Now that Q1 2011 is all wrapped up, what are we learning about social media so far this year? What are the early trends and where are the social conversations happening?

1. The Pearlfinders Index
Q1 - 2011
Pearlfinders speaks to 5,000+ marketing decision-makers each year across all industries to uncover
areas of opportunity for every marketing services discipline. The Pearlfinders Index collects and
analyses data from these interviews, allowing us to monitor key characteristics of the marketing services
sector. The Index includes detailed commentary on trends and patterns across the complete spectrum
of marketing services. To skip to analysis of a specific category, click on:
PR;
Digital;
Advertising;
Design/Branding.
Sector Heat
Each of the interviews we conduct is prompted by a corporate development likely to result in a review of
marketing services. Below are the sectors that provided the most opportunities for agencies in Q1.
Most Opportunities % Q1 2011 Q1 2010
1. FMCG 16.6 15.5
2. Retail 11.2 8.3
3. Leisure 8.1 9.8
4. Charity/Associations 7.7 8.6
5. Financial Services 7.0 8.3
Opportunity numbers in the fought-over FMCG and Leisure sectors follow a similar trend to Q1 last year.
FMCG is slightly stronger compared to last year (+1.1%) and leisure somewhat weaker (-1.7%), though
recent news from the leisure industry suggests further weakening ahead as consumers reign in
discretionary spending. So comparing the numbers with last year’s, we anticipate continuing strength in
FMCG through Q2 2011, with leisure tailing off. When it comes to retail – opportunities returned to 2010
levels of demand after a strong January. But with poor Q1 economic data and with bellwethers like
Dixons and Mothercare announcing profit warnings we anticipate the next two quarters will offer fewer
opportunities here. Our advice for your new business planning is to stay invested in FMCG, but to also
look at allocating resources on emerging/niche sectors for your offer.
25
FMCG 2011
20
% Planned Corporate Activity
FMCG 2010
15 Retail 2011
Retail 2010
10
Leisure 2011
5 Leisure 2010
0
Jan Feb March April May Jun

2. Desirable Discipline
During Q1, we tracked the number of times marketing decision-makers said that they were considering
a particular service category. Pearlfinders clients span the marketing spectrum so this data is entirely
discipline neutral and without bias during interviews.
Most Likely To Engage Marketing Support % Q1 2011 Q1 2010
1. Digital 17.2 13.3
2. Consumer PR 12.6 13.3
3. Corporate PR 11.7 9.1
4. Advertising 8.8 6.6
5. Social Media 8.5 6.2
Last year, digital agencies lost ground to advertising, integrated and even consumer PR shops as each
scaled up their own digital capabilities. Digital agencies have now reclaimed this ground in the minds of
many marketers. Increasingly, budget-holders are prioritising projects with more rapid ROI such as
ecommerce, display, smartphone optimisation and search. During Q1 2011 we have seen a steady
increase in opportunities making it the most popular discipline.
Consumer and corporate PR activity throughout the first three months of 2011 has followed a broadly
similar pattern to that experienced in 2010. We now expect consumer PR work to experience a gentle
increase in opportunities moving into Q2, with corporate PR tailing off somewhat now that the end of
many companies' financial years has been reached.
20
18 Digital 2011
16
Digital 2010
% Considering Category
14
12 Consumer PR 2011
10
Consumer PR 2010
8
6 Corporate PR 2011
4
Corporate PR 2010
2
0
Jan Feb March April May June

3. Trigger Happy
The triggers we monitor in the media are the starting point for our research. These represent indicators
for corporate developments and potential marketing challenges. Then by analysing the interviews we
have with marketing decision-makers at these organisations, we are able to track which of the triggers
yield the highest number of qualified new business opportunities.
Best Triggers For New Business Opportunities % Q1 2011 Q1 2010
1. Marketing Decision-Maker Moves 31.5 26.6
2. NPD / Innovation 22.1 14.1
3. Restructuring / Growth 21.4 17.0
4. Agency Reviews 13.6 18.5
5. M&A 7.0 4.4
More and more agency opportunities are arising from innovation, new product launches and
development, as the UK’s entrepreneurial spirit returns. Last year, this category of corporate
development generated the greatest demand for marketing services in Q4 (29.3%), having grown
throughout the year. We anticipate NPD/innovation will continue to deliver one in five of all agency
briefs, and the tax breaks for small businesses in this year's Budget could even boost this.
45
40 DMM 2011
35
DMM 2010
30
NPD/Innovation 2011
% Triggers
25
20 NPD/Innovation 2010
15
Restructuring/growth 2011
10
Restructuring/growth 2010
5
0
Jan Feb March April May June

4. Top Sectors for Marketing Decision-Maker Job Moves
After the annual peak in appointments and role changes that accompanies the New Year, marketing
decision-maker job moves have tailed off. We expect this to level out in Q2 as budgets for the new
financial year are announced and allocated.
Last year, the public sector was one of the top destinations for new marketing budget holders, but now it
only accounts for 3% of appointments. Government cuts have had the opposite impact on the third
sector. It is now essential for charities to have the best fundraisers and marketers to plug the gap with
corporate funding, while associations representing the financial sector have also been bolstering their
marketing and comms teams.
Q1 2011 Q1 2010
1. Charity / Associations 1. Financial Services
2. Financial Services 2. FMCG
3. FMCG 3. Charity / Associations
4. Retail 4. Public Sector
5. Media 5. Leisure
Target Audience
For brands looking to reach specific consumer audiences there were three dominant demographic
categories. Consumer audiences were the main focus within 78% of our interviews.
Top 3 B2C Audiences % Q1 2011 Q1 2010
1. Male 24.3 16.8
2. ABC1 19.1 19.9
3. Female 16.5 11.2
Of the marketers we spoke to, 21.8% were focusing on B2B marketing in Q1, with the three sectors
below providing the most B2B marketing opportunities.
Top 3 Sectors Investing in B2B Marcoms % Q1 2011 Q1 2010
1. Industry / Manufacturing 20.5 16.3
2. Professional Services 20.5 10.2
3. Financial Services 13.6 9.2

5. Feeling Positive
We asked senior decision-makers we spoke to in Q1 how positive they were feeling about the business
environment. In the past we've used this to give us a sense for which marketing teams are getting the
green light for new projects and securing budgets. We used a score where '1' is most positive and '10'
the least.
Most Positive Sectors Q1 2011
1. Apparel 2.5
2. eCommerce 2.6
3. Pharma / Healthcare 2.8
4.Telecoms 3.0
5. Retail 3.0
Month
2010 2011
March
March
June
Sept
April
May
July
Nov
Dec
Aug
Feb
Jan
Oct
1
2
Apparel
Average Positivity
eCommerce
3
Pharma/Healthcare
4
5

6. Customer Objective
We gathered data on companies' primary customer marketing objectives.
Primary Objective Q1 2011 Q1 2010
1. Acquisition 65.3 68.4
2. Retention 16.8 11.3
3. Development 17.9 20.3
80
70
Acquisition 2011
60
Acquisition 2010
50
Retention 2011
40
%
Retention 2010
30 Development 2011
Development 2010
20
10
0
Jan Feb March April May June July Aug Sept Oct Nov Dec
With acquisition and development priorities appearing constant when compared to this time last year,
the focus for marketers this quarter has been on retaining customers. What's apparent in times of
uncertain budgets is that repeat custom proves the most cost-effective way of driving revenues.
National Or Regional
Where marketing decision-makers specified a need for agencies of a particular size or geographical
reach, we tracked the trend.
Agency Size / Geographical Reach Q1 2011 Q1 2010
1. National 60.6 50.8
2. Regional / Niche 39.4 49.2
While there has been a noticeable shift towards agencies with national capabilities since last year, this
can be attributed to the increase in larger brands conducting agency reviews.
These brands are not seeking the services of pitch or search and selection consultants however. In Q1
2010 8.1% of reviews we researched involved search and selection consultants, but so far this year just
3% have taken this approach. One of the lessons larger brands appear to have taken from the recession
is to aim to achieve as much as possible through internal resources, particularly for areas where
external advice isn't absolutely necessary. Agency reviews are evidently falling into this category.

7. Q1 2011 Index: PR Highlights
• PR was consistently the most popular discipline throughout the last 12 months, featuring in
40% of all conversations in Q1 2011.
• Of the 337 PR-specific opportunities we profiled, only 29 arose from press-reported scheduled
PR reviews.
• For the first time in 12 months, consumer PR is no longer the most planned-for marketing
discipline in the mix, second to digital.
• Corporate and B2B comms activity is picking up: this quarter, 26% of PR opportunities were
targeting a B2B audience, where the figure was 23% last year.
Sector activity
The largest incidence of PR opportunities was in the FMCG industry (56), followed by Retail (40) then
Charity/Associations (38). While FMCG remains the most fertile sector, all three are levelling after the
first half of 2010, when uncertainty over market conditions fuelled both consumer and corporate PR
efforts, while charities and associations cut their spend. Looking forward, we have found decision-
makers are predicting comms projects that had been on hold will restart.
18
16
14 FMCG
% PR Opportunities
12
10
Retail
8
6
4
Charity/Associations
2
0
Q1 Q2 Q3 Q4 Q1
For Leisure and Retail industries, meanwhile, a lift is expected from the upcoming bank holiday season.
Brands ranging from Marston's and Domino's Pizza to Stanley Gibbons and ITN spoke about leveraging
the royal wedding for a fresh marketing push. Looking more closely at both sectors compared to the
first quarter of 2010, as an indication of activity in the market, an initial dip after the New Year will
reverse as investment in PR returns during the summer months. We predict the retail sector will see an
increased demand for corporate PR as the stronger players look to reassure investors they can continue
to deliver dividends as others in the sector deliver profit warnings.
14
12 Leisure 2011
10
% PR Opportunities
Leisure 2010
8
6 Retail 2011
4
Retail 2010
2
0
Jan Feb March April May June

8. Online PR now central to restructuring and mergers
The return of more mergers, acquisitions and corporate restructuring activity to the corporate landscape
generated a surge in PR opportunities this quarter. Its most notable impact was on online PR and social
media, which had 30 opportunities for agency involvement as a result of M&A or corporate restructuring
in Q1, compared to just 11 in the same period last year.
While the role of online PR in B2C marcoms and even corporate business development and sales has
been well documented, its central role in supporting M&A and corporate restructuring is now evident.
When BSM was acquired by the AA, it was the AA’s social media expert that led the brand strategy. Brit
Insurance is planning to use inbound investment from its new owners to drive recruitment, again via
social media. Morrisons' strategy to build an online offering through acquisitions has naturally been
accompanied by a greater focus on its broader perception online, again via social media channels.
Products in place of props
A fresh debate this quarter was the role of PR agencies in product placement. While media planning and
creative agencies have been responsible for brokering the initial deals we’ve seen, we think there is
scope for the PR industry to win work here. Broadcast PR and even prop placement specialists have
long been cultivating relationships with TV channels and production companies to secure placement, but
going forward, we see an opportunity for PR experts to feed into strategy. We anticipate openings with
companies looking to craft specific narratives around their brands across multiple media outlets.
Listening, not broadcasting
While the last two years saw a social media bandwagon that compelled brands to build a presence to
keep up with competitors, in 2011 many consumer brands stopped to take stock. The response has
been to reinstate a more traditional perspective – shifting priorities from branded portals and
broadcasting messages, to media monitoring, data mining and customer service. In conversations about
social media, more than twice as many decision-makers this quarter mentioned a broader traditional
approach, compared to Q1 2010.
What this will mean for the coming year is a greater proportion of integrated briefs incorporating social
media, while for PR departments the remit is to be more responsive – the emphasis online has moved
from being proactive to reactive. At video game publisher Ubisoft, for example, we were told "customer
understanding" is at the heart of a new overarching strategy.

