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Join eMarketer Principal Analyst David Hallerman as he discusses the major developments in US online, mobile and social ad spending, and examines 2012’s key areas of growth and trends to watch.
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©2012 eMarketer Inc.
M A R C H 2 2, 2 0 1 2
Digital Ad Trends—What’s Behind the Spending Boom
David Hallerman
Principal Analyst
Sponsored by:
©2012 eMarketer Inc.
What we’ll look at today…
Online ad spend: growth factors
Consolidation: one form of imbalance
Ad formats: imbalance skews the picture
Video, video: cross-channel central
Social: its true place in the scheme of things
Mobile: opportunity but also imbalance
Three numbers: 23.3 and 24.1 and 15.2
Questions about why eMarketer projects ad spending growth at 23.3%
Total digital ad spending
(what’s creating the growth)
©2012 eMarketer Inc.
Total online ad spending makes huge gains annually, but its growth rate is slowing
©2012 eMarketer Inc.
Eight of 15 researchers estimate spending in 2012 at $35 billion or higher
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One factor: This year’s elections will help online ad spending grow by about the same rate as last year
©2012 eMarketer Inc.
Key reasons for total market growth
The “more” factors. That is, more…
Time: consumer time on digital rising rapidly
Inventory: a result of more visits, sites, time
Measurable: the need to be accountable
Video: professional content to support ads
Mobile: time, usage and expectations
Brands: entry points increasing
Dollars: budget focus makes digital central
Twitter – #eMwebinar
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Digital’s rising share of total media ad spending is finally starting to match media usage time
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About 24% of media time is internet time, but multitasking and inattention mean not all time is a good time to advertise
Consolidation
(the game continues but players change)
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Bottom line questions…
Will profits from digital ad sales…?
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Turn into the big bucks?
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Or turn out to be just small change?
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Or slip away like a handful of water?
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The top ad-selling companies are shifting places
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Five companies will get more than two-thirds of digital ad revenues in 2012
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Consolidation in the online ad business is not new, though—the rich grow richer, but unevenly
Twitter – #eMwebinar
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Reality check: Forget growth rates; instead see Google way on top and continued consolidation overall
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Share of total internet ad revenues among top 10 ad-selling companies
200272%
200471%
200669%
200872%
200971%
201072%
201172%
2012??%
Source: IAB/PwC, 2002-2011
©2012 eMarketer Inc.
The imbalanced market can sometimes be a little crazy-making for many other ad-selling companies
Ad formats
(several imbalanced arenas)
Video ad spending will jump more than twice as much as any other format or the overall market
But by dollar share, there’s search—and then there’s everything else
Twitter – #eMwebinar
Search market share among top 4 sites is probably not news
However, search growth has become a two-company competition
Is search a model for other forms of digital advertising?
The digital space mixes branding with…
…direct response marketing, which often means…
…even a single ad can dissolve the classic division between the two
Display advertising
(a diverse market)
Display dollars in 2015 will increase by more than half from 2012—but growth rate will decline from 24.1% to 10.8%
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Video share up, banner share down, sponsorship a potentially profitable niche
Twitter – #eMwebinar
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Significant disparity of display revenue growth at top 5 companies
However, display spending is less consolidated than the total market
Impressions match money: The not-top-5 get about half of display impressions
Weighing the imbalances in digital ad spending helps focus budget choices
Display growth without social and mobile paints a different picture
Three more ways of parsing the current display market
The video focus
(cross-channel possibilities)
Even as online video advertising growth rates slow,spendingwill double in only two years
Twitter – #eMwebinar
Display’s overall market growth at 24.1% is due mainly to video’s strength…
…where about half or more of marketers expect to increase spending in 2012
Key indicators: Comparing growth vs. dollars shows mobile video gaining more but more money goes on the desktop
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As seen on the web? (Nah!) TV’s power is still unmatched for many goals
In a typical week, US consumers watch video mainly on TV, however…
TV forever? Containers may change, but the content basically remains the same
Social and mobile
(beyond the hype)
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Social sites will see greater ad growth in 2012 than the overall market —43% vs. 23% (but social is much more than just advertising)
Twitter – #eMwebinar
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More marketers plan display spending increases on social media than, say, on content publisher sites
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Facebook is the social ad revenue leader, but other social sites are slowly gaining on it
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The social space is large and getting larger — does that mean it’s due for shakeout?
