WHERE’S THE                   MONEY: ONLINE AD-                   TRENDS OUTLOOKJanuary 19, 2011   AAF Birmingham
Agenda                        Digital advertising trends                        Local advertisers speak                 ...
About Borrell Associates                                                      Research                                   ...
Our Research                               Online ad spending data for any US market                               Sales...
Forecasting Sources                               Borrell’s model of marketing spending                                 ...
“Skate to wherethe puck willbe, not where itis.”   - Wayne Gretzky
Local U.S. Ad Spending                                             2010     2011    2012     2016                         ...
This Just In!
Dedicated Digital-Ad Sales AEswww.borrellassociates.com
Promotions
Local U.S. Non-Ad Spending                              ($ Billion)     2010     2011      2012    2016                   ...
Promotions defined                                         Discounts,   coupons,                                         ...
The Growth is in Promotions                                        $400                                        $350       ...
Big Money with Promotions                                            Augusta GA                                           ...
Online Promotions Skyrocketwww.borrellassociates.com© 2010, Borrell Associates, Inc. All rights reserved.   (Borrell Assoc...
Local Promotions Increase Sharewww.borrellassociates.com© 2010, Borrell Associates, Inc. All rights reserved.   (Borrell A...
Local Advertising vs. Local Promotions                                                            $1.56 will be spent     ...
Social
Do you have a social network site or page?                                                     64%       67%              ...
www.borrellassociates.com                            SMBs Online Spending
SMBs use of Social Marketing Platformswww.borrellassociates.com
Business Category Leaders in Socialwww.borrellassociates.com
SMBs Measure of Social Networking Successwww.borrellassociates.com
Mobile
Likely to include mobile in 2011?                                                  Percent        n                       ...
U.S. Total Mobile Ad $ in Perspective                                                         2011www.borrellassociates.co...
Mobile – Local vs. National Ad Spending                                                            National         Local ...
Local Mobile Ad Formats 2010/2011                                          $900                                          $...
Local Mobile Formats 2010-2016                                          $20                                          $18  ...
Online
Local Online Advertising – Historic Shares                             100%                              90%              ...
U.S. Local, Online Ad Formats, 2011/2016                            $18                               $30                 ...
Targeted Ads                            1.   IP-based geographical                            2.   Search                 ...
IP-based geo-targeting                               As determined by a user’s IP address                               ...
Search targeting                               Used when searching for places, businesses,                               ...
Explicit Profile Data Targeting                               Registration quality data                               Co...
Behavioral (Implicit Profile Data)                               Based on profiles that are inferred from an             ...
Mobile/Location-based Targeting                               Targeting through mobile devices –                         ...
Contextual Targeting                               Based on content being viewed on an                                ind...
Birmingham-Hoover, AL Metro
Local Online Ad Spending                                                         Birmingham-Hoover                        ...
Online Ad Formats 2011/2016                            $60                              $100                              ...
Top Online Business Categories 2016                                                    Birmingham-Hoover                  ...
© 2011 Borrell Associates Inc.
Under Siege from Ad Sellers                                             Q4     Q1     Q2     Q3                           ...
U.S. 2010 to 2011 Online Ad Spending Change                               40%                               30%www.borrell...
Marketing Advisors                            Which of these types of information sources                            do yo...
Confidence in rep ad package advice                             50%                             40%www.borrellassociates.c...
Effort seen in reps to listen & understand                             60%                             50%                ...
What can local media do?                                Be consultants, educators                                Develop...
Thank YouPeter Conti, Executive VPBorrell Associates Inc.pconti@borrellassociates.comPhone: 804-360-9434          © 2011 B...
WHERE’S THE MONEY: ONLINE AD-TRENDS OUTLOOK
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WHERE’S THE MONEY: ONLINE AD-TRENDS OUTLOOK

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Presentation by Peter Conti, Jr., Executive VP at Borrell & Associates. This meeting was sponsored by Charter Media.

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  • Showed up at the winners house with a camera crew and a big check, Publishers Clearinghouse Style. Had a big “Winner Revealed” and a big new kitchen reveal.
  • How likely is it that you will incorporate mobile elements in your advertising and marketing efforts to reach potential customers in 2011?
  • In an average month, how many total attempts do you think are made to speak with or reach you about any advertising opportunity of any sort? In an average month, with how many advertising sales people do you speak, in person or on the phone, among these in-coming efforts?
  • Which of these types of information sources do you use to find out about new advertising and marketing opportunities?
  • How confident would you be in advice your print representative might be able to offer on opportunities to place advertising in other media, including online, as part of a package that print rep was selling to you?
  • How much effort do you think advertising reps put into listening and understanding your needs?
  • WHERE’S THE MONEY: ONLINE AD-TRENDS OUTLOOK

    1. 1. WHERE’S THE MONEY: ONLINE AD- TRENDS OUTLOOKJanuary 19, 2011 AAF Birmingham
    2. 2. Agenda  Digital advertising trends  Local advertisers speak  What next?© 2011 Borrell Associates Inc.
    3. 3. About Borrell Associates  Research Advertising revenues & spendingwww.borrellassociates.com  Consulting Advertising strategy & tactics  Industry Conferences  Locally focused Offline and especially online advertising
    4. 4. Our Research  Online ad spending data for any US market  Sales data from 4,400+ local Web sites  Quarterly Delphi Panel surveyswww.borrellassociates.com  Ongoing in-market sales consulting  Major data partnerships:
    5. 5. Forecasting Sources  Borrell’s model of marketing spending  Many government & private inputswww.borrellassociates.com  IRS, BLS, D&B, 10Ks, trade associations  Developing for 20+ years  Ongoing surveys of local advertisers  Ongoing surveys of local media company sites
    6. 6. “Skate to wherethe puck willbe, not where itis.” - Wayne Gretzky
    7. 7. Local U.S. Ad Spending 2010 2011 2012 2016 Online $13.5 $15.3 $18.3 $27.2 Newspaper $21.3 $18.4 $18.5 $19.7www.borrellassociates.com Radio $12.6 $12.1 $11.4 $12.5 Broadcast TV $10.5 $10.5 $11.4 $10.2 Direct Mail $9.5 $8.2 $8.3 $7.3 Other Print $8.4 $8.1 $7.9 $6.1 Directories $6.6 $5.0 $5.3 $4.3 Cable $3.3 $3.2 $3.6 $3.9 Cinema $0.7 $1.0 $1.4 $2.1 Out-of-Home $1.2 $1.1 $1.2 $1.3 Telemarketing $1.0 $0.8 $0.9 $0.9 ($ Billion) $88.6 $83.7 $88.0 $95.5
    8. 8. This Just In!
    9. 9. Dedicated Digital-Ad Sales AEswww.borrellassociates.com
    10. 10. Promotions
    11. 11. Local U.S. Non-Ad Spending ($ Billion) 2010 2011 2012 2016 Promotions $114.3 $169.8 $177.5 $273.7www.borrellassociates.com Online Promos $0.8 $1.4 $1.7 $5.9 Online PR $1.2 $1.2 $1.3 $1.4 Ad Production $20.5 $17.6 $19.9 $25.1 Sales Materials $0.9 $0.8 $0.9 $0.9 P.R. $0.3 $0.3 $0.3 $0.4 Research $0.2 $0.1 $0.1 $0.1 $138.3 $191.2 $201.7 $307.6
    12. 12. Promotions defined  Discounts, coupons, rebates  Samples, premiumswww.borrellassociates.com  Contests, sweepstakes  Webinars  Viral marketing  Text messaging
    13. 13. The Growth is in Promotions $400 $350 $300www.borrellassociates.com $250 $274 $ Billion $200 Local Promo $170 $177 Local Ads $150 $114 $100 $50 $89 $84 $88 $96 $- $- $- $- 2010 2011 2012 2016
    14. 14. Big Money with Promotions Augusta GA Ferguson Extreme Kitchen Contestwww.borrellassociates.com  253 entries  7,627 registrations  30,000 votes  $50,000 prize, $50,000 sponsorship package  Turned a contest that ran 6 weeks into a program that ran 4 months
    15. 15. Online Promotions Skyrocketwww.borrellassociates.com© 2010, Borrell Associates, Inc. All rights reserved. (Borrell Associates Q4, 2009, US Totals, in billions)
    16. 16. Local Promotions Increase Sharewww.borrellassociates.com© 2010, Borrell Associates, Inc. All rights reserved. (Borrell Associates Q4, 2009, US Totals, in billions)
    17. 17. Local Advertising vs. Local Promotions $1.56 will be spent on local promotionswww.borrellassociates.com …for every $1 in local advertising  11% Growth in Advertising in 2014  26% Growth in Promotions© 2010, Borrell Associates, Inc. All rights reserved. (Borrell Associates Q4, 2009, US Totals, in billions)
    18. 18. Social
    19. 19. Do you have a social network site or page? 64% 67% 58%www.borrellassociates.com 45% © Borrell Associates, Inc. SMB Survey Q1 2011 Q3 2010 Q4 2010 Q1 2011 Q2 2011
    20. 20. www.borrellassociates.com SMBs Online Spending
    21. 21. SMBs use of Social Marketing Platformswww.borrellassociates.com
    22. 22. Business Category Leaders in Socialwww.borrellassociates.com
    23. 23. SMBs Measure of Social Networking Successwww.borrellassociates.com
    24. 24. Mobile
    25. 25. Likely to include mobile in 2011? Percent n Very likely 12.4% 604www.borrellassociates.com Somewhat likely 23.5% 1,142 Not very likely 30.0% 1,457 Not at all likely 22.4% 1,086 Don’t know 11.6% 563 Total 100.0% 4,852
    26. 26. U.S. Total Mobile Ad $ in Perspective 2011www.borrellassociates.com “Stationary” Online Ad Spend Online Ad $38.7 B Offline Ad Spending Spending $182.1 B $48.9 B
    27. 27. Mobile – Local vs. National Ad Spending National Local $35www.borrellassociates.com $30 $25 ($ Billion) $20 $15 $10 $5 $- 10 11 12 13 14 15 16
    28. 28. Local Mobile Ad Formats 2010/2011 $900 $800 $700www.borrellassociates.com $600 Email Audio ($ Million) $500 Targeted Display $400 Video $300 RoS Display Search $200 $100 $- 2010 2011
    29. 29. Local Mobile Formats 2010-2016 $20 $18 Email $16www.borrellassociates.com Audio $14 $12 ($ Billion) RoS Display $10 $8 Video $6 $4 Search $2 Targeted $0 Display 10 11 12 13 14 15 16
    30. 30. Online
    31. 31. Local Online Advertising – Historic Shares 100% 90% 80% Other 70%www.borrellassociates.com Local Cable 60% Directories 50% 40% Radio 30% Broadcast TV 20% Newspapers 10% Pureplay 0% 2002 2003 2004 2005 2006 2007 2008 2009 2010
    32. 32. U.S. Local, Online Ad Formats, 2011/2016 $18 $30 $16 $1,509 Targeted $25 Targeted $14 Display Displaywww.borrellassociates.com $12 Static $20 $14,596 Static $5,288 Display/RoS Display/RoS $10 Paid Search $15 Paid Search $8 $2,144 $6 $5,615 Direct/Email $10 Direct/email $4,210 $4 $643 $629 Video $5 Video $2 $2,401 $4,491 $ $817 Audio $ Audio 2011 ($ in Billions) 2016
    33. 33. Targeted Ads 1. IP-based geographical 2. Search 3. Explicit Profile Datawww.borrellassociates.com 4. Behavioral (Implicit Profile Data) 5. Mobile/Location-based 6. Contextual
    34. 34. IP-based geo-targeting  As determined by a user’s IP address  Used for local advertisers to reach their audiencewww.borrellassociates.com  25-50 miles accuracy  Better suited for regional advertisers to reach DMA level
    35. 35. Search targeting  Used when searching for places, businesses, housing, entertainment, etc.  Based on queryingwww.borrellassociates.com  Allows for highly relevant advertising  Performs well, high value
    36. 36. Explicit Profile Data Targeting  Registration quality data  Collected either offline or online  Data may be associated with a cookiewww.borrellassociates.com  Not about where user has been but what they have said about themselves  First party data commands a premium over third party data
    37. 37. Behavioral (Implicit Profile Data)  Based on profiles that are inferred from an individual user’s technical footprint and viewing behaviorwww.borrellassociates.com  Data collected through online activities – specific pages, searches, CTs  Used in conjunction with Explicit Profile Data  Higher probability of user interest  Higher ad rates, CPA, PPC
    38. 38. Mobile/Location-based Targeting  Targeting through mobile devices – smartphones, GPS (tablets), some laptops  Confirmed location (GPS)www.borrellassociates.com  Most available ad inventory has only DMA- level targeting  Confirmed-location targeting is extremely accurate
    39. 39. Contextual Targeting  Based on content being viewed on an individual Web page  Based on geography and the targetwww.borrellassociates.com  Can range from niche to mass  Accurate, commands higher price  Sometimes layered with IP targeting
    40. 40. Birmingham-Hoover, AL Metro
    41. 41. Local Online Ad Spending Birmingham-Hoover $100.0 $90.0 $80.0 $91.6www.borrellassociates.com $70.0 $60.0 ($ in Millions) $50.0 $40.0 $53.0 $30.0 $20.0 $10.0 $0.0 2011 2016
    42. 42. Online Ad Formats 2011/2016 $60 $100 $90 $50 $5.2 Targeted Targeted Display $80 Displaywww.borrellassociates.com Static $70 Static $40 $17.5 $50.4 Display/RoS $60 Display/RoS $30 Paid Search $50 Paid Search $40 $7.1 $20 $19.5 Direct/Email $30 Direct/email $14.6 $20 $2.0 $10 $1.9 Video Video $8.1 $10 $15.1 $0 $0 $2.5 Audio Audio 2011 2016 ($ in Millions)
    43. 43. Top Online Business Categories 2016 Birmingham-Hoover General Merchandise Stores $21.36 Automotive Sales $12.59www.borrellassociates.com Furniture Sales $6.25 Food Stores - Retail $3.82 Real Estate Services $3.47 Recruitment $3.16 Retail Home Improvement $1.94 $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 ($ in Millions)
    44. 44. © 2011 Borrell Associates Inc.
    45. 45. Under Siege from Ad Sellers Q4 Q1 Q2 Q3 2010 2011 2011 2011 Avg # of AEswww.borrellassociates.com contact you per month 23 25 20 24 Sales pitches © Borrell Associates, Inc. SMB Survey Q1 2011 taken per month 7 7 8 8
    46. 46. U.S. 2010 to 2011 Online Ad Spending Change 40% 30%www.borrellassociates.com 20% 10% 0% Less likely to buy More likely to buy
    47. 47. Marketing Advisors Which of these types of information sources do you use to find out about new advertisingwww.borrellassociates.com and marketing opportunities? © Borrell Associates, Inc. SMB Survey Q1 2011
    48. 48. Confidence in rep ad package advice 50% 40%www.borrellassociates.com 30% 20% © Borrell Associates, Inc. SMB Survey Q1 2011 10% 0% Very Somewhat Not very Not at all Do not Dont confident confident confident confident have print know rep
    49. 49. Effort seen in reps to listen & understand 60% 50% 40%www.borrellassociates.com 30% © Borrell Associates, Inc. SMB Survey Q1 2011 20% 10% 0% A great deal Some effort Not very No effort at Don’t know of effort much effort all
    50. 50. What can local media do?  Be consultants, educators  Develop ad-centric sites  Participate in promotions  Go after non-traditional advertisers© 2011 Borrell Associates Inc.
    51. 51. Thank YouPeter Conti, Executive VPBorrell Associates Inc.pconti@borrellassociates.comPhone: 804-360-9434 © 2011 Borrell Associates Inc. All Rights Reserved
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