9. Q1 2011 Index: Digital Highlights
• A third (32.7%) of marketing budget holders we spoke to were evaluating digital or social media
support in Q1.
• Figures indicate a steady rise – throughout 2010, the average figure was 27%.
• Among digital opportunities, 35% of decision-makers also spoke about mobile. A year ago, the
figure was just 23%.
• 12% of decision-makers mentioned social commerce as a priority. Last quarter, the figure was
8%.
• In new product launches, 55% of marketers planned to invest specifically in digital channels.
Active sectors
The top three industries investing in digital this quarter were FMCG (43), followed by Retail (41), then
Charities / Associations (25). Mapping the incidence of digital opportunities this year against the first half
of 2010, it's clear there's steady investment from brands over the same period.
25
20 FMCG
% Digital Opportunities
15
Retail
10
5 Charity/Associations
0
Q1 Q2 Q3 Q4 Q1
Disciplines within Digital
As tablets and smartphones become the primary consumer touchpoints and the number of hours
consumers spend on them rises, brands have increasingly turned to social media and mobile strategies
to reach them - the appetite for agencies with mobile expertise has never been stronger.
25
Social media
20
Mobile
% Digital Opportunities
15
e-commerce
10
Search
5
Web builds
0
Q1 Q2 Q3 Q4 Q1
The popularity of smartphones among older consumers has also been the catalyst for an increasing
number of digital briefs targeting this group – four times as many in Q1 this year than last.
However, many budget holders are unsure where to focus their resources, citing the importance of
"getting it right first time". Meaningful user behaviour and platform optimisation insights remain scarce

10. for tablets and are in great demand among budget holders grappling with translating both content and
revenue structures to best effect on new platforms. The digital editor of The Telegraph, for one, told us
commercial decisions have yet to be made on a tablet version, and the next few months will be a
research phase.
Across all industries, the number of decision-makers planning to invest in app development has
increased steadily – but we found the terminology has changed. There were no mentions of "tablets"
early last year, as decision-makers waited to gauge public response to the iPad. Mentions of
augmented reality and QR codes more than doubled in Q1 2011 compared to the same period in 2010,
again driven by the potential smartphones and tablets offer.
Geolocal Marketplace Set to Explode
While one of the big talking points last year was geo-location, and how marketers could establish an
initiative that's relevant to their brand, this year we are already seeing the topic shoot up the priority list.
It seems inevitable that this will accelerate through the year following major announcements this month
on Facebook Places, Google Latitude and Twitter's new dashboard functionality. Facebook clearly
expects to change the marketing landscape with the launch of Places Deals and brands anticipating this
move contributed to the spike in conversations about Facebook this quarter. It has also, in the UK at
least, taken the wind out of Foursquare’s sails and marginalised the platform in marketers' minds.
60
50
Facebook
Twitter
% Social Media Conversation
40
Linkedin
YouTube
30
Foursquare
Myspace
20
10
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2009 2010 2011
Twitter is taking a different approach by rolling out a dashboard that lets marketers access data about
their followers. The available metrics include whether more male or female followers are retweeting a
brand’s messages and what percentage of followers are in different countries and states. It will be some
time before advertisers commit serious marketing resources to either platform, but the desire is there.
Truly indispensible digital agencies will be those getting involved at the research and development stage
rather than simply implementation.

11. Q1 2011 Index: Advertising Highlights
• There were over twice as many advertising briefs in Q1 2011 than Q1 2010.
• 14% of marketing budget holders we interviewed were evaluating advertising support.
• 25.9% of opportunities came from scheduled reviews (+4.8% on Q4 2010 but half the level of
Q1 2010).
• New marketing decision-makers still generate 14.7% of advertising opportunities, but this is
10% less than in 2010.
• The most popular target demographic was men. 31.5% of advertising briefs were tailored to
this group.
• While other marketing disciplines have seen a drop in briefs targeting ABC1 audiences,
advertising saw a boost +7.8% on the previous quarter and is +8.3% on Q1 2010.
• Advertising budgets are once again being siphoned off for digital projects. Advertising is now
the fourth most sought after marketing discipline while digital is seeing sustained growth.
Active Sectors
The top three industries investing in advertising this quarter were FMCG (26), followed by Retail (12),
then Leisure (11). While FMCG and retail have steadily contributed more advertising opportunities over
the last 15 months, the leisure sector has been providing fewer opportunities for the last two consecutive
quarters.
30
FMCG
25
% Advertising Opportunities
20
Retail
15
10
Leisure
5
0
Q1 Q2 Q3 Q4 Q1
Digital predictions
Mobile display ad spend was predicted to rise five-fold in Europe in 2011, and in its first quarter we
found 16% of conversations about advertising also brought mobile into the equation. We found that four
times as many agency reviews in Q1 2011 touched on both advertising and digital (43) than in the same
period in 2010, when only 10 decision-makers were evaluating the two disciplines together. It remains to
be seen whether this steep rise will continue, but for ad agencies, an understanding of both fields will
ensure you're more likely to be included in planning mobile campaigns rather than simply providing
creative for digital shops to adapt.
Getting to grips with placement
The single biggest event in terms of advertising legislation this quarter was the legalisation of UK
product placement. Hailed as a solution to the TV viewer's tendency to fast-forward ads, marketers are
now reading up on regulations to understand what's possible, and what could benefit the brand.
Analysts predicted that brand owners would fear a consumer backlash – but brands we spoke to said
this fear stems not from the public but from within the marketing industry itself.

