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European Interactive Advertising Trends Tracking Research from IAB Europe & JupiterResearch

European Interactive Advertising Trends Tracking Research from IAB Europe & JupiterResearch. October 2005. Tracking Survey overview. First, inaugural joint survey between JR & IAB Europe JR need – to access industry executives across Europe

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European Interactive Advertising Trends Tracking Research from IAB Europe & JupiterResearch

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  1. European Interactive Advertising TrendsTracking Research from IAB Europe & JupiterResearch October 2005

  2. Tracking Survey overview • First, inaugural joint survey between JR & IAB Europe • JR need – to access industry executives across Europe • IAB need – to generate additional research data and analysis on industry trends • Fielded across Europe through IAB leaders to Online Advertisers & Online Media Owners • Conducted August / September 2005 • 27 advertisers / 53 publisher respondents

  3. Research Key Findings • While money steadily flows into the online advertising industry stakeholders are recognizing the importance of, but struggling to deliver, better: • Targeting • Optimization • Integration • Consumer Engagement

  4. Content owners are experiencing greater website usage and participation

  5. Content Owners are Noticing Online Media Consumption Growing and Becoming More Active Percentage of Media Owners Question: “Please state to what extent you agree or disagree with the following statements:” Source: IAB Europe / JupiterResearch Executive Survey 08/05, Publisher n = 53 (Western Europe only)

  6. Content Owners also Noticing Increasing Site Usage and Loyalty Amongst Registered Users 67% experienced increase Question: “How has the number of active registered users (who visit your website at least once a month) change over the last 12 months?” Source: IAB Europe / JupiterResearch Executive Survey 08/05, Publisher n = 45 (Western Europe only)

  7. Half of European Content Owners Have Seen their Opt-in Database grow in last 12 months 50% experienced increase Question: “How did the size of your opted-in user database change over the last 12 months?” Source: IAB Europe / JupiterResearch Executive Survey 08/05, Publisher n = 53 (Western Europe only)

  8. Majority of Content Owners Offer, and Receive, A Level of Audience Participation Percentage of Online Media owners Question: “In which of the following ways do you enable visitors to interact with your site?” Source: IAB Europe / JupiterResearch Executive Survey (9/05), Publisher n = 53 (Western Europe only)

  9. 60 percent of European Content owners Offer, or plan to Offer, RSS Content Feeds Percentage of Content Owners Question: “What are your company’s plans for publishing content via RSS news feed?” Source: IAB Europe / JupiterResearch Executive Survey 08/05, Publisher n = 53 (Western Europe only)

  10. Content owners are expecting growth to slow despite revenue diversification & increasing impressions

  11. European Online Publishers Expect Revenue Growth to Slow Despite Growing Web Usage 44% experienced >25% growth 04 to 05 Only 21% expect >25% growth 05 to 06 Percentage of Online Media owners Question:“How did your total website advertising revenue change in the first half 2005 compared to first half 2004?” Question:“How do you expect your total website advertising revenue to change in the first half 2006 compared to first half 2005?” Source: IAB Europe / JupiterResearch Executive Survey 08/05, Publisher n = 53 (Western Europe only)

  12. A More Sophisticated Blend of Content Attached Online Ad Options is Emerging Display Ad Format Ad Type Question: “How was your total website advertising revenue in 2004 distributed among the following formats?” Question: “How did different formats contribute to your total display advertising revenue in 2004?” Source: IAB Europe / JupiterResearch Executive Survey 08/05, Publisher n = 53 (Western Europe only)

  13. Content Owners Are Increasingly Competing For Budget Against Paid Search Question: “How is your online advertising media budget allocated among each of the following formats?” Source: IAB Europe / JupiterResearch Executive Survey 08/05, Advertiser n = 27 (Western Europe only)

  14. Content Owners Are Increasingly Competing Against CPC / CPA Buying Models Question: “How is your online advertising media budget allocated among each of the following payment models?” Source: IAB Europe / JupiterResearch Executive Survey 08/05, Advertiser n = 27 (Western Europe only)

  15. Content Owners Are Looking to Increasing Impressions Before New Advertisers Percentage of Media Owners Question: “Which of the following tactics are you planning to use to improve online revenue performance in 2004 / 2005?” (Please select up to 3.) Source: JupiterResearch Executive Survey (5/04), n = 30 / (9/05) n = 53 (Online Media Owners, Western Europe only)

  16. Online Targeting issues • Advertisers Struggling to Achieve Better Online Targeting & Media selection in an increasingly competitive environment • In Paid Search – keyword selection, dayparting, geo-targeting • In Display advertising – placement selection (measurement issues), format selection, technology selection • In email – list management, segmentation, personalization, timing and frequency

  17. Key Challenges in Online Media P&B are Targeting & Placement Selection in Increasingly Competitive Landscape Percentage of Advertisers Question: “Thinking about online media planning and buying, what do you see as the main challenges in reaching online consumers over the next 12 months? ” Source: IAB Europe / JupiterResearch Executive Survey 08/05, Advertisers n = 27 (Western Europe only)

  18. Delivery of Personalized, Targeted Offerings Primary Challenge to Future Customer Acquisition Percentage of Advertisers Question: “What do you see as the main challenges to acquiring and satisfying customers over the next few years?” Source: IAB Europe / JupiterResearch Executive Survey 08/05, Advertisers n = 27 (Western Europe only)

  19. Three Quarters of Online Content Owners Agree Advertisers Looking for Better Targeting To what extent do you agree / disagree with the following statement: “Advertisers are looking for more advanced targeting on my site ” Source: IAB / JupiterResearch Executive Survey 08/05, Publisher n = 43 (Western Europe only)

  20. Online Optimization issues • Advertisers struggling to find the balance between time / effort in v. reward out in optimization • Finding the time and resource to optimize • Selecting the right tools to optimize • Achieving optimal level of optimization

  21. Compounded by Data Gathering / Analysis issues • Advertisers struggling to collate, synthesize, interpret and act upon campaign performance data available to them • Abundance of performance data a help and hindrance – hard to see the wood from the trees • Multiple platforms offering multiple reporting tools • Not one consistent marketing dashboard available

  22. Compounded by Measurement & Evaluation issues • Advertisers struggling to measure the complete impact of the online advertising investment • Myopic focus on click through (because you can) • Lack of understanding of the prolonged, delayed response, attitudinal / brand perception shifts • Impact offline • Few appreciating the value of online brand engagement

  23. Advertisers Spend Most Time Optimizing & Evaluating Campaigns Percentage of Advertisers Question: “Thinking about resources, time and effort spent, what do you see as the main challenges in managing your online marketing over the last 12 months?’ Source: IAB Europe / JupiterResearch Executive Survey 08/05, Advertisers n = 27 (Western Europe only)

  24. Three Quarters of Online Content Owners Agree Advertisers Looking for Better Tracking & Reporting To what extent do you agree / disagree with the following statement: “Advertisers are looking for more advanced tracking & reporting” Source: IAB / JupiterResearch Executive Survey 08/05, Publisher n = 43 (Western Europe only)

  25. Integration issues • Advertisers struggling to develop truly integrated communication strategies for cross-channel consistencies • Silos still remain • Planning / Briefing process still has digital as secondary consideration • Pre-campaign planning and post-campaign measurement still disjointed

  26. Delivery of Consistent, Integrated Messages Second Key Challenge to Future Customer Acquisition Percentage of Advertisers Question: “What do you see as the main challenges to acquiring and satisfying customers over the next few years?” Source: IAB Europe / JupiterResearch Executive Survey 08/05, Advertisers n = 27 (Western Europe only)

  27. Consumer Engagement issues • Advertisers struggling to engage with increasingly empowered digital consumers • Consumers becoming harder to reach, engage, persuade and satisfy • Need to gain opt-in, permission, willing engagement • Need to deliver compelling, engaging content

  28. Increased ability to access & sift abundance of info Increased ability to communicate, interconnect & congregate Increased ability to gain on-demand satisfaction Increased ability to publish selfexpression Increased ability to customize consumption As Digital Platform Usage Grows Consumers Will Find Themselves Ever More Empowered Enabling Digital Platforms Source: JupiterResearch 10/05

  29. CONSUMER Fragmented Heterogeneous Active (Participant) Informed Interconnected High Expectations Converged media consumption MARCOMS Targeted Narrowcast Multi-dimensional Inclusive Dialogue Rich infotainment Consumer authority Consumer-dictated delivery Channel integration CONSUMER Aggregated Homogeneous Passive (Receiver) Uninformed Disconnected Low expectations Singular media consumption MARCOMS Mass Broadcast One-dimensional Intrusive Monologue Basic information Advertiser authority Organization-dictated delivery Channel silos Marketers Must Shift Communication Strategies to To Accommodate Empowered Consumers REQUIRED SHIFT IN MARCOMS APPROACH Post-digital Pre-digital Source: JupiterResearch 10/05

  30. Creative Execution issues • Poor integration, at early stage, leads to digital creative often advertising the advertising + “matching luggage’ syndrome • Over-dominance of the ATL agency / TV commercial (linear message doesn’t include offer to participate) • Digital creative execution often an afterthought • Little interactivity at core of a creative idea

  31. Compelling Content & Consumer Control Key To Building Loyalty Percentage of Advertisers Question: “What do you see as the best tactics to build loyalty and avoid switching amongst your online target audience?” Source: IAB Europe / JupiterResearch Executive Survey 08/05, Advertisers n = 27 (Western Europe only)

  32. Summary of Key Findings • Key Challenges in Online Marketing are: • Channel Integration • Outstanding Creative Execution • Relevancy & Targeting • Data Gathering / Analysis • Campaign Optimization • Measurement & Evaluation • In the context of Growing Consumer Empowerment

  33. What’s Holding the Industry back? • Lack of standardized Audience Measurement • Lack of Audience Identification / Insight • Lack of Appreciation of the Changing Nature of Consumers • Difficulties in Data Analysis / Integration • Too much Channel Protectionism (Silos still exist) • Too little Integrated Planning, Creative execution, Campaign Measurement • Lack of Skilled, Experienced Resource - Data analysts / Optimizers

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