Future of Digital - Global Trends & Statistics - 2012
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Future of Digital - Global Trends & Statistics - 2012 Presentation Transcript

  • 1. The  Future  Of  Digital  Henry  Blodget  CEO  &  EIC,  Business  Insider  
  • 2. The  medium  is  now  ~20   years  old.      
  • 3. So,  how  are  we  doing?      
  • 4. 2+  billion  people  online   Global)Internet)Popula4on) 2,500" 2,000" 1,500"(millions)) 1,000" 500" 0" 1990" 1991" 1992" 1993" 1994" 1995" 1996" 1997" 1998" 1999" 2000" 2001" 2002" 2003" 2004" 2005" 2006" 2007" 2008" 2009" 2010" 2011" Source:(Interna-onal(Communica-on(Union,(Google(
  • 5. 2/3  of  the  world  left  to  go   Global&Internet&Popula*on& 7,000" 6,000" 5,000" 4,000"(millions)& 3,000" Global&Popula*on& 2,000" 1,000" Internet&Popula*on& 0" 1990" 1991" 1992" 1993" 1994" 1995" 1996" 1997" 1998" 1999" 2000" 2001" 2002" 2003" 2004" 2005" 2006" 2007" 2008" 2009" 2010" 2011" Source:(Interna-onal(Communica-on(Union,(Google(
  • 6. However…      
  • 7. Most  of  the  money  is  already  online   Distribu(on+Of+Global+Income,+2000++ Bo#om%70% percent% 18%% Top%30%percent% 82%%Source:(UN(Human(Development(Report,(Trends(In(Global(Income(Distribu=on(
  • 8. So  the  market’s  more  mature  than  you  think.      
  • 9. Meanwhile,  something  profound  happened  last   year…  
  • 10. PC  growth  stalled   Global#PC#Shipments#By#Manufacturer#100,000" iPad"released" 90,000" 80,000" 70,000" Other# 60,000" 50,000" Apple# 40,000" Acer# 30,000" Dell# 20,000" Lenovo# 10,000" HP# 0" 1Q08" 2Q08" 3Q08" 4Q08" 1Q09" 2Q09" 3Q09" 4Q09" 1Q10" 2Q10" 3Q10" 4Q10" 1Q11" 2Q11" 3Q11" 4Q11" 1Q12" 2Q12" 3Q12" Source:(Gartner,(IDC(
  • 11. Smartphone  sales  blew  past  PC  sales   Global)Internet)Device)Sales) )1,000,000,000)) )900,000,000)) )800,000,000)) Tablets) )700,000,000)) )600,000,000))Units) )500,000,000)) Smartphones) )400,000,000)) )300,000,000)) )200,000,000)) )100,000,000)) Personal)Computers) )3)))) 2000) 2001) 2002) 2003) 2004) 2005) 2006) 2007) 2008) 2009) 2010) 2011) Source:(Gartner,(IDC,(Strategy(Analy5cs,(company(filings,(BI(Intelligence(es5mates(
  • 12. Tablets  are  now  driving  all  the  growth  in  PC  market   Global$Computer$Shipments$ 140,000" 120,000" 100,000" Tablets$ (thousands)$ 80,000" 60,000" 40,000" PCs$ 20,000" 0" 1Q08"2Q08"3Q08"4Q08"1Q09"2Q09"3Q09"4Q09"1Q10"2Q10"3Q10"4Q10"1Q11"2Q11"3Q11"4Q11"1Q12"2Q12"3Q12" Source:(Gartner,(IDC,(Strategy(Analy5cs(company(releases(
  • 13. So  the  future  is  mobile   G>20&Internet&Access& 3,000& 2,500& 2,000& Consumer& Mobile& Broadband& 1,500&Connec:ons& (milions)& 1,000& Mobile& 500& Fixed& Fixed& Fixed& 0& 2005& 2010& 2015& Source:(Boston(Consul/ng(Group,(Mary(Meeker,(Kleiner(Perkins,(Morgan(Stanley(Research,(Berg(Insight(
  • 14. Where  are  we  in  the  mobile  revolution?      
  • 15. Globally,  we’re  still  early…   Global&Smartphone&vs.&Mobile&Phone&Users,&2012E& 7,000# 6B# Mobile# Phone#Users# 6,000# 5,000#Global&Users&(millions)& 4,000# 3,000# 2,000# 1B# Smartphone# Users# 1,000# 0# Smartphone# Mobile#Phone# Source:#Strategy#AnalyCcs,#InternaConal#TelecommunicaCons#Union# Note:#Some#users#own#more#than#one#device#
  • 16. But  growth  slows  after  50%  penetration  
  • 17. U.S.  and  other  markets  are  past  halfway  point   U.S.SmartphonePenetra6on 80%# 70%# FeaturePhones 60%# 55% 50% 50%# 45% 40%# Smartphones 30%# 20%# 10%# 0%# Oct/10# Nov/10#Dec/10# Jan/11# Feb/11#Mar/11#Apr/11#May/11#Jun/11# Jul/11# Aug/11#Sep/11# Oct/11# Nov/11#Dec/11# Jan/12# Feb/12#Mar/12#Apr/12#May/12#Jun/12# Source:(Nielsen(
  • 18. US  smartphone  growth  starting  to  slow   U.S.%Smartphone%Market:%Year9Over9Year%Net%Adds% 40" 35" 30" 25" Users% Added% 20"(millions)% 15" 10" 5" 0" Q1" Q2" Q3" Q4" Q1" Q2" Q3" Q4" Q1" Q2" Q3" Q4" Q1" Q2" Q3" Q4" Q1" Q2" Q3" 2008" 2008" 2008" 2008" 2009" 2009" 2009" 2009" 2010" 2010" 2010" 2010" 2011" 2011" 2011" 2011" 2012" 2012" 2013" Source:(comScore,(Nielsen(
  • 19. Most  future  US  smartphone  buyers  will  be   older  and  poorer   Smartphone#Penetra=on#By#Age#And#Income#(U.S.)#90%# 80%$80%# 77%$ 74%$ 75%$ 69%$ 70%$70%# 65%$ 65%$ 65%$ 63%$ 60%$60%# 58%$ 56%$ 53%$ 52%$ 50%$ 51%$50%# 48%$ 43%$ 44%$ 41%$ 42%$40%# 38%$ 31%$ 32%$ 30%$30%# 27%$ 23%$ 24%$ 21%$20%# 18%$ 16%$ 17%$ 16%$ 15%$ 16%$10%# 0%# Ages#18#1#24# Ages#25#1#34# Ages#35#1#44# Ages#45#1#54# Ages#55#1#64# Ages#65+# <15k# 15k#1#35k# 35k#1#50k# 50k#1#75k# 75k#1#100k# 100k+# Source:  Nielsen  
  • 20. So  the  focus  is  on  markets  like  China,  which  now  accounts  for  ~25%  of  smartphone  sales.   Global%Smartphone%Shipments% !180,000!! !160,000!! !140,000!! !120,000!!(thousands)% !100,000!! !80,000!! Rest%Of%The%World% !60,000!! !40,000!! !20,000!! China% !"!!!! 1Q11! 2Q11! 3Q11! 4Q11! 1Q12! 2Q12! Source:(Gartner,(IDC,(Strategy(Analy5cs,(Canalys,(BII(es5mates(
  • 21. China  is  already  twice  the  size  of  US  market   ChineseInternetUsers 600" Total 500" Mobile 400" Broadband(millions) 300" 200" 100" 0" June"06" Dec"06" June"07" Dec"07" June"08" Dec"08" June"09" Dec"09" June"10" Dec"10" June"11" Dec"11" June"12" Source:(China(Internet(Network(Informa5on(Center(
  • 22. MEDIA  
  • 23. Remember  when  they  said  no  one  would  ever  pay  for  content?      
  • 24. Digital  content  revenues  are  exploding   DigitalContentRevenue,2005<2011 $14,000,000# GlennBeckTV $12,000,000# TheStreet.com WSJDigital NYTimesDigital $10,000,000# LinkedIn Hulu SpoDfy Dropbox $8,000,000# Total Zynga Digital Content Kindle   Revenue $6,000,000#(thousands) Ne)lix $4,000,000# $2,000,000# iTunes $0# 2005# 2006# 2007# 2008# 2009# 2010# 2011# Source:(BI(Intelligence,(company(filings(
  • 25. Digital  Advertising  still  growing  rapidly   U.S.)Digital)Adver6sing) $35# $30# $25#(billions)) $20# $15# $10# $5# $0# 1995# 1996# 1997# 1998# 1999# 2000# 2001# 2002# 2003# 2004# 2005# 2006# 2007# 2008# 2009# 2010# 2011# Source:(IAB(
  • 26. At  largest  U.S.  tech  and  media  companies,   nearly  40%  of  ad  revenue  is  digital   Online$vs.$Offline$Adver*sing$(U.S.),$2006<2011$ $80,000# $70,000# $60,000# 38%# 23%# share# share# $50,000# Online   U.S.$ $40,000# Adver*sing$ Revenue$ (millions)$ $30,000# 62%# 77%# share# share# $20,000# Offline   $10,000# $0# 2006# 2007# 2008# 2009# 2010# 2011# Source:#Company#filings#and#BI#Intelligence#esFmates.#Companies#include:#Google,#Yahoo,#AOL,#MicrosoN,#Facebook,#Time#Warner,#Disney,#Viacom,#CBS,#News## Corp,#New#York#Times,#GanneX,#McClatchy,#Time#Inc,#Entercom,#CBS#Radio,#Clear#Channel,#Citadel,#Cum#
  • 27. TV  still  biggest.  Online  close  behind.     Print  getting  smashed.   U.S.$Adver*sing,$2006:2011$ $80,000$ $70,000$ 4%$ 7%$ Outdoor$ 6%$ $60,000$ Radio$ 9%$ 11%$ $50,000$ Print$ 14%$ 20%$ U.S.$ All$Other$Online$Adver*sing$ $40,000$ 23%$ Revenue$ 13%$ (millions)$ $30,000$ 10%$ Google   $20,000$ 41%$ Television$ 42%$ $10,000$ $0$ 2006$ 2007$ 2008$ 2009$ 2010$ 2011$ Source:$Represents$annual$U.S.$adverAsing$revenue$for$20$large$media$companies$based$on$company$filings$and$our$own$esAmates$
  • 28. Digital  has  already  “disrupted”   one  media  sector…      
  • 29. As  news  consumption  moved  online…   News%Media%Audience%and%Revenue%Growth,%201092011%%%25%$ 23%$20%$ 17%$15%$10%$ 9%$ 5%$ 5%$ 1%$ 1%$ 1%$ 1%$ 0%$ &1%$ &5%$ &4%$ &4%$ &6%$ &7%$ &7%$&10%$ Online$$ Network$TV$ Local$TV$ Audio$ Cable$TV$ Magazines$ Newspaper$ Audience$Growth$ Revenue$Growth$ Source:(Nielsen(Media(Research,(the(Audit(Bureau(of(Circula9on(and(Arbitron,(SNL(Kagan,(eMarketer,(Veronis(Suhler(Stevenson,(Radio(Adver9sing(Bureau,(Publishers( Informa9on(Bureau,(Na9onal(News(Associa9on,(BIA/Kelsey(
  • 30. Newspaper  ad  revenue  collapsed  
  • 31. Google  now  generates  as  much  U.S.  ad  revenue  as   newspapers  and  magazines  (all  of  them)   Google$Generates$More$U.S.$Ad$Revenue$Than$Newspapers$ $50,000## $45,000## $40,000## $35,000## $30,000## U.S.$Ad$Revenue$ $25,000##(millions)$ $20,000## $15,000## $10,000## $5,000## $0## 2004# 2005# 2006# 2007# 2008# 2009# 2010# 2011# 1H2012# Google#(U.S.)# U.S.#Magazines## U.S.#Newspapers## Source:(Google,(NAA,(PIB(
  • 32. (Some)  paywall  subscriptions  are  growing,  but…   New+York+Times+Digital+Subscribers+ 600" 500" 400" (thousands)+ 300" 200" 100" 0" 2Q11" 3Q11" 4Q11" 1Q12" 2Q12" 3Q12" Source:(company(releases( Note:(does(not((include(print(subcribers(with(digital(access(
  • 33. “Digital  dimes”  don’t  offset  lost  print  dollars   Newspaper(Ad(Revenue((Print(vs.(Online)( !$60,000!! !$50,000!! !$40,000!! In!Millions! !$30,000!! !$20,000!! !$10,000!! !$#!!!! 2003! 2004! 2005! 2006! 2007! 2008! 2009! 2010! 2011! Source:(Newspaper(Associa0on(Of(America( Print! Online!
  • 34. Of  course,  print  news  is   old  news…      
  • 35. Now  the  question  is…      
  • 36. Is  TV  next?   NielsenPrime+meHouseholdRa+ngs6.2$6.1$6.0$5.9$5.8$5.7$5.6$5.5$5.4$5.3$ 2007-2008$ 2008-2009$ 2009-2010$ 2010-2011$ 2011-2012$ Big$4$U.S.$TV$Networks$Average$
  • 37. For  now,  TV  ad  spending  still  growing   TV&Ad&Spend,&200772011& $74$ $72$ $70$ $68$Total&TV&Ad&Spend& $66$(billions)& $64$ $62$ $60$ $58$ 2007$ 2008$ 2009$ 2010$ 2011$ Source:(Nielsen(
  • 38. But  behavior  is  changing   U.S."Prime2me"TV"Viewing" (%"of"18949"TV"set"users"during"899"PM"hour,"mul2ple"responses"permiBed)" 6%$ 6%$ 7%$ 8%$ 17%$ 16%$%"of"TV"set"users" 26%$ 82%$ 83%$ 64%$ 2004$ 2008$ 2012$ Live$TV$ Recorded$TV$ Video$game$ Streaming$video$ Source:(GfK(
  • 39. Pay  TV  subscriptions  are  now  trending  down   Pay&TV&Subscriber&Net&Addi3ons& 1000$ 800$ 600$ 400$ TelCo& 200$ Satellite& Subscriber&Net&Addi3ons& 0$ (thousands)& Total& !200$ !400$ Cable& !600$ !800$ !1000$ 1Q09$ 2Q09$ 3Q09$ 4Q09$ 1Q10$ 2Q10$ 3Q10$ 4Q10$ 1Q11$ 2Q11$ 3Q11$ 4Q11$ 1Q12$ 2Q12$ 3Q12$ Source:  Bernstein  Research  
  • 40. ‘Over-­‐the-­‐top’  video  is  real  and  growing  fast.     DigitalVideoRevenue,2006?2011 $5,000# Hulu $4,000# YouTube $3,000# Total Digital Revenues (millions) $2,000# $1,000# Ne#lix $0# 2006# 2007# 2008# 2009# 2010# 2011# Source:#Company#filings#and#BI#Intelligence#esDmates#
  • 41. Live  events  are  increasingly  being  viewed  over   the  Internet   GrowthOfTotalLiveVideoViewingTimeViaConnectedTV DevicesAndGamingConsoles(Q32012)300%#250%#200%#150%#100%# 50%# 0%# 2(Jul# 9(Jul# 16(Jul# 23(Jul# 30(Jul# 6(Aug# 13(Aug# 20(Aug# 27(Aug# 3(Sep# 10(Sep# 17(Sep# 24(Sep# Source:(Ooyala(
  • 42. Digital  video  advertising  is  on  the  rise   Online)Video)Ad)Revenue)(U.S.)) $2,500# $2,000# $1,500#(millions)) $1,000# $500# $0# 2006# 2007# 2008# 2009# 2010# 2011# Source:(Interac-ve(Adver-sing(Bureau,(eMarketer,(comScore,(BI(Intelligence(es-mates(
  • 43. But  as  with  print,  digital  =  less  money  than  TV   Ad#Loads,#TV#vs.#Digital# (%#share#of#programming)# 1.5%&100%& 7.9%& 90%& 24.8%& 80%& 70%& 60%& 50%& 98.5%& 92.1%& 40%& 75.2%& 30%& 20%& 10%& 0%& TV& Online&video& Streaming&TV&online& Content& Ads& Source:(comScore,(June(2012(
  • 44. What  does  history  teach  us?          
  • 45. As  habits  change…          
  • 46. The  money  follows.      
  • 47. By  the  way,  “old  media”  isn’t   the  only  media  being   disrupted...      
  • 48. Americans  now  spend  more  time  on     social  networks  than  portals   AverageTimeSpent:Portalsvs.SocialNetworks(U.S.) 30 SocialNetworks 25 20 PortalsAverageMinutes 15 PerUsageDay 10 5 0 Nov62010 Dec62010 Jan62011 Feb62011 Mar62011 Apr62011 May62011 Jun62011 Jul62011 Aug62011 Sep62011 Oct62011 Nov62011 Dec62011 Source:(comScore(
  • 49. 1/7th  of  the  world’s  population  now  use  Facebook   Facebook(Ac+ve(Users( 1,100( 1,000( 900( 800( 700( Ac+ve( 600( Users( Monthly(Ac+ve(Users((millions)( 500( 400( 300( 200( Daily(Ac+ve(Users( 100( 0( 1Q09( 2Q09( 3Q09( 4Q09( 1Q10( 2Q10( 3Q10( 4Q10( 1Q11( 2Q11( 3Q11( 4Q11( 1Q12( 2Q12( 3Q12(
  • 50. Time  spent  on  Yahoo,  et  al,  continues  to  decline   Yahoo%Time%Spent%%%vs.%Total%Internet%(U.S.)% 16%# 14%# 12%# 10%# 8%# 6%# 4%# 2%# 0%# 1Q07#2Q07#3Q07#04Q7#1Q08#2Q08#3Q08#4Q08#1Q09#2Q09#3Q09#4Q09#1Q10#2Q10#3Q10#4Q10#1Q11#2Q11#3Q11#4Q11#1Q12# Source:(comScore,(Ci-(Investment(Research(And(Analysis(
  • 51. Now,  in  online  ads,  it’s  Google,  Facebook,  and  “other”…   Google  
  • 52. Facebook  has  blown  past  AOL,     Microsoft,  and  Yahoo     U.S&Digital&Adver:sing& $9,000# $8,000# 15%& $7,000# 4%& 7%& $6,000# 8%& Other& 11%& Digital& $5,000#Adver:sing& AOL& Revenue& Facebook&(millions)& $4,000# Yahoo& 6%& 13%& $3,000# Microso0& 30%& 55%& $2,000# 11%& Google& $1,000# 40%& $0# 2Q06#3Q06#4Q06#1Q07#2Q07#3Q07#4Q07# 1Q08#2Q08#3Q08#4Q08#1Q09#2Q09#3Q09#4Q09#1Q10#2Q10#3Q10#4Q10#1Q11#2Q11#3Q11#4Q11#1Q12# Source:(company(filings(BII(es5mates(
  • 53. YouTube,  Hulu,  Glam,  Twitter,  Demand,  et  al.,   also  taking  portal  share…   US(Digital(Adver=sing:(New(Growth(Companies( $1,800# Glam(Media( $1,600# Federated(Media( Twi6er( $1,400# $1,200# Demand(Media( Digital( $1,000# Adver=sing( Hulu( Revenue( (millions)( $800# WebMD( $600# $400# YouTube( $200# Facebook( $0# 2Q06#3Q06#4Q06#1Q07#2Q07#3Q07#4Q07#1Q08#2Q08#3Q08#4Q08#1Q09#2Q09#3Q09#4Q09#1Q10#2Q10#3Q10#4Q10#1Q11#2Q11#3Q11#4Q11#1Q12# Source:(company(filings(BII(es5mates(
  • 54. “Display”  ad  growth  is  flattening   U.S.&Display&Adver9sing& $3,000# $2,500# Microso3& $2,000# AOL& Display&Adver9sing& $1,500# Revenue& Yahoo& (millions)& $1,000# Other& $500# Google& $0# 2Q06#3Q06#4Q06#1Q07#2Q07#3Q07#4Q07#1Q08#2Q08#3Q08#4Q08#1Q09#2Q09#3Q09#4Q09#1Q10#2Q10#3Q10#4Q10#1Q11#2Q11#3Q11#4Q11#1Q12# Source:(company(filings,(BII(es6mates(
  • 55. Real-­‐time  bidding  is  automating  what’s  left   RTB$As$%$Of$Digital$Display$Ad$Spending$ 30%# 25%# 20%# 15%# 10%# 5%# 0%# 2010# 2011# 2012# 2013# 2014# 2015# 2016# Source:(eMarketer(
  • 56. So,  will  Facebook  ever  be  bigger   than  Google?      
  • 57. Unlikely.      
  • 58. Google  is  like  advertising  at  a  store.      
  • 59. Facebook  is  like  advertising  at  a  party.      
  • 60. Social  referrals  to  commerce  sites  are  tiny   Drivers&of&ELCommerce&Traffic& 90.0%& 80.0%&   70.0%&   60.0%& Facebook referrals up 92% year-over-Percentage& 50.0%&   year… Of&Traffic&& 40.0%& 80.6%& 30.0%& 20.0%& 10.0%& 9.7%& 7.5%& 1.7%& 0.5%& 0.02%& 0.0%& Google& Yahoo& Bing& AOL& Facebook& TwiBer& Source:(RIchRelevance(
  • 61. And  speaking  of  advertising   at  stores...      
  • 62. E-­‐tailers  are  now  building  ad  businesses   U.S.$Retailers:$Total$Display$Ad$Impressions$$ 30,000" 25,000" 20,000" 15,000"(MM)" 10,000" 5,000" 0" Q3"2011" Q4"2011" Q1"2012" Q2"2012" Q3"2012" """"Other" """"Target"Corpora8on" """"Best"Buy"Sites" """"WalBMart" """"Amazon" Source:(comScore(
  • 63. Amazon  ad  revenue  is  already  $1+  billion  a  year…  
  • 64. And  as  eCommerce  continues  to  take  share…   U.S.&Retail&Sales& $5,000,000# E.Commerce& $4,500,000# $4,000,000# $3,500,000# $3,000,000# (millions)& $2,500,000# $2,000,000# Offline&Retail&Sales& $1,500,000# $1,000,000# $500,000# $0# 1995# 1996# 1997# 1998# 1999# 2000# 2001# 2002# 2003# 2004# 2005# 2006# 2007# 2008# 2009# 2010# 2011# Source:(Federal(Reserve(Economic(Data66St.(Louis(Fed,(BI(Intelligence(es=mates(
  • 65. New  brands  are  blending  marketing  and  commerce   SocialCommerceRevenues $3,500 Fab $3,000 ShoeDazzle OneKingsLane $2,500 Ideeli Zulily $2,000 Total BeyondTheRack Revenue (millions) HauteLook $1,500 RueLaLa LivingSocial $1,000 $500 GiltGroupe Groupon $0 2008 2009 2010 2011 Source:(Company(Filings,(BII(Es8mates(
  • 66. MOBILE  
  • 67. So,  what  do  people     do  on  mobile?  
  • 68. Well,  first,  they  do  pretty  much   everything  they  do  online…      
  • 69. They  play  games  and  social-­‐network…   Daily&Smartphone&App&Consump4on,&Minutes&Per&Category& 7# 7# 10# 10# 12# 11# 24# 15# 25# 24# Q1#2011# Q1#2012# Games# Social#Networking# News# Entertainment# Other# Source:(Flurry(Analy/cs(
  • 70. They  listen  to  music...   75%# 70%# 55%#%#of#Traffic#from#Mobile# Pandora# 50%# Twi6er# 33%# Facebook# 25%# 5%# 1%# 0%# 2008# 2009# 2010# 2011# Source:#Mary#Meeker,#Kleiner#Perkins,#companies#
  • 71. They  consume  content…   Top&Mobile&Categories&By&Growth&In&Audience,&Dec.&2010&vs.&Dec.&2011&(U.S.)& 35,000% 30,000% 25,000% Total& 20,000% 74%% Mobile& Audience&(thousands)& 15,000% 72%% 94%% 77%% 70%% 80%% 74%% 10,000% 69%% 134%% 5,000% 82%% 0% Health% Online%Retail% Mens% Electronic% Gaming% Job%Lis:ngs% General% Classifieds% Auc:on%Sites% Family% Informa:on% Magazine% Payment% Informa:on% Reference% Entertainment% Content% DecS10% DecS11% Source:(comScore(MobieLens,(3(mon.(avg.(ending(Dec82011(vs.(Dec82010(
  • 72. They  look  at  pictures  and  video.     U.S.$Video$Engagement,$Monthly$Minutes$Per$Ac;ve$User$ 472# 425# 378# 324# 276# 231# 152# 110# 93# 63# Mar#2011# June#2011# Sept#2011# Dec#2011# Mar#2012# Google#Internet#Sites# iOS#&#Android#Photo#&#Video#Apps#Source:(Flurry(Analy/cs,(comScore(Video(Matrix(
  • 73. They  use  their  devices  while  they  watch  TV   Percentage)Of)Smartphone)Users)Who)Use)Their)Phones) While)Watching)TV)90%#80%#70%#60%#50%#40%#30%#20%#10%# 0%# Monthly# Mul5ple#Times#A#Week# Daily## Source:(Nielsen(Cross/Pla2orm(Report(Q2,(2012(
  • 74. They  shop…   Ecommerce#Website#Traffic#By#Device#100%# Tablet# 90%# Smartphone# 80%# 70%# 60%# 50%# PC# 40%# 30%# 20%# 10%# 0%# Q1#2011# Q2#2011# Q3#2011# Q4#2011# Q1#2012# Q2#2012# Q3#2012# Source:(Monetate(
  • 75. They  use  smartphones  to  make  buying   decisions  in  stores.   U.S.$Smartphone$Owners$Ac3vity$In$Retail$Stores$ 24.0%& 22.3%& 20.4%& 20.2%& 19.7%& 18.8%& 16.2%& 14.6%& 14.1%& 13.1%& 12.3%& 11.1%& 10.9%& 10.0%& 8.3%& 7.2%& 6.3%& 5.2%&Took&Picture&Of& Texted/Called& Scanned&A& Sent&Picture&Of& Found&Store& Compared& Found&Coupons& Research&Product&Checked&Product& Product& Friends/Family& Product&Barcode& Products&To& LocaJon& Product&Prices& For&Deals& Features& Availability& About&Product& Family/Friends& Males& Females&
  • 76. They  pay  for  stuff   PayPal#Mobile#Payments#Processed# $5,000# $4,000# $3,000# Total##Payment# Volume#(millions)# $2,000# $1,000# $0# 2008# 2009# 2010# 2011#
  • 77. They  buy  content     Media&Content&Paid&For&On&A&Tablet,&Q4&2011&70%#60%#50%#40%#30%#20%#10%# 0%# Downloaded# Books# Movies# Magazines# TV#Shows# Streaming# Sports# News# Music# Radio# US# Italy# UK## Germany# Source:(Nielsen(
  • 78. And  they  do  stuff  they     DON’T  do  online…      
  • 79. Play  Angry  Birds,  et  al   Angry&Birds&Downloads&vs.&Nintendo&DS&Sales& 700,000" 600,000" 500,000" 400,000" Total&Downloads& Or&Sales&(thousands)& 300,000" 200,000" 100,000" 0" Mar"10" Jun"10" Sept"10" Dec"10" Mar"11" Jun"11" Sept"11" Dec"11" Note:&Includes&Nintendo&3DS&Sales& Source:  New  reports,  company  releases,  BI  Intelligence  estimates  
  • 80. Take  and  share  pictures   Instagram&Es5mated&Users& 100,000" 90,000"   80,000" 70,000" Total&& 60,000"   Users& 50,000"(thousands)& 40,000" 30,000" 20,000" 10,000" 0" 3/2011" 4/2011" 5/2011" 6/2011" 7/2011" 8/2011" 9/2011" 10/2011"11/2011"12/2011" 1/2012" 2/2012" 3/2012" 4/2012" 5/2012" 7/2012" 7/2012" 8/2012" 9/2012" Source:(news(reports,(company(releases,(BII(Es6mates(
  • 81. BOTTOM  LINE:     Mobile  devices  =    More  Internet  usage  +     New  applications  
  • 82. In  fact,  mobile  has  made  digital  24/7   Share  Of  Device  Page  Traffic  Over  A  Day:    Source: comScore, Telefonica, Macquarie Capital (USA), December 2011
  • 83. This  leads  to  another  big   question…  
  • 84. Mobile  usage  is  up  across  the  board   U.S.%Mobile%Content%Usage% 80%# Sent%Text%Message% 70%#Share%of%mobile%populaCon%that%has...% 60%# Used%Downloaded%Apps% 50%# Used%Browser% Accessed%Social%Network% 40%# %Or%Blog% Played%games% 30%# Listened%to%music%% 20%# 10%# 0%# Feb# Apr# May# Jun# Jul# Aug# Sept# Oct# Nov# Dec# Jan# Feb# Mar# Apr# May# Jun# Jul# Aug# Sept# Oct# Nov# Dec# Jan# Feb# Mar# Apr# May#June# July# Aug# Sep# 10# 10# 10# 10# 10# 10# 10# 10# 10# 10# 11# 11# 11# 11# 11# 11# 11# 11# 11# 11# 11# 11# 12# 12# 12# 12# 12# 12# 12# 12# 12# Source:(comScore(
  • 85. People  are  consuming  a  huge  amount  of   content  through  mobile…   Media&Content&Accessed&Through&Mobile&Device& 59%$ 57%$ 53%$53%$41%$ 29%$ 29%$ 27%$ 26%$ 27%$ 25%$ 23%$ 22%$ 20%$ 9%$ 10%$ 9%$ 5%$Books$ Movies$ TV$Shows$ Magazines$ News$ Social$ Downloaded$ Sports$ Streaming$ Networking$ Music$ Radio$ Tablet$ Smartphone$Source:(Nielsen(Q4(2011(Mobile(Connected(Device(Report(
  • 86. As  mobile  increases,  all  other  media  decreases   Share&Of&Consumer&Time&Spent&With&Major&Media& 45%$ 44%$ 43%$ 42%$ 26%$ 26%$ 26%$ 25%$ 17%$ 16%$ 15%$ 14%$ 12%$ 9%$ 9%$ 8%$ 8%$ 7%$ 7%$ 7%$ 6%$ 6%$ 5%$ 4%$ TV$ Online$ Radio$ Mobile$ Print$ Other$ 2009$ 2010$ 2011$ 2012$ Source:(eMarketer,(October(2012(
  • 87. So  mobile  advertising     will  be  huge,  right?  
  • 88. Hmmm…  
  • 89. The  “bullish”  mobile-­‐ad  story  is  the  huge   gap  between  time-­‐spent  and  ad  spending.   2011$U.S.$Ad$Spending$vs.$Consumer$Time$Spent$By$Media$ 42%$ 43%$ 25%$ 26%$ 22%$ 15%$ 11%$ 10%$ 7%$ 1%$ TV$ Print$ Web$ Radio$ Mobile$ Ad$Spend$Per$Media$ Time$Spent$Per$Media$Source:  Mary  Meeker  (KPCB),  eMarketer,  IAB  
  • 90. But  maybe  there’s  a  good  reason   for  that  gap…      
  • 91.  The  screen  is  really  small.  
  • 92. Mobile  monetization  still  behind  the  desktop   ARPU,&Desktop&vs.&Mobile&& $58.95& $25.00& $17.61& $6.62& $5.00& $3.87& Pandora& Zynga& Tencent& Mobile& Desktop& Source:(Pandora,(Zynga,(Tencent(
  • 93. Mobile  CPMs  are  much  lower   Effec%veCPM,Desktopvs.Mobile $3.50& $0.75& Desktop&Internet& Mobile&Internet&Source:(comScore,(Vivaki,(Mobclix(Exchange(
  • 94. Most  “mobile”  ads  are  mainly  web  search  +   display  ads  viewed  on  mobile   2011$Global$Mobile$Ad$Spend$By$Category$ Messaging 10% Display 28% Search 62% Source:((IAB(
  • 95. Google  completely  owns  mobile  search   Global&Mobile&Search&Market&Share&100%# Google& 90%# 80%# 70%# 60%# 50%# 40%# 30%# 20%# 10%# bing& Yahoo!& 0%# Dec# Mar# Jun# Sep# Dec# Mar# Jun# Sep# Dec# Mar# Jun# Sep# Dec# Mar# Jun# Sep# 08# 09# 09# 09# 09# 10# 10# 10# 10# 11# 11# 11# 11# 12# 12## 12# Source:(Global(StatCounter(
  • 96. So  Google  owns  mobile,  too   Mobile&Ad&Market&Share&100%# 90%# Other& Microso4& 80%# Yahoo& Apple& 70%# Pandora& 60%# 50%# Millennial&Media& 40%# 30%# Google& 20%# 10%# 0%# 1Q09# 2Q09# 3Q09# 4Q09# 1Q10# 2Q10# 3Q10# 4Q10# 1Q11# 2Q11# 3Q11# 4Q11# Source:(news(reports,(company(releases,(BII(es5mates(
  • 97. Overall,  mobile  is  still  a  tiny  fraction  of   digital  ad  spending.   U.S.DigitalAdver7singRevenues $35# Mobile $30# $25#(billions) $20# $15# $10# $5# $0# 2007# 2008# 2009# 2010# 2011# Source:((IAB,(BIA-Kelsey,(BII(es2mates(
  • 98. And  it’s  growing  much  slower  than  TV  +   Internet  in  the  first  5  years   Comparave*U.S.*Adversing*Media* Annual*$*Revenue*Growth*(First*5*Years)*$5,000% $4,621%$4,500%$4,000% $3,698%$3,500%$3,000%$2,500% $2,162% $2,162% $1,920%$2,000%$1,500% $1,171% $1,012% $907%$1,000% $806% $500% $358% $392% $267% $80% $55% $160% $0% Year%1% Year%2% Year%3% Year%4% Year%5% Broadcast%TV% Mobile% Internet% Source:((IAB,(McCann1Erickson,(BIA1Kelsey,(BII(es9mates( Note:(Adjusted(for(infla9on(
  • 99. But!  
  • 100. “Native”  mobile  ads  are  finally  beginning   to  appear…   •  Ads  in  timelines  (Twitter  /  Facebook)   •  Shareable  ads   •  Location-­‐based  mobile  ads  
  • 101. Location-­‐based  mobile  ads  can  target  users   at  the  mall,  restaurants,  car  dealers  …   Monthly(Ad(Requests(Per(Mobile(User(By(Loca9on(80"70"60"50"40"30"20"10" 0" l" " s" l" t" " " " " " " ry rs ts ts rs rs rs al te or pu an an le le le le ra M Ho rp am ai ai ea ai Lib ur ur Ai et et et r"D ta ta "C "R "R "R es es ol Ca x cs ng Bo ho "R r"R ni hi ice g" Sc tro he ot Bi rv Cl Ot ec "S e El ck i QuSource:(JiWire,(Q3(2012(
  • 102. Targeted  mobile  ads  have  higher  CPMs   CPMs%For%Selected%Mobile%Ad%Pla3orms% xAd!local! !$3.50!!LSN!Mobile!local!ads!! !$5.00!! Adsmobi!video!ads! !$5.00!! Flurry!video!ads! !$10.00!! !$(!!!! !$2.00!! !$4.00!! !$6.00!! !$8.00!! !$10.00!! !$12.00!!Source:(Ad(pla.orms,(BII(Research,(Greg(Sterling,(Opus(Research(
  • 103. So,  yes,  mobile  ads  are  just  getting  started     U.S.&Mobile&Ad&Forecast& $7,000# $6,000# Local& $5,000#Mobile&Ad& $4,000#Revenue&(millions)& $3,000# We  are  here   $2,000# Media& $1,000# $0# 2009A# 2010A# 2011A# 2012E# 2013E# 2014E# 2015E# 2016E# 2017E#
  • 104. APPS  
  • 105. App  Store  downloads  on  pace  to  hit  60   billion  by  mid-­‐2013   Apple%App%Store%Downloads%65,000,000,000"60,000,000,000"55,000,000,000"50,000,000,000"45,000,000,000"40,000,000,000"35,000,000,000"30,000,000,000"25,000,000,000"20,000,000,000"15,000,000,000"10,000,000,000" 5,000,000,000" 0" 1/1/11" 2/1/11" 3/1/11" 4/1/11" 5/1/11" 6/1/11" 7/1/11" 8/1/11" 9/1/11" 10/1/11" 11/1/11" 12/1/11" 10/1/12" 11/1/12" 12/1/12" 1/1/12" 2/1/12" 3/1/12" 4/1/12" 5/1/12" 6/1/12" 7/1/12" 8/1/12" 9/1/12" 1/1/13" 2/1/13" 3/1/13" 4/1/13" 5/1/13" 6/1/13"
  • 106. Smartphone  users  spend  more  time  on  apps  than  web   TotalTimeSpentUsingMobileWebvs.Apps 140" 120" 100" 80"MinutesSpent PerMonth (Biillions) 60" Apps 40" 20" MobileWeb 0" Mar+11" Apr+11" May+11" Jun+11" Jul+11" Aug+11" Sep+11" Oct+11" Nov+11" Dec+11" Jan+12" Feb+12" Mar+12" Source:(Nielsen(Smartphone(Analy5cs(
  • 107. Mobile  app  revenue  is  growing  fast,  but   still  relatively  small.   Mobile)App)Revenue) $4,000# $3,500# $3,000# $2,500#(millions)) $2,000# $1,500# $1,000# $500# $0# 2008# 2009# 2010# 2011# Source:(iSuppli,(Forrester(Research,(company(releases,(BII(es8mates(
  • 108. Because  most  downloads  are  free   MobileAppStoreDownloads,Freevs.Paid:2011 TotalDownloads Free$Downloads$ 89%$Source:(Garner,(September(2012(
  • 109. “Freemium”  is  the  dominant  model    
  • 110. Games  are  the  biggest  money  makers  
  • 111. Mobile  has  become  a   platform  game.  