12. As product placement strategy is integrated more broadly into creative campaigns, we think there is an
opportunity for advertising agencies to get involved earlier with new products. While products developed
for specific shows might be a step too far for many, we expect brands to turn increasingly to their
incumbent to ensure NPD and even pack design is working in harmony with placement strategy.
Kellogg's Marketing Services Director’s objection to product placement is the absence of introduction or
explanation – the best agencies will address this by broadening involvement with all the marcoms
channels being utilised.

13. Q1 2011 Index: Design and Branding Highlights
• 12.4% of marketing budget holders we interviewed were reviewing design / branding support.
• As a proportion of all briefs profiled this was down 4.2% on the previous quarter, but up 2.6%
on Q1 last year (9.8%).
• The most popular target demographic was men – 25% of design / branding briefs were tailored
towards this group.
• Design and branding for B2B brands has seen a solid increase on the previous quarter
(+6.9%).
• Briefs targeting ABC1 audiences (14.6%) are becoming increasingly scarce, contributing a
smaller portion of opportunities each quarter for the last four (-11.7% on Q1 2010).
Active Sectors
Of the 109 design and branding specific briefs we profiled in Q1, the largest incidence was for the
FMCG sector (25), followed by Retail and then Charity / Associations. Charities and associations
saw the biggest increase on Q4 for design and branding opportunities (+6.6%).
35
30
% Design & Branding Opportunities
FMCG
25
20
Retail
15
10
5 Charity/Associations
0
Q1 Q2 Q3 Q4 Q1
Pack design
There were nearly twice as many packaging design opportunities in Q1 2011 (43) compared with
2010 (27) as brands seek to address current consumer, retailer and internal expectations. Greener
packaging is expected as standard, although further redesigns have been required following health
risks from mineral oils in recycled card. Supermarkets are increasingly prescriptive on pack format,
driving demand for greater creativity to achieve standout. Cost cutting has also led to opportunities
for pack design as brands look to use less packaging and cheaper materials. 29.7% of
opportunities came from NPD and innovation, more than doubling over the last 12 months from
12.3% Q1 2010. Looking to the future, we expect each of these trends to remain on budget-holders’
priority lists.

14. Online budget allocation
Having tracked opportunities for all marketing disciplines over the last 15 months we can plot the
following graph to compare demand for digital vs. design and branding expertise.
20
18 Digital
16
Design/Branding
14
% Considering Category
12
Linear
10 (Design/Branding)
8
Linear (Digital)
6
4
2
0
Jan Feb March April May June July Aug Sept Oct Nov Dec Jan Feb March
2010 Month 2011
The two disciplines followed a similar trajectory in the first quarter of 2010, but have since settled
into a pattern of competition. A peak in opportunities for design shops corresponds very closely with
the months where digital is less dominant and vice versa. Looking at the trend lines it is clear that
there is confusion among budget holders when it comes to allocating resources to online projects.
While it is rare to come up against a digital agency when pitching for a major design brief, it is the
ongoing development and creation of content and branded material online where the lines are
blurred. As brands’ demand for dynamic, rich content steadily rises, costs need to be managed, and
there is often a temptation to opt for a commoditised solution from the retained digital agency. We
think design shops are missing out on this longer-term source of repeat business, and can make a
strong case for greater involvement in content creation.
Smaller design shops also need to be assertive about their digital capabilities and successes from
the outset, reassuring marketers of your ability to provide a solution that fully addresses the
challenges attached to multiplatform brand activity. In other words, making the business case for
design leading the way rather than technical expertise.