Media Lounge Emarketer Presentation 032708

eMarketer

The Changing BT LandscapeTrends & Traps

ValueClick MediaMedia Lounge

Chicago, March 27, 2008

David HallermanSenior Analystdhallerman@emarketer.com

Internet & BT SpendingInternet & BT Spending

Source: eMarketer, March 2008

$16.9$21.1

$25.9$30.0

$35.0

$41.0

$51.0

$10

$20

$30

$40

$50

2006 2007 2008 2009 2010 2011 2012

US Internet Advertising Spending, 2006 - 2012 (billions)

$4,800

$2,900

$1,850

$1,250$875

$575$350

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

2006 2007 2008 2009 2010 2011 2012

US Behavioral Targeting Ad Spending, 2006 - 2012 (millions & % of Internet total)

Source: eMarketer, March 2008

2.1%

2.7%

3.4%

4.2%

5.3%

7.1%

9.4%

BT ad spending growth will be far stronger than for total Internet advertising…

56.8%

65.5%

48.0%

59.4%64.3%

52.2%

42.9%

24.4%

17.1%16.7%15.8%22.7%25.0%

34.6%

0%

20%

40%

60%

2006 2007 2008 2009 2010 2011 2012

BT Total Internet Source: eMarketer, March 2008

32%27%

26%

20%18%

0%

10%

20%

30%

Per Per Click BehavioralTargeting

Rich Media ContextualTargeting

Banner Ads

Tactics marketers say will get budget increases of more than 5% in 2008

Source: MarketingSherpa, ad:tech, February 2008

% respondents, Dec. 2007

Perspective…Perspective…

US Digital Spending, Revenues, Sales, 2008 (millions)

Retail e-commerce sales $161,000 Search engine optimization (SEO)

$2,625

Travel sales (leisure, unmanaged business)

$109,700 User-generated content sites ad revenues

$1,748

Internet advertising (total) $25,900 Social network sites ad revenues

$1,560

Paid search advertising $10,360 E-mail marketing $1,550

Google net revenues $7,917 Video advertising $1,100

B2B Internet advertising $4,400 CPG Internet ad spending $1,190

Classified advertising $4,287 Behavioral targeted advertising $875

Local online advertising $3,700 Podcast ad spending $240

Newspaper sites ad revenues $3,300 Mobile search ad revenues $107

Source: eMarketer, 2007-2008

US Digital Spending, Revenues, Sales, 2011 (millions)

Retail e-commerce sales $245,100 Search engine optimization (SEO)

$4,900

Travel sales (leisure, unmanaged business)

$166,212 User-generated content sites ad revenues

$4,303

Internet advertising (total) $41,000 Video advertising $3,900

Paid search advertising $15,990 Behavioral targeted advertising $2,900

Google net revenues ???? Social network sites ad revenues

$2,700

B2B Internet advertising $8,000 CPG Internet ad spending $1,810

Classified advertising $6,500 E-mail marketing $1,650

Local online advertising $6,400 Mobile search ad revenues $910

Newspaper sites ad revenues $6,100 Podcast ad spending $400

Source: eMarketer, 2007-2008

Viewing the BT landscape…

Marketers want the relevance

Publishers want further revenues

But…tracking data is still evolving

But…biggest advertisers conservative

Privacy ???s: individuals & government

39%

43%

49%

59%

60%

66%

71%

80%

82%

0% 20% 40% 60% 80%

Consumer insights

Behavioral targeting

Brand strategy

Customer marketing

Partnerships

PR

In-house digitalproduction

Field marketing

Entertainment marketing

US marketers say, “BT among most important tactics (online or offline)”

% respondents, 2007

Source: IAB, ANA, Booz Allen Hamilton, October 2007

Neutral8%

Agree79%

Disagree9%

Don't Know4%

Most ad execs agree: “Long tail always existed, technology makes it easier…”

Source: MediaPost, Dynamic Logic, March 2007

% respondents,Mar. 2007

40%

59%

61%

72%

74%

80%

0% 20% 40% 60% 80%

Data accuracy

Term definitions (eg pageviews, visits, visitors)

Expanding reportingfunctionality

Integrating data other thanWeb traffic or clickstream

Dedicating additionalresources

Validity of cookie-basedmeasurement

Problems with Web analytics make ad tracking somewhat problematical

% respondents, Apr. 2007

Source: WebAnalyticsDemystified, June 2007

27%

28%

29%

29%

32%

36%

42%

60%

0% 20% 40% 60%

Marketing basics

SEO

Personalization

Green marketing

Multicultural issues

Breakdown of old media

Innovative branding

Viral/word of mouth

US marketers say, “Personalization top marketing trend, but basics rule!”

% respondents, Oct. 2007

Source: Anderson Analytics, November 2007

21% to 40%12%

41% to 60%3%

61% to 100%1%

None10%

1% to 20%74%

Budget share that ad execs reserve for new media properties and experimentation

Source: AAF, February 2007

% respondents, Jan. 2007

Source: Advertising Age, TNS, June 2007

1.1%

5.1%

3.6%2.9%

4.4%3.8%

0.6%

5.7%

1.5% 1.3%

0%

1%

2%

3%

4%

5%

6%

7%

1. Pro

cter &

Gam

ble

2. AT&T

3. Genera

l Moto

rs

4. Tim

e Warn

er

5. Veriz

on

6. Ford

Moto

r Co.

7. Gla

xoSmith

Kline

8. Wal

t Dis

ney Co.

9. Johnson &

Johnso

n

10. Unile

ver

Largest US advertisers still (mainly) put small share of spending online*

*display advertising,

2006

3.1% share among top 100

Sir Tim Berners-LeeCreatorWorld Wide Web

“If you want to use it [my Web history] for something, then you

have to negotiate with me. I have to agree, I have to

understand what I’m getting in return.”

40%

54%

57%

71%

72%

0% 20% 40% 60%

Online advertising intrusivewhen not relevant

Aware that browsing infomay be collected for

advertising

Not comfortable withbrowsing history being

used to serve relevant ads

Delete cookies at least 2-3times a month

Familiar with term"behavioral targeting"

US consumers say, “Not comfortable with being tracked online”

% respondents, Feb. 2008

Source: TNS, TRUSTe, March 2008

Jon LeibowitzCommissionerFederal Trade Commission

“When you’re surfing the Internet, you never know who is peering over your

shoulder or how many marketers are watching.”

“Thank You!”

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