BIA/Kelsey's Top 10 Predictions for Local Media in 2013


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2013 is already off to a fast start, with the industry intensely focused on key acquisitions and major technology investments, rich content distribution, advancements in native advertising and sales channel innovation. In this slide deck, BIA/Kelsey analysts outline the events and activities that will have the biggest effect on the local media industry this year.

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BIA/Kelsey's Top 10 Predictions for Local Media in 2013

  1. 1. BIA/Kelsey’s AnnualAnalyst Picks & Predictions January 23, 2013
  2. 2. Agenda  Looking Back at 2012 and Setting the Context for 2013  Rick Ducey  Charles Laughlin  Analyst Roundtable Discussion  Moderator, Rick Ducey  Online Media  Mobile Media  Social Media  Transactions and Loyalty  Video Media  Directional Media  Upcoming BIA/Kelsey Conference:  LEADING IN LOCAL: The National Impact  Subscribing to BIA/Kelsey Advisory Services  Q&A 2 © 2013 BIA/Kelsey. All Rights Reserved.
  3. 3. Executive Summary  At the beginning of every year, BIA/Kelsey issues its “Picks and Predictions” for the year ahead, offering our best guess of what the year will bring in local, social, mobile, directional, vertical and video advertising.  In previous years, the individual advisory services issued their own predictions, focused on each program’s core coverage area. We took a different approach for 2013. This year’s predictions cover a wide range of subjects, from mobile ad revenue to loyalty to cloud based SMB services to sales channel innovation. 3 © 2013 BIA/Kelsey. All Rights Reserved.
  4. 4. BIA/Kelsey Analyst & Thought-Leadership Team Rick Matt Charles Mark Geoff Peter Ducey Booth Laughlin Fratrik Price Krasilovsky Managing Director Chief Strategy Officer SVP, Managing Editor VP/Chief VP, Valuations & VP, Conferences Economist Financial Consulting Senior Analyst Celine Jed Suzanne Steve Michael Jeanne Matthiessen Williams Ackley Marshall Boland Datillo Senior Analyst Senior Analyst Senior Research Director of Research Senior Analyst Manager,Competitive Intelligence Analyst Media Valuations 4 © 2013 BIA/Kelsey. All Rights Reserved.
  5. 5. BIA/Kelsey Local Media Index 2011–2012 Online Local BIA/Kelsey Local Media Index S&P 500 Radio Broadcast TV Yellow Pages Newspaper Diversified Media Cable Outdoor Onine Advertising & Search 500 450 400 350 300 250 200 150 100 50 0 1/3/2011 6/7/2012 12/14/2011 11/29/2012 3/30/2011 6/24/2011 9/20/2011 3/13/2012 8/31/2012 5 © 2013 BIA/Kelsey. All Rights Reserved.
  6. 6. Getting Ready for 2013 2013 Trend The Lowdown Nationalizing the Local National retailers will enter the local mix, driven in Opportunity large part by social media. Social Delivers Money will flow into social advertising as its reputation for ineffectiveness fades. Mobile on the March Long-lagging mobile revenues will take off this year as new ad formats take better advantage of strong mobile usage. The Cloud as Great Cloud-based computing will chip away at the Equalizer advantages big businesses have over SMBs. Focus on Selling Figuring out continuous contact and long tail selling will challenge traditional media companies. BIA/Kelsey 2013 The National Impact March 18-20, Boston, MA Leading in Local SMB Digital Marketing Sept. 11-13, Austin, TX conferences Interactive Local Media, Dec. 10-12, San Francisco, CA 6 © 2013 BIA/Kelsey. All Rights Reserved.
  7. 7. Quick Take: Our 2013 Predictions No. 1 No. 2 No. 5 U.S. Mobile Ad Amazon + Apple + SMB Services Revenues Top Facebook + Google Occupy the $4 Billion = Acquisition Frenzy CloudReputation Big Banks Bet No. 7Management on Offers & No. 8Meets Content Loyalty Double-DigitDistribution Native Ads Bump for Online No. 4 Come intoNo. 3 Video Spend Focus No. 6 Finally, Props Local Sellers for Social National Innovate Around Advertising Retailers Go the Long Tail Local No. 9 No. 10 7 © 2013 BIA/Kelsey. All Rights Reserved.
  8. 8. No. 1: U.S. Mobile Ad Revenues Top $4B“U.S. mobile ad revenues will reach $4.2 billion, a 36 percentincrease over 2012. The portion of this attributed to localizedcampaigns will be about $2.1 billion (50 percent). Growth in mobile local ad spending will be driven by continued momentum in advertiser evolution to localize campaigns, due to users’ mobile local intent (i.e., 50 percent of mobile searches are local). Premiums on higher-performing mobile ads will also drive this local share shift.” Michael Boland Senior Analyst, Mobile Source: BIA/Kelsey, 2012 8 © 2013 BIA/Kelsey. All Rights Reserved.
  9. 9. No. 2: SMB Services Occupy the Cloud“IT infrastructure has long been the predictor ofwhich software solutions were available tobusinesses. Newer and smaller businesses lackedthe required infrastructure for the more robustsoftware packages typically available to enterpriseclients. Now that the IT market is moving towards cloud based computing, robust infrastructure is no longer required for enterprise-type solutions. This Matt Booth will dramatically change the local ad market. Chief Strategy Officer, Sr. Analyst, Online Watch for SaaS (software as a service) Media workflow solutions to make their way into the local market this year and define SMB products and services for the next decade.” 9 © 2013 BIA/Kelsey. All Rights Reserved.
  10. 10. No. 3: Rep Mgmt. Meets Content Distribution“Listings syndication, reviews monitoring,reputation scoring and social managementhave been converging toward a singledashboard. In 2013, the focus shifts to richcontent distribution across publishernetworks. Solutions must ingest, manageand syndicate coupons/offers/deals, socialfeeds, menus, photos, video and more. Content distribution networks (e.g., Jed Williams SinglePlatform) gained traction – and funding Senior Analyst, – by focusing on specific SMB content and Social Media building a publisher network for broad distribution. This trend will continue, with additional rich SMB content ripe for this distributed model.” 10 © 2013 BIA/Kelsey. All Rights Reserved.
  11. 11. No. 3: SMB Content Distribution Networks Type of SMB Company Funding Publisher Network ContentYext Real-Time Listings $65.8M 50+ Sold to ConstantSinglePlatform Menus 100+ Contact for $100MSignpost Offers $5M 1200+ NYC-basedLocal Vox Advertorial/Events $7.4M publisher network; Tribune Media 11 © 2013 BIA/Kelsey. All Rights Reserved.
  12. 12. No. 4: Big Banks Bet on Offers and Loyalty“Banks and other financial institutionshave been testing the waters of thedeals, offers and loyalty space for thepast couple of years. In 2013, they willdive in feet first as they look to boostSMB retention, earn commissions andcut rewards spending. We expect major acquisitions and Peter Krasilovsky investment in the offers space, VP & Senior Analyst, building on 2012 investments. The Transactions & big question is whether the deals Loyalty space will implode before it completely transitions to a broader offers and loyalty platform.” 12 © 2013 BIA/Kelsey. All Rights Reserved.
  13. 13. No. 4: Banks ‘Buy’ Vs. ‘Build’Financial institutions made at least four acquisitions of transactionmarketing related firms in 2012. That’s just the “buy” versus “build”component. Overall activity last year with vendors, etc. was intense. Date of Financial Institution Transaction Marketing Co. Acquisition JP Morgan Chase Bloomspot December 20 Capitol One November 30 MasterCard TruAxis September 6 BarclayCard Analog Analytics June 4 13 © 2013 BIA/Kelsey. All Rights Reserved.
  14. 14. No. 5: AMZN + AAPL + FB+ GOOG = Acquisition Frenzy“Together, these four dominant Plenty of Cash & Caponline brands represent roughly Apple Google Facebook AMZN$900 billion of market capitalization Market Cap $472B $238B $68B $124B (mid-Jan.)and $90 billion of ready cash. As Availabletheir respective services Cash $29B $45B $10B $5Bincreasingly overlap, we see a fluid (mid-Jan.)acquisition market developing in Sources: BIA/Kelsey, company reports, 20132013-14. This frenzy will be drivenprimarily by pressure to grow. Matt Booth However, we also expect to see Chief Strategy Officer, Sr. Analyst, these companies acquire for Online Mediaexternal talent and expertise. The year 2013 will be kind to owners of fast-growing Internet services, mobile or SaaS businesses.” 14 © 2013 BIA/Kelsey. All Rights Reserved.
  15. 15. No. 6: National Retailers Go Local“Retailers will increasingly look beyond their owninventory and customer base this year to becomebuyer hubs that also incorporate local sellers. Amazon has been telegraphing this trend in recent years, with online stores, comparison shopping,product inventory and product listing ads adding newrevenue streams to the mix. The rise of social media is rapidly accelerating this sea change. QVC’s December acquisition of social classifieds Oodle is Peter Krasilovsky an example of this trend.” VP & Senior Analyst, Transactions & Loyalty 15 © 2013 BIA/Kelsey. All Rights Reserved.
  16. 16. No. 7: Double Digit Bump for Online Video Spend“Online video ad spend will continueto increase by double digits, drivenby more advertisers seeing it as acomplement to TV advertising withnew incremental spending but alsodrawing spend share away fromdisplay, print and TV.” Rick Ducey Managing Director & Senior Analyst, Video Source: BIA/Kelsey, 2012 16 © 2013 BIA/Kelsey. All Rights Reserved.
  17. 17. No. 8: Native Ads Come into Focus“This year we expect to see nativeadvertising gain clearer definition andscalable solutions. Social networkscontinue to drive innovation in native, withformats combining social context and in-stream integration.These formats will begin to be bought and sold programmatically, enabling larger, optimized buys and more precise Jed Williams targeting. As programmatic buying Senior Analyst, accelerates, it will encourage more Social Media local publishers to participate by opening up native inventory to contextually-targeted placement.” 17 © 2013 BIA/Kelsey. All Rights Reserved.
  18. 18. No. 8: Native Advertising in Social Media Facebook Mobile App Install Ads Twitter Promoted Tweets 18 © 2013 BIA/Kelsey. All Rights Reserved.
  19. 19. No. 9: Finally, Props for Social Advertising“We expect 2013 to be the year that social advertising gains morerespect as new research reveals stronger links to purchase decisions.” Rick Ducey Managing Director & Senior Analyst, Video New ARF study released Jan 16, 2013 (“Digital & Social Media in the Purchase Decision Process”) indicates that, “digital and social media have empowered consumers and that brands have an important role in facilitating conversations amongst consumers and themselves.” Sources: comScore, ARF, 2012 19 © 2013 BIA/Kelsey. All Rights Reserved.
  20. 20. No. 10: Innovation Around the Long Tail“Directory publishers and others with largedeployed sales forces face a dilemma.Acquiring and retaining new customers witha sales force built on high margins just isn’teconomically viable. The average spend istoo low and the churn is too high. This year we expect to see publishersinvest and innovate around the challenge Charles Laughlin of profitably acquiring long-tail SVP & Senior Analyst, advertisers. This will involve greater use Directional Media of resellers, low-cost telesales, direct marketing and self-service.” 20 © 2013 BIA/Kelsey. All Rights Reserved.
  21. 21. JOIN US AT March 18-20, 2013 Boston, MA Westin Copley PlaceLEADING IN LOCAL: The National Impact will zero in on Attend LEADING IN LOCAL forhow local has evolved as an important channel not only for actionable insights from todayssmall businesses, but for national players who are targeting interactive local leaders.locally. The conference will focus on how to leverage localand win your share of the $134 billion local media market. VIKRAM SHARMA CEO, Gannett SESSIONS INCLUDE: Digital Marketing Services  SuperForum: Applying Five Local Channels to National DOM MOREA  The Mobile/Social SuperForum: From National to SVP, First Data Local  Local Services Marketing: Adding in Social, Mobile and Content BRIAN HALLIGAN CEO, HubSpot; Senior  The Deals/Loyalty + Rewards Landscape: Big Shifts Lecturer, MIT in Local Commerce  Geolocal: New Targeting, New Search, New Maps  Local Deals and Sales: The New Online and Mobile DAVID KIDDER Models Author, The Startup Playbook  Media Leaders: Applying The Lessons of Leading in Local Special Code: PREDICTIONS (Save $200 on registration) Reserved. 21 © 2013 BIA/Kelsey. All Rights
  22. 22. What It Takes To Lead In Local& How BIA/Kelsey Can Help  Information on the Market  Forecasts, SMB Research, Market Data  Information on the Competition  Competitive Intelligence  Innovation & Best Practices  Reports, Advisory, Conferences  Top Executive Buy-in  Concierge Service, Advisory & Custom Research  Strategic Consulting  Expert strategy and planning, actionable recommendations  Funding  Investment Banking & Mezzanine Funding 22 © 2013 BIA/Kelsey. All Rights Reserved.
  23. 23. Driving Success with Insights,Analysis and Consulting BIA/Kelsey – Drive value Building Success with expert servicesfor Clients from the Financial / Strategic Consulting Ground Up Make decisions with reliable, actionable market insights Advisory Services Identify, analyze and manage the competition Competitive Intelligence Track local marketplace dynamics Media Ad View Networking, deal-making, informative Conferences 23 © 2013 BIA/Kelsey. All Rights Reserved.
  24. 24. Questions and Comments: Rick Ducey 703.802.2995 © 2013 BIA/Kelsey. All Rights Reserved. This published material is for internal client use only. It may not be duplicated or distributed in any manner not permitted by contract. Any unauthorized distribution could result in termination of the client relationship, fines and other civil or criminal penalties under federal law.BIA/Kelsey disclaims all warranties regarding the accuracy of the information herein and similarly disclaims any liability for direct, indirect or consequential damages that may result from the use or interpretation of this information.