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Based on S&P data analysis, we estimate that companies could spend $185 billion in advertising in 2014 - $7 billion more than the eMarketer estimate as of Dec. 2013. We've detailed our analysis and estimate in this presentation.
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...AND WHERE THEY WILL GO
WHY 2014 AD BUDGETS COULD ROCKET PAST EXPECTATIONS
HERE'S WHY
Based on S&P 500 (big company) analysis, we estimate companies could spend $185 billion in advertising in 2014 - $7 billion more than the eMarketer estimate as of Dec. 2013.
Ad budgets peaked at $178 billion in 2007 before the recession, and are projected to reach $178 billion for 2014, according to eMarketer.However, most S&P companies surpassed 2007 values years ago and have kept growing.
ADVERTISING BUDGET GROWTH IS LAGGING BEHIND CORPORATE GROWTH
S&P 500 Average Company Value Is Up 41% Since 2007
-40.0%2008
-30.0%-20.0%-10.0%
0.0%10.0%20.0%30.0%40.0%50.0%
2009 2010 2011 2012 2013 2014
S&P 500 EPS Gr Since 07
eMarketer Ad Gr Since 07
The Standard & Poor 500 Index is an index of 500 companies chosen for market size, liquidity and industry grouping. The Index is designed to be a leading indicator of the health of U.S. equities. It is currently hovering around all-time highs.
-40.0%2008
-30.0%-20.0%-10.0%
0.0%10.0%20.0%30.0%40.0%50.0%
2009 2010 2011 2012 2013 2014
S&P 500 Average Company Earnings Are Up 48% Since 2007
S&P 500 EPS Gr Since 07
eMarketer Ad Gr Since 07
The Standard & Poor 500 Index is an index of 500 companies chosen for market size, liquidity and industry grouping. The Index is designed to be a leading indicator of the health of U.S. equities. It is currently hovering around all-time highs.
2008
-30.0%-40.0%
-20.0%-10.0%
0.0%10.0%20.0%30.0%
40.0%50.0%
2009 2010 2011 2012 2013 2014
S&P 500 Average Dividends Are Up 42% Since 2007
S&P 500 EPS Gr Since 07
eMarketer Ad Gr Since 07
The Standard & Poor 500 Index is an index of 500 companies chosen for market size, liquidity and industry grouping. The Index is designed to be a leading indicator of the health of U.S. equities. It is currently hovering around all-time highs.
2014:Brickfish Estimate
$185 billion1.73% of total revenue
advertising expenditures
eMarketer Estimate
$178 billion1.67% of total revenue
advertising expenditures
NOW, THINK OF TOTAL ADVERTISING BUDGETS AS A PERCENTAGE OF THE S&P 500 COMPANIES' TOTAL REVENUE
YEAR2009 2010 2011 2012 2013 2014
1.98% ($178 B)
1.88% ($170 B)
1.82% ($147 B)
1.75% ($153 B)
1.66% ($158 B)1.69% ($165 B)
1.72% ($171 B) 1.73% ($185 B)
1.67% ($178 B)
1.5
2.0
% O
F TO
TAL
REVE
NU
E
2007 2008
While the US GDP was severely impacted by weather in Q1, analysts believe that the U.S. economy continues to improve - so why would ad spend as a percentage of total revenue decrease from last year?
Even if it remained stagnant from last year at 1.72%, we would see a $184 billion total ad spend.
Looking Ahead to 2014 Growth
Despite the weather, 68% of S&P 500 companies surpassed estimates for Q1 earnings.
Consider These 2014 Major Media Events:Winter Olympics � Midterm Elections � World Cup
(February) (November) (June-July)
WHERE WILL THE NEW AD DOLLARS GO? MOBILE & DIGITAL
Today, consumers spend 6.5x more minutes each day with mobile than with print media - yet advertisers this year will spend an estimated $32.2 billion on print and only $13.1 billion on mobile.
TIME SPENT PER DAYCHANGE
SINCE 2013
CHANGESINCE 2013DOLLARS SPENT PER HOUR
MOBILE
DIGITAL
MOBILE
DIGITAL
+ 23%
+ 10%
- 18%
CONSUMERS
ADVERTISERS
+ 40%
+ 11%
+ 19%
$0.07
$0.10
$0.83
2 hrs 51 min
5 hrs 46 min
26 min
20% of all media consumptionis on mobile - but advertisers only budget 4% of ad dollars there.
In 2013, mobile revenue totaled $38 billion - but less than $15 billion came from advertising.
Venture capital firmKPCB calls mobile a
$30 billionad opportunity.
Sources: eMarketer, Kleiner Perkins Caufield & Byers, “Internet Trends 2014”, S&P Dow Jones Index Data 5/30/14
Are you ready to go mobile-first? Call our team at (855) 281-4500 for a digital strategy session.
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