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INTERNET AND MOBILE HAVE THE GREATEST GROWTH POTENTIAL IN TERMS OF TIME SPENT WITH MEDIA

$20B+ opportunity in USA. INTERNET AND MOBILE HAVE THE GREATEST GROWTH POTENTIAL IN TERMS OF TIME SPENT WITH MEDIA. Internet advertising reached $30B in the U.S., while mobile advertising reached $1.6B, according to the IAB.

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INTERNET AND MOBILE HAVE THE GREATEST GROWTH POTENTIAL IN TERMS OF TIME SPENT WITH MEDIA

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  1. $20B+opportunity in USA INTERNET AND MOBILE HAVE THE GREATEST GROWTH POTENTIAL IN TERMS OF TIME SPENT WITH MEDIA Internet advertising reached $30B in the U.S., while mobile advertising reached $1.6B, according to the IAB NOTE: INTERNET EXCLUDES MOBILE. PRINT INCLUDES NEWSPAPER AND MAGAZINE. $20B OPPORTUNITY CALCULATED ASSUMING INTERNET AND MOBILE AS SPEND SHARE EQUAL RESPECTIVE TIME-SPENT SHARE. SOURCE: ANALYSIS BY MARY MEEKER, KLEINER PERKINS. TIME SPENT AND AD SPEND SHARE DATA EMARKETER, 12/11 INTERNET AND MOBILE AD SPENT AMOUNT PER IAB.

  2. DISPLAY AND RICH MEDIA/VIDEO ARE NOT GROWING AMONG IAB-REPORTING PUBLISHERS Advertising format share* (percent of total revenue) NOTES: *FORMAT DEFINITIONS MAY HAVE CHANGED OVER THE TIME PERIOD DEPICTED, BOTH WITHIN THE SURVEY PROCESS AS INTERPRETED BY SURVEY RESPONDENTS. **IN 2011, MOBILE REVENUE IS PRESENTED IN THE FORMATS SECTION OF THE REPORT AS A SEPARATE CATEGORY FOR THE FIRST TIME.IN ORDER TO PROVIDE A COMPARISON TO THE PRIOR YEAR, WE HAVE REVISED 2010 REVENUES FOR AD FORMATS TO BE ON A CONSISTENT BASIS SOURCE: IAB FULL-YEAR AD-SPENDING REPORT 2011

  3. INTERNET-DELIVERED MEDIA WILL BEGIN TO CATCH UP TO TV U.S. total media spending, by media, 2007-2006 (billions) *PRINT ONLY; **EXCLUDES OFF-AIR RADIO AND DIGITAL NOTE: DIRECTORIES SPENDING INCLUDES YELLOW PAGES AND OTHER. MAGAZINE SPENDING INCLUDES B2B, CONSUMER, LOCAL AND SUNDAY. EMARKETER BENCHMARKS ITS U.S. NEWSPAPER AD SPENDING PROJECTIONS AGAINST THE NEWSPAPER ASSOCIATION OF AMERICA (NAA) DATA, FOR WHICH THE LAST FULL YEAR MEASURED WAS 2010. MOBILE AD SPENDING INCLUDES DISPLAY (BANNER, RICH MEDIA AND VIDEO), SEARCH AND MESSAGING-BASED ADVERTISING. NEWSPAPER SPENDING INCLUDES CLASSIFIED, NATIONAL AND RETAIL. EMARKETER BENCHMARKS ITS U.S. ONLINE AD SPENDING PROJECTIONS AGAINST INTERACTIVE ADVERTISING BUREAU (IAB)/PRICEWATERHOUSECOOPERS (PWC) DATA, FOR WHICH THE LAST PERIOD MEASURED WAS Q3 2010. ONLINE SPENDING INCLUDES BANNER ADS (STATIC DISPLAY), SEARCH ADS (PAID LISTINGS, CONTEXTUAL TEXT LINKS AND PAID INCLUSION), RICH MEDIA, VIDEO (IN-STREAM, IN-BANNER, IN-TEXT), CLASSIFIED ADS, SPONSORSHIPS, LEAD GENERATION (REFERRALS) AND EMAIL (EMBEDDED ADS ONLY); . EMARKETER BENCHMARKS ITS U.S. OUTDOOR AD SPENDING PROJECTIONS AGAINST OUTDOOR ADVERTISING ASSOCIATION OF AMERICA (OAAA) DATA, FOR WHICH THE LAST FULL YEAR MEASURED WAS 2010. OUTDOOR SPENDING INCLUDES ALTERNATIVE, BILLBOARDS, CINEMA, STREET FURNITURE AND TRANSIT. EMARKETER BENCHMARKS ITS U.S. RADIO AD SPENDING PROJECTIONS AGAINST RADIO ADVERTISING BUREAU (RAB) DATA, FOR WHICH THE LAST FULL YEAR MEASURED WAS 2010. TV SPENDING INCLUDES BROADCAST TV (NETWORK, SYNDICATION AND SPOT) AND CABLE TV. SOURCE: EMARKETER, JAN 2012

  4. EVEN TOP PUBLISHERS REPORT AN ONGOING SHIFT TO “PAY BY THE CLICK” ADVERTISING Internet ad revenues by pricing model* 64% 32% 4% * PRICING MODEL DEFINITIONS MAY HAVE CHANGED OVER TIME PERIOD DEPICTED, BOTH WITHIN THE SURVEY PROCESS AS INTERPRETED BY SURVEY RESPONDENTS. SOURCE: IAB FULL-YEAR SPENDING REPORT 2011

  5. VIDEO IS THE PREMIUM GROWTH FORMAT FOR ONLINE SPEND U.S. online ad spending growth, by format, 2008-2016 (percent change) NOTE: EMARKETER BENCHMARKS ITS U.S. ONLINE AD SPENDING PROJECTIONS AGAINST THE INTERACTIVE ADVERTISING BUREAU (IAB)/PRICEWATERHOUSECOOPERS (PWC) DATA, FOR WHICH THE LAST FULL YEAR MEASURED WAS 2010; ONLINE AD DATA INCLUDES CATEGORIES AS DEFINED BY IAB/PWC BENCHMARK—BANNER ADS (STATIC DISPLAY), CLASSIFIED ADS, EMAIL (EMBEDDED ADS ONLY), RICH MEDIA, SEARCH ADS (INCLUDING CONTEXTUAL TEXT LINKS, PAID INCLUSION, PAID LISTINGS AND SEO), SPONSORSHIPS, LEAD GENERATION (REFERRALS) AND VIDEO (INCLUDING IN-BANNER, IN-STREAM, IN-TEXT); INCLUDES MOBILE AD SPENDING WITHIN EXISTING FORMATS, MAINLY SEARCH AND BANNERS. SOURCE: EMARKETER, JAN 2012(

  6. FACEBOOK TOPS ONLINE DISPLAY PUBLISHERS FOR TIME SPENT AND IMPRESSIONS Social and Google (which includes YouTube) take off for time spent–at the expense of portals FACEBOOK: 13.9% 1,343,170* impressions SOURCES: COMSCORE MEDIA METRIX; *COMSCORE AD METRIX

  7. VOLUME OF DISPLAY DRIVEN Top display advertisers by impressions–June 2012 SOURCE: COMSCORE JUNE 2012 DATA

  8. INTERNET DISPLAY AD SPENDING TOP 10 ADVERTISERS Top spenders list over past two years tends to be response-driven SOURCE: KANTAR MEDIA

  9. THE LUMASCAPE MAP OF DISPLAY How the display ad players feed into each other to get your ad online SOURCE: LUMA PARTNERS

  10. ADVERTISER / AGENCY PUBLISHER SERVICES SERVICES SIMPLIFIED LUMA DISPLAY ECOSYSTEM CHART Display marketing is consolidating around a handful of technology “stacks” with Google in everything SUPPLY ENABLEMENT DEMAND ENABLEMENT MARKETPLACE PUBLISHER AD SERVER ADVERTISER AD SERVER + DATA MGMT. DATA MGMT.L SOURCE: LUMA PARTNERS

  11. BRAND SPEND PREDICTED TO GROW U.S. online ad spending by objective, 2011-2016, in billions $62.00 $32.03 BRANDING DIRECT RESPONSE NOTE: EMARKETER BENCHMARKS ITS U.S. ONLINE AD SPENDING PROJECTIONS AGAINST THE IAB/PWC DATA, FOR WHICH THE LAST FULL YEAR MEASURED WAS 2010; NUMBERS MAY NOT ADD UP TO TOTAL DUE TO ROUNDING. SOURCE: EMARKETER, JAN 2012

  12. MEASUREMENT IS THE KEY TO BOTTLENECK FOR MARKETERS Cross-channel efforts are also a challenge SOURCE: THE STATE OF MARKETING 2011: UNICA’S ANNUAL SURVEY OF MARKETERS

  13. WHO SEES MY ADS? AdSafe numbers for viewability vary by creative size and method sold SOURCE: ADSAFE SEMIANNUAL REVIEW 2012

  14. BRAND AWARENESS Measures the level of familiarity respondents have with a brand RECOGNIZE YOUR BRAND WHEN PRESENTED WITH ITS NAME? AD BREAKTHROUGH Measures the level of “breakthrough” of online advertising by gauging online ad awareness RECOGNIZE THAT YOU’VE ADVERTISED ONLINE RECENTLY? MESSAGE ASSOCIATION Measures the extent to which respondents can match the messages and/or concepts in the creative to the brand ASSOCIATE YOUR BRAND WITH ITS VALUE PERCEPTION? BRAND FAVORABILITY Measures the extent to which respondents have a positive or favorable opinion of the brand APPRECIATE, RESPECT OR OTHERWISE CARRY FAVORABLE OPINIONS ABOUT YOUR BRAND? PURCHASE CONSIDERATION Measures the likelihood of respondents to consider the brand in their future purchase INTEND TO PURCHASE OR TAKE ACTION RELATING TO YOUR BRAND? TRADITIONAL BRAND MEASURES Guide to building engagement with display BRAND METRICS: DO YOUR KEY AUDIENCE SEGMENTS: SOURCE: DYNAMIC LOGIC 2012

  15. BRAND SAFETY: THE $2B PROBLEM Q: How much would you expect display ad spending to grow if brand-safety issues were successfully addressed? SOURCE: “BEYOND THE GREY AREAS: TRANSPARENCY, BRAND SAFETY AND THE FUTURE OF ONLINE ADVERTISING,” APRIL 2010

  16. NOT SAFE FOR WORK 72% of campaign-delivered ads appear next to dicey content SOURCE: COMSCORE, “THE ECONOMICS OF ONLINE ADVERTISING: HOW VIEWABLE AND VALIDATED IMPRESSIONS CREATE DIGITAL SCARCITY AND AFFECT PUBLISHER ECONOMICS,” AUGUST 2012

  17. RISK COMPOSITION OF PUBLISHERS Ad networks tended to have the highest safety-risk levels MODERATE HIGH VERY HIGH SOURCE: ADSAFE SEMIANNUAL REVIEW: Q2 2012 INDUSTRY ANALYSIS AND FINDINGS

  18. THE FIVE DEGREES OF DANGER Display advertising and the risks to brand safety SOURCE: “BEYOND THE GREY AREAS: TRANSPARENCY, BRAND SAFETY AND THE FUTURE OF ONLINE ADVERTISING,” APRIL 2010

  19. PREMARKET QUALITY Does my creative have the right to succeed? • Branded Recognition • Brand to Buy Next AUDIENCE DELIVERY Did we efficiently reach our target? • % Impressions to Target/Targeting Index • Frequency of Exposure • % Impressions in View • CPM IN-MARKET EFFECTIVENESS Are we moving the needle? • Brand Awareness • Purchase Interest • Message Association • Direct Response KELLOGG’S KEY INDICATOR’S FRAMEWORK Establishing a model for advertising effectiveness–applied initially to online media SOURCE: KELLOGG’S

  20. SOCIAL NETWORKS/SOCIAL MEDIA MOBILE PLATFORMS Central to marketing mix: 90% and 74% of marketers are suing social and mobile, respectively SOURCE: ANA “DIGITAL/SOCIAL MEDIA SURVEY,” 2012

  21. 2011 2016 GROWTH IN DISPLAY ADVERTISING: AUDIENCE BUYING Twice the rate of search, driven by audience buying COMPOUND ANNUAL GROWTH RATES: 55% DISPLAY: AUDIENCE 17% DISPLAY: SITE SPECIFIC 10% SEARCH AUDIENCE SITE-SPECIFIC SOURCE: EMARKETER 2012 PROJECTIONS

  22. Top publishers want to focus here INTEGRATED SPONSORSHIPS Make an impact with site-specific sponsorship and custom solutions CONTEXT AND PLACEMENT Educate and influence with site-based placements AUDIENCE TARGETING Identify and inspire key audience with advanced targeting SCALE Capture large audiences efficiently and at scale While agencies put their efforts here THE DISCONNECT BETWEEN HOW PUBLISHERS AND AGENCIES VIEW AD INVENTORY These two sides are focusing on different priorities SOURCE: PUBMATIC

  23. CPM $20 Revenue Recaptured by a Secondary Premium Channel: Based on level of targeting and transparency $14 Premium sales $9 $6 Remnant$0.50 Impression Volume INVENTORY’S VARIABLE VALUE IN REAL TIME Pubmatics view of how publishers should strategically tier and sell their inventory SOURCE: PUBMATIC

  24. RISING STARS GET MORE INTERACTION THAN STANDARD ADS Users are 2.5 times more likely to interact with Rising Star ads UNIVERSAL REACTION RATE REFERS TO THE NUMBER OF TIMES A USER’S MOUSE ENTERS FRAME OF AD AND IS ACTIVE (NOT PARKED) FOR 0.5 SECONDS OR LONGER (MAX. OF ONE INTERACTION PER LOAD) DIVIDED BY THE NUMBER OF TIMES AD FULLY LOADS ON PAGE (MAX. ONE LOAD PER PAGE). SOURCE: IAB RISING STARS RESEARCH WITH IPG MEDIA LAB, FEB. 2012

  25. AD LOADS FOR ONLINE VIDEO INCH UP Despite an increase in number of ads within online video, users aren’t tuning out 7.96 1.32 0.56 SOURCE: FREEWHEEL PROFESSIONAL VIDEO MONETIZATION REPORT, Q2 2012

  26. IAB’S NEW PORFOLIO OF AD UNITS Entertain, enlighten and engage–at scale

  27. BEYOND THE CLICK Key metrics redefined, IAB working definitions

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