Digital focus 2012: Media Consumption and Trends

Putting Digital In Focus: 2012

Charlie D. Ray
Broad Street Interactive
@CharlieDR
@BroadST_ATX

Charlie D. Ray, Broad Street Interactive |
charlie@broadstreetinteractive.com | @CharlieDR |
@BroadST_ATX

Change, Change and Change
2011 marked an exciting year for the digital media industry and
signaled an even more momentous year ahead. Amidst this
constantly evolving landscape, successful digital strategies
require insights into not only the current environment, but
also into what trends will shape the future for digital
consumers.

With so much change in media consumption habits, new
technology and segmentation it is important to take a look at
how this evolution affects marketers, advertisers and their
agencies.

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The democratization of information
• The adoption of broadband internet access slowed
dramatically over the last year. Two-thirds of
American adults (66%) now have a broadband
internet connection at home, a figure that is little
changed from the 63% with a high-speed home
connection at a similar point in 2009.

• Most demographic groups experienced flat-to-
modest broadband adoption growth over the last
year. The notable exception to this trend came
among African-Americans, who experienced 22%
year-over-year broadband adoption growth.
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Focus on the Facts
• Facebook-led social
media is redefining
communication
• Search continues to
grow
• Online video signals a
“sea change” in video
consumption
• Smartphones and
Tablets fuel the rise
of the “Digital
Omnivore”

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Media Migration

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People and their gadgets

Mobile phone penetration
continues to shift the entire digital
advertising ecosystem

Tablets saw explosive growth at
the end of 2011.

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Online Activities

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Digital Omnivores
• Facebook-led social media is redefining communication in
the digital and physical worlds. Social media accounted for
16.6% of all online minutes at the end of 2011.

• If current trends continue, Social Networking will soon
declare its supremacy over Portals. The Entertainment
category, which includes TV and music content, video sites
and entertainment news, is also gaining market share and
currently accounts for 13 percent of time spent. Meanwhile,
web-based email’s market share slipped below 10 percent
for the first time.

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Search: Feeding the Monster
• Google owns two-thirds of the search market, but Bing has
captured 15% of the market on its own and surpassed Yahoo!
this year in market share.

• Despite the U.S. search market’s overall maturity, it continued
to grow at double-digit rates, posting an 11-percent increase
in 2011.

• With the U.S. being a very mature market for search,
continued volume increases will rely on driving a greater
number of searches per searcher, which ultimately depends
on delivering more value to the end user with high quality
search results.

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Online Video Signals “Sea Change”
• The increasing availability and adoption of long-form video
content has driven a dramatic increase in video viewing as
consumers exercise their freedom to watch available content
however, whenever and wherever they want.

• More than 100 million Americans watched online video
content on an average day to close out 2011, representing a
43-percent increase versus year ago. In addition to more daily
viewers, the number of video streams jumped 44 percent to
43.5 billion in December 2011.

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Smartphones and Tablets fuel the rise
of the “Digital Omnivore”
• The rise of smartphones and tablets has
drastically altered consumers’ digital media
consumption – changing the way people
access content, where they consume it and
the frequency of consumption. This evolution
of digital device interaction has given rise to
an age of ‘digital omnivores’ – consumers who
access content through several touch points
during the course of their daily digital lives.
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Smartphones and Tablets fuel the rise
of the “Digital Omnivore”
• In 2011, the majority of all mobile phone owners
consumed mobile media on their device, marking an
important milestone in the evolution of mobile from
primarily a communication device to a content
consumption tool. At the end of 2011, more than 8
percent of all digital traffic was consumed beyond
the ‘classic web’ across devices such as smartphones
and tablets.
• In December 2011, 28.5 million mobile users
accessed online retail content on their mobile
devices, up 87 percent from the previous year
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Smartphone Penetration
• About 234 million Americans over the age of 13 used
cellphones in January, meaning that the penetration
for smartphones in the U.S. is around 43.3%.
• As has been the current trend, both Google and
Apple’s share of the smartphone market grew at
RIM’s expense. Google’s Android platform now
claims 48.6% of the market and Apple’s iOS has
29.5%, a jump of 2.3% and 1.3%, respectively, over
October. RIM’s share is now 15.2%, a 2% drop.
Microsoft’s share also fell 1% to 4.4%.
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The Tablet Explosion
• In 2011 consumers had the choice of more than one
hundred distinct tablet devices with several highly-
publicized releases including the iPad2, Kindle Fire,
NOOK Tablet and Samsung Galaxy S fueling market
adoption. To put the rapid uptake of tablets in
perspective, it took seven years to reach nearly 40
million smartphones compared to less than two
years to reach nearly 40 million tablets,
demonstrating the vast appeal of these devices and
consumers’ desire for connection.
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E-Commerce is Bigger Than Ever
• Despite the backdrop of continued economic
uncertainty, 2011 was a strong year for retail e-
commerce.
• Throughout the year, growth rates versus the prior
year remained in double-digits to significantly
outpace growth at brick-and-mortar retail.
• Consumers remained cautious spenders overall, but
increasingly turned to digital commerce due to two
prevailing factors: price and convenience.

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E-Commerce is Bigger Than Ever
• Total U.S. retail and travel-related e-commerce
reached $256 billion in 2011, up 12 percent from
2010.
• Travel e-commerce spending grew 11 percent to
$94.5 billion, while retail (non-travel) e-commerce
spending jumped 13 percent to $161.5 billion for the
year.
• Not surprisingly, November ($17.2 billion) and
December ($20.0 billion) were the heaviest online
spending months of the year. 2011 saw
ecommerce’s first billion dollar days.
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What does all that mean for digital
advertising?

Or better yet, advertising in general?

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Shifting Budgets
• Advertising budgets are shifting online.
• Increased digital investments mean
advertisers are focusing on ROI and
engagement more than impressions and
clicks.
• Although, the number of advertisers
delivering more than one billion ad
impressions grew by 38% in Q4 2011.
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Print Versus Online
• Online ad spend is projected to outpace print
budgets for the first time this year.
• TV, Outdoor and Radio all project modest
increases in ad spend for 2012.
• Publishers struggle to replace lost print ad
revenue with digital spend.

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Print Versus Online
• Digital will be the primary beneficiary of the shift in
marketer dollars, but growth will not bypass
traditional media completely.
• While print and directories will see declines and
radio and outdoor only modest gains, TV ad
spending will remain robust, at $64.78 billion in
2012. It will rise to $72.05 billion by 2016, roughly in
line with the growth rate for total media ad
spending.
• But in the face of steeper increases in digital, TV’s
share of the total will experience a slight decline.
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Advertising Industry Chaos Ensues
• Advertisers are finding that seeding catchy videos on
viral channels like YouTube and Facebook can be a
more cost-effective way to project brand awareness
than spending millions of dollars on TV, radio and
online ads.
• Others are growing their audiences through custom
games, mobile apps or user-generated content
promotions. The goal now is to attract rather than
distract, to engage rather than intrude.

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It’s a mixed up world…

is an ad network

is an ad portal and tech platform

is an ad agency

is an ad analytics company

is a data company

is all of the above

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Who’s out to eat your lunch?

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Looking at 2012
• E-Commerce Explosion: After two years of sluggish online spending, retail e-
commerce bounced back to double-digit growth rates in 2010 and 2011. The
penetration of mobile will have brick and mortar retailers scrambling to get
customers in the store and not lose them to real-time comparison shopping.

• Daily Deals Sites Take Off, Then Stabilize: Is daily deal fatigue becoming a factor?
It is possible that some consumers have increasingly begun to tune out the
onslaught of daily emails. Improved targeting mechanisms for consumers and
better deal optimization tools for merchants will help ensure a strong value
proposition for all constituents, as 2012 will mark a year of maturation for the
daily deal sector.

• Mobile and Tablets will change the way advertisers plan campaigns: With the
market penetration of mobile and tablets, advertisers can no longer afford to
ignore these platforms when creating new campaigns.

• Local Advertisers will permeate the web: More local opportunities will drive more
advertisers online.

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Looking at 2012
• Social: Social media will continue to see growth in
engagement and brands will be forced to listen to
consumers.

• Reputation Management: Even brands that aren’t
active on social media will listen. Listening to
consumers is a requirement in the digital age.

@BroadST_ATX

Looking at 2012
• Search: Search continues to show significant growth. Users
will conduct more searches requiring search engines to refine
results. The days of affordable pay per click campaigns are
over.

• Display: New ad units will continue to contribute to display’s
dominance. However, the pressure is on for ROI and
measurement.

• Video: The availability of inventory will force prices for video
up as more advertisers embrace the long form video and
better content that shows strong growth through premium
sites, subscription services and YouTube.

@BroadST_ATX

The “Mad Men” are Dead

“The old-fashioned supertanker model is already dead. Clients want smaller
collections of people tied to nimble, innovative, evolving structures that can
shape and mold themselves into whatever form is needed to solve their
problems.”

Karine Wilsher, Managing Director, Fallon

@BroadST_ATX

How do you cope?

@BroadST_ATX

No, how you really cope…
Change, Change or Change. We are smart adaptable
people faced with enormous changes in our industry.
It is up to us to cut through the seduction of the
“shiny new object” and the confusing pace of change
to reassure our clients and companies that we are
committed to the basics of business. Advertising
generates results and we will deliver, regardless of
the platform.
--Charlie Ray

@BroadST_ATX

Thank you!
Charlie D. Ray
Broad Street Interactive

charlie@broadstreetinteractive.com facebook.com/BroadSTATX

@BroadST_ATX
@CharlieDR

@BroadST_ATX

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