  • 112. Platform  markets  tend  to  standardize  around  one  or  two   platforms.  
  • 113. Right  now,  mobile  is  a  two-­‐horse  race.   GlobalMobilePla:ormMarketShare100%# 90%# 80%# Other 70%# 60%# 50%# Windows Blackberry 40%# Apple 30%# 20%# Android 10%# 0%# Q1#2009# Q2#2009# Q3#2009# Q4#2009# Q1#2010# Q2#2010# Q3#2010# Q4#2010# Q1#2011# Q2#2011# Q3#2011# Q4#2011# Q1#2012# Q2#2012# Q3#2012# Source:(Gartner,(IDC,(Strategy(Analy5cs,(BI(Intelligence(es5mates,(and(company(filings#
  • 114. Android  has  the  largest  smartphone   platform  globally.   SmartphoneMarketShareByOS(Global) 100%# Microso8 90%# Other 80%# 70%# Symbian 60%# ShareofGlobalUnit 50%# Blackberry Sales 40%# Apple 30%# 20%# Android 10%# 0%# Q3#2009# Q4#2009# Q1#2010# Q2#2010# Q3#2010# Q4#2010# Q1#2011# Q2#2011# Q3#2011# Q4#2011# Q1#2012# Q2#2012# Q3#2012# Source:(Gartner(
  • 115. Partly  because  it  owns  China   ChineseSmartphoneMarketShareByPla9orm100%# Other 90%# 80%# Symbian Apple 70%# 60%# 50%# 40%# Android 30%# 20%# 10%# 0%# Q2#2011# Q3#2011# Q4#2011# Q1#2012# Q2#2012# Q3#2012# Source:(Analysys(Interna1onal(
  • 116. And  it’s  the  same  two-­‐horse  story  in  tablets   Tablet%Market%Share%By%Pla8orm%100%# Blackberry% Nook% 90%# 80%# Kindle% 70%# 60%# Android% 50%# 40%# 30%# iPad% 20%# 10%# 0%# Q2#2010# Q3#2010# Q4#2010# Q1#2011# Q2#2011# Q3#2011# Q4#2011# Q1#2012# Q2#2012# Q3#2012# Source:(Es+mates(based(on(informa+on(from(IDC,(Strategy(Analy+cs,(and(company(filings#
  • 117. But  a  big  mystery  has   arisen...  
  • 118. Where  are  all  these  Android   users?  
  • 119. Apple  is  dominating  app  revenue   Mobile%App%Revenue%By%Pla<orm% $4,000# $3,500# Other% $3,000# Android%% $2,500#(millions)% $2,000# $1,500# $1,000# Apple%iOS% $500# $0# 2008# 2009# 2010# 2011# Source:(iSuppli,(Forrester(Research,(company(releases,(BII(es8mates(
  • 120. And  most  commerce  and  web  traffic  is  from  Apple   Ecommerce%Website%Traffic%By%Mobile%Pla:orm% 100%# Other% Android%Tablets% 90%# Android% 80%# 70%# 60%# iPhone% 50%# 40%# 30%# iPad% 20%# 10%# 0%# Q1#2011# Q2#2011# Q3#2011# Q4#2011# Q1#2012# Q2#2012# Q3#2012# Source:(Monetate(
  • 121. Do  Android  folks  actually  use   their  devices?  
  • 122. Mobile  profits  are  going  mainly  to  two  players.   Opera?ng%Profit%Share%By%Vendor% 80%% 70%% Nokia% Apple% 60%% 50%% Samsung% 40%% 30%% 20%% Sony%Ericcson% 10%% RIM% HTC% LG% 0%% Motorola% !10%% !20%% 2007% 2008% 2009% 2010% 2011% Q1%2012% Q2%2012% Q3%2012% Source:(Company(releases,(Canaccord(Genuity(es6mates(
  • 123. So,  what’s  the  future  of  media?  
  • 124. Digital?  
  • 125. Yes.  
  • 126. Mobile?  
  • 127. Yes.  
  • 128. Mobile  ONLY?  
  • 129. No.  
  • 130. Digital  is  now  a  4-­‐screen  world…  
  • 131. Maybe  5  screens  soon…  
  • 132. But  mobile  FIRST?  
  • 133. Only  if  you  have  a  totally   mobile-­‐centric  app...  
  • 134. ...Or  you  want  to  annoy  your   users  and  customers.  
  • 135. Thank  you  very  much.  
  • 136. Henry Blodget Founder, CEO & Editor-in-Chief, Business Insider Marcelo Ballvé, Editorial Director Alex Cocotas, Analyst Josh Luger, Director of Subscription Products Peter Lee, InternBI  Intelligence  is  a  new  subscription  service  from  Business  Insider      that  provides  in-­‐depth  insight,  data,  and  analysis  of  the  mobile  industry.    More  info  at    intelligence.businessinsider.com