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Mobile ad spending will rise from $1.45 billion last year to $2.61 billion this year, driven by everything but text messaging
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About half of mobile spending went to Google — far more than even Apple
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The mobile market is mainly search, with a large slice slice of banners and rich media
Twitter – #eMwebinar
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And mobile search is mainly Google (another huge cluster)
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Mobile display: one more market that’s concentrated, but a bit less so
Getting your share of the mobile market often means playing with the big dogs
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Conclusions
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The 23.3% projection for 2012 is for the overall market.
But the overall market is imbalanced.
Some of the imbalanced elements: search nearly 50% of whole, and growing at 27% video growth at 55%, but makes up only 8% of total five companies will get nearly 67% of ad revenues social dominated by Facebook, with 70% of category ad dollars mobile display dominated by three networks (60%), and mobile
search is nearly all Google (95%)
Display online, and video in particular, offer more opportunities for lessening the imbalance than does search, social or mobile.
But note how display growth (sans social and mobile) at 15.2% more accurately represents the mainstream online ad market.
Conclusions:Ad spending growth is uneven, but…
Consumers Reward Brand Transparency
Lack Favorability Towards OBA Concept
Impact of Transparency on Perceptions of Online
Advertising
I would be inclined to do more business with ad advertiser or publisher who gives me the option to opt-out of OBA
I would be more inclined to click on an advertisement that gives me the option to opt-out of OBA
BASE: Total Qualified Respondents (n=1004)Q75 Please indicate the degree to which you agree or disagree with each of the following statements related to online advertising .
55%51%
Do not like
Neutral
Like
Addressing Consumer Concerns with DAA-Compliant Self Regulation
Advertising Preferences IconSelf-Regulatory Program For Behavioral Advertising
The Digital Advertising Alliance (DAA)
Substantial growth: 400+ companies comply
900 billion compliant impressions per month
All top-15 global advertisers participate, including: American Express, AT&T, Disney, General Motors, Kraft Foods, Microsoft and Walmart
Feb, 2012: The DAA announced that it will immediately begin work to add support for browser based DNT header signals. Planning to integrate by end of year.
DAA – AdChoices Program Growth and News
DAA Evolution
A simple ad tag inserts the DAA icon
1.
How Does DAA Compliance Work?
Advertising User Experience
If clicked the icon launches privacy notice inside the ad
2. Consumers have option to click to Preference Manager and opt out of selected tracking networks
3.
a
Consumer favorability increases 50% with “Powered By TRUSTe” DAA Compliance
BASE: Total Qualified RespondentsQ935/Q950 And, how does having this information available make you feel about the advertiser?
Impact onFeelings Towards
the Advertiser
About TRUSTe
Leader in Privacy Management Solutions 14 years of privacy experience Robust technology platform #1 privacy brand & trustmark
Comprehensive Solution Suite All media and devices Global coverage Self- and full-service options
Leading Provider to Leading Brands Over 5,000 clients Leading DAA AdChoices Icon Provider Over 100 Billion DAA Compliant Ads Served
©2012 eMarketer Inc.
Q&A Session
Digital Ad Trends—What’s Behind the
Spending Boom
Sponsored by:
TRUSTe
You will receive an email tomorrow with a link to
view the deck and webinar recording.
David Hallerman
US Digital Ad Spending: Key Trends for 2012
Local Online Advertising: Digital Trends, Challenges and Opportunities
Western Europe Mobile Ad Spending
Western Europe Digital Advertising: Spending and Trends
Learn more about digital advertising with an eMarketer corporate subscription
To learn more: www.emarketer.com/products
800-405-0844 or [email protected]
Over 120 reports are published each year. Following are a few of the recent ones focusing on spending: