years ago? Is of target customers, listen to what they
introductions for you your cost per lead on the rise? want and give it to them.
If there is a gadget website, I’m not going to
tell my grandma to go there, but if I know That question shouldn’t discourage This social revolution is an extremely
someone that loves gadgets, I’m going to marketers to abandon traditional market- compelling reason to re-think, re-allocate,
tell them about it. That WOM needs a much ing initiates — remember it’s a healthy and maybe increase your marketing
more targeted and effective message. balance between traditional and new-age budget. Because now we know where the
marketing that will yield success. leads are coming from, we can measure
How the web works. what return there is on running a Face-
For most people there is a behind- My point being, it’s not important whether book contest, and we see that strategic
the-scenes technology in web pages or not you’ve explored or supported social blogging is responsible for a rising in-
that tracks their activity. As a result a media before reading this white paper. crease in web traffic and leads. 15

16. PART 5
The Facts That
are Driving Change
Six insights you won’t want to ignore
1 Sweeping change:
With 20.4 trillion dollars up for
vices. Executives indicate this digital
metamorphosis ultimately will help
grabs in the digital economy (according their firms provide more responsive
to research firms IDC and iDate) we are customer care (60%), reduce the time
heading into a major period of change. required to complete tasks (60%) and
Mobility, cloud computing, business intel- improve employee productivity (58%).”
ligence and social media will be restruc-
turing and organizing both developed and
developing economies.
3 The digital divide reverses:
Cash rich companies in the devel-
oping world are heavily investing in new
2 Industries undergo digital
transformation:
technologies…it’s becoming a desperate
land grab in a virtual world where the
It’s the only way they will be able to com- barriers have been breached. The deciding
pete in a restructured global economy that factor may simply be a matter of attitude.
is digitizing fast. a. the end of 2011 according to The
At
“While new firms will embrace the
a. International Telecommunications
digital marketplace straight away, Union (ITU) there were 4.5 billion
e
­ stablished firms will need to mobile subscriptions in the develop-
Business effectiveness and productivity is not just
making more stuff, but systematically figuring out the t
­ ransform how they sell, price, pro- ing world. Mobile penetration in the
16 right things to make. duce and deliver products and ser- developing world is now 79 percent.

17. 4 The emerging-market:
Customer takes center stage.
5 Business shifts into
hyper-drive: 6 Firms reorganize to
fully embrace the
Rapid economic growth, along with rising In today’s business environment real- digital economy:
populations and income levels, are putting time business intelligence and predictive New lean and agile companies are storm-
emerging markets at the center of corpo- analysis will be required not only for faster ing the new digital landscape, unencum-
rate growth strategies. decision-making, but to cope with unex- bered by prohibitive rules and rigid poli-
a. n markets like China and India,
I pected market risks and opportunities. cies. The best method to adapt to change
disposable income growth was soar- is to embrace it, companies like IBM are
ing at 8%, at the time of this report moving towards a network structure
as opposed to just 2% in the US and which is more market like and organic,
1% in Japan. April 2012, IBIS World globally integrating organizations that
reports a further slow down to under can locate anywhere to take advantage of
1% for the US. low costs.
FIGURE 3: China becomes the worlds largest economy
30000
China
25000 United States
20000
GDP, $ppp, billions
15000
10000
5000
0
80
82
84
86
88
90
92
94
96
98
00
02
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17

18. PART 6
One Area CEOs Should
Focus On in the
Current Economy
Dean Whitney, Aericon CEO
W
e have entered the golden age of
design. From a product maturity
­
perspective digital innovation has set the
bar extremely high. Great design, func-
tionality and performance have gone
from being excitement factors to basic
­expectations.
18

19. You need to look at the entire an email on their iPad while waiting at a network where you could share pictures?
online brand experience. doctor’s appointment? Whatever the case New York Angel Chairman Brian Cohen
the experience should be in line with your invested in Pinterest.
This interface is open 24/7. Bright and brand promise, enjoyable and intuitive.
shiny things easily sway consumers. How will you innovate?
Especially when these links and images The social network Digg, once valued at More than ever, innovative businesses can
are popping up in their streams and being $175m, just sold its remaining assets to disrupt the marketplace, defy all reason
talked about by their friends. the LinkedIn and the Washington Post and become successful. Clever ideas and
for $500k. In 2008 MySpace was over- sweat equity can challenge competitors
It’s hard to predict in what scenario your taken by Facebook as the world’s largest with much deeper pockets and greater re-
audience will engage your brand. Will they social network. Instagram was bought sources. How will you innovate? How will
be doing a search on a smart phone after for $1 Billion while the one time leader you listen to your customers and strive to
seeing something on TV that sparked Flickr’s future is in question. And who make your brand experience something to
an idea? Will they be clicking a link from would have invested in another social talk about?
FIGURE 4: Market Maturity
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20. Aericon is a full service digital marketing agency
headquartered in Boston, MA. Our focus is on results
oriented agile digital marketing programs. We provide
strategy, creative and technology services.
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